Q4/W2

SHS
Fundamentals of
Accounting, Business, and
Management 1

Quarter 4
Learning Activity Sheet 8
Worksheet, Financial Statements and
Completing the Accounting Cycle
Negros Occidental High School

Government Property
NOT FOR SALE
Fundamentals of Accounting, Business, and Management 1
Activity Sheet No. 8
First Edition, 2022

Published in the Philippines

By the Department of Education
Region 6 – Western Visayas

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Development and Enhancement Team of Fundamentals of

Accounting, Business, and Management 1 Activity Sheet
Negros Occidental High School
Senior High School

Writer: John Rey B. Andicoy

Cover Page Designer: Deyru J. Morancil

Quality Assurance Team: Paul Andro T. Emberso

Maximo F. Torrento, Jr.
Rizzalyn Mae G. Mendoza
Eunice A. Malala

School Management Team: Donna Bella O. Aposaga

Asst. Principal II for Academics, SHS

Josette S. Terrora
Principal IV

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Introductory Message
Welcome to Fundamentals of Accounting, Business, and Management 1 Learning
Activity Sheet (LAS) on Worksheet, Financial Statements and Completing the
Accounting Cycle!

The Learning Activity Sheet is a product of the collaborative efforts of the Schools
Division of Negros Occidental and DepEd Regional Office VI - Western Visayas
through the Curriculum and Learning Management Division (CLMD). This is
developed to guide the learning facilitators (teachers, parents and responsible adults)
in helping the learners meet the standards set by the K to 12 Basic Education
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The Learning Activity Sheet is self-directed instructional materials aimed to guide

the learners in accomplishing activities at their own pace and time using the
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The Fundamentals of Accounting, Business, and Management 1 Activity Sheet
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 Name of Learner: ________________________________________
Grade, Strand & Section: ____________________ Date: ________

FUNDAMENTALS OF ACCOUNTING, BUSINESS, AND

MANAGEMENT 1 ACTIVITY SHEET
Worksheet, Financial Statements and Completing the Accounting Cycle

I. I. Learning Competencies with Code

 complete the accounting cycle (ABM_FABM11-IVa-d-34)

II. II. Background Information for Learners

THE WORKSHEET

Accountants often use a worksheet to help transfer the data from the unadjusted
trial balance to the financial statements. This multi-column document provides
an efficient way to summarize the data for financial statements. It simplifies the
adjusting and closing process. It can also reveal errors.

Step 5 – PREPARING THE WORKSHEET

The steps in the preparation of a worksheet will be illustrated using the Del
Mundo Landscape Specialist case:

1. Enter the account balances in the unadjusted trial balance columns and total
the amounts.
The numbers, titles and balances of the accounts as of Nov. 30 are lifted
directly from the ledger before the adjusting entries are prepared. The
accounts are listed in the worksheet in the order they appear in the ledger.
Total debits must equal to the total credits, as shown in Exhibit 1-1. Accounts
with zero balances (e.g. salaries payable, interest payable, etc.) are also
presented. Listing all the accounts with their balances helps identify the
accounts that need adjustments. This practice will help ensure the
achievement of completeness and accuracy in the adjustment process.

2. Enter the adjusting entries in the adjustments columns and total the amounts.
When a worksheet is used, all adjustments for Del Mundo Landscape
Specialist were explained in the previous Learning Activity Sheet. The same
adjustments are entered in the adjustments columns of the worksheet in
Exhibit 1-2. As each adjustment is entered, a letter is used to identify the debit
entry and the corresponding credit entry. Note that the adjustments are not
journalized until after the worksheet is completed and the financial statements
are prepared.

