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Entrepreneurship 2
Quarter 4 – Module 5-6
Preparing and Maintaining Financial Records
and Reports

Department of Education • Republic of the Philippines

 ENTREPRENEURSHIP 2

Copyright: Department of Education

Publisher: Department of Education, Mandaue City Division

This learning module was developed by the following personnel:

MA.FE B. CALIGDONG
Mandaue City Comprehensive National High School

JOCELY O. BACARON
Mandaue City Comprehensive National High School

VANESA B. BEJO
Mandaue City Comprehensive National High School
 Entrepreneurship 2

Quarter 4 – Module 5

Preparing Financial Records and Reports

Department of Education – Republic of the Philippines

 HOW TO USE THE MODULE

This module is a self-learning tool that contains instructional materials and

activities for the students to complete each of the learning outcomes of the module. It
has an instruction that can be clearly understand by the learner. It is a self –pace
learning kit, it means that the module should be done according to the pace of the
student but will not exceed on the weeks given by the facilitator.
The module includes theories, principles, and practices in simple bookkeeping.
The learning material on preparing and maintaining financial records and reports
contains the knowledge, skills and attitudes required for the subject.
The instruction is given on how to go through about the module, the students
have to work on the module based on the given activity, the facilitator has to require
students to submit the outputs stated in the module and on the duration of the period as
per instruction of the facilitator.
 Introduction

Entrepreneurship is a subject of Technical Vocational Education Curriculum

(TVE) for Grade 10 students under the K to 12 curriculums. It is designed for preparing
the individual learner to earn a living or increase his earning, by utilizing the knowledge
and skills acquired at school. It is aimed at preparing individual necessary for self-
reliance.
The subject provides varied and relevant activities and opportunities to
determine understanding of the key concepts and to demonstrate learning
competencies as required by the subject. Thus, it aims to provide knowledge and skills
that can be applied in a specific skill acquired by the students in his/her chosen field of
interest in the TLE subject to be use in lifelong learning.
The learning material is specifically designed to focus on the different learning
competencies to develop the knowledge and acquire skills in all entrepreneurial
activities of the learner.

Content Standards
The learner demonstrates understanding of the theories, principles, and
practices in simple bookkeeping.
Performance Standards
The learner prepares, analyzes, interprets and presents financial reports of the
business operations, and demonstrate safe-keeping and maintaining business
documents.
Objective:
Learners are expected to become proficient in performing skill on the
competency;
1. prepares and maintains financial records and reports – Balance Sheet

Subject Requirements
Grade 10 student must take the Entrepreneurship subject to complete the
Technical Vocational Education curriculum. The subject is added to the curriculum as a
special subject to train the students on how to venture into business using the skill
acquired in TLE subject. The subject requires a total number of 2 hours per week.
The subject is added to the curriculum to equip the learners with the appropriate
knowledge, attitude, values, and skills on entrepreneurial activities necessary to
become self reliance and productive citizens of our society.
Pre- assessment test

Read the questions carefully, write the letter of your answer on a 1 whole sheet
of paper.

1. It refers to a statement that shows what the business owns, what it owes, and
what the owner is worth.
a. balance sheet
b. income statement
c. trial balance
d. worksheet

2. It is a form of balance sheet wherein the assets, liabilities and capital are
arranged horizontally.
a. report form
b. account form
c. horizontal form
d. diagonal form

3. It refers to an accounting values shown in the balance sheet.

a. real accounts
b. nominal accounts
c. business accounts
d. accounting accounts

4. The balance sheet is a statement showing the assets, liabilities and ____ of the
business.
a. income
b. expenses
c. capital
d. profit

5. It refers to a form of balance sheet that assets, liabilities, and capital are arrange
vertically.
a. account form
b. report form
c. vertical form
d. horizontal form

Activity 1

In the preparation of a balance sheet, the three elements of accounting are used
namely; Assets, Liabilities, and Capital. Below are the are the accounting values belong
to the three elements. Classify the values as to assets, liabilities and capital. Write it in
their respective columns.
1. Cash 4. Merchandise 7. account payable 10. furniture
2. Capital 5. Notes receivable 8. Taxes payable
3. Notes payable 6. Owners drawing 9. equipment
 Assets Liabilities Capital

Topic : Balance Sheet

Balance Sheet- is a statement showing the financial condition of the business as

of a given date. The ability of the business to settle its obligations as they become due.
This statement shows what the business owns (assets), what it owes (liability), and
what the owner is worth (capital). Accounting values shown in the balance sheet are
REAL ACCOUNTS.

