PERIODICAL EXAMINATION

Name: _________________________________ Date: _______________ Score: ______

1. What is an information system that measures, process and communicates financial

information about an economic entity?
A. Accounting
B. Bookkeeping
C. Financial Accounting
D. Financial Statements

2. Which of the following correctly defines accounting?

A. It is a process involving one business function only to oversee tax collection entities
B. It is a systematic recording of financial transaction
C. It is incomprehensive process of recording business transaction
D. It is a process of analyzing only transactions to over sight business agencies

3. Applying the principle that accounting provides quantitative information, what could be
presented?
A. Building
B. Equipment
C. Financial Statements
D. Service provided

4. Which nature states that accounting is a process that involves gathering, compacting,
interpreting and disseminating economic information in a systematic way?
A. Accounting as an art
B. Accounting as a means to an end
C. Accounting as a process
D. Concepts and conventions

5. What is the ultimate end of accounting based on one of its nature?

A. To accumulate the communicate information essential to the understanding of the
activities of an entity.
B. To provide external information-communication system
C. To provide quantitative information
D. To report on the resources and obligation of the entity to the owners.

6. Which of the following is not a nature of accounting?

A. Accounting as an art
B. Accounting as a medium of communication between the firm and the external
parties
C. Accounting as a process
D. Accounting as a means to an end

7. All of the statement below is not a nature of accounting except one, which of the following is a
nature of accounting?
A. Accounting is not merely an act of prudence to exercise control but its necessity arises
from the need of compliance with many legal requirements
B. Accounting is a special type of calculative service that comes handy to management
for the purpose of exercising control over many functional areas of business.
C. Accounting is summarizing diverse economic data into homogenous group or unit
called account
D. Accounting must rely on a set of previously agreed concepts, conventions and
rules.

8. All are functions of accounting except one that is a nature of accounting, which one is it?
A. Accounting as a means to an end
B. Accounting as a medium of communication between the firm and external parties
C. Recording Function
D. Compliance with legal requirements

9. What function states that accounting is essentially a recordkeeping function of the past,
present and future economic events of the business?
 A. Control Function
B. Income Determination
C. Recording Function
D. Summarizing Function

10. What is the function which states that accounting is not an end in itself but it exists to serve
a purpose?
A. Accounting as means to an end
B. Accounting as a medium of communication between the firm and the external
parties
C. Compliance with legal requirements
D. Income Determination

11. All are functions of accounting, which one is not?

A. Concepts and Conventions
B. Control
C. Compliance with legal requirements
D. Recording

12. All are not function of accounting, which one is a function?

A. Accounting is more of an art than a science
B. Although accounting system is characterized by a host of rules, procedures and
conventions they are not the end by themselves
C. Net income determination under the historical cost method lies at the heart of the
whole accounting methodology
D. The ultimate end of accounting is to provide external information-communication
system.

13. Which activity shows the nature of accounting as a stewardship function?

A. Evaluation of employees performance
B. Preparation of budget
C. Perform appraisals
D. Preparation of financial statements at the end of accounting period and
presenting the results thereof

14. Whose work was the origin of accounting generally attributed to?
A. Benjamin Workman
B. Christopher Columbus
C. Luca Pacioli
D. Napoleon Bonaparte

15. What was used to record payments of wages in Babylonia at around 3600 B.C?
A. Abacus
B. Clay Tablets
C. Disks
D. Stones

16. Which of the following is not a book used by Amatino Manucci in constructing a
comprehensive and fully-articulated set of double-entry records?
A. Cash Books
B. Expense Ledger
C. General Ledger
D. Journal

17. All correctly differentiate Management Accounting from Financial Accounting except one,
which is it?
A. Management Accounting is timely and future oriented while Financial Accounting is
delayed and based on historical cost.
B. Management Accounting is not concerned with the proper valuation of assets and
liabilities only their productivity while Financial Accounting is concerned with the proper
valuation of assets and liabilities.
C. Management Accounting measures only the operation performance while
Financial Accounting both measures both financial and operation performance.
D. Management Accounting need not to comply with various accounting standards while
Financial Accounting must comply.
18. Ana is employed in an accounting firm who examines and in charged in screening the
accuracy, fairness, truthfulness and reliability of financial statements. What branch of
accounting does her job belongs?
A. Auditing
B. Cost Accounting
C. Fiduciary Accounting
D. Tax Accounting

