NAME: SECTION:

FUNDACC-FINAL EXAM

1. What is the era that replaced hand tools with machine or power tools?
a. Computer age c. Information age
b. Industrial revolution d. Media age

2. What is considered to be the greatest corporate fraud case recorded in American history which
caused Arthur Andersen, a top audit firm to close business?
a. Enron scandal c. Waste management scandal
b. AIG scandal d. Worldcom scandal

3. Who is considered the Father of Accounting?

a. Dr. Gunter Dreyer c. Luca Pacioli
b. Benedetto Cotrugli d. William the Conqueror

4. Which branch of accounting is involved in a profession that involves partnering in management

decision making, devising planning and performance management systems?
a. Financial Accounting c. Management Accounting
b. Government Accounting d. Auditing

5. Which branch of accounting is involved in deals with the theoretical framework covering
accounting principles and concepts.
a. Financial Accounting c. Management Accounting
b. Government Accounting d. Auditing

6. Who provides the financial resources to keep the business going?

a. Investors/owners c. Primary users
b. Secondary users d. Stockholder

7. Who are interested in the company’s current financial position and results of operations, as well
as the company’s financial history, before making an investment?
a. Potential investors c. Primary users
b. Secondary users d. Stockholders

8. What form of business organization whose owners are called stockholders?

a. Corporation c. Single proprietorship
b. Partnership d. Cooperatives

9. What form of business organization is a duly registered association of persons, with a common
bond of interest, who have voluntarily joined together to achieve a lawful common social or
economic end?
a. Corporation c. Single proprietorship
b. Partnership d. Cooperatives

10. Which type of business operation is engaged in the buying and selling of goods?
a. Merchandising c. Manufacturing
b. Service concern d. Cooperatives

11. Which concept which assumes that the business enterprise will continue to operate indefinitely?
a. Entity concept c. Objectivity concept
b. Going concern d. Periodicity
12. Which concept provides financial accounting information about the economic activities of an
enterprise for specified time periods?
a. Entity concept c. Objectivity concept
b. Going concern d. Periodicity

13. Which of the following year that has twelve-month period starting on January 1 to December 31?
a. Calendar year c. Fiscal year
b. Leap year d. Liturgical year

14. Which concept regards business as separate and distinct from its owners?
a. Entity concept c. Objectivity concept
b. Going concern d. Periodicity

15. Which concept assumes that financial reporting is only concerned with significant information
enough to affect decisions?
a. Adequate disclosure c. Consistency
b. Materiality d. Accrual principle

16. What is the effect on the accounting equation when the customer paid cash for services
rendered?
a. Increase in assets – Increase in capital c. Decrease in assets – Decrease in capital
b. Increase in assets – Increase in liabilities d. Decrease in assets – Decrease in liabilities

17. What is the effect on the accounting equation when the company received a note for services
rendered?
a. Increase in assets – Increase in capital c. Decrease in assets – Decrease in capital
b. Increase in assets – Increase in liabilities d. Decrease in assets – Decrease in liabilities

18. What is the effect on the accounting equation when the company paid salaries for employees?
a. Increase in assets – Increase in capital c. Decrease in assets – Decrease in capital
b. Increase in assets – Increase in liabilities d. Decrease in assets – Decrease in liabilities

19. What is the effect on the accounting equation when the company rendered services on credit?
a. Increase in assets – Increase in capital c. Decrease in assets – Decrease in capital
b. Increase in assets – Increase in liabilities d. Decrease in assets – Decrease in liabilities

20. What is the effect on the accounting equation when the company paid electricity bill received?
a. Increase in assets – Increase in capital c. Decrease in assets – Decrease in capital
b. Increase in assets – Increase in liabilities d. Decrease in assets – Decrease in liabilities

