ACC 106 - P1 EXAMINATION, Part 1

BMM Co. prepared its unadjusted trial balance and determined that the totals of debits and credits do not
equal. Further investigation revealed the following: How much is the difference between the total debits and
total credits in the trial balance? *
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16,000 excess debits

16,000 excess credits
 
22,000 excess debits
22,000 excess credits
 
The total credits in the statement of financial position columns of a worksheet are ₱2,161,200, while the total
debits in the income statement columns are ₱740,400. The total debits in the adjusted trial balance are
₱2,970,000. How much is the profit (loss) for the period? *
1/1

68400
 
 
This concept views each transaction as having a two-fold effect on values – a value received and a value
parted with, and each transaction is recorded using at least two accounts. *
1/1
Equilibrium
Duality
 
Twins concept
No I.D., No entry concept
 
BMM Co. has the following information: How much is the cash balance per bank statement? *
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370
 
 
BMM Co. is preparing its September 30, 20x1 bank reconciliation. Relevant information is shown below: The
compound entry to reconcile the accounts includes a *
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net debit to cash for ₱2,020.

 
net credit to cash for ₱700.
credit to notes receivable for ₱2,500
net debit to accounts receivable for ₱590.
 
BMM Co. records all disbursements using nominal accounts. On December 31, 20x1, BMM Co. has total
expenses of ₱4,000,000 before considering the following: How much is the adjusted total expenses? *
···/1

64600
 

Correct answer
3704000
 
If the Cash Short and Over account has a credit balance at the end of the period and the investigation for the
discrepancy was without merit, the balance would be reported in the financial statements as *
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receivable from an employee.
loss.
other liabilities.
other income or gain.
 
 
The BMM Manufacturing Company received its bank statement for the month ending May 31. The bank
statement indicates a balance of ₱32,400. The cash account as of the close of business on May 31 has a
balance of ₱8,350. In reconciling the balances, the following items were discovered: How much is the
adjusted balance of cash? *
1/1

4300
 
 
Which of the following is added to the cash balance per bank statement when preparing a bank
reconciliation statement? *
1/1
Credit memo
Debit memo
Outstanding check
Deposit in transit
 
 
BMM Corporation's checkbook balance on December 31, 2001 was ₱8,000. In addition, BMM held the
following items in its safe on December 31: The proper amount to be shown as cash on BMM's balance
sheet at December 31, 2001, is *
···/1

0
 

Correct answer
8600
 
BMM Co. established a petty cash fund of ₱1,400. The following were the fund disbursements during the
period: In addition to the receipts (source documents) for the above items, the petty cash box contained ₱8
in coins and an IOU of ₱8 from the secretary handling the fund. The IOU is to be treated as salary advance.
The company uses a cash over and short account, as needed. The company decided to decrease the petty
cash fund to ₱1,000 after replenishing the fund. How much is the cash (shortage) or overage during the
period? *
···/1

1050
 

Correct answer
-4
 
It is a formal record where transactions are initially recorded. *
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Journal entries
Ledger
 
Master file
Journal

Correct answer
Journal
 
At December 31, 20x3, BMM Co. had the following balances in the accounts it maintains at CNN Bank: BMM
Co. classifies debt securities acquired three months or less before maturity date as cash equivalents. In its
December 31, 20x3 statement of financial position, what amount should BMM Co. report as cash and cash
equivalents? *
1/1
240000
 
 
On March 1, an entity received ₱3,000 from a client as an advance for 12 months’ worth of delivery services.
The entity initially recorded the receipt as a debit to cash and a credit to delivery service revenue. The
adjusting entry on December 31 would include a *
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debit to delivery service revenue for ₱2,500.
 
credit to unearned delivery service revenue for ₱500.
credit to delivery service revenue for ₱500.
No adjusting entry is required because the delivery service exactly covers a one-year period.

Correct answer
credit to unearned delivery service revenue for ₱500.
 
BMM Company had the following bank reconciliation at March 31: All reconciliation items at March 31
cleared through the bank in April. Outstanding checks at April 30 totaled ₱15,000. What is the amount of
cash disbursements per books in April? *
···/1

98000
 

Correct answer
89200
 
A company paid its property taxes on October 1 for the period October 1, year 1 to September 30, year 2.
When the payment was made, the company debited property taxes expense and credited cash for ₱8,000.
The adjusting entry at December 31, year 1 would include which of the following: *
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debit prepaid property taxes, ₱6,000.
 
credit prepaid property taxes, ₱6,000.
credit property tax expense, ₱2,000.
debit property tax expense, ₱6,000.
 
When a bank receives cash from a depositor, the bank credits which of the following accounts? *
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Cash on hand
an appropriate income account
Cash in bank
 
Deposit liability

Correct answer
Deposit liability
 
Under the imprest system of handling petty cash funds, the petty cash fund account is credited when  *
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disbursement is made out of the fund.
the fund is replenished.
 
the fund is not replenished and the fund is adjusted for the disbursements during the period.
the imprest balance of the fund is increased.

Correct answer
the fund is not replenished and the fund is adjusted for the disbursements during the period.
 
Which of the following is not one of the components of an accounting information system? *
1/1
Personnel
Accounting policies
Equipment and devices used to expedite accounting work
T--account
 
 
The adjusting entry to recognize an expense that has been incurred but not yet paid involves a debit and a
credit to *
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an asset account and a liability account, respectively.
an asset or contra asset account and an expense account, respectively.
 
an expense account and a liability account, respectively.
a receivable account and a revenue account, respectively.

Correct answer
an expense account and a liability account, respectively.
 
The credit total of a trial balance exceeds the debit total by ₱350. In investigating the cause of the difference,
the following errors were determined: How much is the reconciled balance using the information given
above? *
···/1

0
 

Correct answer
7450
 
The policies and procedures used to safeguard assets, ensure accurate business information, and ensure
compliance with laws and regulations are called *
0/1
voucher system.
 
bank reconciliation.
internal controls.
proof of cash.

Correct answer
internal controls.
 
