Fundamentals of

Accountancy, Business
and Management 2
Quarter 1  Module 5:
Components and Structures of
Cash Flow Statement (CFS)
 FUNDAMENTALS OF ACCOUNTANCY, BUSINESS AND MANAGEMENT 2 (FABM)
Statement of CASH FLOW (SCF)
MODULE 4 ACTIVITIES
School Year 2022-2023

NAME: ____________________________________ YEAR AND SECTION: ___________________________

DATE: ____________________________________ RATING: _________________________________________

What I Know

MULTIPLE CHOICE:
Directions: Choose the letter of the best answer. Write the chosen letter on a
separate sheet of paper.

1. Which element of financial statement provides information about the cash receipts
and cash payments of an entity during a period?
a. Statement of financial position c. Statement of changes in equity
b. Statement of comprehensive income d. Statement of cash flows

2. Which component of cash flow statement involves providing services, producing

and delivering goods and the cash effects of transactions directly related to the
main revenue – producing activities of the company?
a. Operating activities c. Financing activities
b. Investing activities d. All of the above

3. The decrease in the value of tangible assets such as building, furniture and
equipment is called what?
a. Accrued expense c. Amortization
b. Depreciation d. Mortgage

4. What do you call an amount owed to others for unpaid expenses?

a. Accrued liabilities c. Unearned revenues
b. Depreciation expense d. Accounts payable

5. Payment of insurance premiums in advance would increase the amount of which

account?
a. Prepaid expense c. Accrued income
b. Unearned income d. Accrued expense

6. Which of the following is an example of a financing activity?

a. Acquiring land c. Paying off a loan
b. Employing workers d. Selling equipment

7. The following are categorized under of Operating Activities, EXCEPT:

a. Cash received from clients
b. Payments to suppliers
c. Payments to acquire office equipment
d. Cash payment to employees
8. What would be the effect of Payment to Settle Note Payable to the company’s
cash flow under financing activities?
a. Decrease c. No effect
b. Increase d. None of the Above

9. This activity includes cash transactions related to obtaining and selling of

property and equipment and other non - current assets.
a. Operating activity c. Financing activity
b. Investing activity d. Cash flow activity

10. Which of the following is an example of an investing activity?

a. Obtaining bank loan c. Producing goods and services
b. Paying taxes to the government d. Purchasing a building

11. All are example of operating activity EXCEPT:

a. Receipts from sales of goods
b. Payments for taxes
c. Payments to acquire debt securities
d. Receipts from customers

12. This financial statement shows the net increase/decrease in cash during the
period and the cash balance at the end of the period.
a. Statement of financial position
b. Statement of comprehensive income
c. Statement of changes in equity
d. Statement of cash flows

13. What do you call the element of financial statement prepared based on
information from the income statement and the balance sheet?
a. Statement of financial position
b. Statement of comprehensive income
c. Statement of changes in equity
d. Statement of cash flows

14. Which of the following is cash outflow from operating activities?

a. Payment for interest expense
b. Payment to acquire property and equipment
c. Payment to settle notes payable
d. Payment to owners in the form of withdrawals

15. As per Philippine Accounting Standards (PAS) No. 7, enterprises are

encouraged to report cash flows from operating activities using which method?
a. Direct method c. both a and b
b. Indirect method d. none of the above
What’s New
Activity 1: My Personal CFS
Directions:
1. Compute your monthly allowance (Formula: daily allowance x number of days
in a month) and write it on the allotted column/section on the table below.
2. Compute for any liabilities that you got from your classmates, friends, and
family members on its column section.
3. Compute for and write your expenses on food, transportation etc. on its column
section. (Formula: daily expenses x no. of days in a month).
4. Deduct the amount you spent from the amount of your allowance to get the
amount of your remaining cash then write your answer on its column.

Month Monthly Liabilities Expenses Remainin

Allowance g Cash
Food Transpo Other
rtation
June
July
August
September
October
TOTAL
How do your allowance, liabilities and expenses are associated with the statement of
cash flows? Answer the given question in the space provided.
What’s More
Activity 2: Classifying Cash Transactions
Directions: Categorize each cash flow as (O) for operating, (I) for investing, (F) for
financing. Write your answer on the space provided below.

1. Cash received from sale of building.

2. Cash paid for salaries.
3. Cash received for interest on a note receivable.
4. Cash paid to acquire a new truck.
5. Cash loaned out to a customer in the form of long-term note
6. Cash received for a service rendered.
7. Cash paid for interest.
8. Cash paid for insurance on equipment.
9. Cash received from a debtor representing payments
of principal.
10. Cash paid out to acquire a building.
11. Cash paid for taxes.
12. Cash received from borrowings.
13. Cash paid to acquire equity securities.
14. Cash paid for utilities.
15. Cash received from investments by owner.

Activity 3: Compute Me!

Direction: Study the given data below and compute for (1) the cash generated/used
in financing activities, (2) the net change in cash for the year, and (3) prepare the
CFS for the year. Write your answer on a separate worksheet.