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3. Compute each account’s adjusted balance by combining the unadjusted trial
balance and the adjustment figures. Enter the adjusted amounts in the
adjusted trial balance columns.
Exhibit 1-3 displayed the adjusted trial balance prepared by combining
horizontally, line by line, the amount of each account in the unadjusted trial
balance columns with the corresponding amounts in the adjustment columns.
This procedure is called cross-footing. To illustrate, the first line showed
cash with a debit amount of ₱182,250 in the unadjusted trial balance. There
is no adjustment to the cash account so that the ₱182,250 is entered in the
debit column of the adjusted trial balance. On the second line is the accounts
receivable with a ₱7,500 balance in the unadjusted trial balance; a debit of
₱2,500 is entered in the adjustments columns. The resulting balance is a
₱10,000 debit in the adjusted trial balance.
Supplies, on the third line, showed a debit of ₱1,000 in the unadjusted trial
balance columns and a credit of ₱500 in the adjustments columns. The ₱500
credit is subtracted from the ₱1,000 debit; the result is a ₱500 debit in the
adjusted trial balance. Lawn cutting revenues, on the nineteenth and
twentieth lines, reported a ₱37,500 credit in the unadjusted trial balance;
₱2,250 and ₱2,500 credits in the adjustments columns. These three credit
amounts are added, and the ₱42,250 sum is entered in the credit column of
the adjusted trial balance. This process is followed through all the accounts.
The adjusted trial balance columns are then totaled to check the accuracy of
the cross-footing. A simple convention to observe when extending amounts
from the trial balance to the adjusted trial balance follows:
 Add when the type of adjustments (debit or credit) is the same as the
unadjusted balance.
 Subtract when the type of adjustment (debit or credit) is different from the
unadjusted trial balance.
4. Extend the asset, liability and owner’s equity amounts from the adjusted trial
balance columns to the balance sheet columns. Extend the income and
expense amounts to the income statements columns. Total the statements
columns.
Every account is either a balance sheet account or an income statement
account. Asset, liability, capital and withdrawal accounts are extended to the
balance sheet columns. Income and expense accounts are moved to the
income statement columns. Debits in the adjusted trial balance remain as
debits in the statement columns while credits as credits. Each account’s
adjusted balance should appear in only one statement column as shown in
Exhibit 1-4. At this stage, the initial totals of the income statement and balance
sheet columns are not equal.

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5. Compute profit or loss as the difference between total revenues and total
expenses in the income statement. Enter profit or loss as a balancing amount
in the income statement and in the balance sheet, and compute the final
column totals.
Revenues (Income Statement credit column total) ₱42,250
Expenses (Income Statement debit column total) 25,250
Profit ₱17,000
Profit or loss is equal to the difference between the debit and credit columns
of the income statement. The profit or loss should always be the amount by
which the debit and credit columns for the income statement, and the debit
and credit columns for balance sheet differ. The profit figure of ₱17,000 is
entered in the debit column of the income statement and the credit column of
the balance sheet. After completion, total debits and total credits in the income
statement and balance sheet columns must be equal.
The profit figure is extended to the credit column of the balance sheet
because profit increases owner’s equity and increase in owner’s equity are
recorded as credits Observe that the capital account amount of ₱450,000
shown in the worksheet reflects the beginning rather than the ending balance.
Additional investments and profit must be added, and withdrawals subtracted
to arrive at the ending capital balance; this is done when the statement of
changes in equity is prepared.

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5
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ESSENCE OF FINANCIAL STATEMENTS
The financial statements are the means by which the information accumulate
and processed in financial accounting is periodically communicated to the users.
Without accounting information embodied in the financial statements, users may
not be able to arrive at sound economic decisions. The objective of financial
statements is to provide information about the financial position, financial
performance, and cash flows of an entity that is useful to a wide range of users
in making economic decisions.
COMPLETE SET OF FINANCIAL STATEMENTS
An entity shall present with equal prominence of all the financial statements in
a complete set of financial statements. Per revised International Accounting
Standards (IAS) No. 1, a complete set of financial statements comprises:
1. A statement of financial position as at the end of the period;
2. A statement of comprehensive income for the period;
3. A statement of changes in equity for the period;
4. A statement of cash flows for the period;
5. Notes, comprising a summary of significant accounting policies and other
explanatory information; and
6. A statement of financial position is at the beginning of the earliest
comparative period when an entity applies an accounting policy
retrospectively or makes a retrospective restatement of items in its financial
statements or when it reclassifies items in its financial statements.
In a nutshell, the statement of financial position or balance sheet lists all the
assets, liabilities and equity of an entity at a specific date. The income statement
presents a summary of the revenues and expenses of an entity for a specific
period. The statement of changes in equity presents a summary of the changes
in the capital such as investments, profit or loss, and withdrawals during a
specific period. The statement of cash flows reports the amount of cash received
and disbursed during the period. Accounting policies are the specific principles,
bases, conventions, rules and practices adopted by an enterprise in preparing
and presenting financial statements. Notes to financial statements provide
narrative descriptions or disaggregation of items presented in the statements
and information about the items that do not qualify for recognition in the
statements.
Step 6 – PREPARING THE FINANCIAL STATEMENTS
Once the worksheet is completed, it is easy to prepare the financial statements
for the account balances that have been extended to the appropriate income
statements and balance sheet columns. Most of the information needed to
prepare the income statement of changes in equity and balance sheet is
available from the worksheet. The statements presented are those of Del Mundo
Landscape Specialist. Note that financial statements shall be presented at least
annually.
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Income Statement
The income statement is a formal statement showing the performance of the
enterprise for a given period of time. It summarizes the revenues earned and
expenses incurred for that period of time. The income statement for Del Mundo
Landscape Specialist (refer to Exhibit 1-5) is prepared directly from the income
statement columns of the worksheet in Exhibit 1-4.