Which of the following is not considered an internal control over cash? *
0/1
rotating duties among employees with cashier responsibilities
separating the responsibilities for cash custody and cash recording
 
management’s operating style
voucher system

Correct answer
management’s operating style
 
BMM Co. is preparing its March 31, 20x1 bank reconciliation. The following information was determined:
How much is the adjusted balance of cash? *
···/1
0
 

Correct answer
330000
 
It is a fund that is used to pay relatively small amounts. *
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pretty cash fund
small fund
revolving fund
petty cash fund
 
 
BMM Co. received cash to be held in trust for CNN Co. under an escrow agreement. How should BMM Co.
report the amount received in its financial statements? *
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as part of cash
as a liability
 
as an asset and a liability
as an off-balance sheet item that is disclosed in the notes

Correct answer
as an asset and a liability
 
BMM Co. had the following bank reconciliation at March 31, 20x1: All reconciling items at March 31, 20x1
cleared the bank in April. Outstanding checks at April 30, 20x1 totaled ₱7,000. There were no deposits in
transit at April 30, 20x1. What is the cash balance per books at April 30, 20x1? *
···/1
44900
 

Correct answer
48200
 
The amount of the outstanding checks is included on the bank reconciliation as: *
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an addition to the balance per bank statement
a deduction from the balance per bank statement
 
an addition to the balance per depositor’s records
a deduction from the balance per depositor’s records
Option 4
 
Journal entries based on the bank reconciliation are required on the depositor’s books for: *
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additions to the balance according to the depositor’s records
deductions from the balance according to the depositor’s records
both a and b
both additions to and deductions from the balance according to the bank’s records
 
 
On December 31, 20x1, BMM Company had the following cash balances: Cash in banks includes ₱600,000
of compensating balances against short-term borrowing arrangements at December 31, 20x1. The
compensating balances are not legally restricted as to withdrawal by BMM. In the current assets section of
BMM's December 31, 20x1, balance sheet (statement of financial position), what total amount should be
reported as cash? *
1/1
1850000
 

ACC 106 - P1 EXAMINATION, Part 2

Which of the following statements is incorrect regarding the initial recognition of receivables?  *
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On initial recognition, the fair value of a short-term receivable may be equal to its face amount.
On initial recognition, the fair value of a long-term receivable bearing a reasonable interest rate is deemed
equal to its face amount.
On initial recognition, the fair value of a long-term noninterest bearing receivable is deemed equal to the
present value of future cash flows from the instrument discounted at the effective interest rate on initial
recognition.
On initial recognition, the fair value of all interest-bearing receivables is deemed equal to their face amount.
 
 
An analysis and aging of accounts receivable of the BMM Company at December 31, 2002 showed the
following: Compute for the net realizable value of the accounts receivable of BMM Company at December
31, 2002. *
···/1

799200
 

Correct answer
727200
 
The note is due in four equal annual installments. The first installment is due one period from initial
recognition. What is the carrying amount of the note at initial recognition? *
···/1

772000
 

Correct answer
582742
 
On January 2, 20x3, BMM Co. sold equipment with a carrying amount of ₱480,000 in exchange for a
₱600,000 noninterest bearing note due January 2, 20X6. There was no established exchange price for the
equipment. The prevailing rate of interest for a note of this type at January 2, 20x3 was 10%. In BMM' 20x3
income statement, what amount should be reported as interest income? *
···/1

450000
 

Correct answer
45000
 
The note is due in five equal annual installments. The first installment is due at initial recognition. What is the
carrying amount of the note at initial recognition before any collection? *
···/1

3383316
 

Correct answer
626194
 
Which of the following best describes the concept of time value of money? *
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interest is earned or incurred on debt instruments due to passage of time
 
interest is earned only on interest-bearing receivables
the amount debited to interest receivable is always equal to the interest income recognized during the
period
if no interest receivable is recognized, no interest income is also
 
For the month of December, the records of BMM Corporation show the following information: How much are
the gross sales in December? *
1/1
120000
 
 
On January 1, 20x1, BMM Co. sold transportation equipment with a historical cost of ₱12,000,000 and
accumulated depreciation of ₱7,000,000 in exchange for cash of ₱100,000 and a noninterest-bearing note
receivable of ₱4,000,000 due in 4 equal annual installments starting on January 1, 20x1 and every January
1 thereafter. The prevailing rate of interest for this type of note is 12%. How much is the interest income in
20x1? *
···/1

288200
 

Correct answer
288220
 
Why did the accountant cross-foot amounts in the worksheet? *
1/1
probably to get the adjusted balance of an account
 
because the amount cannot cross-foot the accountant
to get into the other side of the worksheet
because the accountant does not have a ruler to make a double-rule

BMM Company received a one-year non-interest-bearing note receivable. When the note receivable was
recorded, which of the following were debited or credited? *

Interest Receivable
Discount on Note Receivable
Score
Yes
1/1
 
No
0/0
 
Yes
No
On January 1, 20x1, BMM Co. received a 4-year, noninterest bearing note of ₱1,000,000 in exchange for
land with carrying amount of ₱500,000. The note is due on December 31, 20x4. The effective interest rate is
14%. How much is the carrying amount of the note on the Dec. 31, 20x2 and what is the net effect of the
transaction in BMM Co.’s 20x1 profit or loss? *

674,971
769,467
82,891
174,971
94,496
(9,189)
Score
Carrying amount on Dec. 31, 20x2
0/1
 
Net effect in 20x1 P/L ; Increase (Decrease)
0/0
 
Carrying amount on Dec. 31, 20x2
Net effect in 20x1 P/L ; Increase (Decrease)
Correct answers

674,971
769,467
82,891
174,971
94,496
(9,189)
Carrying amount on Dec. 31, 20x2
Net effect in 20x1 P/L ; Increase (Decrease)
Carrying amount on Dec. 31, 20x2
Net effect in 20x1 P/L ; Increase (Decrease)
 
What factor should you use for a ₱2,000 note receivable that is collectible in full after five years? *
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Present value of 1
 
Present value of an ordinary annuity of 1
Present value of an annuity due of 1
Any of these
 
Which of the following is true regarding non-interest bearing note receivables? *
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they are always discounted to their present value on initial recognition
they include a specified principal amount but an unspecified interest amount
they include a specified principal and specified interest
they cause no interest income to be recognized over their term
they include an unspecified principal and an unspecified interest
 
 
Under the allowance method of recognizing bad debts on trade accounts receivable, the effect of writing off
an account to an entity's working capital is *
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increase
decrease
either a or b depending on the current level of the entity's working capital
no effect
 
 
The following information is available for BMM Company: It has been determined that an allowance for
doubtful accounts of ₱9,500 is needed at December 31, 2004. What amount should BMM record as "bad
debt expense" for the year ended December 31, 2004? *
···/1

8500
 

Correct answer
10500
 
BMM Co. received the following note: The note is due in lump sum in five years’ time. What is the carrying
amount of the note at the end of the second year? *
···/1

936426
 

Correct answer
877430
 
On July 1, 2002, BMM Corp. received a one-year note with a face value of ₱900,000 and a stated interest
rate of 15 percent in exchange for a machine with a fair value of ₱1,000,000. What is the effective interest
rate on the note? *
0/1
16.67 percent
 