Learning is Fun Company has presented the following in order to aid the account
in preparing CFS during the month.
a. Net income: P200, 000
b. Depreciation expense: P25, 000
c. Gain on sale on property and equipment: P100. 000
d. Decrease in trade and other receivables: P 70, 000
e. Purchase of property and equipment: P200, 000
f. Payment of loan from bank: P150, 000

1. Compute for the cash generated/used in financing activities. (5 pts)

2. Based on the given above, compute for the net change in cash for the year. ( 5
pts)

3. If the ending balance of cash account is P700, 000, prepare the CFS for the
year. ( 15 pts)
What I Have Learned

ACTIVITY 4: Fill in the Blanks

Direction: Complete the sentences below by filling in the blanks with the correct
word/s or phrase/s.

1. The cash flows statement has three components, namely: ,

, and .
2. The element of financial statement that provides information about cash
transactions of an entity during the period of time is called .
3. Under PAS No.7, the enterprises are encouraged to report cash flows from
using but indirect method is acceptable
4. This activity involves providing services, and producing and delivering goods is
known as .
5. Investing activity includes making and , activities like acquiring and
in debt or equity securities and obtaining and selling of
.
6. Cash activity under this section includes obtaining resources from owners and
creditor. This component of cash flows statement is called .
7. The net amount of change in cash either it is an increase or decrease for the
period brought by cash transactions activities is known as .
8. The balance of the account at the beginning of the accounting period is called
.
9. Ending balance of the cash account is the balance at the of
accounting period.
10. Unlike statement of comprehensive income, cash flows statement shows
while the latter follows accrual principle.
What I Can Do
Activity 5: Problem Solving
Directions: Read and analyze the problem below then do the following
requirements.
Assuming, you owned a sari-sari store and had a beginning cash amounting of
P50, 000 and the following transactions occurred during the month.
a. Purchase of goods. Paid in cash. 100, 000
b. Sales of goods. Received cash. 150, 000
c. Paid utilities 30, 000
d. Paid rent 10, 000
e. Sold equipment for cash 100, 000
f. Owner withdraws investment 10, 000
Required:
a. Compute for your net cash flow generated/used in operating activities. (5
pts)
b. Compute for your net cash flow generated/used in investing activities. (5 pts)
c. Compute for your net cash flow used in financing activities. (5 pts)
d. Prepare a cash flows statement using direct method. ( 15 pts)

Activity 6: Answer Me
Direction: Answer the following questions on a separate sheet of paper.

1. What is statement of cash flows? Briefly explain.

2. Explain the three activities under cash flows statement.

3. Discuss the differences between the direct and indirect method of presenting
cash flows from operating activities.
Assessment
Directions: Choose the letter of the best answer. Write the chosen letter on a separate
sheet of paper.

1. All are example of operating activity EXCEPT:

a. Receipts from sales of goods c. Payments for taxes
b. Payments to acquire debt securities d. Receipts from customers

2. As per Philippine Accounting Standards (PAS) No. 7, enterprises are encouraged

to report cash flows from operating activities using which method?
a. Direct method c. both a and b
b. Indirect method d. none of the above

3. What do you call the element of financial statement prepared based on

information from the income statement and the balance sheet?
a. Statement of financial position
b. Statement of comprehensive income
c. Statement of changes in equity
d. Statement of cash flows

4. Which of the following is an example of an investing activity?

a. Obtaining bank loan c. Producing goods and services
b. Paying taxes to the government d. Purchasing a building

5. Which of the following is cash outflow from operating activities?

a. Payment for interest expense
b. Payment to acquire property and equipment
c. Payment to settle notes payable
d. Payment to owners in the form of withdrawals

6. This activity includes cash transactions related to obtaining and selling of

property and equipment and other non - current assets.
a. Operating activity c. Financing activity
b. Investing activity d. Cash flow activity

7. This financial statement shows the net increase/decrease in cash during the
period and the cash balance at the end of the period.
a. Statement of financial position
b. Statement of comprehensive income
c. Statement of changes in equity
d. Statement of cash flows
8. What do you call an amount owed to others for unpaid expenses?
a. Accrued liabilities c. Unearned revenues
b. Depreciation expense d. Accounts payable

9. The decrease in the value of tangible assets such as building, furniture and
equipment is called what?
a. Accrued expense c. Amortization
b. Depreciation d. Mortgage

10. Payment of insurance premiums in advance would increase the amount of which
account?
a. Prepaid expense c. Accrued income
b. Unearned income d. Accrued expense

11. What would be the effect of Payment to Settle Note Payable to the company’s
cash flow under financing activities?
a. Decrease c. No effect
b. Increase d. None of the Above

12. What is the element of financial statements that provides information about the
cash receipts and cash payments of an entity during a period?
a. Statement of financial position c. Statement of changes in equity
b. Statement of comprehensive income d. Statement of cash flows

13. Which of the following is an example of a financing activity?

a. Acquiring land c. Paying off a loan
b. Employing workers d. Selling equipment

14. Which component of cash flow statement involves providing services,

producing and delivering goods and the cash effects of transactions directly
related to the main revenue – producing activities of the company?
a. Operating activities c. Financing activities
b. Investing activities d. All of the above

15. The following are categorized under of Operating Activities, EXCEPT:

a. Cash received from clients
b. Payments to suppliers
c. Payments to acquire office equipment
d. Cash payment to employee