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Presentation of Statement of Financial Position

The document discusses two formats for presenting a statement of financial position (SFP): 1) The account form mimics a T-account with assets on the left and liabilities/equity on the right with totals shown side by side. 2) The report form simply lists all assets followed by liabilities and then equity, with totals also shown equal. It also covers the key elements of preparing an SFP including classifying accounts and using single and double underlining for subtotals and grand totals.

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Mylene Santiago
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261 views

Presentation of Statement of Financial Position

The document discusses two formats for presenting a statement of financial position (SFP): 1) The account form mimics a T-account with assets on the left and liabilities/equity on the right with totals shown side by side. 2) The report form simply lists all assets followed by liabilities and then equity, with totals also shown equal. It also covers the key elements of preparing an SFP including classifying accounts and using single and double underlining for subtotals and grand totals.

Uploaded by

Mylene Santiago
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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PRESENTATION

OF STATEMENT
OF FINANCIAL
POSITION
TWO ACCEPTABLE FORMATS OF SFP
1. The ACCOUNT FORM mimics the general ledger T-account format.
The assets are reported on the left and the list of liabilities and equity
are on the right.
Total assets and total liabilities and equity are shown side by side to
highlight that both totals are equal.
2. The REPORT FORM SFP is a simple list. All the assets are listed
first, followed by liabilities and finally the equity account.
Assets Liabilities and Equity
Cash xxx Accounts Payable xxx
Accounts Receivable xxx Accrued Expenses xxx
Inventory xxx Unearned Income xxx
Prepaid Expenses xxx Notes Payable xxx
Notes Receivable xxx Long-term Payable xxx
Property, Plant, and Equipment xxx xxx
Intangible assets xxx Owner, Capital xxx
Total Assets xxx Total Liabilities and Equity xxx
Assets
Cash xxx
Accounts Receivable xxx
Inventory xxx
Prepaid Expenses xxx
Notes Receivable xxx
Property, Plant, and Equipment xxx
Intangible assets xxx
Total Assets xxx

Liabilities and Equity


Accounts Payable xxx
Accrued Expenses xxx
Unearned Income xxx
Notes Payable xxx
Long-term Payable xxx
xxx
Owner, Capital xxx
Total Liabilities and Equity xxx
NO. 4
1. Accrued Expenses
2. Cash
3. Inventory
4. PPE / Intangible Assets
5. Accounts Payable
NO. 4
f. Notes payable
g. Owner’s Capital
h. Unearned Revenue
i. Receivable
j. Prepaid Expenses
k. Non-current liabilities
i. Intangible Assets
PROBLEM 1.

DEBIT CREDIT
491, 725 135, 760
355, 965
PROBLEM 2.

DEBIT CREDIT
245, 800 360, 435
114, 635
LESSON WRAP-UP
STATEMENT OF FINANCIAL POSITION

The statement of financial position is another term for the


balance sheet. The statement lists the assets, liabilities, and
equity of a business as of the report date. As such, it provides a
snapshot of the financial condition of a business as of a
specific date.
FORMAT OF THE STATEMENT OF FINANCIAL
POSITION

1.ACCOUNT FORM
2.REPORT FORM
FORMAT OF THE STATEMENT OF FINANCIAL
POSITION
The format of the statement of financial position follows the basic accounting
equation, which states that:

Assets = Liabilities + Equity

This means that all asset line items are presented first, with a total that
matches the totals for liabilities and equity, which are presented next.
HOW TO PREPARE SFP
1. Start with the heading.
2. Present your assets. Classify you assets into current and noncurrent
assets
3. Present your liabilities. Liabilities should also be classified as current
and noncurrent
4. Add the owner’s equity. The SFP is an equation of “Assets = liabilities
+ equity”. Thus, we need to add the owner’s equity in the “liabilities
and equity” section of our SFP.
SINGLE UNDERLINING AND DOUBLE
UNDERLINING
Single underlining in accounting is generally used to
indicate a subtotal.
Double underlining in accounting is typically used to
indicate a grand total.

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