ABM Grade 12 Modules and activities! 2022-2023

FABM2 part1

A statement of financial position has a number of important components. These include assets, liabilities, working capital (net current assets), and capital employed. In broad terms, assets are things that a business owns, whilst liabilities are things or money that a business owes.

A statement of financial position has a number of important components. They are capital employed, working capital (net current assets), liabilities, and assets. Liabilities, on the other hand, are things or money that a business owes. In general terms, assets are things that a business owns.

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Fabm2

1. Define asset and give examples.
> Asset is a resources controlled by the business as a result of past transactions and events and from which future economic benefits are expected to flow to the business. Examples are cash, property, equipment, and etc.

2. Define liability and give examples.
> Liability is a present obligations of an entity arising from past transactions or events. Examples are shortterm-debt, accounts payable, and contracts and etc.

3. Differentiate current assets fron non-current assets.
> Current assets are a company's short-term assets; those that can be liquidated quickly and used for a company's immediate needs. Non-current assets are long-term and have a useful life of more than a year.

4. Differentiate current liabilities from non-current liabilities.
> Current liabilities are a company's short-term financial obligations that are due within one year or a normal operating cycle. Long-term (non-current) liabilities are obligations listed on the balance sheet not due for more than a year.

5. Identify the key elements of a statement of financial position.
> A statement of financial position has a number of important components. These include assets, liabilities, working capital (net current assets), and capital employed. In broad terms, assets are things that a business owns, whilst liabilities are things or money that a business owes.

6. Discuss the procedures in constructing a statement of financial position.
> The balance sheet or the statement of financial position is one of the major components of financial statements, which include the income statement, statement of cash flow, statement of changes in equity and the notes to financial statements. Here are the procedures in constructing a statement of financial position:

1. Prepare the Statement Heading
2. Prepare the Asset Section
3. Prepare the Liabilities Section
4. Prepare the Owner's Equity
5. Ensure that the Accounting Equation is balance

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Exercise 5-1: Classification of Accounts
2. Asset, current
3. Liability, non-current
4. Asset, current
5. Asset, current
6. Asset, current
7. Asset, current
8. Liability, current
9. Asset, current
10. Liability, current
11. Equity accounts
12. Liability, current
13. Asset, current
14. Liability, current
15. Asset, non-current
16. Asset, current
17. Liability, current
18. Asset, current
19. Liability, current

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Statement of financial position (SFP)

Current Assets Examples:
1. Cash and cash equivalent
2. Trade accounts receivables
3. Notes receivables
4. Interest receivables
5. Financial asset at fair value through profit of loss (FAFVPL)
6. Inventories
7. Supplies and other prepaid assets
8. Prepaid rent
9. Accounts receivable
10. Office supplies

Non-current Assets Examples:
1. Property, plant, and equipment
2. Intangible assets
3. Investment properties
4. Biological assets

Current Liabilities Examples:
1. Trade accounts payable
2. Current portion notes payable
3. Interest payable
4. Other accrued expenses
5. Income tax payable
6. Unearned revenues

Non-current Liabilities Examples:
1. Long-term debt
2. Bonds payable
3. Notes payable

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