INTRODUCTORY MODULE

P1- MC
Multiple Choice Questions (50 items)

Email address *

raalbete@gmail.com

Score ng seksyon 40/50

Name (Last, First, MI) *

Fernandez, Ruth Ann A.

Module Learning Objectives

After completing this module, you should be able

to recall:
1. knowledge about the components of an
accounting system and double-entry recording
system.
2. how to perform the accounting processing
cycle steps leading to the Vnancial statements.
3. how to analyze economic events, record
these transactions using the general journal
format and prepare an unadjusted trail balance.
4. how to record adjusting journal entries in
general journal format and prepare an adjusted
trial balance
5. how to prepare Vnancial statement

Introductory Module P1
Composition

This module has two (2) phases which are:

1. Multiple Choice Questions (50 items)
2. Comprehensive Questions in excel format
(50 items)

To proceed to the next phase, a student must

correctly answer 85% of all the questions. Upon
doing so, the link to the next phase will be sent
together with the results.

Students who failed must go over the topics

tested by the questions and study them, each,
before answering again this module to achieve
the required score. Students can answer this
module any number of times until Jan. 5, 2019.

On Jan. 6, 2019, students who have failed to

achieve the desired score will forfeit their
opportunity to answer the next phase and
receive a grade of 0 .

Review of Basic Accounting

Process

Each question is adapted from various sources

and aims to measure students proVciency and
competence in the covered topics. A score
below 85% correct answers, on the Vrst try,
indicates that student failed to acquire and retain
from under courses the basic proVciency and
competence in the topics tested. As such, the
failing students are required to intensely study
the topics covered before answering again this
module to achieve the required score to proceed
to the next phase.

A trader, who commenced

business in the year, extracted his
trial balance on the last day of the
Vrst month as shown below. It
failed to balance. Which of the
following would explain the
failure? *

Salaries, an expense, has been

stated in error as a credit balance.

The trial balance fails to include one

or more of the account balances.

The Trial balance has been added

wrongly.

A payment has been posted wrongly

to the credit side of an account
instead of debit.

The total of the debit balances

listed in a trial balance will not be
equal to that of the credit
balances... *
if an amount paid for purchases is
posted to Stationery account.

if an amount entered in the prime

entry book (journal) is not posted.

if an amount drawn by the owner is

posted to the debit of the Capital
account.

if a transaction has not been entered

in the book of prime entry (journal).

Amelia Company received its

telephone bill on February 15,
2011 in the amount of $325. This
bill covered the period from
January 1, 2011 through January
31, 2011. Amelia paid this bill
immediately. The company uses a
calendar year accounting period
and prepares its Vnancial
statements only once a year at
the end of the year. The general
journal entry to record this
transaction includes: *

A debit to the Cash account for $325.

A credit to the Telephone Expense

account for $325.

A debit to the Telephone Expense

account for $325.

A credit to Accounts Payable for

$325.

A debit to Accounts Payable for

$325.

A company adopts the accounting

practice whereby all external
transactions involving prepaid
expenses, such as prepaid
insurance, prepaid rent, and oice
supplies are initially debited to the
asset account when acquired. If
the company fails to adjust any
one of these accounts for the
current year, what will be the
effect on (1) the current year's
total expenses, (2) total revenues,
(3) net income, and (4) ending
owner's equity? *
Understated, understated,
understated, and understated.

Understated, overstated, overstated,

and overstated.

Understated, no effect, overstated,

and overstated.

Overstated, overstated, no effect, and

no effect.

Understated, no effect, overstated,

and understated.

Boron Company is a sole

proprietorship. Its bookkeeper has
prepared the adjusted trial
balance as of December 31, 2011.
Even though this adjusted trial
balance is correct in every
respect, there is still one account
whose balance does not
represent the correct end-of-the-
period balance. Which account is
it? *

Accounts Receivable.

Cash.

Accumulated Depreciation.

Owner's equity.

None of these.

The notion that the life of a

business is divisible into time
periods of equal length is known
as which of the following? *

Continuing-concern principle.

