Learning Module for Accountancy, Business and Management

Republic of the Philippines

Department of Education
National Capital Region
DIVISION OF CITY SCHOOLS – MANILA
Manila Education Center Arroceros Forest Park
Antonio J. Villegas St. Ermita, Manila

Fundamentals of Accountancy
Business and Management 2

Learning Competency:

Identify the Elements of SCI and describe each of

them and Prepare a SCI for a Service Business using a
single-step approach. (ABM_ FABM12-Ic-6)
 Learning Module for Accountancy, Business and Management 2

HOW TO USE THIS MODULE?

Before starting the module, I want you to set aside other task/s that
may disturb you while enjoying the lessons. Read the simple instructions
below to successfully enjoy the objectives of this kit. Have fun!

1. Follow carefully all the contents and instructions indicated

in every page of this module.

2. Write on your notebook the concepts about the lessons.

Writing enhances learning that is important to develop and
keep in mind.

3. Perform all the provided activities in the module.

4. Let your facilitator/guardian assess your answers using the

answer key card.

5. Analyze conceptually the posttest and apply what you have

learned.

6. Enjoy studying!
PARTS OF THE MODULE
 Expectations - These are what you will be able to know after
completing the lessons in the module.
 Pre-test - This will measure your prior knowledge and the concepts
to be mastered throughout the lesson.
 Looking Back to your Lesson - This section will measure what
learnings and skills did you understand from the previous lesson.
 Brief Introduction- This section will give you an overview of the
lesson.
 Activities - This is a set of activities you will perform with a partner.
 Remember - This section summarizes the concepts and applications
of the lessons.
 Check your Understanding - It will verify how you learned from the
lesson.
 Post-test - This will measure how much you have learned from the
entire module

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LESSON The Elements of SCI of Single

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Proprietorship Business
EXPECTATIONS

You will represent real-life situations using Statement of Comprehensive

Income. Specifically, this module will help you:
 Know the Elements of a Statement of Comprehensive Income and describe
each of these in a single proprietorship business
Let us start your
journey in learning more on
SCI. I am sure you are
PRETEST ready and excited to answer
the Pretest. Enjoy answering!

Fill in the blanks with the correct answer by recalling the Income Statement and the
Elements of SCI.
_________ 1. Accounts in the SCI are (Permanent/Temporary
_________ 2. The two elements of financial statements for SCI
_________ 3. Formerly known as Income Statement
_________ 4. Includes salaries and utilities.
_________ 5. Includes rental revenue, sales and service income.
_________ 6. Best approach for a single proprietorship business.
_________ 7. Includes gains and losses of a hedging derivatives. Great, you
_________ 8. Income is greater than expenses will give you. finished answering
_________ 9. If expenses is more than net income, you will have the questions. You
may request your
_________10, Includes company name, income and expenses.
facilitator to check
your work.
Congratulations and
keep on learning!
=+
LOOKING BACK TO YOUR LESSON

Last topic, we talked about the different elements of the Statement of Financial
Position: the Assets, Liabilities and Owner’s Equity. In the accounting equation,
Total assets equals total liabilities plus total owner’s equity.
For example, if your asset is equal to Php100,000.00 then your liabilities and
owner’s equity accounts should also be equal to Php100,000.00.
Let us recall more of your knowledge on our topic from the previous module.

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 Learning Module for Accountancy, Business and Management 2
Direction: Solve for the unknown by recalling the accounting equation,
A = L + C

Assets = Liabilities + Owner’s Equity

1. Php500.00 = Php100.00 + ______________

2. ____________ = Php2,000.00 + Php3,000.00

3. Php15,000.00 = _________ + Php10,000.00

4. Php120,000.00 = _________ + Php100,000.00

5. Php55,000.00 = Php5,0000.00 + ____________

BRIEF INTRODUCTION

A statement of comprehensive income consists of all revenues, gains

and losses that cause the equity account to change at the end of the
accounting period. They are nominal accounts or temporary accounts because
at the end of the accounting period, balances under these accounts are
transferred to the Capital Account, thus having only temporary amounts and
resulting to zero as the balances at the beginning of the following year.