15.0 percent
3.5 percent
11.11 percent

Correct answer
3.5 percent
 
A trial balance before adjustments included the following: If the estimate of uncollectibles is made by taking
1% of net sales, the amount of the adjustment is *
1/1

4110
 
 
On January 1, 20x1, BMM Co. sold transportation equipment with a historical cost of ₱12,000,000 and
accumulated depreciation of ₱7,000,000 in exchange for cash of ₱100,000 and a noninterest-bearing note
receivable of ₱4,000,000 due in 4 equal annual installments starting on January 1, 20x1 and every January
1 thereafter. The prevailing rate of interest for this type of note is 12%. How much is the carrying amount of
the receivable on December 31, 20x1? *
1/1
1,690,510
892,857
2,690,051
 
1,594,388
 
During the year, BMM Company made an entry to write off a ₱4,000 uncollectible account. Before this entry
was made, the balance in accounts receivable was ₱80,000 and the balance in the allowance account was
₱4,500. The net realizable value of accounts receivable after the write-off entry was *
1/1
75500
 
 
The overdraft per bank statement of BMM Co. was ₱36,088 as of March 31, 20x1. The following information
was gathered. How much is the overdraft per BMM’s cashbook on March 31, 20x1? *
···/1

0
 

Correct answer
33670
 
On July 1, 2010, a company obtained a two-year 8% note receivable for services rendered. At that time, the
market rate of interest was 10%. The face amount of the note and the entire amount of the interest are due
on June 30, 2012. Interest receivable at December 31, 2010, was *
1/1
5% of the face value of the note.
4% of the face value of the note
 
5% of the July 1, 2010 present value of the amount due on June 30, 2012.
4% of the July 1, 2010 present value of the amount due on June 30, 2012.
 
A trial balance before adjustments included the following: If the estimate of uncollectibles is made by taking
10% of gross account receivables, the amount of the adjustment is *
1/1

4540
 

At the close of its first year of operations, December 31, 2004, BMM Company had accounts receivable of
₱490,000, after deducting the related allowance for doubtful accounts. During 2004, the company had
charges to bad debt expense of ₱90,000 and wrote off, as uncollectible, accounts receivable of ₱40,000.
What should the company report on its balance sheet at December 31, 2004 as accounts receivable before
the allowance for doubtful accounts? *
1/1
540000
 
 
According to the PFRSs, receivables (with allowed practical expedient for trade receivables) are initially
recognized at *
1/1
fair value
present value
cost
fair value plus transaction costs.
 
 
The note is due in lump sum in five years’ time. What is the carrying amount of the note at initial
recognition? *
···/1

384505
 

Correct answer
415495
 
BMM Co. received the following note: The note is due in four equal annual installments. The first installment
is due one period from initial recognition. How much is the balance of the unearned interest income (discount
on note receivable) at the end of the second year? *
···/1

322571
 

Correct answer
86242
 
BMM Co. has been recognizing bad debt expenses based on the direct write-off method. In 20x4, How much
is the doubtful accounts expense to be recognized in 20x4? *
···/1
5050
 

Correct answer
34000
 
On Jan. 2, 20x1, an entity sold a machine in which the receipt of the consideration is deferred to May 1,
20x2. The total collection on May 1, 20x2 will include both principal and interest. Assuming interest at a 10%
rate, the initial measurement of the receivable would be computed as the total collection multiplied by what
time value of money factor? *
0/1
Future value of annuity of 1
Future value of 1
Present value of annuity of 1
 
Present value of 1

Correct answer
Present value of 1
 
BMM Co. received the following note: The note is due in four equal annual installments. The first installment
is due one period from initial recognition. What is the carrying amount of the note at the end of the second
year? *
···/1

877429
 

Correct answer
513758
 
At 30 September 2000, BMM Ltd. had a provision for doubtful debts of ₱37,000. During the year ended 30
September 2001 the company wrote off debts totaling ₱18,000, and at the end of the year, it is decided that
the provision for doubtful debts should be ₱20,000. What should be included in the income statement for bad
and doubtful debts? *
0/1
₱35,000 debit
₱1,000 debit
₱38,000 debit
₱1,000 credit
 

Correct answer
₱1,000 debit

ACC106/GEN009 QUIZ 1 PART 1 

An accounting record into which the essential facts and figures in connection with all transactions are initially
recorded is called the
0/1
a.ledger.
 
b.account.
c. trial balance.
d. none of these.

Correct answer
d. none of these.
 
These are entries made at the end of the accounting period to update certain amounts so that they reflect
correct balances at the designated time.
1/1
a. Correcting entries
b. Adjusting entries
 
c. Reclassification entries
d. Reversing entries
 
ABC Co. prepared its unadjusted trial balance and determined that the totals of debits and credits do not
equal. Further investigation revealed the following: The debit posting for a cash sale was omitted.
6,000The balance of Inventory was listed as a credit instead of debit 36,000The balance of Insurance
expense was listed as Rent expense 9,000Unearned interest income was listed as a debit instead of credit
15,000. How much is the difference between the total debits and total credits in the trial balance?
1/1
a.36,000
b.42,000
c.48,000
 
d.55,000
 
On August 1, 20x1, an entity prepays one-year insurance for ₱240,000. If the entity uses the expense
method of initial recording, the 20x1 year-end adjusting journal entry will include
1/1
a.a debit to prepaid insurance for ₱140,000.
 
b.a credit to insurance expense for ₱100,000.
c.a debit to prepaid insurance for ₱100,000.
d.a debit to insurance expense for ₱140,000.
 
The inexperienced accountant of Raymel Co. prepared the following closing entry on December 31, 20x1:
(refer to the photo) How much is the correct amount of “Income summary” to be closed to retained earnings?
1/1

a. 786,000
b. 1,028,000
c. 1,066,000
 
d. 1,048,000
 
Accompanying the bank statement was a credit memorandum for a short-term, noninterest-bearing note
collected by the bank. What entry is required in the depositor’s accounts?
1/1
a.Debit Cash; credit Miscellaneous Income
b.Debit Cash; credit Notes Receivable
 
c.Debit Accounts Receivable; credit Cash
d.Debit Notes Receivable; credit Cash
 
These are deductions made by the bank to the depositor’s bank account but not yet recorded by the
depositor.
0/1
a.Credit memos (CM)
b.Debit memos (DM)
c.Outstanding checks (OC)
d.Deposits in transit (DIT)
 

Correct answer
b.Debit memos (DM)
 
Coins, currencies, checks, money orders, money on deposit, and cash funds that are available for
unrestricted use in current operations are disclosed in the notes to the financial statements as
1/1
a.Cash.
 
b.Cash equivalents.
c.Investments.
d.Accounts receivable.
 