Forms of Balance Sheet

1. Report form – the assets, liabilities and capital are arranged vertically. The
assets are shown first and followed by liabilities and capital. This form is used if
there are only few accounts involved. Journal sheet with two money columns are
to be used for this form.

2. Account form – the assets, liabilities and capital are arranged horizontally. The
assets are shown on the left side while the liabilities and capital are on the right
side. This form is best if there are several accounts involved and written on a
ledger sheets.

Points to Be Observed in Preparing the Balance Sheet

1. It should have a heading that consist of:

a. Name of the business or owner
b. Title of the list (Balance Sheet)
c. Date ( as of Month day year same as income statement)
2. List down the account titles according to its classification and format (report
form- vertical, while account form – horizontal). The items in each section should
be indented from the left margin so that the section headings will stand out
clearly. The total of each section should be shown properly.
3. Peso sign should be used properly.
4. A single line should be drawn below an amount whenever addition or subtraction
has to be performed.
5. In the account form, the final totals on the left and right sides should be written
on the same horizontal line.
6. Whichever form is used, double lines should be drawn under the final totals. The
total assets should be equal to the total liabilities and capital.
Below are examples of the two forms of the Balance Sheet.

Account Form
R.A. Laundry Services
Balance Sheet
As of July 31, 2020
Assets Liabilities & Capital
Current Assets: Current Liabilities
Cash ₱30,948.35 A/P ₱20,000.00
A/R Wan 5,000.00 Capital:
Laundry Supplies 5,050.90 R.A. Capital ₱100,000.0
0
Total Current Assets ₱40,999.25 Less: RA Drawing ₱1,500.00
Fixed Assets: Net Capital ₱98,500.00
Laundry Eqpt ₱50,000.00 Add: Net Profit 12,499.25
Fur 10,000.00 Total Capital ₱110,999.25
Office Eqpt 30,000.00
Total Fixed Assets 90,000.00
Total Assets ₱130,999.25 Total Liabilities and Capital ₱130,999.25

Note: Net Profit was taken from the income statement or worksheet
Double rule the totals (assets and Liabilities and capital)
Single rule less: RA drawing

Report Form
R.A. Laundry Services
Balance Sheet
As of July 31, 2020
ASSETS
Current Assets:
Cash ₱30,948.35
A/R Wan 5,000.00
Laundry supplies 5,050.90
Total current assets ₱40,999.25
Fixed Assets:
Laundry Eqpt ₱50,000.00
Fur 10,000.00
Office Eqpt 30,000.00
Total fixed assets 90,000.00
Total Assets ₱130,999.25
LIABILTIES and CAPITAL
Current Liabilties
A/P ₱20,000.00
Capital
R.A. Capital ₱100,000.00
Less: RA Drawing 1,500.00
Net Capital ₱98,500.00
Add: Net Profit 12,499.25
Total Capital 110,999.25
Total Liabilities and Capital ₱130,999.25
Below is an example of a worksheet. Base on the given worksheet prepare a Balance
Sheet dated December 31, 2020. Use a report form of Balance sheet.

RJ Enterprise
Worksheet
December 31, 2020

Trial Balance Income Statement Balance Sheet

Account Titles
Debit Credit Debit Credit Debit Credit
Cash ₱10,000 ₱10,000
Merchandise 10,000 10,000
Equipment 15,000 15,000
Account Payable ₱9,000 ₱9,000
Capital 20,000 20,000
Owners Drawing 4,000 4,000
Income 15,000 ₱15,000
Electricity Expense 5,000 ₱5,000
Totals ₱44,000 ₱44,000
Sub-Total ₱5,000 ₱15,000 ₱39,000 ₱29,000
Net Profit 10,000 10,000
Totals ₱15,000 ₱15,000 ₱39,000 ₱39,000

RJ Enterprise
Balance Sheet
As of December 31, 2020

Assets
Current Assets:
Cash ₱10,000.00
Merchandise 10,000.00
Total current assets ₱20,000.00
Fixed assets:
Equipment 15,000.00
Total assets ₱35,000.00
Liabilities and Capital
Current Liabilities:
Account Payable ₱9,000.00
Capital
Owners Capital ₱20,000.00
Less: Owners Drawing 4,000.00
Net Capital 16,000.00
Add: Net Profit 10,000.00
Total Capital 26,000.00
Total Liabilities and Capital ₱35,000.00
Enrichment Activity