Information about the performance of an enterprise, in particular its profitability,

is required in order to assess potential changes in the economic resources that
it is likely to control in the future. It is also useful in predicting the capacity of the
enterprise to generate cash flows from its existing resource base.
An entity shall present all items of income and expense recognized in a period:
a.) In a single statement of comprehensive income, or
b.) In two statements: a statement displaying components of profit or loss
(separate income statement) and a second statement beginning with profit
or loss and displaying components of other comprehensive income
(statement of comprehensive income).
Statement of Changes in Equity
The statement of changes in equity summarizes the changes that occurred in
the owner’s equity. The statement is now a required statement. Changes in an
enterprise’s equity between two balance sheet dates reflect the increase or
decrease in its net assets during the period.
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Balance Sheet
The balance sheet is a statement that shows the financial position or condition
of an entity by listing the assets, liabilities and owner’s equity as at a specific
date. The information needed for the balance sheet items is the net balances at
the end of the period, rather than the total for the period as in the income
statement. The statement is also called the statement of financial position.
Users of financial statements analyze the balance sheet to evaluate an entity’s
liquidity, its financial flexibility, and its ability to generate profits, and its solvency.
Liquidity refers to the availability of cash in the near future after taking account
of the financial commitments over this period. Financial flexibility is the ability
to take effective actions to alter the amounts and timings of cash flows so that it
can respond to unexpected needs and opportunities. This includes the ability to
raise new capital or tap into unused lines of credit. Solvency refers to the
availability of cash over the long term to meet financial commitments as they fall
due.
Format
The balance sheet can be presented in either the report format or the account
format. The report format simply lists the assets, followed by the liabilities then
by the owner’s equity in vertical sequence. The account format lists the assets
on the left and the liabilities and owner’s equity on the right. Either balance sheet
format is acceptable.
Classification
It is proper to present a classified balance sheet; that is, the assets and liabilities
are separated into various categories. Assets are sub-classified as current
assets and non-current assets; while liabilities as current liabilities and non-
current liabilities.

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To make the accounting information useful to decision-makers, the items in the
balance sheet may be grouped and arranged in accordance with the following
guidelines:
 Assets are classified and presented in decreasing order of liquidity. Cash is
the most liquid. Assets that are least likely to be converted to cash are listed
last.
 Liabilities are generally classified and presented based on time of maturity
such that obligations that are currently due are listed first.
The classified balance sheet of Del Mundo Landscape Specialist in report
format is:

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Statements of Cash Flows
The statement of cash flows provides information about the cash receipts and
cash payments of an entity during a period. It is a formal statement that classifies
cash receipts (inflows) and cash payments (outflows) into operating, investing,
and financing activities. This statement shows the net increase or decrease in
cash during the period and the cash balance at the end of the period; it also
helps project the future net cash flows of the entity. The discussion below gives
an overview of some important concepts involved in the preparation of the cash
flow statement.

