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Accountancy Business and

Management (ABM)
ENTREPRENEURSHIP
Quarter 2 – Module 8
Terminal Report of Business
Operations
ABM 12 – Entrepreneurship
Alternative Delivery Mode
Quarter 2 – Module 8: Terminal Report of Business Operations
First Edition, 2020

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 What I Need to Know
This module was designed and prepared for you. It is here to help you to know
more about business. The objectives of each lesson will serve as your gauge as to the
knowledge you will hone upon completing this module. Pre-assessment and post-
assessment are included which deal with the topics that are covered. It will measure of
how well you have learned the module.

This module was aligned with the DepEd Senior High School curriculum.
The module has one lesson namely:
Lesson 8 – Terminal Report of Business Operations

After going through this module, you are expected to:

1. Identify the reasons for keeping business records;
2. Perform Key Bookkeeping Tasks;
3. Identify where there is a profit or loss for a business; and
4. Generate an overall report on the activity.

What I Know
Answer the following set of definition by choosing from the box which best
describes the items.

Balance Sheet Income Statement of Owner’s Bookkeepers

Statement Cash Flow Equity
Statement

__________________1. A statement of account that shows the assets, liabilities and

expenses of the business for a given period of time.
__________________2. A statement of account that shows the assets, liabilities and
your equity in the business on a given date.
__________________3. Are the people responsible for maintaining an organization’s
key accounting records, known as ledgers
__________________4.
Summarizes the changes in owner’s equity for a specific period
of time.
__________________5. Summarizes information about the cash inflows (receipts) and
outflows (payments) for a specific period of time.

Lesson
Terminal Report of
8 Business Operations
The terminal report is an opportunity for the implementing entity to present the
project's outcome, particularly with regard to meeting the expected accomplishments
and delivering the anticipated results.

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 What’s In
4 PICS 1 WORD
1. _ _ _ _ R _ _ _ G

2. _ C _ _ _ _ _ N _

3. _ _ _ _ _ E

4. B _ _ _ _ _ _ _

5. _ _ C _ _ N _ _

What’s New
WHY SHOULD WE KEEP RECORDS?
Everyone in business must keep records. Keeping good records is very important
to your business. Good records will help you do the following:
Monitor the progress of your business - You need good records to monitor the progress
of your business. Records can show whether your business is improving, which items
are selling, or what changes you need to make. Good records can increase the likelihood
of business success.
Prepare your financial statements - You need good records to prepare accurate
financial statements. These include income (profit and loss) statements and balance
sheets. These statements can help you in dealing with your bank or creditors and help
you manage your business.
Identify sources of your income - You will receive money or property from many
sources. Your records can identify the sources of your income. You need this information
to separate business from nonbusiness receipts and taxable from nontaxable income.
Keep track of your deductible expenses - Unless you record them when they occur,
you may forget expenses when you prepare your tax return.

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Keep track of your basis in property - Your basis is the amount of your investment
in property for tax purposes. You will use the basis to figure the gain or loss on the sale,
exchange, or other disposition of property, as well as deductions for depreciation,
amortization, depletion, and casualty losses.
Prepare your tax returns - You need good records to prepare your tax returns. These
records must support the income, expenses, and credits you report. Generally, these
are the same records you use to monitor your business and prepare your financial
statement.
Support items reported on your tax returns - You must keep your business records
available at all times for inspection by the IRS. If the IRS examines any of your tax
returns, you may be asked to explain the items reported. A complete set of records will
speed up the examination.
Performing Key Bookkeeping Tasks
Bookkeepers are responsible for maintaining an organization’s key accounting
records, known as ledgers. Day-to-day activities include recording transactions such as
income and outgoings and posting them to various accounts. A bookkeeper’s job
description should emphasize the need for a strong sense of time management and
organizational skills, and with exposure to many aspects of the accounting function.
A Bookkeeper job description generally includes:
- Recording transactions and posting them to various accounts
- Processing payments
- Conducting daily banking activities
- Producing various financial reports

RULES OF DEBIT AND CREDIT

You DEBIT to show: You CREDIT to show:

