USJ-R College of Commerce | Acctg 101 Rm 403 MWF 8:30 AM – 10:30 AM | NEF, CPA
Typical Account Titles Used  SSS/Philhealth/PAG-ibig Premium Payable – due and
I. ASSETS
A. Current Assets – assets that are expected to be realized, sold
or consumed with the enterprise’ normal operating cycle.
 Cash – money (paper, coins, money substitutes e.g. check,
postal money orders, bank drafts, treasury warrants)
1. Cash in Bank
2. Cash on Hand
 Petty Cash Fund – money set aside for small or petty
expenses; exist when the business uses the imprest system
of keeping cash
 Cash Equivalents – short-term highly liquid instruments
readily convertible into cash and present insignificant risk of
changes in value because of changes in interest rates
 Notes Receivable – promissory note received arising from
rendering services, sale of merchandise, etc.
 Accounts Receivable – amounts collectible arising from
services rendered to customers on accounts, oral or verbal
promise to pay
 Allowance for Uncollectible Accounts – a contra-asset
account  deduction from Accounts Receivable; possible
loss from uncollected accounts
 Accrued Interest Income / Interest Receivable – amount of
interest earned on an interest-bearing notes receivable
which is not yet collected
 Advances to Employees – amounts collectible from
employees for allowing them to make cash advances
subject to deduction against their salaries and wages
 Inventories – assets which are (1) held for sale in the
ordinary course of the business (Finished Goods); (2) in the
process of production for such sale (Goods/Work in Process
Inventory); in the form of materials or supplies to be
consumed in the production process or in the rendering of
services (Raw Materials Inventory)
 Prepaid Expenses – expenses paid for in advance but have
not yet expired, e.g. Prepaid Insurance, Prepaid Rent,
Prepaid Taxes
 Unused Supplies – cost of stationery and other supplies
purchased for use but are left on hand and still unused
B. Non-Current Assets – all other assets not classified as current
 Property, Plant and Equipment (PPE) – tangible assets
which are held by an enterprise for use in production or
supply of goods and services, for rental to others, or for
administrative purposes, and are expected to be used
during more than one period
1. Land – site where building used as office or store is
constructed, non-depreciable
2. Building – finished construction owned by business
where operations or transactions take place
3. Equipment – Store Equipment, Office Equipment,
4. Furniture and Fixtures – chairs, tables, counters,
display cases, etc.
 Accumulated Depreciation – a contra-asset account, a
deduction from PPE
 Long-term Investments – assets not used in operating
activities such as notes receivable and investment in
stocks and bonds
 Intangible Assets – long-term assets used to produce or
services, usually lack physical form and have uncertain
benefits
II. LIABILITIES
A. Current Liabilities – financial obligations expected to be
settled in the normal course of the operating cycle, due to be
settled within one year from balance sheet date
 Accounts Payable – financial obligation of the entity, oral
or verbal promise to pay
 Notes Payable – financial obligation evidenced by a
promissory note issued by the business
 Accrued Expenses – expenses incurred by business but
not yet paid
payable by the entity to SSS/Philhealth Insurance
Corp./Home Development Mutual Fund; composed of
both employer and employee contributions
 Withholding Tax Payable – amount due and payable to
the BIR for taxes withheld from employee’s salaries
 Unearned Income – income collected or received in
advance but not yet considered as “earned”
B. Non-Current Liabilities – long term financial obligations not
payable within 1 year or the operating cycle, whichever is
shorter
 Notes Payable (Long-term)
 Mortgage Payable – requires fixed/tangible property to
be placed as collateral to ensure payment
III. OWNER’S EQUITY – owner’s claim on the assets; residual
interest; net assets
A. Capital – generic equity account, may increase or decrease
anytime as a result of business operation
B. Withdrawal – owner’s cash or non-cash withdrawals from
the entity
Temporary/Nominal Accounts
C. Revenue or Income
 Sales – revenue derived from sale of merchandise
 Service Revenue/Income – all types of income derived
from rendering of services
 Professional Income – income earned by professional
from the practice of their profession; may be specified
as “Accounting or Auditing Fees”, “Legal Fees Income”,
“Dental Fees Income”, “Medical Fees Income”
 Rent Income – income earned building, space or other
properties owned and rented out by the entity
 Interest Income – income received by the business
arising from an amount of money borrowed by
customer and is usually covered by a promissory note
 Miscellaneous Income – income earned by the business
which is not the main line of its activity and could not be
classified clearly
D. Expenses
 Cost of Sales / Cost of Goods Sold – cost to produce and
sell the goods
 Interest Expense – expense incurred from borrowed
money, shown separately as deduction from Operating
Income before arriving at Net Income
 Rent Expense – amount paid or incurred for use of
property not owned by the entity
 Repairs or Maintenance – incurred in repairing or
servicing the building, machineries, vehicles, equipment,
etc.
 Supplies Expense – compensation given to employees
of a business
 Salaries Expense – compensation given to employees of
a business
 Doubtful Accounts Expense – anticipated loss that the
business may incur arising from uncollectible accounts
 Depreciation Expense – allocated portion of the cost of
PPE or fixed assets
 Taxes and Licenses – amount paid for business permits,
licenses and other government dues, except Income Tax
which is not allowable by law as a deduction
 Insurance Expense – expired portion of the insurance
premium
 Utilities – telephone, light and water bills; may also
include gasoline, lubricants and oil
 SSS/Philhealth/Pag-IBIG Contribution – employer’s
share on the contributions
 Miscellaneous Expense – any amount paid as expense
which is not significant enough to warrant a particular
classification
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 USJ-R College of Commerce | Acctg 101 Rm 403 MWF 8:30 AM – 10:30 AM | NEF, CPA