THE ELEMENTS OF COMREHENSIVE INCOME are as follows:

1. Heading is compose of company name, the SCI title and the date
starts with for the period ended (date)
2. Income are increases in economic benefits during the period in the
form of inflows or enhancement of assets or decreases of liabilities
that result in increases in equity, other than those relating to
investments by the business owners.
3. Expenses are decreases in economic benefits during the period in the
form of outflows or depletions of assets or increases of liabilities that
result in decreases in equity, other than those relating to distributions
to the business owners.
4. Net Income/(Net Loss) is the result of operation. If the income is
greater than the expenses, then the result is net income while if the
expenses are greater than income, then the result is net loss.

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 Learning Module for Accountancy, Business and Management 2
Under the nature of expense method, expenses are presented
according to their nature (for example, depreciation, purchase of materials,
transport costs, employee benefits and advertising costs) and are not
reallocated among their functions within the entity. This method is easy to
apply because no reallocation of expenses is necessary.

The examples of comprehensive income are gains or losses in hedging

derivatives, translation of foreign currency exchange rate adjustments and
unrealized gains and losses on postretirement benefits

A SCI shows expenses by their nature is referred to as Single-Step Approach

Parlor Co.
Statement of Comprehensive Income
For the period ended December 31, 2019

Income Php5,000.00
Expenses (1,500.00)
Profit for the year Php3,500.00
Other Comprehensive Income 500.00
Total Net Income Php4,000.00
=========
Shown below is the format of statement of comprehensive income with
proper label of its elements:

TMAM TRANSPORT HEADING

STATEMENT OF COMPREHENSIVE INCOME
For the period January 31, 2020

Service Revenue Php50,000.00 REVENUE

Expenses

Salaries Expense Php15,000.00

Rent Expense 10,000.00 EXPENSES
Utilities Expense 5,000.00 30,000.00

Net Income/(Net Loss) Php20,000.00

Add Other Comprehensive Income 4,000.00
Total Net Income Php24,000.00 NET INCOME
==========

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 Learning Module for Accountancy, Business and Management 2
ACTIVITIES

Activity 1 Now that you have read the brief introduction of Statement of
Comprehensive Income you can answer the statement below. Write the correct
word or words to complete the statement.
_______1. An example to this is gains or losses on hedging derivatives
_______2.An approach used on preparing statement of comprehensive income
that shows expense by its nature.
_______3.An increases in economic benefits during the period in the form of
inflows or enhancements of assets or decreases of liabilities that result in
increases in equity
_______4.This occurs when revenue is less than expenses.
_______5.It arises in the course of the ordinary activities of a business and is
referred to by a variety of different names including sales, fee, interest, and etc.
_______6.The difference between an Income Statement and SCI …
_______7.The nature of business for a single step statement of comprehensive
income
_______8.The nature of business for a multi-step statement of a comprehensive
income
_______9.the expenses to be given to the company’s employees for the services
they have rendered.
______10.The expenses usually referred to by Meralco, Maynilad and PLDT
Activity 2 Write TRUE if the statement is correct and FALSE if the statement
is incorrect. If your answer is false, write the word or phrase that makes the
statement incorrect and rewrite the correct answer.

______1. The revenue earned by a service business for rendering services for a
fee is commonly referred to as Service Income or Service Revenue.
______2. A Statement of Comprehensive Income may be presented using a
“multi-step statement” presentation only?
______3. Revenue includes both income and gains.
______4. If expenses are greater than income, the difference is net loss.
______5.The revenue earned by the merchandising business from its sales of
goods is commonly referred to as Sales.

