Beruflich Dokumente
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Solvency availability of cash over the long term to meet obligations when they fall due.
Elements of Financial Position
1. Assets: Resource owned and/or controlled by the enterprise that provides future benefits.
a. Cash: money on hand or in banks
b. Account Receivable: valid claims from customers arising from the provision of service or
delivery of goods in the ordinary course of business, wherein the price is still not paid.
c. Supplies on hand: supplies purchased by the business (bond paper, envelops, ballpen,
staples, etc.)
d. Inventories: goods bought from the suppliers for resale to customers at a price higher
than cost.
e. Property, plant and equipment: long-lived assets which have been acquired for use in
operations.
2. Liabilities: a present obligation arising from past events which are to be settled in the future.
a. Accounts Payable: amounts due payable to suppliers for goods purchased or services
received.
b. Salaries Payable: amounts due to employees.
c. Utilities Payable: amounts due to utility companies (water, electricity, etc.)
d. Advances from customers: amounts received from customers, in advance, for the
delivery of goods or provision of services. (Down-payment minsan tawag mga bes)
e. Loans Payable: obligations from lenders (banks, financial institutions) to be paid on a
specified future date agreed.
3. Equity: it means claim. The residual interest in the assets of the business after deducting all its
liabilities.
Elements pertaining to Performance/Profitability
1. Income: increase in economic benefits during accounting period. It encompasses both revenues
and gains. It may be in form of the following:
a. Inflows or enhancement of assets
b. Decrease of liabilities
c. Increase in equity (result of the above)
2. Revenues: arises from the course of the ordinary activities of the business. (Sales, Fees, Interest,
etc.)
3. Gain: other items not on the course of ordinary activities of the business. (Sale of land)
4. Expenses: decrease in economic benefit during the accounting period. It encompasses losses. It
may be in form of the following:
a. Outflow or depletion of assets
b. Increase of liabilities
c. Decrease in equity (result of the above)
5. Losses: does not arise in the course of ordinary activities of the business.
Sample Senario:
Gerald Gabby Anderson is a famous artist who has a girl friend named Maja Salvador. He was
caught cheating with Bea Alonzo which resulted to the break-up of Gabby and Maja. Due to a broken
heart, Gabby shifts career and decided to create a business in advertising. His business was later on named
Kutis-Bayujg. During May 2016, the company first month of operations, the following transactions
occurred:
May
1
5
9
11
16
17
19
20
21
27
29
31