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Kagawaran ng Edukasyon
Rehiyon IV-A CALABARZON
SANGAY NG BATANGAS
Grade: 11
Course Title: Fundamentals of Accountancy, Business
and Management 1
Content: The Accounting Equation
Content Standards: The Accounting Equation
Performance Standards: Solve problems applying the
accounting Equation
Time
Section
Date
Learning Competencies:
ABM_FABM11- IIIb-c-17
Illustrate the accounting equation.
ABM_FABM11- IIIb-c-18
Perform operations involving simple cases with the use
of accounting equation.
Subject Matter: The Accounting Equation
References: K to 12 Basic Education Curriculum SHS
Accountancy, Business and Management (ABM),
pages 2-3
Textbook: Basic Accounting Theory and Practices
Ma. Luisa Witty Ramirez Reyes, pages 16-21
Procedure
Activity I
Motivation
Activity 2
You have now some ideas about the three major
accounts of a financial make up. Assets, Liabilities and
Owners Equity. Let me first define these three
accounts.
Assets are a company's resourcesthings the
company owns. Examples of assets include cash,
accounts receivable, inventory, prepaid insurance,
investments, land, buildings and equipment.
Liabilities are a company's obligationsamounts the
company owes. Examples of liabilities include notes or
loans payable, accounts payable, salaries and wages
payable, interest payable, and income taxes payable (if
the company is a regular corporation). Liabilities can be
viewed in two ways:
(1) as claims by creditors against the company's assets,
and
(2) a sourcealong with owner or stockholder equityof
the company's assets.
Owner's or stockholders' equity also reports the
amounts invested into the company by the owners plus
the cumulative net income of the company that has not
been withdrawn or distributed to the owners.
Owner's equity or stockholders' equity is the amount
left over after liabilities are deducted from assets:
Assets - Liabilities = Owner's (or Stockholders') Equity
These three accounts have the same relationship to
each other. We call this relationship the Accounting
Equation.
Assets
Liabilities
Owners Equity
Liabilities
Owners Equity
Republika ng Pilipinas
Kagawaran ng Edukasyon
Rehiyon IV-A CALABARZON
SANGAY NG BATANGAS
1.
Asset
Liabilities
Owners
Equity
2.
3.
Cash
P100,000.0
0
=
=
Liabilities
0
+
+
Owners
Equity
Capital
P100,000.0
0
=
=
=
Liabilities
Accounts
PayableBank
P4,000.00
P5,000.00
+
+
Equity
Capital
4.
5.
6.
.
Assessment
Individual Activity:
Using the given data accomplish the accounting
equation by applying necessary operations.
Assets
a.
b.
c.
d.
e.
760,00
0
860,00
0
?
626,60
0
?
P1,000.0
0
Prepared by:
Abstraction
Why Assets is always equal to Liabilities and Owners
Equity?
Application:
Work Together:
I will group you into five groups. Review the
Accounting Equation and examine each of the
transactions and perform necessary operation with
the use of Accounting Equation.
I will ask one group to share the solution with the
class. If that groups solution is wrong, another group
will be asked to share, and so on.
For the group activity I will illustrate and perform the
operation for transaction No. 1 and each group will
do the rest
Transactions:
ESTELITA M. MARASIGAN
Liabilitie
s
360,000
Owners
Equity
?
592,000
108,000
376,240
760,000
?
800,000
(100,000
)