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EASTERN MINDORO COLLEGE

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BONGABONG, ORIENTAL MINDORO

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9 4 Telefax (043) 2835479 * e-mail: emc_1945@yahoo.com

Name:________________________ Score: ___________

I. Identification: Write the correct answer to the following questions.

________________ 1. This refers to open accounts which represent the amount of money owd by the customers to the
business.
________________ 2. This represents assets held for sale in the ordinary course of business, in the process of
production for sale or in the form of materials or supplies to be consumed in the production
process or in the rendering of services.
________________ 3. This refers to an advance payment made by the business to cover for future rental payments.
________________ 4. This represents assets such as tables, chairs, filing cabinets and display racks.
________________ 5. This is a contra-valuation account which refers to the portion of accounts receivable that is
estimated to be uncollectible at the end of a particular accounting period.
________________ 6. This refers to open accounts which represent the amount of money owed by the business to
creditors or supplies.
________________ 7. This represents the amount of money borrowed by the business from a bank or a lending
institution.
________________ 8. This represents cash collected by the business in advance for a service or good that is yet to be
rendered or delivered.
________________ 9. This represents interests credited by the bank to the account of the business arising from bank
deposits.
_______________ 10. This represents the earnings made by any business that is into selling goods or merchandise.
_______________ 11. The resources controlled by the business as a result of past transaction and events and from
which future economic benefits are expected to flow to the business.
_______________ 12. The present obligations of an entity arising from past transactions or events, the settlement of
which is expected to result in an outflow from the business of resources embodying economic
benefits.
_______________ 13. The residual interest contains the net difference between total assets and total liabilities.
_______________ 14. The earnings arising from the main line of operations of the business.
_______________ 15. The costs being incurred by the business in generating revenue.

II. Identify the major accounts

Account Title Assets Liabilities Owner’s Equity Revenue Expense

1. Petty cash funds
2. Delivery equipment
3. Julio Moreno, Drawing
4. Unused office supplies
5. Office supplies expense
6. Loans receivable
7. Deferred rent revenues
8. Tools, furniture and fixtures
9. Building
10. Patterns, molds and dies
11. Depreciation – patterns, molds and dies
12. Unearned rent income
13. Unearned interest income
14. Accrued taxes
15. Accrued rent expense
16. Prepaid taxes
17. Investment in bonds
18. Franchise
19. Advances from customers
20. loss on sale of land
 III. Indicate the effects of each transaction of Bernal Law Office on the accounting elements. Write the word
Debit or Credit under the affected accounting element.

1. Eric Bernal invested cash to start a law firm.

2. Paid rent for a room in a building in Cubao, Quezon City.
3. Purchased computer and accessories from Western Equipment. Term: on Credit.
4. Bought office supplies, for cash.
5. Paid for the printed stationery and supplies ordered from Mutual Printing Press.
6. Returned some of the supplies to Mutual Printing Press and received a cash refund.
7. Legal services rendered to clients. Term: Cash.
8. Paid half of the amount due to Western Equipment.
9. Billed Florentina Castro, a client, for legal services rendered.
10. Eric Bernal Withdrew cash, for family’s use.
11. Collected 95% of the amount due from Florentina Castro.
12. Received a cash loan from an associate. Issued a promissory note in exchange for the amount borrowed.
13. Paid for the utilities for the current month.
14. Eric Bernal paid the balance due to Western Equipment out of his personal savings.
15. Paid the loan due to an associate in full.