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 Learning Module for Accountancy, Business and Management 2
______6. Income increases economic benefits during the period in the form of
inflows of cash from rendering services.
______7. The statement of Comprehensive Income shows information on an
entity’s financial performance during the period.
______8. A Statement of Comprehensive Income that shows expenses by its
function is referred to as prepared using a single-step approach.
______9. Expenses encompass both expenses and losses.
_____10.The statement of profit and loss and other comprehensive income is
synonymous to the income statement.
Activity 3. Solve for the unknown (Remember the formula Income minus
Expenses plus Comprehensive Income is equal to Net Income or Net Loss)

1. Service Income ???

Expenses (Php10,000.00)
Net Income/(Net Loss) Php25,000.00

2. Service Income Php35,000.00

Expenses (Php15,000.00)
Net Income/(Net Loss) Php20,000.00
Other Comprehensive Income Php5,000.00
Comprehensive Income ???

3. Service Income Php65,000

Expenses ???
Net Income/(Net Loss) Php18,000
Other Comprehensive Income 2,000
Comprehensive Income Php20,000

4. Service Income Php58,000

Expenses (Php38,0000)
Net Income/(Net Loss) ???
Other Comprehensive Income Php10,000
Comprehensive Income Php30,000

5. Service Income Php80,000

Expenses (Php120,000)
Net Income/(Net Loss) ______________

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 Learning Module for Accountancy, Business and Management 2

REMEMBER

A statement of comprehensive income consist of all revenues, gains

and losses that causes the equity account to change at the end of the
accounting period, that could be an increase or a decrease. The difference
between an Income Statement and Comprehensive income is the later consists
of comprehensive income such as gains or loss of hedging derivatives,
translation of currency exchange rate and unrealized gains and losses on a
postretirement benefits.

The elements of comprehensive income are (1) Heading; (2) Income; (3)
Expenses; and the (4) Result of operation, (net income or net loss).

There are two methods in the preparation of SCI, according to nature;

and the according to function. This module explained the former method
which is according to nature which is better for a single proprietorship
business.

CHECK YOUR UNDERSTANDING

Directions: Analyze the transactions of Tiny Bubbles Co, put an emoji

smiley if it is part in the preparation of Statement of Comprehensive Income
and NA if it is not part in the preparation of SCI.
Tiny Bubbles, a parlor owner, asks you to prepare her statement of
comprehensive income for the month of August with the following transactions.
1. Her company has cash deposited in a bank account amounting to
P50,000 as her initial capital
2. She bought parlor furniture set amounting to Php75, 000.00 by paying
20% down and the balance in 12 monthly installments.
3. Supplies expense for the month is Php20,000.00
4. She paid two month’s rent amounting to Php24,000.00
5. Her total income for the month of August is Php120, 000.00 cash.
6. She paid one staff for Php5,000.00 a month

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 Learning Module for Accountancy, Business and Management 2
7. The business paid Php4,500.00 for the light, water and internet
connection.
8. She has trade receivables amounting to Php25,000.00 for services
rendered
9. She had a loan from the bank amounting to Php100,000.00 to be paid in
5 years
10. Paid transportation expenses amounting to Php2,500.00.00

POSTTEST

Directions: Prepare a Statement of Comprehensive Income for the following

independent transactions. Use your surname as your company name.

1. Service Revenue Php95,000.00; Salaries Expense Php5,000.00;

Transportation Expense Php15,000.00; Rent Expense Php20,000.00;
Utilities Expense Pph3,000.00; Other Comprehensive Income is
Php8,000.00

2. Salaries Expense Php25,000.00; Transportation Expense Php1,000.00;

Rent Expense Php10,000.00; Utilities Expense Php5,000.00; and Service
Revenue is Php40,000.00.

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 Learning Module for Accountancy, Business and Management 2

REFLECTIVE LEARNING SHEET

Photo by Ellie Burgin from Pexels

Manila lockdown has cripples many businesses in the Philippines.