Cash Flows from Operating Activities

Operating activities generally involve providing services, and producing and
delivering goods. Cash flows from operating activities are generally the cash
effects of transactions and other events that enter into the determination of profit
or loss. This cash flow can be presented using the either the direct or the indirect
method.
Using the direct method, the entity’s net cash provided by (used in) operating
activities is obtained by adding the individual operating cash inflows and then
subtracting the individual operating cash outflows.
The indirect method derives the net cash provided by (used in) operating
activities by adjusting profit for income and expense items not resulting from
cash transactions. The adjustment begins with profit followed by the addition of
expenses and charges (e.g. depreciation) that did not entail cash payments.
Then, increases in current assets and decreases in current liabilities involved in
the determination of profit but which did not actually increase or decrease cash,
are subtracted from profit. Finally, decreases in current assets and increases in
current liabilities are added to profit to obtain net cash provided by (used in)
operating activities.
Cash Flow
 receipts from sale of goods and performance of services
 receipts from royalties, fees, commissions and other revenues
Cash Outflows
 payments to suppliers of goods and services
 payments to employees
 payments for taxes
 payments for interest expense
 payments for other operating expenses
Cash Flows from Investing Activities
Investing activities include making and collecting loans; acquiring and disposing
of investments in debt or equity securities; and obtaining and selling of property
and equipment and other productive assets.
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 Cash Inflows
 receipts from sale of property and equipment
 receipts from sale of investments in debt or equity securities
 receipts from collections on notes receivable
Cash Outflows
 payments to acquire property and equipment
 payments to acquire debt or equity securities
 payments to make loans to others generally in the form of notes
receivable
Cash Flows from Financing Activities
Financing activities include obtaining resources from owners and creditors.
Cash Inflows
 receipts from investments by owners
 receipts from issuance of notes payable
Cash Outflows
 payments to owners in the form of withdrawals
 payments to settle notes payable

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Step 7 – ADJUSTMENTS ARE JOURNALIZED AND POSTED

The adjustment process is a key element of accrual basis accounting. The

worksheet helps in the identification of the accounts that need adjustments. The
adjusting entries are directly entered into the worksheet. Most accountants
prepare the financial statements immediately after completing the worksheet.
The adjustments are journalized and posted as the closing entries are made.
This step in the accounting cycle brings the ledger into agreement with the data
reported in the financial statements.

Illustration. The adjustments pertinent to the Del Mundo Landscape Specialist

are illustrated below:

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Step 8 – CLOSING ENTRIES ARE JOURNALIZED AND POSTED
Income, expense and withdrawal accounts are temporary accounts that
accumulate information related to a specific accounting period. These
temporary accounts facilitate income statement preparation. At the end of each
year, the balances of these temporary accounts are transferred to the capital
account. Thus, the balance of the owner’s capital account represents the
cumulative net result of income, expense, and withdrawal transactions. This
phase of the cycle is called the closing procedure.

A temporary account is said to be closed when an entry is made such that its
balance becomes zero. Closing simply transfer the balance of one account to
another account. In this case, the balances of the temporary accounts are
transferred to the capital account. A summary account – Income Summary is
used to close the income and expense accounts. The steps in closing the
accounts of an entity will be illustrated using the Del Mundo Landscape
Specialist case.

1. Close the income accounts

Income accounts have a credit balances before the closing entries are
posted. For this reason, an entry debiting each revenue account in the
amount of its balance is needed to close the account. The credit is made to
the income summary account. The entry to close the income accounts for
the Del Mundo Landscape Specialist is as follows:

The dual effect of the entry is to make the balances of the income accounts
equal to zero, and to transfer the balances in total to the credit side of the
income summary account. Note that the data for closing the income
accounts can be found in the credit side of the income statement columns of
the worksheet in Exhibit 1-4.

2. Close the expense accounts

Expense accounts have debit balances before the closing entries are
posted. For this reason, a compound entry is needed crediting each expense
account for its balance and debiting the income summary for the total. These
data can be found on the debit side of the income statement columns of the
worksheet.