21. What is the effect on the accounting equation when the company purchase of equipment on
account
a. Increases asset and decrease liability
b. Increase asset and liability
c. Decrease equity
d. Decreases asset and liability
22. A customer brought his car to your repair shop and after the work was done he made a cash
payment of P15,000 representing 50% of the repair bill and then issued a note for the balance of
P15,000 promising to pay after one month. The accountant immediately recorded P30,000 as
revenue of the repair shop. What accounting principle this support?
a. Matching c. Cost
b. Accrual d. Objectivity
23. A customer brought his car to your repair shop and after the work was done he made a cash
payment of P15,000 representing 50% of the repair bill and then issued a note for the balance of
P15,000 promising to pay after one month. The accountant immediately recorded P30,000 as
revenue of the repair shop. What accounting principle this support
 a. Matching c. Cost
b. Accrual d. Objectivity
24. Which accounting area involves the review and examination of accounting records and financial
statement and from which a professional and unbiased opinion is given as to the fairness of the
accounting information contained in the financial statements?
a. Forensic Accounting c. Auditing
b. Financial Accounting d. Cost Accounting
25. What is the accounting concept that disallows the presentation of owner's personal assets and
liabilities in the statement of financial position of the business?
a. Identity b. Separation c. Objectivity d. Entity
26. Amalia Industries received a utility bill of P7,315.23 and immediately paid 65% of it. The effect of
the transactions in statement of financial position is:
a. Increase in asset by P4,754.90 c. Increase in liability by P4,754.90
b. Decreased in asset by P4,754.90 d. None
27. The company’s assets are P90,000,000 of which 5/9 represents owner's equity. How much is its
total liabilities?
a. P4,000,000 c. P5,000,000
b. P40,000,000 d. P50,000,000
28. At the beginning of the year, the liabilities of Shelltron Service Station amounted to P 152,500
but it decreased by P 45,000 during the year. The assets increased by P110,500 during the year
and at the end of the year amounted to P 485,700. What is owner's equity at the start of this
year?
a. P330,200 c. P222,700
b. P482,700 d. P267,700
29. The following are the essential elements of an asset. Which is not?
a. Controlled by the entity
b. Result of future events
c. Future economic benefit is expected
d. The amount can be measured reliably
30. The following are the essential elements of a liability. Which is not?
a. Present obligation
b. Result of a past event
c. Future economic benefit is expected
d. Results to an outflow of resources
31. What is the account used for telephone, water, and light services received or used up?
a. Utilities expense c. Communication Expense
b. Rent Expense d. Power Expense
32. The owner-manager wrote on a piece of paper that utility expense for electricity was incurred by
the business in the amount of P1,500. The accountant refused to record these transactions
unless the receipts for this are surrendered to him. What concept is applied?
a. Accrual c. Unit of Measure
b. Cost d. Objectivity
33. Which of the following is not another term for equity?
a. Net assets
b. Net worth
c. Capital
d. Net liabilities
34. What is the first step in accounting cycle?
a. Record transactions in a journal
b. Analyze transactions from source documents
c. Post journal entries to general ledger accounts
d. Adjust the general ledger accounts
35. Which of the following is not characteristic of proprietary theory that influences accounting for
partnerships?
a. Partners & salaries are viewed as a distinguishing of income rather than component of
net income.
 b. Partnership is not viewed as separate and distinct from the owners.
c. A partnership is characterized by limited liability.
d. Changes in ownership structure of a partnership result in the dissolution of the
partnership

36. Which of the following cannot be found in a Statement of Financial Position of a partnership
business but not in the sole proprietorship?
a. Owner’s Equity
b. Accumulated Depreciation
c. Partner’s Equity
d. Accounts payable
37. Which of the following will not comprise financial statements of a partnership business?
a. Statement of Financial Position
b. Statement of Changes in Owner’s Equity
c. Statement of Comprehensive Income
d. Statement of Cash Flow

38. The basic components of financial statements include all of the following, except
a. Statement of retained earnings
b. Statement of Changes in Owner’s Equity
c. Statement of Comprehensive Income
d. Statement of Cash Flow
39. This includes coins, currencies, checks, bank deposits, and other cash items readily available for
use in the operations of the business
a. Accounts receivables c. Marketable securities
b. Cash and cash equivalents d. Cash
40. These are stocks bonds purchased by the enterprise and are to be held for only a short span of
time or duration and are usually purchased when a business has excess cash.

a. Accounts receivables c. Marketable securities

b. Cash and cash equivalents d. Cash
41. Amount collectible from the customer to whom sales have been made or services have been
rendered on account or credit.