19. Which of the following correctly differentiate Cost Bookkeeping and Cost Accounting?
A. Cost Bookkeeping is the process of recording cost data in books of accounts
while cost bookkeeping uses those data once extracted in the cost books and
provides information for managerial planning and control
B. Cost Bookkeeping is a mechanical task of recording data in books of accounts while
cos bookkeeping is recording of data by cost
C. Cost Bookkeeping involves merely recording while cost accounting involves
examination of data
D. Cost Bookkeeping involves just recording while cost accounting involves identification
of cost

20. What branch of accounting determines the costs of products, processes, projects and
analyzes cost-behavior, cost-volume profit relationship, make or buy decisions and selling
prices for products?
A. Bookkeeping
B. Cost Accounting
C. Financial Accounting
D. Management Accounting

21 Which branch of accounting involves the collection of financial data?

A. Auditing
B. Bookkeeping
C. Cost Bookkeeping
D. Financial Management

22. Financial accounting provides economic and financial information for all of the following
except which one?
A. Creditors
B. Investors
C. Managers
D. Other external users,

23. Who are the individuals and organizations outside the company who want financial
information about the company?
A. Tertiary Users
B. Internal Users
C. Intermediate Users
D. External Users

24. Which among the following does not belong?

A. Creditors
B. Customers
C. Government
D. Stockholders

25. Who are the interested parties who need the accounting information to make decisions such
as plans organization and run the business?
A. Intermediate Users
B. Internal Users
C. External Users
D. Both External and Internal Users

26. Which of the following does not belong?

A. Potential Investors
B. Owners
C. Management
D. Employees

27. Which of the following is not a decision made by external users?

A. Analyze the feasibility of investing in a company
 B. Evaluate the risk of granting or lending money
C. Regulates the business
D. See whether the business is profitable and what are the financial resources
available

28. All are information needed by internal users except for which one?
A. Available cash, production cost
B. Production Cost
C. Profit for the period
D. Risks of granting credit or lending money

29. How many is the minimum needed person to form a partnership?

A. 1
B. 2
C. 3
D. 4

30. Which of the following is not true about corporation?

A. Its stockholders are personally liable for the corporation’s debts.
B. It is owned by its stockholders
C. It is an artificial being created by operations of law
D. It is a separate legal entity

31. Gabriel Roy wanted to start a corporation that is a retail business in his own and wanted to
name it GR Corp. He already has the necessary documents to be filed in the Securities and
Exchange Commission including the minimum amount of capital needed to start a corporation.
Can he be able to start a corporation in his own even if he is alone?
A. Yes, because he already have the minimum capital
B. No, because the needed minimum numbers of incorporators is 5 and Gabriel Roy is
only 1.
C. Yes, because under the revised corporation code allows the one person
corporation provided that he pass the guidelines set in forming a one person
corporation
D. No, because sole proprietorship is the appropriate type of business for him.

32. What type of business organization has the advantage of the owner makes all the decision
and need not to confer with anyone?
A. Corporation
B. Joint Venture
C. Partnership
D. Sole Proprietorship

33. Which of the following is not a disadvantage of a partnership?

A. Partnership dissolves if one of the partner dies
B. It is easy to form
C. Owners will not always agree on decisions which could lead to management conflicts
D. Partners are exposed to unlimited liabilities

34. Which of the following is true about sole proprietorships?

A. Partners are exposed to unlimited liabilities
B. Owners are not personally liable for business
C. Owners receives all the profits and absorbs all losses
D. Business is separate and distinct form its owners

35. What type of business does the buying and selling of products?
A. Infrastructure
B. Merchandising
C. Manufacturing
D. Service

36. George grows soya beans and use them in his production of soya milk business. What type
of business does George is in?
A. Service
B. Merchandising
C. Manufacturing
D. Both Manufacturing and Merchandising
37. Andi is a trader of different goods for 3 years. His business is doing well but he wanted to
create another business. He decided to engage in a bakery industry which he uses the flour he
sells in his trading business. What type of business Andi is in?
A. Service
B. Merchandising
C. Manufacturing
D. Both Manufacturing and Merchandising

38. What is one advantage of a corporation?

A. Difficulty to raise capital
B. Has perpetual lifetime
C. Single ownership
D. The most easiest to form

39. All given data pertains to advantage and disadvantage of a service type of business, except
one. Which is not?
A. Visible products
B. Maintaining human capital
C. Inability to standardize services
D. Absence of inventory

40. Ana wanted to put up a business. She attended a seminar on business matters. She is a
certified public accountant. She wanted to start up a business using her profession. Applying the
concepts of different forms of business according to activities, what type of business she is likely
to have?
A. Manufacturing
B. Merchandising
C. Service
D. Sole proprietorship

41. What is the principle that states that revenue is to be recognized when goods are delivered
or services are performed?
A. Consistency
B. Historical Cost
C. Objectivity
D. Revenue Recognition