Since many businesses were closed during the ECQ, many employees
were displaced from work. The income of the displaced employees,
because becomes zero while the expenses are still the same as that of the
normal business situation. I hope your parents or other members of the
family are not among them. Assess and enumerate all your family income
and expenses during the lockdown. List down all strategies measures
your family did in order to survive since the aid from the government
agencies , such as local and national were not enough to sustain the two
and half months lockdown.https://soffront.com/blog/best-tips-run-business-time-
lockdown/

My family’s comprehensive income during COVID 19 pandemic

INCOME Php __________

EXPENSES _________
NET INCOME Php __________

https://www.deccanherald.com/opinion/parenting-we-must-view-the-covid-19-lockdown-as-an-opportunity-to-introduce-
our-kids-to-the-wonder-of-unstructured-time-824088.html. Image edit to stock photo

E-SITES

To further explore the concept learned today and if it is possible to connect to

internet, you may visit the link:
https://www.accountingcoach.com

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 Learning Module for Accountancy, Business and Management 2
REFERENCES

Books:
Ferrer, R & Millan, Z. V. (2017). Fundamentals of Accountancy, Business &
Management Part 2. 1st Edition

Haddock, M., Price, J., & Farina, M. (2012). College Accounting: A Contemporary
Approach, Second Edition. New York: McGraw-Hill/Irwin.

Valencia, E. G., & Roxas, G. F. (2010). Basic Accounting (3rd ed.). Mandaluyong City,
Philippines: Valencia Educational Supply.

Teaching Guide in Senior High School Fundamentals of Accountancy Business and

Management 2, donated by the Commission on Higher Education in Collaboration
with the Philippine Normal University to Department of Education

Websites:
https://asia.nikkei.com/Spotlight/Coronavirus/Manila-lockdown-cripples-
businesses-big-and-small
https://soffront.com/blog/best-tips-run-business-time-lockdown/

Acknowledgment
Writer: Ma. Cristina A. Labay, MM

Editor: Isabel A. Gumaru, DBA

Evaluator: Ellaine I. Dela Cruz, DBA

Validators & Reviewers: Remylinda T. Soriano, EPS

Angelita Z. Modesto, PSDS
George G. Borromeo, PSDS

Management Team :

Maria Magdalena M. Lim, Schools Division

Superintendent, Manila
Aida H. Rondilla, Chief Education Supervisor
Lucky S. Carpio, EPS in charge of LRMDS
Lady Hannah C. Gillo, Librarian II, LRMDS

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 Learning Module for Accountancy, Business and Management 2

ANSWER KEY

PRETEST
1. Temporary 6. Single approach
2. Income and Expenses 7. Comprehensive income
3. Statement of comprehensive income 8. Net income
4. Expenses 9. Net Loss
5. Income 10. Heading

LOOKING BACK TO YOUR LESSON:

1. Php 400.00 4. Php 20,000.00
2. Php 5,000.00 5. Php 50,000.00
3. Php 5,000.00

ACTIVITIES:
Activity 1:
1. Comprehensive income 6. Comprehensive income
2. Single approach 7. Single proprietorship
3. Income 8. Merchandising
4. Net loss 9. Salaries Expense
5. Revenues 10.Utilities Expense

Activity 2:

1. True 6. True
2. False 7. True
3. True 8. False
4. True 9. True
5. True 10.True

Activity 3:

1. Php35,000.00 4. P20,000.00
2. Php25,000.00 5. (Php40,000.00)
3. Php47,000.00

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CHECK YOUR UNDERSTANDING:

Numbers 1, 2 and 9 = NA

Number 3 to 8 and 10 =

POSTTEST
1.

Company Name
Statement of Comprehensive Income
For the period ended______

Service Revenue Php95,000.00

Rent Expense Php20,000.00
Salaries Expense 5,000.00
Utilities Expense 3,000.00
Transportation Expense 15,000.00 43,000.00
Net Income Php52,000.00
Comprehensive Income 8,000.00
Net Comprehensive PHP 60,000.00
============

2.

Company Name
Statement of Comprehensive Income
For the period ended _____

Service Revenue Php40,000.00

Rent Expense Php10,000.00
Salaries Expense 25,000.00
Utilities Expense 5,000.00
Transportation Expense 1,000.00 (Php41,000.00)
Net Loss (Php1,000.00)
==========

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