Prepare a balance sheet for Mr. Ramil Santos as shown in the worksheet, Use
report form.
Ramil Santos
Worksheet
July 31, 2021

Trial Balance Income Statement Balance Sheet

Account Titles
Debit Credit Debit Credit Debit Credit
Cash ₱40,000 ₱40,000
Account Receivable 10,000 10,000
Merchandise 6,000 6,000
Account Payable ₱6,000 ₱6,000
Capital 50,000 50,000
Owners Drawing 5,000 5,000
Sales 15,000 ₱15,000
Rent Expense 5,000 ₱5,000
Water expense 5,000 5,000
Totals ₱71,000 ₱71,000
Sub-Total ₱10,000 ₱15,000 ₱61,000 ₱56,000

Generalization

1. It refers to a form of balance sheet arranged vertically.

2. A net profit which is added to capital is taken from what of a worksheet?
3. What is place under the total to indicate it is correct or finished?
4. What is subtracted from capital?
5. A fixed assets and current assets are added to have a_____.

Application

Let us apply what you have learned: Prepare a Balance Sheet given the
following data use a report form of Balance Sheet. Use your name as owner of the
business. For the date January 2021.

Cash ₱45,000.00
Account Receivable 15,000.00
Merchandise 11,000.00
Account Payable ₱11,000.00
Capital 55,000.00
Owners Drawing 10,000.00
Sales 20,000.00
Rent Expense 10,000.00
Water Expense 10,000.00
Net Profit 15,000.00
Post assessment

Read the questions carefully, write the letter of your answer on a 1 whole sheet
of paper.

1. It refers to a statement that shows what the business owns, what it owes, and
what the owner is worth.
e. balance sheet
f. income statement
g. trial balance
h. worksheet

2. It is a form of balance sheet wherein the assets, liabilities and capital are
arranged horizontally.
e. report form
f. account form
g. horizontal form
h. diagonal form

3. It refers to an accounting values shown in the balance sheet.

e. real accounts
f. nominal accounts
g. business accounts
h. accounting accounts

4. The balance sheet is a statement showing the assets, liabilities and ____ of the
business.
e. income
f. expenses
g. capital
h. profit

5. It refers to a form of balance sheet that assets, liabilities, and capital are arrange
vertically.
e. account form
f. report form
g. vertical form
h. horizontal form

Additional Activity

Do some research of a balance sheet of the different businesses and try to

identify then classify the three elements of accounting which are present in a balance
sheet. Make three columns.
Answer Key
Pre- Assessment Test
1. A
2. B
3. A
4. C
5. B
Activity 1

Assets Liabilities Capital

Cash Notes Payable Capital
Merchandise Account Payable Owners Drawing
Notes Receivable Taxes Payable
Equipment
Furniture

Enrichment Activity
Ramil Santos
Balance Sheet
As of July 31, 2021

Assets
Current Assets
Cash ₱40,000.00
Account Receivable 10,000.00
Merchandise 6,000.00
Total Assets ₱56,000.00
Liabilities and Capital
Current Liabilities:
Account Payable ₱6,000.00
Capital
Owners Capital ₱50,000.00
Less: Owners Drawing 5,000.00
Net Capital 45,000.00
Add: Net Profit 5,000.00
Total Capital ₱50,000.00
Total Liabilities and Capital ₱56,000.00

Generalization:
1. Report form
2. Income Statement
3. Double Rule/Line
4. Owners Drawing
 5. Total Assets
Application
Name of Owner
Balance Sheet
As of January, 2021

Assets
Current Assets:
Cash ₱45,000.00
Account Receivable 15,000.00
Merchandise 11,000.00
Total assets ₱71,000.00
Liabilities and Capital
Current Liabilities:
Account Payable ₱11,000.00
Capital
Owners Capital ₱55,000.00
Less: Owners Drawing 10,000.00
Net Capital 45,000.00
Add: Net Profit 15,000.00
Total Capital 60,000.00
Total Liabilities and Capital ₱71,000.00

Post Assessment
1. E
2. F
3. E
4. G
5. F

Additional Activity 10 points

(own work)
References:
Reynaldo M. Valdez.,et al Competency Based Curriculum and Competency Based
Learning
Material for Fourth Year, July 2009
Norma Olmos Oplado Introduction to Accounting
www.bplans.com

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