6 Mich is flse concerning & The left side of an se side 1° Of any acco The word “debie" mana 0 increase unt appears on ‘and the word “rede ment 10 decreasefelger. Cheriton ‘What function do general ledgers serve inthe accounting process? Jeunes! fe ._ Billing of customers for services rendered ‘d Payment of dividends 9 Recording income only when services are performed is a case of & Entity © Accra Accounting b. Cost principle Materiality 10. Which ofthe following entries increase total assets? 2. Dr. Cash; Cr. Loans Payable «Dr. Land; Cr. Cash ». Dr. Building; Cr. Mortgage Payable (4) Choices aand b 11 What is the effet upon the total assets ofa business when an account receivable has been collected? 2 Ines oa sets Octane ©: Dose tte ¢ Neate stove 12. Ifa transaction sauses total lailities to decrease but doesnot affect the owner's equity, what change, if may will occur inthe total assets? ~ Asses will bs nreased No “Assets will be decreased None of the above "3. Revenue une the present PERS is rived fm te flowing general actives, exept 2. Selling products -& Disposing of resourees oer tha products 6 Rendering services @ Proceeds fom borrowing ein oe One 14. ‘Which of the following is not a temporary a yunt? 4. Withdrawal account S Asset account . Expense account ~ Revenue account 15. Which ofthe following transactions increase capital Bought land for cash J}. Bought equipment on account and issued a promissory note Q Rendered services on account ‘Received cash proceeds from a bank for amount borrowed 16. Purchase of land on account with a down payment requires a debit to Cash © Accounts Payable 4. Mortgage payable a. Reporting 8 FS S Summarizing #2 ithe © Chssifjing ‘@. Recording “e-t-) #18. Iftevenuel are greater than expenses, the income summary account will be closed by / Crediting Income summary and debiting retained earnings Gdvating income summary and crediting retained earnings ©. Debiting cash and crediting income sum: 44. Debiting income summary and crediting eash 19. ‘The total assets is P500,000 anc the total liabilities is P200,000. Which of the following is oo 2 Toc ques RRSBSRE Met Wort 7300.00 8 capita 300,000 @ Allott above 20. Which one of the following is an adjunct account that should not be close at the end of every ‘accounting period?© Allowance for doubtful accounts Bo Freight in © Discount on bonds payable 44. Share premium 21. Which is false concerning use of special journals? ‘® Only sales of merchandise on account are recorded inthe sales journal. Cash sales are recorded in the eash receipts journal, > Parshases of any items on account are recorded inthe purchases joursal, Acquisitions of any items for cash are recorded inthe cash disbursement journal © Transactions that canaot be appropriately recorded ina special joumal are recorded ina special journal are recorded inthe general journal @ Only cash purchases are recorded in the eash disbursements journal 22. The overriding qualitative characteristic of accounting information is a Relevance b. Understandability & Reliab @ Decision usetutness 23. Adjusting enties involve & Only real accounts . Only nominal accounts $< Only capital accounts One real and one nominal account 24. A prepaid expense can best be described as an amount Paid and currently matched with earnings @® Paid and not Gireditly matched With earnings © Not paid and currently matched with earnings 4 ‘Notpaid and not curently matched with earnings 25. An accrued revenue can best be described as an amount & Collected and currently matched with expenses Collected and not currently matched with expenses (ete cen aan i ©" Not collected and not currently matched with expenses 26. [Which of the folowing concep is violated when azole propricior ues the same bank acount for his business and personal affairs? Going eoncem Entity concept b. Matching principle Accounting period 27. Adiusting entries are based primarily onthe accounting principles of gs Revenue realization and materiality . P2,900 ©. P2,400 @. P2,100 ae wanes One — A geritte 000 accounts receivable posted tothe debit side ofthe general ledger as P100 wil Uniderstite the accounts receivable by P900 Overstate the accounts receivable by P900 © Understate the accounts receivable by P1,100 4: Overstate the accounts receivable by P1, i100 pate asset ofthe business atthe star of the month is P1,000,000 and the owner's equity is 800,000. Equipment worth PS00,000 were purchased during the month of ehh ‘only P150,000 aid for. At the end of the month, liabilities will become G)’P550,000 ©. P800,000 - P1,150,000 4. 