On August 1, 20x1, an entity prepays one-year insurance for ₱240,000. If the entity uses the asset method
of initial recording, the 20x1 year-end adjusting journal entry will include
1/1
a.a credit to prepaid insurance for ₱140,000.
b.a credit to insurance expense for ₱140,000.
c.a credit to prepaid insurance for ₱100,000.
 
d.a debit to prepaid insurance for ₱140,000.
 
On January 1, 20x1, an entity collects a 3-year advance rent of ₱360,000. If the entity uses the income
method of initial recording, the 20x1 year-end adjusting journal entry includes
1/1
a.a debit to rent income for ₱240,000
 
b.a credit to unearned rent for ₱120,000
c.a debit to unearned rent for ₱240,000
d.a credit to rent income for ₱120,000
 
The amount reported as "Cash" on a company's statement of financial position normally should exclude
1/1
a.postdated checks that are payable to the company.
 
b.cash in a payroll account.
c.undelivered checks written and signed by the company.
d.petty cash.
 
When an item of expense is paid and recorded in advance before it is incurred, it is normally called a(n)
1/1
a. prepaid asset/expense.
 
b. accrued expense.
c. estimated expense.
d. cash expense.
 
In a bank reconciliation, deposits not recorded by the bank are:
1/1
a.added to the balance according to the bank statement
 
b.deducted from the balance according to the bank statement
c.added to the balance according to the depositor’s records
d.deducted from the balance according to the depositor’s records
 
The credit total of a trial balance exceeds the debit total by ₱700. In investigating the cause of the difference,
the following errors were determined: (a)A credit to accounts receivable of ₱660 was not posted; (b)A
₱6,000 debit to be made to the Purchases account was debited to Accounts payable instead; (c)A ₱3,600
credit to be made to the Sales account was credited to the Accounts receivable account instead; (d)The
Interest payable account balance of ₱5,040 was included in the trial balance as ₱6,400. The reconciled
balance from the given information is
1/1
a.8,490.
b.8,640.
c.8,940.
 
d.9,240.
 
On January 1, 20x1, an entity collects a 3-year advance rent of ₱360,000. If the entity uses the liability
method of initial recording, how much is the unearned rent as of December 31, 20x1?
0/1
a. 240,000
b. 180,000
c. 120,000
 
d. 80,000

Correct answer
a. 240,000
 
Cash in foreign currency is valued at
1/1
a.face value.
b.current exchange rate.
 
c.current exchange rate reduced by an allowance for expected decline in peso.
d.estimated realizable value.
 
It is the basic storage of information in accounting.
1/1
a. Journal entry
b. T-account
c. Debit or Credit
d. Account
 
 
Reversing entries are 1.normally prepared for prepaid, accrued, and estimated items. 2.necessary to
achieve a proper matching of revenue and expense. 3.desirable to exercise consistency and establish
standardized procedures.
0/1
a.1
b.2
c. 3
d. 1 and 2
 

Correct answer
c. 3
 
A trial balance
1/1
a.proves that debits and credits are equal in the ledger.
b.provides a listing of open accounts and their balances which are used in preparing financial statements.
c.is usually prepared three times in the accounting cycle.
d.all of these.
 
 
These are short-term, highly liquid investments that are so near their maturity that they represent
insignificant risk of changes in value due to changes in interest rates.
1/1
a.Cash and Cash equivalents
b.Treasury bills
c.Treasury notes
d.Cash equivalents
 
 
Bank overdrafts that cannot be offset should be
1/1
a.reported as a deduction from the current asset section.
b.reported as a deduction from cash.
c.netted against cash and a net cash amount reported.
d.reported as a current liability.
 
 
On January 1, 20x1, an entity collects a 3-year advance rent of ₱360,000. If the entity uses the income
method of initial recording, how much is the rent income for the year 20x1?
0/1
a. 240,000
 
b. 180,000
c. 120,000
d. 80,000

Correct answer
c. 120,000
 
Bank statements provide information about all of the following except
1/1
a.checks cleared during the period.
b.NSF checks.
c.bank charges for the period.
d.errors made by the company.
 
 
On January 1, 20x1, an entity collects a 3-year advance rent of ₱360,000.If the entity uses the liability
method of initial recording, the 20x1 year-end adjusting journal entry will include
1/1
a.a debit to rent income for ₱120,000.
b.a credit to unearned rent for ₱240,000.
c.a debit to unearned rent for ₱120,000.
 
d.a credit to rent income for ₱240,000.

ACC106/GEN009 QUIZ 1 PART 2

 
Cash in checking account ₱35,000 Cash in money market account 75,000 Treasury bill, purchased
11/1/20x1, maturing 1/31/20x2 350,000 Treasury bill, purchased 12/1/20x1, maturing 3/31/20x2 400,000.
What amount should Noise Co. report as cash and cash equivalents in its December 31, 20x1 statement of
financial position?
2/2
a.110,000
b.385,000
c. 460,000
 
d. 860,000
 
The records of Kapiz Co. show the following balances on December 31, 20x1: (REFER TO PHOTO)
QUESTION: How much is the cash and cash equivalents to be reported in the 20x1 financial statements?
2/2

12870000
 
 
The information below was taken from the bank transfer schedule prepared during the audit of Fox Co.’s
financial statements for the year ended December 31, 2001. Assume all checks are dated and issued on
December 30, 2001. (REFER TO THE PHOTO) QUESTION: Which of the following checks might indicate
kiting?
2/2
a.#101 and #303.
b.#202 and #404
 
c.#101 and #404
d.#202 and #303
 
The following were the transactions involving an entity’s petty cash fund during the period. (REFER TO THE
PHOTO) QUESTION: The petty cash fund is not replenished and financial statements are prepared on July
31, 20x1. The month-end adjustment to the petty cash fund would not include a
2/2

a.debit to receivable from custodian for ₱1,800.

b.credit to petty cash fund for ₱28,500.
c.total debits to various expense accounts for ₱26,700.
credit to cash in bank for ₱28,500.
 
 
On December 31, 20x1, the petty cash fund of Kristelle Co. with a general leger balance of ₱15,000
comprises the following: (REFER TO THE PHOTO) QUESTION: The entry to replenish the fund on
December 31, 20x1 includes a
2/2
a.credit to cash shortage or overage for ₱2,910.
b.debit to cash shortage or overage for ₱2,910.
c.credit to cash in bank for ₱9,450.
 
d.credit to petty cash fund for ₱9,450.
 