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3. Close the income summary account
After posting the closing entries involving the income and expense accounts,
the balance of the income summary account will be equal to the profit or loss
for the period. A profit is indicated by a credit balance and a loss by a debit
balance. The income summary account, regardless of the nature of its
balance, must be closed to the capital account. For the Del Mundo Landscape
Specialist, the entry is as follows:

The effect of posting this closing entry is to close the income summary
account balance and to transfer the balance to Del Mundo’s capital account
for the profit.

4. Close the withdrawal account

The withdrawal account shows the amount by which capital is reduced during
the period by withdrawals of cash or other assets of the business by the owner
for personal use. For this reason, the debit balance of the withdrawal account
must be closed to the capital account as follows:

The effect of posting this closing entry is to close the withdrawal account and
to transfer the balance to the capital account.

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Step 9 – PREPARATION OF A POST-CLOSING TRIAL BALANCE

It is possible to commit an error in posting the adjustments and closing entries

to the ledger accounts; thus, it is necessary to test the equality of the accounts
by preparing a new trial balance. This final trial balance is called a post-closing
trial balance.
 The post-closing trial balance verifies that all the debits are equal to the
credits in the trial balance.
 The trial balance contains only balance sheet items such as assets, liabilities,
and ending capital because all income and expense accounts, as well as the
withdrawal account, have zero balances.
Notice that only the balance sheet accounts have balances because at this
point, all the income statement accounts have been closed.

Step 10 – REVERSING ENTRIES

Preparing the post-closing trial balance may not be the last step in the
accounting cycle. Some entities elect to reverse certain end-of-period
adjustments on the first day of the new period. A reversing entry is a journal
entry that is the exact opposite of a related adjusting entry made at the end of
the period. It is basically a bookkeeping technique made to simplify the
recording of regular transactions in the next accounting period.

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It should be emphasized that reversing entries are optional. Also, the act of
reversing a previously recorded adjusting entry should not lead us to the
conclusion that the entries reversed are unnecessary or inaccurate.

Even when an entity follows the policy of making reversing entries, not all
adjusting entries should be reversed. Generally, a reversing entry should be
made for any adjusting entry that increased as an asset or a liability account.
Therefore, all accruals are reversed but only deferrals initially recorded in
income statement – income or expense – accounts are reversed.

After analyzing the rest of the adjusting entries, the adjustments that can be
reversed are as follows: prepaid expenses (expense method), unearned
revenues (income method), accrued expenses and accrued revenues.

Illustration. To show how reversing entries can be helpful, consider the

adjusting entry made in the records of Del Mundo Landscape Specialist to
accrue salaries expense:

When the employees are paid on the next regular payday, the entry would be:

Note that when the payment has made, without a prior reversing entry, the
accountant must look into the records to find out how much of the ₱4,000 applies
to the current accounting period and how much was accrued at the beginning
of the period.

This step may appear easy in this simple case, but think of the problems that
may arise if the entity has many employees, especially if some of them are paid
on different time schedules such as weekly or monthly. A reversing entry is an
accounting procedure that helps to solve this difficult problem. As noted above,
a reversing entry is exactly what its name implies. It is a reversal of the adjusting
entry made. For example, observe the following sequence of transactions and
their effects on the ledger account – salaries expense:

1. Adjusting Entry

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2. Closing Entry

3. Reversing Entry

4. Payment Entry

These transactions had the following effects on salaries expense:

a. Adjusted salaries expense to accrue ₱1,600 in the proper accounting period.

b. Closed the ₱5,600 in total salaries expense for November to income
summary.
c. Established a credit balance of ₱1,600 on Dec. 1 in salaries expense equal
to the expense recognized through the adjusting entry on Nov. 30. The liability
account salaries payable was reduced to a zero balance.
d. Recorded the ₱4,000 payment of half-month’s salaries with ten workdays in
the usual manner. The reversing entry has the effect of leaving a balance of
₱2,400 (₱4,000 - ₱1,600) in the salaries expense account. This ₱2,400
balance represented the salaries expense for the six workdays in December.

Making the payment entry was simplified by the reversing entry. Reversing
entries apply to all accrued expenses or revenues.