1,000,000 {ad was acquired at a cost of P150,000 in 2000 t's current market value is P300,000 Attached ‘o the property isan outstanding mortgage payable of P80,000. This property was inreceg by the‘ovmer in a real estate business. If mortgage is assumed by the business, the land will be debited for ‘a. P150,000 'P220,000 b. 300,000 130,000 39: ‘The beginning and ending balances of Jessie forthe year were PS4,000 and P52,000 respectively. {withdrawal exceeded contributions during the year by P4,500, what was the net income or net loss forthe year? 12,000 loss 12,000 net income b. 3,000 net income ‘None of the above 40. Ifrevenue is P500,000, expenses are P200,000, and withdrawals are P300,0000 the amount of the decrease in capital is a. 200,000 Zero . 200,000 € None of the above 41. K Punch contracted for P360,000 a -wspaper advertising deal for 36 full page ads intended to Sh gamete gv sie ete ahh the end of 2007, total of 12 full page ads had been released and the rest in the next two years, ‘The balance of prepaid advertising account at of 2007 should be ane Sas = 2 42. The trial balance taken at the end of 2007 showed a debit total exceeding the credit total by Pfck00. Which of the following is probably responsible for this situation? The balance of P89,000 in the acéumulited depreciation acount was enteréd 6h the iil balance as P80,900 . The balance of P4,050 in the advertising expense account was entered on the tral balance as eredit ©. The balance of P9,000 inthe office equipment account was entered on the trial balance as. 900 4d. ‘The balance of P16,200 in the unexpired insurance account was entered on the trial balance as credit 43. ‘A machine costing P100,000 which was already 50% depresited was sold by the George Travel Agapiey Tor P70,000. The business shold recognize €2) a gain of P20,000 ‘c. Gain of P30,000 ‘Loss of P20,000 4. Loss of P30,000 44. The company's assets are P9,000,000 of which 1/3 represent owner's equity, How much is total liabilities ‘a. P3,000,000 6,000,000 . 1,500,000 T P2,700,000 45. On December 31 of the current year, Breek.s Distributor reported the following: ‘Total sales for current year: P780,000, which includes PT60,000 in cash sales Account receivable balance at Dec. 31, current year: P190,000 Bad debts written off during the current year: P6,800 Balance of Allowance for Doubtful Accounts at January 1; current year: P8300 sistas Compute for the bad debts estimates and ‘Prepare the necessary adjusting entries to record bad debts expenses assuming this company’s bad debts are estimated to equal: «1 Setetinie, TO0 ~16i00) ¥ van I00¢0 x 0:05 = Ao - 1500 =P Rep 6500 ~ c¢00 = 1910 =~‘The financial information for XY7. Corp, as of December 31, 208 is enumerated below. S Gross Sales Sales retum & Allowance Sales discounts Freight in eat? Depre expentel Return & Allowances on purchases ™ Delivery Van % Office Equipment & Office Furniture Store Equipment Accounts Receivable Expenses incurred: * ‘Sales salaries % Advertising > Store supplies ~ Delivery % Office salaries & Bonuses Offiée Supplies ‘Taxes & licenses Bad POLIS — JOD Interest pain on bonds issued Interest paid on loan] L 088 on sale of investment Loss on sale of equipment 3820 ee 7D 46. 1x47. The total expenses related to sales is: 48 X 49, 50. Casualty loss from fire Inventory, Dee 31,2007 ‘Additional information: P 3,800,000 40,000 25,000 80,000 21,000 85,000 300,000 1,950,000 65,000 20,000 650,000 350,000 850,000 450,000 320,000 350,000 90,000 30,000 75,000 300,000 55,000 33,000 12,000 115,000, B5,000 23,000 43,000 35,000 525,000 Coittssions of 4% of total sles ivere give to siles personal Availed discount for 15% of total 2Pseo BRDO REX 104 5, an, 4) 09 sue Rrerary — yaspe0, Freight. sco Dn endtg eve PD wo ny PRL a 172982 Fad debts is estimated to be 5% of the outstanding balance of Accounts Receivable Fixed assets are depreciated at 5% of the book balance ‘Tax rate is at 30% 4 \. The Cost of Sales is: a. 2,190,750 +a) 697,000 b. 1.700750 «1,700,000 CaP 1,927,500 6 752,000 b. 768,000 ©. 700,000 . The other income total is: 186,000 b. 168,000. 110,000 d._121,000 . The total administratjyegexpenses is: ‘& 697,000 488,000 «773,000. 752,000 ‘The net income is: a 168,175 b. 83,475 © 119.250 @)267,750 : w