Fundamentals of ABM 2

The course deals with the preparation and analysis of financial statements of a service business and merchandising business using horizontal and vertical analyses and financial ratios.

Preparation of the Bank Reconciliation Statement and Income tax preparation.  Knowledge and skills in the analysis of financial statements will aid the future entrepreneurs in making sound economic decisions.

Content Standards

The learners demonstrate an understanding of 

1. account titles under the assets, liabilities, and capital accounts of the Statement of Financial Position, namely, cash, receivables, inventories, prepaid expenses, property, plant and equipment, payables, accrued expenses, unearned income, long-term liabilities and capital that will equip him/her in the preparation of the SFP using the report form and account form, solve exercises and problems that require preparation of an SFP for a single proprietorship with proper classification of accounts as current and noncurrent using the report form and the account form
2. the service income and operating expenses of a service business as well as sales, contra sales, purchases, contra purchase accounts, cost of goods sold and general administrative and selling expenses of a merchandising business that will equip him/her in the preparation of the SCI for both service and merchandising businesses and solve exercises and problems that require preparation of SCI for a service business and a merchandising business
3. the forms of business organization, namely, single proprietorship, partnership, and corporation, and the structure of a SCE of a single proprietorship that will equip him/her in the preparation of the said financial report, solve exercises and problems that require preparation of an SCE for a single proprietorship
4. the components and the structure of a Cash Flow Statement that will equip him/her in the preparation of the said financial report and solve exercises and problems that require preparation of a Cash Flow Statement
5. the methods or tools of analysis of financial statements to include horizontal analysis, vertical analysis, and financial ratios to test the level of liquidity, solvency, profitability, and stability of the business and solve exercises and problems that require computation and interpretation using horizontal analysis, vertical analysis, and various financial ratios
6. the types of bank accounts, basic transactions, and documents related to bank deposits and withdrawals, share samples of bank account forms and documents in class and discuss them uses and importance
7. a bank reconciliation statement, its nature and structure, and reconciling items and methods of preparation solve exercises and problems involving the following:
   1. Identification of the proper treatment of reconciling items in the bank reconciliation statement
   2. preparation of a bank reconciliation statement
8.  
9. the sound principles of taxation, its purpose, and preparation of forms and payment of taxes accomplish the BIR (Bureau of Internal Revenue) forms.