QUEZON CITY UNIVERSITY - BATASAN CAMPUS

FINANCIAL ACCOUNTING
FINALS EXAMINATION

Name: ________________________________________ Section: ___________________ Score: ______ / 100

ANSWER SHEET – SET A

MULTIPLE CHOICE. 30 points
1 6 11 16 21 26
2 7 12 17 22 27
3 8 13 18 23 28
4 9 14 19 24 29
5 10 15 20 25 30

ADJUSTING ENTRIES. 20 points Debit Credit

a

STATEMENT OF COMPREHENSIVE INCOME. 15 points.

Service Revenue
Less: Cost of Service
Gross Income
Less: Operating Expenses
Net Income

STATEMENT OF CHANGES IN EQUITY. 15 points.

Owner’s Equity, beg.
Add: Additional Investment
Add: Net Income
Less: Drawings
Owner’s Equity, end

CLOSING ENTRIES. 20 points. Debit Credit

a

1
MULTIPLE CHOICE: (1 POINTS EACH)
1.The information about financial performance and financial position of a business entity are
reflected in:
a. Statement of Financial Position
b. Statement of Comprehensive Income
c. Notes to Financial Statements
d. Financial Statements

2. Cash receipts from the rendering of service/s and /or sale of goods are example of:
a. Operating Activities c. Investing Activities
b. Financing Activities d. Extra Curricular Activities

3. These are the transactions dealing with the exchange of cash between the business and its
owners and creditors:
a. Operating Activities c. Investing Activities
b. Financing Activities d. Extra Curricular Activities

4. The accounting equation may NOT be expressed as:

a. Equity = Liabilities - Assets c. Equity = Assets - Liabilities
b. Assets = Liabilities + Equity d. Liabilities = Assets - Equity

5. The carrying value of the depreciable assets equal to:

a. Original cost minus depreciation expense for the period
b. Original cost minus accumulated expense
c. Estimated cost minus depreciation expense for the period
b. Estimated cost minus accumulated expense

6. Which of the following transactions is an example of an accrual?

a. Unrecorded income is recognized
b. Interest for the month is recorded
c. Expired prepaid insurance is recorded
d. Rent advances were recorded

7. The increase in the value of non-current assets like jewelries, land, gold are called as
a. Deterioration c. Appreciation
b. Depreciation d. Depletion

8. The recognition of an expense could result in corresponding INCREASE in:

a. Asset c. Equity
b. Liability d. Net Income

9. This is also called as the Prepaid Expense

a. Deferred Expense c. Accrued Expense
b. Deferred Income d. Accrued Income

10. Estimated sales price of the asset at the end of its useful life.
a. Depreciation c. Deferral
b. Salvage Value d. Estimated Value

11. Which of the following pairs of accounts will NOT appear on the same adjusting entry
a. Rent Expense and Rent Payable
b. Accounts Receivable and Service Income
c. Service Income and Unearned Income
d. Interest Income and Interest Payable

12. An adjusting entry on deferrals and accruals would NOT include which of the following
accounts?
a. Interest Receivable c. Unearned Revenue
b. Interest Payable d. Cash

Use the following date for questions 13-20

The following pertains to MIMIYUH CORP. as of December 31, 2019.
a. Depreciation of the equipment is P10,000 per month
b. A 1-year insurance policy was purchased last July 31, 2019 for P18,000. Asset method was used.

2
 c. Supplies purchased amounting to 12,000 was known to only have a remaining P7,000 balance
at year end.
d. Accrued interest on the note payable amounting to P2,000. No payment was made yet.
e. The company received a P24,000 advance payment on services still to be performed to clients.
Half of the amount is to be rendered on 2020. Liability Method was used.
f. Services amounting to P15,000 has been performed but not yet billed as of Dec. 31, 2019
13. The adjusting entry for DEPRECIATION (a) would include:
a. Credit to Building – P10,000
b. Credit to Depreciation Expense – P10,000
c. Credit to Accumulated Depreciation – P10,000
d. Debit to Accumulated Depreciation – P10,000

14. The adjusting entry for DEPRECIATION (a) would include:

a. Debit to Building – P10,000
b. Debit to Depreciation Expense – P10,000
c. Debit to Accumulated Depreciation – P10,000
d. Debit to Non-Current Asset – P10,000

15. The adjusting entry for INSURANCE POLICY (b) would include:
a. Debit to Insurance Expense – P9,000
b. Debit to Prepaid Insurance – P9,000
c. Debit to Insurance Expense – P7,500
d. Debit to Prepaid Insurance – P7,500