Monetary unit principle.

Revenue recognition principle.

Time-period principle.

Business entity principle.

At any given point in time, it is

possible to describe general
ledger accounts as having an
expected or "normal" balance:
either a debit balance or a credit
balance. This normal balance is
on the side of the account, that is,
the debit side or credit side, which
represents the "increase" side of
the account. In order, what is the
normal balance for the Equipment
account, the Owner's Equity
account, and the Sales Revenue
account? *

Debit, credit, credit.

Debit, debit, debit.

Credit, debit, credit.

Credit, credit, debit.

Debit, debit, credit.

The personal residence of Samuel

Leonard was landscaped with all
new trees, shrubs, and kowers.
This improvement was paid for
with a check written against
Samuel's business checking
account. The landscaping
provides no beneVt to Samuel's
business. What account should be
debited for this transaction? *

Samuel Leonard, Capital.

Samuel Leonard, Withdrawals.

Landscaping Improvements.

Landscaping Expense.

None of the above.

You own a CPA Vrm. You have

agreed to provide accounting
services on behalf of a client for a
fee of $650 per month. Your
services will be rendered
uniformly during the year, and you
begin your work on April 16. You
use the accrual basis of
accounting for your own company
and prepare monthly Vnancial
statements for your Vrm. Your
client makes his Vrst payment of
$650 to you on May 16. Which of
the following entries will you
record on May 16 when you
receive the $650 cash payment? *
Cash, debit, $325; Accounts
Receivable, credit, $325.

Cash, debit, $650; Accounts

Receivable, credit, $325; Fees
Earned, credit, $325.

Cash, debit, $650; Fees Earned,

credit, $650.

Accounts Receivable, debit, $650;

Cash, credit, $325; Fees Earned,
credit, $325.

None of the above.

Which of the following statements

is true? *
Revenue accounts are increased by
debit entries.

Journalizing entries occurs after

posting entries.

Debit entries are entries involving the

right-hand side on an account.

An account shows increases and

decreases and an account balance.

Journalizing errors should be erased

and a correct entry made.

At the end of the Vscal year, an

adjusting entry was made for
accrued salaries of $2,000. The
salaries for one week, $4,250,
were paid on the Vrst Friday of the
new Vscal period. When the
weekly salaries are paid on the
Vrst Friday of the new accounting
period, what will be the general
journal entry? *
Salaries Expense, debit, $4,250;
Cash, credit, $4,250.

Salary Expense, debit, $2,000; Cash,

credit, $2,000.

Salaries Expense, debit, $4,250;

Salaries Payable, credit, $4,250.

Salary Expense, debit, $2,250;

Salaries Payable, debit, $2,000; Cash,
credit, $4,250.

None of the journal entries shown

above.

Given the following data, calculate

the value of the Vrm’s capital:
Fixed assets Php 4,000; stock Php
350; debtors Php180; cash at
bank Php 650 and creditors Php
280. *

Php 5,180

Php 5,460

Php 5,000

Php 4,900

A proprietorship employs one full-

time accountant. This person is
considered an employee. On the
desk in front of her are Vve
different business documents.
Which one of the following would
not be considered an original
source document from the
proprietorship's point of view? *
A bank receipt for $10,000
evidencing yesterday's cash receipts
deposited in the bank.

The original copy of the insurance

policy taken out by the proprietorship
to insure the vehicle it purchased
during its Vrst month of operations.
The annual insurance premium of
$500 was printed within the contract.

The invoice received by the

proprietorship from Samsung
Electronics when the proprietorship
purchased its Vrst lot of inventory to
be sold to its customers.

A cancelled check for $500

representing payment in full for the
annual insurance premium
mentioned in item B above.

A copy of the Balance Sheet at the

end of the company's Vrst year of
existence.

On March 1, 2011, a company

collects a $500 deposit from a
customer for the installation of a
home-theater system. The
installation is scheduled for May
5, 2012. How should the company
record this entry on March 1,
2011? *
The Cash account is credited for
$500.

The Sales Revenue account is

credited for $500.