• Decrease in Assets
• Increase in Assets
• Increase in Liabilities
• Decrease in liability
• Increase in Owner’s Equity
• Decrease in owner’s equity
- Initial Investment
- Through Owner’s Withdrawal
- Additional Investment
- Expenses
- Revenue or Income

The following are the effects of transactions to the Assets, Liabilities and
Owner’s Equity of Mr. Santos’ Laundry Services Company.
Transactions Asset Liability Owner’s
(January 2020) Equity
1. Mr. Santos invested 1 Million Pesos in the Increase No Increase
business Change
2. Rendered services to Don Emilio for Increase No Increase
P20,000 Change
3. Owner purchased a Washing Machine on Increase Increase No
account for P50,000. Change
4. The owner withdrew cash for P100,000 Decrease No Decrease
for personal use. Change
5. Paid for the Laundrywomen’s salaries for Decrease No
P30,000. Change Decrease
Journalizing is the process of recording transactions in the journal after it has
been recognized and measured. Posting is the process of transferring information from
the journal to the ledger. See sample journal entries below using the transactions above:

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 Date Accounts Debit Credit
January 1 Cash P1,000,000
Mr. Sy, Capital P1,000,000

January 2 Cash 20,000

Service Revenue 20,000

January 3 Laundry Equipment 50,000

Cash 50,000

January 4 Mr. Santos, Drawing 100,000

Cash 100,000

January 5 Salaries Expense 30,000

Cash 30, 000

FINANCIAL STATEMENTS
Companies prepare Four (4) Financial statements from the summarized
accounting data, namely:

• Income Statement or Statement of Comprehensive Income – presents

revenues and expenses and resulting net income or net loss for a specific
period of time. (See Sample Format below)
Mr. Santos' Laundry Shop
Income Statement
For the year ended December 31, 2020
Service Revenue xxx
Rental Income xxx
Interest Income xxx
Total Revenues and Income xxxx
Net Purchase
Depreciation Expense yyy
Utilities Expense yyy
Salaries Expense yyy
Interest Expense yyy
Supplies Expense yyy
Total Expenses yyyy

Net Income xxxx-yyyy

• Owner’s Equity Statement – summarizes the changes in owner’s equity for

a specific period of time as a result of additional investment or withdrawal by
the owner.
Mr. Santos' Laundry Shop
Statement of Changes in Equity
For the year ended December 31, 2020
Owner, Capital January 1, 2020 xxx
Add: Net Income xxx
Owner's Contribution xxx
Less: Drawings xxx

Accounts Payable xxx

Notes Payable xxx
Total Liabilities xxx

Owners' Capital xxx

Total Liabilities and Owner's Equity xxx

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• Balance Sheet or Statement of Financial Position (SFP) – reports the
financial condition/position of a business relating to its assets, liabilities, and
owner’s equity as of a given period.

Mr. Santos' Laundry Shop

Balance Sheet
As of January 6, 2021

Assets
Cash P x, xxx, xxx
Accounts Receivable xx, xxx
Equipment xx, xxx
Furnitures and
Fixtures x, xxx
Total Assets P x, xxx, xxx

Liabilities
Accounts Payable P x, xxx, xxx
Notes Payable xx,xxx
Utilities Payable xx, xxx
Loan Payable x, xxx
Total Liabilities P x,xxx,xxx

Owner's Equity
Capital P x, xxx, xxx
Total Equity P x, xxx,xxx

• Statement of Cash Flow – summarizes information about the cash inflows

(receipts) and outflows (payments) for a specific period of time.

Mr. Santos' Laundry Shop

Statement of Cash Flows
For the year ended December 31, 2020

Cash Flows from Operating Activities

Cash Transactions xxx
Net Cash provided by (used in) operating activities xxx

Cash Flows from Investing Activities

Cash Transactions xxx
Net Cash provided by (used in) investing activities xxx

Cash Flows from Financing Activities

Cash Transactions xxx
Net cash provided by (used in) financing activities xxx
Net Increase (decrease) in cash and cash equivalents xxx
Cash and cash equivalents at the beginning of the year xxx
Cash and cash equivalents at the end of the year xxx

Note: The income statement, owner’s equity statement and statement of cash flows are
all for a period of time whereas the balance sheet is for a point in time.