42. Which principle states that expenses should be recognized in the accounting period in which
goods and services are used to produce revenue and not when the entity pays for those goods
and services?
A. Expense Recognition
B. Consistency
C. Materiality
D. Revenue Recognition

43. Which of the following is not a principle of accounting?

A. Adequate Disclosure
B. Consistency
C. Double- entry bookkeeping
D. Materiality

44. Which of the following does not belong?

A. Expense Recognition
B. Objectivity
C. Revenue recognition
D. Stable Monetary Unit

45. When estimating unearned revenues, what principle applies?

A. Conservatism
B. Consistency
C. Adequate Disclosure
D. Historical Cost

46. Martin Corporation purchased land in 2007 for P 290, 000. In 2015, it purchased a nearly
identical parcel of land for P 460, 000. In its 2015 balance sheet, Martin Corporation valued
these two parcels of land at a combined value of P 290, 000. By reporting the land in this
manner, what principle does Martin Corporation violated?
A. Adequate Disclosure
 B. Historical Cost
C. Materiality
D. Objectivity

47. Alaminos Corporation had been found out to have concealed information in their financial
statement of P 240, 000 not reported. What principle was violated?
A. Consistency
B. Revenue Recognition
C. Expense Recognition
D. Consistency
E. Adequate Disclosure

48. Akiko Corporation uses only one accounting method in its operation. What principle does
Akiko Corporation conformed to?
A. Adequate Disclosure
B. Consistency
C. Materiality
D. Objectivity

49. Plastikaware Corporation had incurred P 2,000,000 income for the month of July 2018. It wa
recorded in their financial statement P 2,000, 000 income for the month of July 2018. What
principle does the company followed or adheres to?
A. Expense Recognition
B. Historical Cost
C. Matching
D. Periodicity

50. Hager Incorporated after 5 years in the business was found to be bankrupt. The business
did not survive the fast paced environment due to strong completion however the company fails
disclose immanent bankruptcy. What principle was violated?
A. Business Entity
B. Consistency
C. Going Concern
D. Periodicity

51. Owner’s equity may be depicted in what way?

A. Assets = Liabilities
B. Assets + Liabilities
C. Liabilities + Assets
D. Assets – Liabilities

52. Which of following is correct?

I. Assets must always be equal to Liabilities plus Owner’s Equity
II. Sometimes Assets minus Liabilities equals Owner’s Equity
III. Assets minus Liabilities equals Owner’s Equity

A. Both I and II
B. Neither I nor II
C. Both I and III
D. Neither I nor III

53. If the transaction causes an asset account to decrease, which of the following related effects
may occur?

A. An increase of equal amount in the common stock account

B. An increase in a liability account
C. An increase of equal amount in another asset account
D. An increase in the combined of total liabilities and owner’s equity account

54. How are you going to restate the basic accounting equation?
A. Assets = Liabilities
B. Assets-Liabilities = Owner’s Equity
C. Both A and B
D. Neither A nor B

55. George has a business of laundry shop. He wanted to have an increase in his capital not
coming through income. If you are George, how will you make it possible?
A. Acquire New Equipment
 B. Look for an investor to invest in your business that would increase your capital
as Owner’s Equity and at the same time your Cash as Asset
C. Loan in a bank payable for 5 years
D. Purchase cash

56. The accounting equation for Uno Enterprises is as follows:

Assets = Liabilities + Owner’s Equity
P 120,000 = P 60,000 + P 60,000

If Singko Enterprise purchases office supplies on account P 25,000, what will be its’ accounting
equation?

A. Assets = Liabilities + Owner’s Equity

P 120,000 = P 60,000 + P 60,000
B. Assets = Liabilities + Owner’s Equity
P 145,000 = P 60,000 + P 85,000
C. Assets = Liabilities + Owner’s Equity
P 145,000 = P 72,500 + P 72,500
D. Assets = Liabilities + Owner’s Equity
P 145,000 = P 85,000 + P 60,000

57. As of June 30, 2018, Mandirigma Company has assets of P100, 000 and Owner’s equity of
P40, 000. What are the liabilities for Mandirigma Company as of June 3, 2018?
A. P40,000
B. P60,000
C. P100,000
D. P140,000

58- 60. Aizen Mantago had the following transactions. Record them by using the accounting
equation to show their effects on his Assets, Liabilities and Owner’s equity.

a.) Invested P 20,000

b.) Purchased mobile phone for P 9,000
c.) Received income P 12, 000

Prepared By:

Francia Mae S. Bueno

Let- Law Student

Submitted to:

Mr. Dennis B. Colar

Instructor