In preparing its bank reconciliation on December 31, 20x1, Sun Co. has made available the following data:
(REFER TO THE PHOTO) QUESTION: Sun's adjusted cash in bank balance on December 31, 20x1 is
2/2

36125
 
 
In preparing its August 31, 20x3 bank reconciliation, Morning Co. has made available the following
information: Balance per bank statement, 8/31/x3 18,050; Deposit in transit, 8/31/x3 3,250; Return of
customer’s check for insufficient funds, 8/31/x3 600; Outstanding checks, 8/31/x3 2,750; Bank service
charges for August 100. What is the correct cash balance of Morning on August 31, 20x3?
···/2

18250
 

Correct answer
18550
 
Use the following information for the next three questions: The accounting records and bank statement of
Entity A show the following information: (REFER TO THE PHOTO) How much is the deposit in transit?
2/2
160000
 
 
How much is the credit memo?
2/2

760000
 
 
How much is the adjusted cash balance?
2/2

1904000
 
 
The next three items are based on the following information: Taken from the records of Girly Co. are the
following: (REFER TO THE PHOTO) How much are the deposits in transit on November 30?
2/2
5820
 
 
How much are the outstanding checks on November 30?
2/2

8280
 
 
How much is the adjusted balance of cash on November 30?
2/2

3000
 
 
Use the following information for the next three questions: Kriselda Co. has the following information for the
months of June and July. ( REFER TO THE PHOTO) 12.How much is the adjusted cash receipts in July?
2/2
a. 24,150
b. 27,900
c. 30,750
 
d. 24,350
 
How much is the adjusted cash disbursements in July?
2/2
a. 27,600
 
b. 27,900
c. 21,000
d. 21,600
 
How much is the adjusted cash balance as of July 31?
2/2
a. 12,000
 
b. 8,850
c. 15,930
d. 14,600

ACC106/GEN009 P1 QUIZ 2
 
A higher interest rate results to
1/1
a.increased amount of present value.
b.decreased amount of present value.
 
c.same amount of present value.
d.Answer cannot be determined due to insufficient data
 
Present value is
1/1
a.the value now of a future amount.
b.the amount that must be invested now to produce a known future value.
c.always smaller than the future value.
d.all of these.
 
 
When the allowance method of recognizing bad debts expense is used, the entry to record the write-off of a
specific uncollectible account would decrease
1/1
a.the allowance for doubtful accounts.
 
b.the profit for the period.
c.the net realizable value of accounts receivable.
d.the working capital.
 
Which of the following should be recorded in Accounts Receivable?
1/1
a.Receivables from officers representing employee loans
b.Receivables from subsidiaries
c.Dividends receivable
d.None of these
 
 
The present value of 1 for a period of zero equals
1/1
a.1.
 
b.0.
c.Error!
d.Answer depends on the interest rate
 
An entity sells goods either on cash basis or on 6-month installment basis. On January 1, 20x1, goods with
cash price of ₱50,000 were sold at an installment price of ₱75,000. Which of the following statements is
correct?
1/1
a.Net receivable of ₱75,000 is recognized on the date of sale.
b.Net receivable of ₱50,000 is recognized upon full payment of the total price.
c.The ₱20,000 difference between the cash price and installment price is recognized as interest income on
the date of sale.
d. Net receivable of ₱50,000 is recognized on the date of sale.
 
 
A shorter period results to
1/1
a.increased amount of present value.
 
b.decreased amount of present value.
c.same amount of present value.
d.shorter accountant.
 
Information from the records of Stormfall Co. is shown below:Accounts receivable - net of ₱8,000 credit
balance in customers' accounts 100,000Notes receivable (trade) 15,000Notes receivable (non-trade),
₱15,000 collectible within one year 30,000Dividends receivable 2,000Subscriptions receivable
2,000Advances to officers and employees (due in 10 months) 4,000Accounts payable - net of ₱10,000
debit balance in suppliers' accounts 3,000. How much is the total trade receivables ?
1/1
132,000
123,000
 
143,000
120,000
 
Information from the records of Stormfall Co. is shown below:Accounts receivable - net of ₱8,000 credit
balance in customers' accounts 100,000Notes receivable (trade) 15,000Notes receivable (non-trade),
₱15,000 collectible within one year 30,000Dividends receivable 2,000Subscriptions receivable
2,000Advances to officers and employees (due in 10 months) 4,000Accounts payable - net of ₱10,000
debit balance in suppliers' accounts 3,000. How much is the total current receivables ?
1/1
154,000
 
162,000
145,000
140,000
 
Which of the following factors would show the largest value for an interest rate of 12% for six periods?
1/1
a.Present value of 1
b.Present value of an ordinary annuity of 1
c.Present value of an annuity due of 1
 
d.Answer cannot be determined

II. PROBLEM SOLVING 75 minutes (2 points each)

32 of 42 points
INPUT YOUR NUMERICAL ANSWER ONLY, EXAMPLE= IF YOUR ANSWER IS P123,456, WRITE
ONLY= 123456, IF YOUR ANSWER IS 0, WRITE= 0. ROUND OFF ANSWERS TO NEAREST PESO,
EXAMPLE= IF YOUR ANSWER IS P123.45, WRITE= 123, IF YOUR ANSWER IS P123.55, WRITE= 124.
 
ABC Co. has the following information before any year-end adjustment. Accounts receivable, Dec. 31
600,000; Allowance for doubtful accounts, Jan. 1 18,000 (Dr.); Percentage of receivables 2%; Write-offs and
recoveries during the year amounted to ₱22,800 and ₱3,000, respectively. How much is the bad debts
expense for the year?
2/2

49800
 
 
How much is the carrying amount of the receivable on December 31, 20x1? (REFER TO THE PHOTO)
2/2

438016
 
 
On January 1, 20x1, ABC Co. sold transportation equipment with a historical cost of ₱12,000,000 and
accumulated depreciation of ₱7,000,000 in exchange for cash of ₱100,000 and a noninterest-bearing note
receivable of ₱4,000,000 due in 4 equal annual installments starting on January 1, 20x1 and every January
1 thereafter. The prevailing rate of interest for this type of note is 12%. How much is the carrying amount of
the receivable on December 31, 20x1?
2/2

2690051
 
 
On January 1, 20x1, Mojo Co. sold transportation equipment with a historical cost of ₱20,000,000 and
accumulated depreciation of ₱7,000,000 in exchange for cash of ₱500,000 and a noninterest-bearing note
receivable of ₱8,000,000 due in 4 equal annual installments starting on December 31, 20x1 and every
December 31 thereafter. The prevailing rate of interest for this type of note is 12%. How much is the current
portion of the receivable on December 31, 20x1?
2/2
1423560
 