E. Gain and Losses – increase or decrease in net assets from trading as a business entity and must be registered with the
incidental transactions of an entity (nor directly related to the Department of Trade and Industry:
revenue producing activities of the enterprise) a. Business name
F. Income Summary – temporary account used in the closing b. Tagline
process which the balances of revenue and expense accounts c. Trademark
(including any gains or losses) are transferred; its balance is d. Patent
transferred to the capital account (or retained earnings for a 11. This organization aims to promulgate and improve accounting
corporation) standards that will constitute GAAP in the Philippines
a. PICPA
b. Board of Accountancy
c. Professional Regulation Commission
I. Introduction to Accounting d. Financial Reporting Standards Council
1. Accounting as a field of discipline relates with economics 12. It is an independent private sector body with the objective of
because: achieving uniformity in the accounting principles which are used
a. Men need to make decisions to survive, progress or perish by business enterprises for financial reporting around the world
b. Accounting provides economic reports, and measure a. International Accounting Standards Committee
business activities, in terms of money b. International Federation of Accountants
c. Accounting uses money as the principal medium of express c. FASB
for objectivity in measurement d. SEC
d. Accounting deals with business transactions which is central 13. The London-based organization tasked to harmonize the
to commercial law dealing with obligations and contracts accounting standards across countries is the
2. Which phase of accounting emphasizes the significance of the a. Financial Accounting Standards Board (FASB)
peso amount contained in the financial statements b. Accounting Standards Council (ASC)
a. Classifying c. International Financial Reporting Standards Committee
b. interpreting (IFRS)
c. bookkeeping d. International Accounting Standards Board (IASB)
d. summarizing 14. International Financial Reporting Standards (IFRS) adopted by
3. The procedural element of accounting is the International Accounting Standards Board include all of the
a. Auditing following
b. Accounting a. International Financial Reporting Standards
c. Bookkeeping b. International Accounting Standards
d. Provide services c. International Standards of Audit
4. They encompass the conventions, rules and procedures d. Interpretations originated by the International Financial
necessary to define what is accepted accounting practice Reporting Interpretations Committee (IFRIC)
a. Accounting assumptions 15. Which of the following statements is/are true regarding the
b. Accounting concepts Conceptual Framework:
c. Conceptual framework S1: It sets out the concepts that underlie the preparation and
d. Generally accepted accounting principles presentation of financial statements for external users
5. Known as the inventor of the double entry bookkeeping as he S2: It is concerned with general and special purpose financial
introduced the Florentine Approach of double entry in the 14th statements including consolidated financial statements
century S3: Its purpose us to assist preparers of financial statements in
a. Luca Pacioli applying PFRS and in dealing with topics that have yet to form
b. Eugen Schmanlenbach the subject of a PFRS
c. Andrea Bargarigo S4: It defines standards for any particular measurement or
d. Amantino Manucci disclosure issue
6. Which of the following statements about users of accounting a. Only one statement is true
information is incorrect? b. Only two statements are true
a. Production manager is an internal user c. Only three statements are true
b. Bureau of Internal Revenue examiners are external users d. All statements are true
c. Loan officers of MBTC are external users e. None of the statements are true
d. SEC, BOI are internal users 16. The objectives of financial reporting are based on
7. Which area of public accounting practice means the examination a. The need for conservatism
of financial statements by a CPA for the purpose of expressing an b. Reporting on management’s stewardship
opinion as to the fairness of the statements? c. International financial reporting standards
a. Management Advisory Services d. The needs of users of the information
b. Internal auditing 17. The conceptual framework of accounting sets out certain
c. External auditing essential characteristics of accounting information. Which of the
d. Taxation following is not an enhancing qualitative characteristic?
8. The form of business organization where capital is owned by 2 or a. Understandability
more persons who agreed to divide their net income or net loss b. Comparability
based on the agreed profit and loss ratio: c. Relevance
a. Sole proprietorship d. Timeliness
b. Partnership 18. The financial accounting information is directed towards the
c. Corporation common needs of users and is independent of presumptions
d. cooperative about particular needs and desires of specific users
9. Which of the following entities is a legal entity and can be sued? a. Relevance
a. Company b. Completeness
b. Partnership c. Verifiability
c. Sole proprietorship d. neutrality
d. Limited-liability partnership 19. According to the conceptual framework, the quality of
10. A title used by any sole trader, partnership, or company, which information that helps the users increase the likelihood of
differs from his or her own personal name, for the purpose of