III. Accompanying DepEd Textbook and Other References

 Andres, C.S., et.al, 2016 Teaching Guide for Senior High School
Fundamentals of Accountancy, Business and Management 1. Quezon City,
Philippines. CHED. EC-TEC Commercial.
 Ballada, Win, et.al, 2017 Fundamentals of Accountancy, Business and
Management 1 Made Easy. Suite 203 KB Arizona Tower, 838 Padre Campa
St., Espana, Sampaloc, 1015 Manila, Philippines. Domdane Publishers.

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III. IV. Activity Proper

ACTIVITY 1 Problem Analysis

Direction: Read and analyze the problem and answer the required tasks.
Kay Travel was organized on September 1, 2021. Assume that the accounts
are closed and financial statements are prepared each month. The company
occupies a rented office space and its office equipment owned have an
estimated useful life of 10 years from the date of acquisition, September 1, 2021.
The unadjusted trial balance for Kay Travel on November 30, 2021 is shown
below:
Unadjusted Trial Balance
Account Title Debit Credit
Cash 1,750
Accounts Receivable 1,210
Office Equipment 4,800
Accumulated Depreciation-Office Equipment 80
Accounts Payable 1,640
Kay, Capital 7,490
Kay, Withdrawal 500
Service Revenue 4,220
Advertising Expense 800
Salaries Expense 3,600
Rent Expense 770
13,430 13,430
Additional information:
The rent expense amounting to ₱770 covers the rental for the month of
November and December 2021.
Required tasks:
1. Prepare the adjusting entries necessary for the above problem.
2. Prepare an adjusted trial balance.
3. Prepare an income statement ending November 30, 2021.
4. Prepare the closing entries.
ACTIVITY 2 Evaluate and Answer Me!
Evergreen Laundry carried out the following transactions during the month of
May 2021. Which of the following transactions below represented expenses in
the said month? Explain.
1. Paid an attorney amounting to ₱500 for legal services rendered in April.
2. The owner withdrew ₱1,600 from the business for personal use.
3. Purchased a copying machine for ₱25,000 cash. The machine has a useful
life of 25 months.
4. Paid ₱450 gasoline for the delivery truck used in business during May.
5. Paid ₱3,000 salaries of employees for time worked during the month of May.
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Guide Questions:
 In what ways is the worksheet useful to accountants?
 What useful information does an income statement provide to the business
owner?
 Differentiate the two forms in which a balance sheet may be presented.
 What is a statement of cash flows?
 Why closing entries are made at the end of the accounting period?
 How does a post-closing trial balance differ from the trial balance prepared
before the adjusting entries are made?
V. Reflection

As an ABM student, how important are the worksheet, financial statements

and completing the accounting cycle to a business entity? Explain.
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________

VI. Answer Keys

Activity 1
1.

2.

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3.

4. Closing Entries:

Activity 2
1. The transaction belongs to an expense for the month of April since it was
incurred in the said month.
2. The withdrawal is not an expense account. It should recorded as a
withdrawal made by the owner.
3. Part of the cost of the machine is an expense for the month of May
(depreciation) of ₱25,000/25 months which is ₱1,000 per month. The
machine will benefit more than one accounting period.
4. The gasoline expense is part of the May expenses since it was incurred in
the said month.
5. The ₱3,000 salaries of employees is included in the month of May
expenses since it was incurred in the said month.
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 WEEKLY HOME LEARNING PLAN
Subject: FABM 1 Quarter: Fourth Week No.: 2 LAS No.: 8 a
Formative Summative Learning Task
Day
Learning Mode of Learning Task Date of Mode of
and MELC
Tasks (Self- Delivery Submission Delivery
Time
Test)
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22, accounting cycle Lesson Print Summative 2022 Print
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23
 Fundamentals of Accounting, Business and Management 1
Summative Test No. 2 (Week 2) – Worksheet, Financial Statements and
Completing the Accounting Cycle
Directions: Choose the letter of the correct answer. Write the chosen letter on
the answer sheet provided.
1. Which among the following document provides an efficient way to summarize
the data for financial statements?
A. journal C. subsidiary ledger
B. ledger D. worksheet
2. Which among the following reports present a summary of revenues and
expenses of an entity for a specific period?
A. Balance Sheet C. Statement of Cash Flows
B. Income Statement D. Statement of Changes in Equity
3. It is a statement that summarizes the changes that occurred in owner’s equity.
A. Balance Sheet C. Statement of Cash Flows
B. Income Statement D. Statement of Changes in Equity
4. What do you call to a statement that shows the financial position or condition
of an entity by listing the assets, liabilities and owner’s equity at a specific
date?
A. Balance Sheet C. Statement of Cash Flows
B. Income Statement D. Statement of Changes in Equity
5. Which column of the worksheet shows the profit?
A. Adjustments C. Income Statement
B. Balance Sheet D. Trial Balance
6. Which among the following columns of the accounting worksheet shows the
unadjusted amounts?
A. Adjustments C. Income Statement
B. Balance Sheet D. Trial Balance
7. An Income Statement Debit column of the worksheet contains an account.
What type of account is it?
A. asset account balances C. liability account balances
B. expense account balances D. revenue account balances
8. What is/are the usefulness of the worksheet?
A. It summarizes the effects of all the transactions of the period.
B. It aids the preparation of the financial statements.
C. It identifies the accounts to be adjusted.
D. All of the above.
9. Which of the following sequences of documents or records describes the
proper sequence in the accounting cycle?
A. journal, source documents, ledger, financial statements
B. ledger, source documents, journal, financial statements
C. source documents, journal, ledger, financial statements
D. source documents, ledger, journal, financial statements