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 What’s More

Modified True or False: Read each sentence carefully and determine whether the
statement is True or False. If the statement false, write the correct answer.

1. Balance Sheets report the financial condition/position of a business relating

to its assets, liabilities, and owner’s equity for a specific period of time.
2. Journalizing the process of transferring information from the journal to the
ledger
3. Statement of cash flow summarizes the information about the cash inflows
(receipts) and outflows (payments) for a specific period of time.
4. Statement of Cash Flow presents revenues and expenses and resulting net
income or net loss for a specific period of time.
5. Terminal report is an opportunity for the implementing entity to present the
project's outcome, particularly with regard to meeting the expected
accomplishments and delivering the anticipated results

What I Have Learned

Malou decided to invest in a travel agency. Below are the transactions for the
month of June You are requested to journalize the transactions.
June 1 Malou invested a car worth P550,000 and cash of P1,200,000
4 Barrowed P250,000 from Bank of Zaragoza
5 Bought furniture from Slim’s P30,000 on account
6 Withdrew cash P100,000 for personal use
15 Rendered services to Happy Tours P500,000 on account
21 Paid employee’s salaries for P50,000
30 Collected account from Happy Tours

Date Accounts Debit Credit

June Cash (1) __________
1
Car 350,000
(2) __________ P1,750,000

4 (3) __________ 250,000

Loan Payable (4) __________

5 Furniture (5) __________

Accounts Payable 30,000

6 (6) __________ 100,000

Cash (7) __________

15 Accounts Receivable 500,000

(8) __________ 500, 000

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 21 (9) __________ 50,000
Cash 50,000

30 (10) __________ 500,000

Accounts Receivable 500,000

What I Can Do
Direction: Write your answer on a separate sheet of paper.
1. In your own perspective, how impactful a good recording process is for the
business? Explain your answer.
2. How will a complete terminal report increase a company’s efficiency? Cite
examples.

Assessment

Choose the letter of the best answer. Write the letter on a separate sheet of paper.
1. What do you call the financial statement that summarizes the changes in owner’s
equity for a specific period of time as a result of additional investment or
withdrawal by the owner?
a. Owner’s Equity Statement
b. Statement of Financial Position
c. Statement of Comprehensive Income
d. Statement of Cash Flow

2. How do we post to ledger, if the owner invested P500,000 cash to the business?
a. Debit-Cash; Credit-Cash
b. Debit-Owner’s Equity; Credit-Cash
c. Debit- Cash; Credit-Owner’s Equity
d. Debit-Accounts Receivable; Credit Owner’s Equity

3. What do you call the amount of money received by the business in return of the
services?
a. Expenses
b. Cost
c. Revenue
d. Capital

4. Which of the following is NOT part of the reasons why we keep records?
a. Monitor the progress of your business
b. Keep track of your deductible expenses
c. Identify sources of your income
d. To gain more profit

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5. If the amount of P50,000 was debited to Salaries expense and credited to Cash, what
could the transaction possibly be?
a. The owner invested P50,000 to the business
b. The owner paid the secretary’s salary
c. The owner bought furniture on account
d. The owner paid for the insurance

6. When will the business decrease its owner’s equity?

a. When the owner withdraws cash
b. When the owner gains a revenue
c. When the owner makes an additional investment
d. When the owner makes an income

7. What will happen when the business incurs some expenses?

a. The owner’s equity will decrease
b. The owner’s equity will increase
c. The cash will increase
d. The cash will decrease

8. Which of the following accounts is NOT a component of the Statement of Financial

Position?
a. Cash
b. Accounts Payable
c. Service Revenue
d. Accounts Receivable

9. When the owner purchased a vehicle, what happens to the company’s assets?
a. Increase
b. Decrease
c. Increase and Decrease
d. No change

10. How will the transaction be when the company buys a truck for 100,000 paying
P90,000 cash and P10,000 on account?
a. Debit- Equipment; Credit-Cash; Credit-Accounts Payable
b. Debit-Cash; Debit-Equipment; Credit Accounts Payable
c. Debit-Accounts Payable; Credit-Equipment; Credit Cash
d. Debit-Accounts Payable; Debit-Equipment; Credit Cash