The Unearned Sales Revenue

account is credited for $500.

The Unearned Sales Revenue

account is debited for $500.

None of the above are correct.

A company buys a one-year

insurance policy on February 1,
2011, and immediately pays in
cash the $720 insurance
premium. The company's
bookkeeper records the
transaction by crediting the Cash
account for $720 but debits
Insurance Expense for $720,
instead of debiting Prepaid
Insurance, which would be the
correct entry. Based on this
information, which statement
concerning the trial balance is
correct if the company fails to
correct this bookkeeping error? *

The trial balance is correct as it is.

The total trial balance debits do not

equal the total trial balance credits.

The total trial balance debits are

higher than the total trial balance
credits.

The total trial balance credits are

lower than the total trial balance
debits.

The total trial balance debits equal

the trial balance credits but one or
more account balances are incorrect.

Current assets total $120,000,

plant and equipment assets
$24,000, current liabilities
$48,000, and long-term liabilities
$12,000. What is the current ratio
of the business? *

1.0:1.

2.0:1.

2.5:1.

3.0:1.

None of the above.

Which of the following errors will

a trial balance fail to reveal? *
Php 7,500 received from sales being
posted to the Sales account as Php
5,700

Sales account total being added as

Php 36,400 instead of Php 39,400

Payment of Php 240 for stationery

being posted as Php 420

Payment of Php 2,800 for goods to

be sold being posted to Stationery
account

The typical accounting worksheet

has Vve sets of columns with
each set having a debit column on
the left and a credit column on the
right. In moving from left to right
across the worksheet, which of
the following lists describes the
proper order for four of these sets
of columns? *
Adjustments, Adjusted Trial Balance,
Unadjusted Trial Balance, and
Income Statement.

Adjustments, Adjusted Trial Balance,

Income Statement, and Balance
Sheet.

Adjusted Trial Balance, Adjustments,

Income Statement, and Balance
Sheet.

Adjustments, Adjusted Trial Balance,

Balance Sheet, and Income
Statement.

Unadjusted Trial Balance,

Adjustments, Income Statement, and
Adjusted Trial Balance.

Which of the following accounts

is a temporary account? *

Notes Payable.

Unearned Revenue.

Capital, Lola Delong.

Lola Delong, Withdrawals.

Land.

Optional entries that transfer the

balances in balance sheet
accounts which arose as a result
of certain adjusting entries to
income statement accounts is the
deVnition for which term below? *

Adjusting entries.

Reversing entries.

Closing entries.

Declarations of cash dividends.

Payment of cash dividends.

Braxton Company is a sole

proprietorship. Its owner is
preparing the accounting
worksheet for the 2009 calendar
year. The worksheet is the normal
10-column worksheet studied in
the chapter. There is a $20,000
adjusted balance in the Owner's
Drawings account and the
account has its normal or
expected balance. What happens
to this balance on the worksheet?
*
The adjusted balance is extended
into the debit column of the Income
Statement set of columns.

The adjusted balance is extended

into the credit side of the Income
Statement set of columns.

The adjusted balance is extended

into the debit side of the Balance
Sheet set of columns.

The adjusted balance is extended

into the credit side of the Balance
Sheet set of columns.

None of the above.

A company buys a new car on

February 15, 2011, and
immediately pays in cash the
$25,000 purchase price. The
company's bookkeeper fails to
record the transaction at all.
Based on this information, which
statement concerning the trial
balance is correct if the company
fails to correct this bookkeeping
error? *

The trial balance is correct as it is.

The total trial balance debits do not

equal the total trial balance credits.

The total trial balance debits are

higher than the total trial balance
credits.

The total trial balance debits are

equal to the total trial balance
credits, but one or more accounts
have incorrect balances.

The total trial balance debits equal

the trial balance credits, but only one
account balance is incorrect.

Although it is possible to Vnd an

exception to the following
statement, the vast majority of
adjusting entries follow which
pattern described below? *
One of the accounts debited or
credited is an income statement
account while the second account
debited or credited is a balance
sheet account.