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10. Supplies have a ₱60,000 unadjusted amount on your trial balance. At year-
end, the remaining supplies count a total of ₱20,000. What adjustment will
appear on the worksheet?
A. Supplies 40,000
Supplies Expense 40,000
B. Supplies Expense 20,000
Supplies 20,000
C. Supplies Expense 40,000
Supplies 40,000
D. No adjustment is needed because the Supplies account already has a
correct balance.
Direction: On your answer sheet, write TRUE if the statement is correct, and
FALSE if the statement is incorrect.
11. A loss occurs when there are more expenses than revenue.
12. The worksheet simplifies the adjusting and closing process.
13. The statement of changes in equity reports the amount of cash received
and disbursed during the period.
14. Profit or loss is equal to the difference between the debit and credit columns
of the income statement.
15. The statement of changes in equity considers the profit or loss figure from
the income statement as one of the determining factors that explains the
change in owner’s equity.
16. The balance sheet reports all the income and expenses during the period.
17. The statement of cash flows reports the net increase or decrease in cash
during the period and ends with the cash balance reported in the balance
sheet.
18. Income Summary is used to close the income and expense accounts.
19. Income accounts have debit balances before the closing entries are posted.
20. A reversing entry is a journal entry that is the exact opposite of a related
adjusting entry made at the beginning of the period.

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 Fundamentals of Accounting, Business and Management 1
Performance Task No. 2 (Week 2) – Worksheet, Financial Statements and
Completing the Accounting Cycle

Directions: Read and analyze the given problem. Prepare the adjustments on
the worksheet and complete the worksheet.

The May 31, 2021 trial balance for Rosalina Besario Surveyors is presented as
follows:

The following information pertaining to the year-end adjustments is available:

a. The ₱360,000 prepaid advertising represents expenditure made on

November 2020 for monthly advertising over the next 18 months.
b. Engineering supplies used on May 31, 2021 amounted to ₱90,000.
c. Depreciation on the surveying equipment amounted to ₱160,000.
d. One-third of the unearned survey revenues has been earned at year-end.
e. At year-end, salaries in the amount of ₱140,000 have accrued.
f. The interest of ₱60,000 on the notes payable has accrued at year-end.

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 Fundamentals of Accounting, Business and Management 1
Summative Test No. 2 – Worksheet, Financial Statements and Completing the Accounting Cycle
4th Quarter – Week 2
Answer Sheet

Name of Learner: __________________________________________________________

Grade, Strand & Section: _________________________________ Date: _____________

1. 6. 11. 16.
2. 7. 12. 17.
3. 8. 13. 18.
4. 9. 14. 19.
5. 10. 15. 20.
 Fundamentals of Accounting, Business and Management 1
Performance Task No. 2 – Worksheet, Financial Statements and Completing the Accounting Cycle
4th Quarter – Week 2
Answer Sheet