 
Fabric Co. sells to wholesalers on terms of 2/15, net 30. An analysis of Fabric Co.’s trade receivable
balances on December 31, 20x1, revealed the following: (REFER TO THE PHOTO) How much is the
doubtful accounts expense for the year?
2/2

15600
 
 
On December 27, 20x1, ABC Co. received a sale order for a credit sale of goods with selling price of ₱3,000.
The goods were shipped by ABC on December 31, 20x1 and were received by the buyer on January 2,
20x2. The related shipping costs amounted to ₱20. ABC Co. collected the receivable on January 5, 20x2. If
the term of the sale is FOB destination, freight collect, how much net cash is collected on January 5, 20x2?
2/2

2980
 
 
How much is the balance of the allowance for doubtful accounts on January 1, 20x1? (REFER TO THE
PHOTO)
2/2
18900
 
 
Soap Co. has the following information on December 31, 20x1 before any year-end adjustments. (REFER
TO THE PHOTO) How much is the recoverable historical cost of accounts receivable?
2/2

498370
 
 
On January 1, 20x1, ABC Co. sold transportation equipment with a historical cost of ₱12,000,000 and
accumulated depreciation of ₱7,000,000 in exchange for cash of ₱100,000 and a noninterest-bearing note
receivable of ₱4,000,000 due in 4 equal annual installments starting on January 1, 20x1 and every January
1 thereafter. The prevailing rate of interest for this type of note is 12%. How much is the interest income in
20x1?
2/2

288200
 
 
Washing Co. has the following information on December 31, 20x1 before any year-end adjustments.
Accounts receivable, Jan. 1 80,000; Net credit sales 270,000; Collections from customers (including
recoveries) 140,000; Allowance for doubtful accounts, Jan. 1 10,000; Write-offs 5,000; Recoveries 1,000;
Percentage of receivables 5%. How much is the bad debt expense?
2/2

4300
 
 
On January 1, 20x1, ABC Co. sold a transportation equipment with a historical cost of ₱1,000,000 and
accumulated depreciation of ₱300,000 in exchange for cash of ₱100,000 and a noninterest-bearing note
receivable of ₱800,000 due on January 1, 20x4. The prevailing rate of interest for this type of note is 12%.
How much is the carrying amount of the receivable on December 31, 20x2?
2/2

714286
 
 
An entity sells goods for ₱150,000 to a customer who was granted a special credit period of 1 year. The
entity normally sells the goods for ₱120,000 with a credit period of one month or with a ₱10,000 discount for
outright payment in cash. How much is the initial measurement of the receivable if the entity does not use
the practical expedient allowed under PFRS 15?
2/2

110000
 
 
On January 1, 20x1, ABC Co. sold inventory costing ₱1,800,000 with a list price of ₱2,200,000 and a cash
price of ₱2,000,000 in exchange for a ₱2,400,000 noninterest-bearing note due on December 31, 20x3.
1How much is the carrying amount of the receivable on December 31, 20x1?
2/2

2125390
 
 
On January 1, 20x1, Mojo Co. sold transportation equipment with a historical cost of ₱20,000,000 and
accumulated depreciation of ₱7,000,000 in exchange for cash of ₱500,000 and a noninterest-bearing note
receivable of ₱8,000,000 due in 4 equal annual installments starting on December 31, 20x1 and every
December 31 thereafter. The prevailing rate of interest for this type of note is 12%. How much is the carrying
amount of the receivable on December 31, 20x2?
···/2

0
 

Correct answers
3380103
3380100
3380102
3380104
 
On January 1, 20x1, ABC Co. sold inventory costing ₱1,800,000 with a list price of ₱2,200,000 and a cash
price of ₱2,000,000 in exchange for a ₱2,400,000 noninterest-bearing note due on December 31, 20x3.How
much is the initial measurement of the receivable?
2/2

2000000
 
 
On January 1, 20x1, Mojo Co. sold transportation equipment with a historical cost of ₱20,000,000 and
accumulated depreciation of ₱7,000,000 in exchange for cash of ₱500,000 and a noninterest-bearing note
receivable of ₱8,000,000 due in 4 equal annual installments starting on December 31, 20x1 and every
December 31 thereafter. The prevailing rate of interest for this type of note is 12%. How much is the interest
income in 20x1?
···/2

0
 

Correct answers
728946
728940
728945
728947
 
How much is the adjusted bad debt expense to be reported in the year-end financial statements? (REFER
TO THE PHOTO)
2/2
132300
 
 
On January 1, 20x1, ABC Co. sold machinery with historical cost of ₱3,000,000 and accumulated
depreciation of ₱900,000 in exchange for a 3-year, ₱2,100,000 noninterest-bearing note receivable due in
equal semi-annual payments every July 1 and December 31 starting on July 1, 20x1. The prevailing rate of
interest for this type of note is 10%. How much is the carrying amount of the receivable on December 31,
20x1?
2/2

1241083
 
 
On January 1, 20x1, ABC Co. sold a transportation equipment with a historical cost of ₱1,000,000 and
accumulated depreciation of ₱300,000 in exchange for cash of ₱100,000 and a noninterest-bearing note
receivable of ₱800,000 due on January 1, 20x4. The prevailing rate of interest for this type of note is 12%.
How much is the interest income in 20x1?
···/2

67831
 

Correct answers
68331
68330
68332
 
On January 1, 20x1, ABC Co. sold machinery with historical cost of ₱3,000,000 and accumulated
depreciation of ₱900,000 in exchange for a 3-year, ₱2,100,000 noninterest-bearing note receivable due in
equal semi-annual payments every July 1 and December 31 starting on July 1, 20x1. The prevailing rate of
interest for this type of note is 10%. How much is the interest income in 20x1?
···/2

177649
 

Correct answers
164591
164590
164592
 
On January 1, 20x1, ABC Co. sold transportation equipment with a historical cost of ₱12,000,000 and
accumulated depreciation of ₱7,000,000 in exchange for cash of ₱100,000 and a noninterest-bearing note
receivable of ₱4,000,000 due in 4 equal annual installments starting on January 1, 20x1 and every January
1 thereafter. The prevailing rate of interest for this type of note is 12%. How much is the carrying amount of
the receivable on January 1, 20x3?
···/2

0
 

Correct answers
892857
892850
892856
892858

ACC 106 - PERIOD 2 EXAMINATION, Part 1

 
How much is the doubtful accounts expense for the year?
···/1

3500
 
 
The year-end adjusting entry would most likely include a
0/1

a.₱11,000 net debit to gain.

b.₱7,000 net credit to a fair value adjustment account.
 
c.₱7,000 net debit to held for trading securities.
d.₱5,000 net credit to loss.
 
