Professional Documents
Culture Documents
Caloocan Campus
COLLEGE OF BUSINESS ADMINISTRATION
DEPARTMENT OF ACCOUNTANCY, BUSINESS LAW AND TAXATION
www.ue.edu.ph/caloocan 105 Samson Road, Caloocan City
3. A debit column total is greater than credit column total in the statement of
recognized income and expenses section of the worksheet. This means that
a. mistakes were made in the preparation of the adjusted trial balance
b. the company had a profit
c. the company had a loss
d. the income summary account will have a credit balance after the nominal
account are closed
For items 4 through 8, match the transaction that took place based on the following
given analysis of transactions.
11. An entry requiring a debit to an expense account and a credit to an asset account
is an example of an adjusting entry classified as
a. accrued expense c. prepaid expense
b. depreciation d. uncollectible accounts
12. An entry requiring a debit to an expense account and a credit to liability account
is an example of an adjusting entry classified as
a. accrued expense c. prepaid expense
b. depreciation d. uncollectible accounts
13. The classification of asset and liabilities as current or long term depends on
a. Their order of listing in the ledger
b. Whether they appear on the balance sheet or income statement
c. The relative liquidity of the items
d. The format of the balance sheet – account format or report format
For items 15 through 23, for each of the following accounts; indicate whether the
balance should be:
(a) Carried forward to the next accounting period
(b) Closed by crediting the account
(c) Closed by debiting the account.
For items 25 through 30. Indicate in which column of the worksheet each account
would be extended.
(a) Statement of Financial Performance, debits
(b) Statement of Financial Performance, credit
(c) Statement of Financial Position, debit
(d) Statement of Financial Position, credit
32. The following adjusted account balances are taken from the ledger of Hyper
Supermarket as of December 31, 2011
Freight In P 70,000
Inventory beginning 580,000
Purchase Discount 30,000
Purchase Return and Allowances 25,000
Purchases 1,020,000
Sales Discounts 43,000
Sales Returns and Allowances 37,000
Sales Revenue 1,915,000
33. Before any year-end adjustments, the profit of Heart Co. was P1,870,000.
However, the following adjustments are necessary: office supplies use, P30,000;
services performed for clients but not yet collected, P65,000; interest accrued on
notes payable, P15,000. After recording these adjustments, the profit would be
a. P 1,890,000 c. P 2,020,000
b. P 1,920,000 d. P 2,050,000
34. Happy Company purchased equipment on August 1, 2011 by giving their supplier
a one year, 12% note with a face value of P500,000. The December 31 adjusting
entry related to the note is
a. Debit Interest Expense and credit Cash for P25,000
b. Debit Interest Expense and credit Interest Payable for P25,000
c. Debit Interest Expense and credit Interest Payable for P5,000
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d. Debit Interest Expense and credit Interest Payable for P60,000
35. Supplies totaling P300,000 was purchased during the period and debited to
Supplies Expenses. A physical count shows P30,000 of unused supplies at the
end of the period. The appropriate adjusting journal entry at the end of the period
is
a. Debit Supplies on Hand and credit Supplies Expense for P 30,000
b. Debit Supplies Expense and credit Supplies on Hand for P 30,000
c. Debit Supplies on Hand and credit Supplies Expense for P 270,000
d. Debit Supplies Expense and credit Supplies on Hand for P 270,000
37. If on December 31, 2011, the trial balance showed insurance still unexpired
amounting to P8,000, the adjusting entry would contain
a. Debit to prepaid insurance for P12,000
b. Credit to prepaid insurance for P12,000
c. Debit to prepaid insurance for P8,000
d. Credit to prepaid insurance for P8,000
38. If the estimated depreciation for office equipment were P10,000, the adjusting
entry would contain
a. A credit to accumulated depreciation for P10,000
b. A credit to depreciation expenses for P10,000
c. A debit to accumulated depreciation for P10,000
d. A credit to office equipment for P10,000
39. If as of December 31, the rent of P5,500 for December had not been recorded or
paid, the adjusting entry would include
a. A credit to accumulated rent for P5,500
b. A debit to rent payable for P5,500
c. A debit to rent expense for P5,500
d. A credit to cash for P5,500
40. If services totaling P10,000 had been performed but not billed, the adjusting entry
to record this would include a
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a. Debit to service revenue earned for P10,000
b. Credit to unearned service revenue for P10,000
c. Credit to service revenue earned for P70,000
d. Credit to service revenue earned for P10,000
41. Rent income account has a credit balance of P 240,000 composed of the
following:
Rental for three months ending march 31, 2011, P45,000
A credit of P195,000 representing advance rental payment for one year
beginning April 1
The December 31 adjusting entry will require a debit to Rent Income and a credit
to Unearned Rent of
a. P45,000 c. P 191,250
b. P 48,750 d. P 195,000
42. As of December 31, 2011, GQA Co. Has assets of P 500,000 and Owner’s
Equity of P 200,000. How much are liabilities as at December 31, 2011?
a. P 100,000 c. P 200,000
b. P 150,000 d. P 300,000
43. Insurance expense account has a balance of P10,800 before adjustment. This
amount represents insurance premium for four months beginning October 1,
2011. Based on these data, the prepaid insurance that should be reported in the
December 31, 2011 statement of financial position is
a. P 0 c. P 2,700
b. P 5,400 d. P 10,800
45. An item retailing for P 100,000, subject to a trade discount of 15% is paid for
within the discount period on terms 2/10, n/30. What is the amount of payment
a. P 100,000 c. P 83,300
b. P 85,000 d. P 98,000
46. LBA Enterprises pays its weekly salary of P50,400 for a six day workweek ending
on Saturday. The company follows the calendar year ending December 31.