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 USJ-R College of Commerce | Acctg 101 Rm 403 MWF 8:30 AM – 10:30 AM | NEF, CPA

correctly forecasting the outcome of past or present events is

called:
a. Feedback value
b. Predictive value
c. Representational faithfulness
d. reliability
20. During the lifetime of an entity, accountants produce financial
statements at arbitrary points in time in accordance with which
basic accounting concept?
a. Objectivity
b. Conservatism
c. Matching
d. periodicity
21. It refers to a period of 12 months that ends on any month when
the business is experiencing slack season
a. Calendar year
b. Leap year
c. Natural business year
d. Fiscal year
22. When Andy established Andy’s Superstore, Andy has Php
100,000 in his own bank account yet it is recorded that Andy’s
Superstore has P10,000 capital. Why is this?
a. Andy and Andy’s Superstore are two different entity
b. Andy got his money illegally
c. Andy got his money from loans
d. Andy is just daydreaming when he checked his account
23. Which of the following is an essential characteristic of an asset?
a. The claims to an asset’s benefit are legally enforceable
b. An asset is tangible
c. An asset is recorded at invoice price
d. An asset provides future benefit
24. The term “recognized” is synonymous with the term
a. Recorded
b. Realized
c. Matched
d. consistency
25. For revenue to be recognized the product/service must have
already been delivered to the recipient. What is the concept that
states the above?
a. Realisation Concept
b. Accrual Concept
c. Conservatism Concept
d. Materiality Concept
26. The concept of historical cost refers to
a. The recording of assets at the costs which were incurred
to acquire them
b. The recording of information when products and services
are acquired
c. The matching of future sales prices to the purchase
orders
d. The sales mark up of products and services relevant to
competitors pricing

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