LICKER Co. purchased the following portfolio of held for trading securities during 2002 and reported the
following balances at December 31, 2002. No sales occurred during 2002. All declines are considered to be
temporary. The carrying value of the portfolio at December 31, 2002, on LICKER Co.'s balance sheet would
be
···/1

0
 
 
How much is the total inventory on December 31, 20x1?
1/1
20880000
 
 
LEYLEY Co. transferred loans receivables with carrying amount and fair value of ₱200,000 to LOYLOY, Inc.
for cash amounting to ₱200,000. Under the terms of the transfer, LEYLEY Co. is obligated to repurchase
some of the loans transferred not exceeding ₱20,000. The entry to record the transfer includes all of the
following except
0/1
a.a debit to cash for ₱200,000.
b.a credit to loans receivable of ₱200,000.
c.a credit to liability on repurchase agreement of ₱20,000.
 
d.a credit to loans receivable of ₱180,000.
 
18.On January 1, 20x1, LULU Bank extended a 3-year, ₱1,000,000, 12% loan to LALA, Inc. at a price that
yields an effective interest rate of 10%. Principal is due at maturity but interest is due annually every
December 31. On December 31, 20x1, it was ascertained that the loan was credit-impaired. The loan was
restructured as follows:Only the principal amount of ₱1,000,000 will be collected on the loan. This is due on
December 31, 20x3.The ₱120,000 interest receivable accrued in 20x1 and future interests are waived. How
much is the impairment loss on December 31, 20x1?
···/1
 
 
According to PFRS 9 Financial Instruments, a financial instrument is recognized
0/1
a.when the entity purchases investments in equity securities
b.when the entity becomes a party to the contractual provisions of the instrument
c.when the entity has a codified business model with an objective of holding assets in order to collect
contractual cash flows.
d.all of these
 
 
On January 1, 2002, YAYA Co. paid ₱500,000 for 20,000 shares of MAMA Co.'s ordinary shares and
classified these shares as held for trading securities. YAYA does not have the ability to exercise significant
influence over MAMA. MAMA declared and paid a dividend of ₱.50 a share to its stockholders during 2002.
MAMA reported net income of ₱260,000 for the year ended December 31, 2002. The fair value of MAMA
Co.'s stock on December 31, 2002 is ₱27 per share. What is the net asset amount (which includes both
investments and any related market adjustments) attributable to the investment in MAMA that will be
included on YAYA's balance sheet at December 31, 2002?
···/1

0
 
 
According to PAS 2, inventories are measured at
1/1
a.cost.
b.fair value.
c.net realizable value.
d.lower of a and c.
 
 
If STAR Inc. uses a FIFO cost perpetual inventory system , the ending inventory of Model III calculators at
August 31 is reported as
···/1

156912
 
 
On March 1, 20x1, BLUES CLUES Co. received a 12% note dated January 1, 20x1. Principal and interest on
the note are due on July 1, 20x1. On initial recognition, which of the following accounts increased?
0/1
a.Prepaid interest
b.Unearned interest income
 
c.Interest revenue
Interest receivable
 
How much is the adjusted balance of cash?
1/1

920000
 
 
If STAR Inc. uses a FIFO periodic inventory system, the ending inventory of Model III calculators at August
31 is reported as
···/1

156912
 
 
It is a systematic compilation of a group of accounts.
1/1
a. Chart of T-accounts
b. Trial balance
c. Ledger
 
d. Journal
 
BAYA Co., a VAT payer, imported goods from a foreign supplier. Costs incurred by BAYA include the
following: purchase price, excluding VAT, ₱250; import duties, ₱20; value added tax, ₱15; transportation and
handling costs, ₱5; and commission to broker, ₱2. How much is the cost of purchase of the imported goods?
1/1
a. 292
b. 277
 
c. 257
d. 255
 
The following are among the transactions of CACA Co. during the year:Purchased goods costing ₱20,000
from YOYO, Inc. Billing was received although delivery was delayed per request of CACA Co. The goods
purchased were segregated and ready for delivery on demand. Purchased goods costing ₱35,000 from
Alpha Corp. on a lay away sale agreement. The goods were not yet delivered until after CACA makes the
final payment on the purchase price. CACA Co. made total payments of ₱34,920 during the year. How much
of the goods purchased above will be included in CACA’s year-end inventory?
···/1

20000
 
 
Based on the following information, how much is the cost of goods sold? Decrease in inventory 12,000;
Increase in accounts payable 16,000; Payments to suppliers 80,000
1/1
a. 108,000
 
b. 96,000
c. 76,000
d. 84,000
 
Entity Y has operated a “hold to collect” business model for many years. Its portfolio of assets has for many
years consisted of investment grade bonds issued by utility companies. Entity Y’s investment policies attach
importance to both the yield and the stability afforded by such investments, and result in sales only in
response to significant deteriorations in the credit risk of individual assets within the portfolio. Recently,
however, there has been a wave of takeovers in the utility sector fuelled by overseas interest in the sector.
As a result, Entity Y has sold a number of the bonds within its portfolio in response to unsolicited offers that
have been made to it. Continuing interest in this sector means that such sales are likely to continue in the
future. Can Entity Y continue to classify the unsold bonds under a held to collect business model?
1/1
a.Yes, Entity Y may continue to classify the remaining bonds under the “hold to collect” model.
 
b.No, Entity Y shall reclassify the remaining bonds to the “hold to sell” model.
c.No, Entity Y shall reclassify the remaining bonds to the “hold to collect and sell” model.
d.No, Entity Y must either designate the remaining bonds as FVPL or elect to classify them as FVOCI. The
amortized cost measurement is not appropriate for the remaining bonds.
 