a. Accounts receivables c. Marketable securities

b. Cash and cash equivalents d. Cash
42. These are the unsold goods at the end of the accounting period and is applicable only to a
merchandising business.
a. Accounts receivables c. Long term investment
b. Inventories d. Cash
43. These are tangible assets that are held by an enterprise for use in the production or supply of
goods or services, or for administrative purposes.
a. Land c. Building
b. Property plant and equipment d. Furniture and fixtures
44. Includes tables, chairs, carpets, curtains, lamp and lighting fixtures, and wall decors.
a. Land c. Building
b. Property plant and equipment d. Furniture and fixtures

45. Includes revenue earned or generated by the business in performing services for a customer or
client.
a. Salaries and wages c. Service income
b. Utility expense d. Supply expense
46. Include all payments made to employees or workers for rendering services to a company.
a. Salaries and wages c. Service income
b. Utility expense d. Supply expense
47. Covers office supplies used by a business in the conduct of its daily operations..
a. Salaries and wages c. Service income
b. Utility expense d. Supply expense
48. These are debts arising from the purchase of an asset or the acquisition services on account.
a. Accounts payable c. Unearned revenue
b. Notes payable d. Loans payable
49. Represent obligations of the business arising from advance payments received before goods or
services are provided to the customer.
a. Accounts payable c. Unearned revenue
b. Notes payable d. Loans payable
50. Represents the withdrawals made by the owner of the business in cash or other
a. Income summary c. Capital
b. Drawing assets d. Service revenue
51. It summarizes the cash receipts and cash disbursements for the accounting period
a. Statement of Owner’s Equity c. Statement of Cash flow
b. Balance Sheet d. Income Statement
52. The end product of the accounting process
a. Financial statement c. Books of account
b. General ledger d. Journal
53. It shows the changes in the capital or owner’s equity as a result of additional investment or
withdrawals by the owner, plus or minus the net income or net loss for the year
a. Statement of Owner’s Equity c. Statement of Cash flow
b. Balance Sheet d. Income Statement
54. It shows the financial condition of a business as of a given period. It consists of the assets,
liabilities and capital.
a. Statement of Owner’s Equity c. Statement of Cash flow
b. Balance Sheet d. Income Statement
55. It shows the result of operations for a given period
a. Statement of Owner’s Equity c. Statement of Cash flow
b. Balance Sheet d. Income Statement
56. A record of all the accounts.
a. Chart of accounts c. Transactions
b. Journal d. Ledger
57. Exchanges which involve value received or value parted with.
a. Chart of accounts c. Transactions
b. Journal d. Ledger
58. Forms evidencing the occurrence of transactions and are used as source to record these
transactions
a. Posting c. Journal
b. Ledger d. Business documents
59. Book of original entry
a. Posting c. Journal
b. Ledger d. Business documents
60. The process of transferring transaction from the journal to the ledger
a. Posting c. Journal
b. Ledger d. Business documents
61. Set of books used by accountants to record transactions and events which are financial in
nature.
a. Accounting cycle c. Financial statement order
b. Books of accounts d. Posting
62. Set up a ledger page for each customer
a. General ledger c. Accounts payable ledger
b. Subsidiary ledger d. Accounts receivable ledger

63. Set up a ledger page for each supplier/creditors

 a. General ledger c. Accounts payable ledger
b. Subsidiary ledger d. Accounts receivable ledger
64. Records of the increase (pluses), decrease (minuses), and balances of certain general ledger
accounts
a. General ledger c. Posting
b. Subsidiary ledger d. Compound entry
65. A chronological record of events or business transactions showing all the effects of each
transaction in terms of debits and credits
a. Ledger c. Account
b. Trial balance d. Journal

66. The basic format used to record every account

a. Ledger c. T-account
b. Account d. Journal
67. Increase side of the account
a. Normal balance of an account c. Account title
b. Book of account d. Ledger account
68. The process of recording a transaction in the journal
a. Journalizing c. Classifying
b. Posting d. Interpreting
69. Debit shows
a. Increase in liabilities c. Normal balance of an account
b. Increase in assets d. Account titles
70. Credit shows
a. Increase in liabilities c. Normal balance of an account
b. Increase in assets d. Account titles