Final (2nd Quarter)

S.Y. 2019-2020
Business Finance
Name: Date:
1. What is this that refers to the formal statement that presents the financial conditions of the company as of a
specific date?
a. Balance Sheet b. Income Statement c. Cash Flow Statement d. Financial Conditions
2. Entries in the balance sheet are based on the conventional accounting equation, what is the equation?
a. Assets=Liabilities+Owner’s Equity b. Assets=Liabilities/Owner’s Equity
c. Assets=LiabilitiesxOwner’s Equity d. Assets=Liabilities-Owner’s Equity
3. – 13. Using the following (scramble) accounts, prepared a Balance Sheet for ABC, a retailed company for the year
ending in December 31, 2018.
Accounts Receivable - 31,350
Cash - 53,050
Account Payable - 12,200
Nikka Cantiga, capital -155,550
Land - 80,000
Suppliers - 3,350
14. What is this refers to a transaction that increase the owner’s equity are referred to a ________________?
a. income b. profit c. sales d. revenues
15. This is shows the revenues realized by the business, as well as the costs and expenses incurred in the realization of
said revenues. This is also called profit and loss statement.
a. Balance Sheet b. Income Statement c. Cash Flow Statement d. Financial Conditions
16. What is this that refers to a business consist of the sales of goods or services during the period for which the
statement was prepared?
a. Expenditures b. Income c. Revenues d. sales
17. What is this that consists of production, selling, and other expenses incurred in generating the revenues.
a. Expenditures b. Income c. Revenues d. sale
18. What is this that often prepared in order to give a full and complete picture of cash and disbursement for a period?
a. Balance Sheet b. Income Statement c. Cash Flow Statement d. Financial Conditions
19. – 33. Prepared an Income Statement of Havana Travel and Tours Services for the year ended April 30, 2018. The
company Fees Earned amounting to bP436 000.00 and the Expenses of the company amounting to 299,000.00
with a breakdown: wages expense 89,000.00, office supplies 25,000.00, and miscellaneous expense 6,500.00.
Compute the Net Income.
34. What is this that refers to the company’s ability to generate earnings?
a. Liquidity b. Solvency c. Stability d. Leverage
35. What is this that considered more conservative than the other ratio because its calculation factors in fewer items?
a. current ratio b. quick ratio c. liquidity ratio d. operating cash ratio
36. What is this that indicates the extent to which the claims of short-term creditors are covered by assets that are
expected to be converted to cash in a period corresponding to maturity of liabilities
a. current ratio b. quick ratio c. liquidity ratio d. operating cash ratio
37. Current assets is P 2,000, current liabilities is P 3,500. Solve for current ratio
38. Cash is P2500, Marketable Securities is P3500, A/R is P1500 while Current liabilities are P5000. Solve for quick ratio.
39. - 40 Inventory is P 150, A/P is P 450, cash and A/R total is P 800, Solve for current ratio and quick ratio.
41. If current ratio is 1.7, what is the total A/R if cash is P20,000, inventory is P7,500 and A/P is P30,000?
a. P23,500 b. P24,000 c. P24,500 d.P23,000
42. What is a good current ratio?
a. 1 b. 2 c. 0.5 d.0.75
43. It is considered to be standard for liquidity because it can easily be converted into other assets.
a. Cash b. Bonds c. Stocks d. Inventories
44. If company A has current ratio of 1.3 while company B has a current ratio of 2.1, which is better company?
a. Company A b. Company B c. both Company d. none of the two companies
45. Which ratio is more relevant?
a. Quick ratio b. current ratio c. Both A and B d. None of two ratio
46 – 50. Compute for the ratios of ABC Company. Show your solutions
ABC Financial Statement
as of Dec. 31, 2019
Assets Liabilities and Stockholder’s Equity
Cash P120,000.00 Accounts Payable P70,000.00
Marketable Securities 35,000.00 Short-term notes 55,000.00
Accounts Receivable 45,000.00 Current Liabilities P125,000.00
Inventories 130,000.00 Long-term debt P2,700,000.00
Current assets P330,000.00 Total liabilities P2,825,000.00
Equipment P2,970,000.00 Common stock P500,000.00
Buildings 1,600,000.00 Retained earnings P1,575,000.00
Fixed assets P4,570,000.00 Stockholder’s equity P2,075,000.00
Total Assets P4,900,000.00 Total liabilities and equity P4,900,000.00

Prepared by:
AILEEN L.PATILAN-PUROG MERRY JUNE O. RICA
Subject Teacher Subject Teacher