Assuming that December 31falls on Wednesday, how much is accrued salaries
to be reported in December 31 Statement of Financial Position?
a. P 25,200 c. P 16,800
b. P 8,400 d. P 33,600
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48. If the total assets decrease P50,000 during the period and total liabilities
decrease P24,000 during the same period, the amount and direction (increase or
decrease) of change in owners equity for that period is:
a. P74,000 decrease c. P 74,000 increase
b. P 26,000 decrease d. P 26,000 increase
49. Nasty Company recorded the sale at P 60,000. If the sale was subject to a 20%
trade discount and credit terms of 5/10, n/60, the list price was:
a. P 75,000 c. P 45,000
b. P 48,000 d. P 70,700
50. If revenue was P 90,000, expenses were P75,000 and the owner’s withdrawal
were P 20,000, the amount of net income or net loss would be
a. P 15,000 net income c. P 75,000 net loss
b. P 90,000 net income d. P 5,000 net loss
52. Rosemarie Company records the payment of insurance policies in the prepaid
insurance account. Information pertaining to 2011 follows:
Prepaid insurance, January 1, 2011 P 30,000
Insurance expense P 38,000
Prepaid insurance, December 31, 2011 P 36,000
The cost of insurance acquired during 2011 was
a. P 44,000 c. P 28,000
b. P 8,000 d. P 6,000
53. What sales price should be recorded when an item having a P 90,000 list price is
sold with 12% trade discount? The sales invoice includes terms 2/10, n/30.
a. P 79,200 c. P 74,700
b. P 80,000 d. P 76,500
Item # 54-58. Financial information is listed below for three different companies.
Determine the missing accounts
Liz Monroe Allied
Cosmetics Grocery Wholesalers
Sales P 90,00 P (54) P 144,000
Sales Return 16,000 6,000 12,000
Net Sales ???? 94,000 132,000
Beginning Inventory 14,000 (56) 44,000
Purchases 88,000 100,000 (57)
Purchase Returns 6,000 10,000 8,000
Ending Inventory 32,000 50,000 30,000
Cost of Goods Sold (55) 72,000 (58)
Gross Profit 10,000 22,000 24,000
a. P 102,000 d. P 100,000
b. P 64,000 e. P 108,000
c. P 32,000
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59. On a worksheet, the income statement debit columns equals P800,000 and the
credit columns equals P700,000. Which of the following statement is correct?
a. The company realized a profit of P100,000 and it must be added to the
income statement credit column and the statement of financial position debit
column to complete the worksheet
b. The company incurred a loss of P 100,000 and it must be subtracted from
the income statement debit column and the statement of financial position
credit column to complete the worksheet
c. The company incurred a loss of p100,000 and it must be added to the
income statement credit column and the financial statement position debit
column to complete the worksheet
d. The company realized a profit of P100,000 and it must be subtracted from
the income statement debit column and added to the statement of financial
position debit column
The adjusted trial balance of Pedro Company shows the following balances:
Debit Credit
Cash P 500,000
Accounts receivable 70,000
Furniture and Fixtures 150,000
Accumulated Depreciation P 40,000
Accounts payable 50,000
Pedro, Capital 250,000
Pedro, Drawing 50,000
Service Fee 600,000
Salary Expense 100,000
Depreciation expense 40,000
Miscellaneous expense 30,000
P 940,000 P 940,000
=========================
60. How much is the profit and the total assets of the company?
Profit Total Asset
a. P 430,000 P 680,000
b. P 410,000 P 710,000
c. P 410,000 P 570,000
d. P 460,000 P 750,000
61. The cost of goods available for sale is P 1,300,000. The gross profit is P
350,000, net sales amounted to P 1,000,000, net purchases are p 1,100,000 and
operating expenses are P 300,000. How much is the profit or loss of the company?
a. P 300,000 profit c. P 50,000 profit
b. P 300,000 loss d. P 50,000 loss
62. On November 1, 2011, the Diamond Company prepaid P 36,000 for one year
insurance policy. Diamond debited Insurance Expense and credited Cash for P
36,000. If adjusting entries are recorded annually, the appropriate adjusting entry at
December 31, 2011 is
a. A debit to prepaid insurance and credit to insurance expense for P 6,000
b. A debit to insurance expense and a credit to prepaid insurance for P6,000
c. A debit to insurance expense and a credit to prepaid insurance for P30,000
d. A debit to prepaid insurance and credit to insurance expense for P 30,000
63. Using information in no. 62 and assuming that Diamond Company prepares the
reversing entries, what is the correct reversing entry on January 1, 2012
a. A debit to insurance expense and a credit to prepaid insurance for P6,000
b. A debit to prepaid insurance and a credit to insurance expense for P 30,000
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c. A debit to insurance expense and a credit to prepaid insurance for p 30,000
d. No reversing entry should be recorded
64.Sisa Company reported a net income of P40,000. Its net sales were P 200,000
and a gross profit was 40% of net sales. Operating expenses amounted to
a. P 160,000 c. P 40,000
b. P 60,000 d. P 120,000
65. Net sales amounted to P50,000 with cost of sales representing 50%. If operating
expenses is 30% of gross profit, net income will be.
a. P 5,000 c. P 17,500
b. P 12,500 d. P 7,500
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