16. The adjusting entry for SUPPLIES (c) would include:

a. Debit to Supplies Expense – P7,000
b. Credit to Supplies Expense – P7,000
c. Credit to Supplies Expense – P5,000
d. Debit to Supplies Expense – P5,000

17. The adjusting entry for INTEREST (d) would include:

a. Debit to Notes Payable – P2,000
b. Debit to Interest Payable – P2,000
c. Debit to Interest Expense – P2,000
d. Debit to Interest Expense – P2,500

18. The adjusting entry for INTEREST (d) would include:

a. Credit to Notes Payable – P2,000
b. Credit to Interest Payable – P2,000
c. Credit to Interest Expense – P2,000
d. Credit to Interest Expense – P2,500

19. The adjusting entry for UNEARNED INCOME (e) would include:
a. Debit to Service Income – P12,000
b. Debit to Unearned Income – P12,000
c. Debit to Service Income – P24,000
d. Debit to Unearned Income – P24,000

20. The adjusting entry for UNEARNED INCOME (e) would include:
a. Credit to Service Income – P12,000
b. Credit to Unearned Income – P12,000
c. Credit to Service Income – P24,000
d. Credit to Unearned Income – P24,000

21. The adjusting entry for ACCRUED INCOME (e) would include:
a. Credit to Accounts Receivable – P15,000
b. Credit to Unearned Income – P15,000
c. Credit to Service Income – P15,000
d. Debit to Unearned Income – P15,000

22. Which of the following statements is TRUE?

i. Income and Expense Summary is used during the closing process only.
ii. Real accounts must be closed at the end of every accounting period.
a. Statement I only c. Both Statements are true
b. Statement II only d. None of the above

23. Which of the following statements is TRUE?

3
 i. Statement of Financial Position accounts are called nominal accounts.
ii. Income and Expense Summary account is a nominal account.
a. Statement I only c. Both Statements are true
b. Statement II only d. None of the above

24. Which of the following statements is TRUE?

i. The accounting equation must be balance every after account.
ii. Ledger provides a chronological record of business transactions.
a. Statement I only c. Both Statements are true
b. Statement II only d. None of the above

25. The process of providing financial information to external decision makers is referred to as:
a. Public Accounting c. Government Accounting
b. Management Accounting d. Financial Accounting

26. These are necessary at the end of the accounting period to meet proper measurement of income
and expenses.
a. Financial Statement c. Book of final entry
b. Adjusting Entries d. none of these

27. Expenses associated with estimated uncollectible receivable

a. Bad Debts c. Accrued Expenses
b. Depreciation d. none of these

28. Which of the following may not affect Owner’s Equity?

a. Revenue c. Land acquired
b. Expense d. Drawing

29. The company collected in full the accounts receivable. Considering this alone, the effect will:
a. Increase total assets c. Total assets will be the same
b. Decrease total assets d. Increase Equity

30. The account used to illustrate debits and credits.

a. Q Account c. S Account
b. R Account d. T Account

PROBLEM 1. Prepare for the following December 31, 2019 Adjusting Entries based on the
transactions given below.
a. A physical count of supplies shows a worth of P5,000 remain. The unadjusted balance in the
books of the company are still stated at P12,000.
b. Salaries of employees amounting to P25,000 was not yet paid but incurred.
c. Advance payments by the clients was made last June 30, 2019 at P60,000. Earnings are to
be recorded over the months service has been rendered.
d. The company bought a Building for P5,000,000 last December 31, 2018 and is expected to
be used in 5 years. Depreciation for year 2019 are still to be reported.
e. Outstanding Accounts Receivables are estimated to be uncollectible at the rate of 5%. The
balance of AR on the company’s books is at P100,000.
PROBLEM 2. Using the adjusted trial balance below, prepare for the Financial Statement as
on the space provided in the answer sheet. (30 pts) Use the answer sheet.
PROBLEM 3. Make the closing entries for the same data provided in Problem 2. (20 pts)
Adjusted Trial Balance
ACCOUNTS DEBIT CREDIT
Cash 200,000.00
Accounts Receivable 60,000.00
Supplies 60,000.00
Prepaid Insurance 18,000.00
Delivery Van 420,000.00
Accumulated Depreciation 90,000.00
Accounts Payable 100,000.00
Unearned Rent Revenue 57,000.00
Bonds Payable (10%) 100,000.00
Genesiah, Owner's Equity (2018) 285,000.00
Drawing, Genesiah 10,000.00
Service Revenue 426,000.00
Direct Charges - Salaries Expense 150,000.00
Expense - Rentals 40,000.00
Expense - Utilities 10,000.00
Expense - Depreciation 90,000.00
1,058,000.00 1,058,000.00