On June 19, 2002, a fire destroyed the entire uninsured merchandise inventory of TRIANGLE Merchandising
Company. The following data are available: Inventory, January 1 .........................₱ 80,000 Purchases,
January 1 through June 19 ............. 560,000 Sales, January 1 through June 19 .............. 776,000 Markup
percentage on cost ..........................25%. What is the approximate inventory loss as a result of the fire?
···/1

58000
 
 
Red Light Co.'s cash balance in its balance sheet is ₱1,300,000, of which ₱300,000 is identified as a
compensating balance. In addition, Red Light has classified cash of ₱250,000 that has been restricted for
future expansion plans as "other assets". Which of the following should Red Light disclose in notes to its
financial statements? --Compensating balance---Restricted cash--
0/1
a. Yes ---- Yes
b. Yes ---- No
 
c. No ----- Yes
d. No --- No
 
It is a report that is prepared for the purpose of bringing the balances of cash per records and per bank
statement into agreement.
1/1
a.Bank statement
b.Check Disbursement Voucher
c.Bank reconciliation
 
d. Bank deposit slip
 
Under the allowance method of recognizing bad debts on trade accounts receivable, the effect of writing off
an account to an entity's current ratio is
1/1
a.increase
b.decrease
c.increase if the entity's current ratio is higher than 1 prior to the write-off; decrease if the entity's current
ratio is lower than 1 prior to the write-off
d.no effect
 
 
What is the effective interest rate of a bond or other debt instrument measured at amortized cost?
1/1
a.The stated coupon rate of the debt instrument.
b.The current market rate published by a regulatory body.
c.The interest rate that exactly discounts the estimated future cash payments or receipts over the expected
life of the debt instrument or, when appropriate, a shorter period, to the net carrying amount of the
instrument.
 
d.The basic, risk-free interest rate that is derived from observable government bond prices.
 
What is the ending inventory at cost at December 31, 2002, using the retail inventory method and the FIFO
cost estimation?
···/1

54000
 
 
Unearned income can best be described as an amount that is
1/1
a.collected and currently matched with expenses.
b.collected but not currently matched with expenses.
 
c.not collected but currently matched with expenses.
d.not collected and not currently matched with expenses.
 
If CIRCLE Inc. uses the average cost method to account for inventory, the ending inventory of VTC cameras
at July 31 is reported as
···/1

 
 
Financial assets are initially classified and subsequently measured on the basis of
1/1
a.the entity’s business model for managing the financial assets.
b.the contractual cash flow characteristics of the financial asset.
c.a and b
 
d.a or b
 
How much of the items listed in the table will be included in Squid Game’s Dec. 31, 20x1 cash?
1/1

340000
 
 
The application of the expected credit loss (ECL) model of PFRS 9 requires the measurement of expected
credit losses in a manner that reflects reasonable and supportable information that is available without
undue cost or effort at the reporting date. Such reasonable and supportable information does not include
1/1
a.past events.
b.current conditions.
c.forecasts of future economic conditions.
d.All of these are included
 
 
A trial balance may prove that debits and credits are equal, but
1/1
a.an amount could be entered in the wrong account.
b.a transaction could have been entered twice.
c.a transaction could have been omitted.
d.all of these.
 
 
The following information is available for UMBRELLA Corp. for its most recent year: Net
sales ........................ ₱3,600,000 Freight-in ............................. 90,000 Purchase discounts ...............50,000
Ending inventory ..........................240,000. The gross margin is 40 percent of net sales. What is the cost of
goods available for sale?
···/1
 
 
HONEY Co. purchased goods with invoice price of ₱3,000 on account on December 27, 20x1. The related
shipping costs amounted to ₱50. The seller shipped the goods on December 31, 20x1. HONEY Co. received
the goods on January 2, 20x2 and settled the account on January 5, 20x2. How much is the capitalizable
cost of the inventory purchased if the terms of the shipment are FOB shipping point, freight prepaid?
1/1

3050
 
 
ANA Co. consigned goods costing ₱14,000 to XAYA, Inc. Transportation costs of delivering the goods to
XAYA, Inc. totaled ₱3,000. Repair costs for goods damaged during transportation totaled ₱1,500. To induce
XAYA, Inc. in accepting the consigned goods, ANA Co. gave XAYA, Inc. ₱2,000 representing an advance
commission. How much is the cost of the consigned goods?
1/1

17000
 
 
When testing loans and note receivables for impairment, the rate that should be used is
0/1
a.the current market rate as of impairment testing date.
 
b.the weighted average rate on the remaining term of the instrument.
c.the original effective rate of the instrument.
d.the weighted average rate over the total life of the instrument.
 
There is no principal market for the financial asset. What is the fair value of the asset?
1/1

a. 71
b. 72
c. 74
 
d. 76
 
At what total net amount will the notes be initially recognized?
···/1
 
 
What are the effects of direct loan origination costs and origination fees on the carrying amount of a loan
receivable? Item 1: Direct origination costs; Item 2 :Origination fees
1/1
a.increase increase
b.decrease decrease
c.increase decrease
 
d.no effect no effect
 
The due date of a 90-day note receivable dated July 12 is
0/1
a.September 12.
b.October 9.
c.October 10.
d.October 11.
 
 
In its December 31 balance sheet, Dolly Co. reported trade accounts receivable of ₱250,000 and related
allowance for uncollectible accounts of ₱20,000. What is the total amount of risk of accounting loss related to
Dolly's trade accounts receivable, and what amount of that risk is off balance-sheet risk? (Item 1) Risk of
accounting loss; (Item 2) Off-balance-sheet risk
1/1
a.0; 0
b.230,000; 20,000
c.230,000; 0
 
d.250,000; 20,000
 
If CIRCLE Inc. uses the moving average perpetual inventory system to account for inventory, the ending
inventory of VTC cameras at July 31 is reported as
···/1
ACC 106 - PERIOD 2 EXAMINATION, Part 2
 
On January 1, 20x1, TRIANGLE Co. sold transportation equipment with a historical cost of ₱12,000,000 and
accumulated depreciation of ₱7,000,000 in exchange for cash of ₱100,000 and a noninterest-bearing note
receivable of ₱4,000,000 due in 4 equal annual installments starting on January 1, 20x1 and every January
1 thereafter. The prevailing rate of interest for this type of note is 12%. How much is the carrying amount of
the receivable on January 1, 20x3?
1/1

892857
 
 
The ending inventory at retail should be
1/1

140000
 
 
BOBBA Co. factored ₱100,000 accounts receivable to POPPY Financing Corp. on a without recourse basis
on January 1, 20x1. POPPY charged a 4% service fee and retained a 10% holdback to cover expected sales
returns. In addition, POPPY charged 12% interest computed on a weighted average time to maturity of the
receivables of 73 days over 365 days. How much net proceeds is received from the factoring on January 1,
20x1?
···/1
 
 
When using the periodic inventory system, which of the following generally would not be separately
accounted for in the computation of cost of goods sold?
1/1
a. Trade discounts applicable to purchases during the period
 
b. Cash (purchase) discounts taken during the period
c. Purchase returns and allowances of merchandise during the period
d. Cost of transportation-in for merchandise purchased during the period
 
On July 1, 20x1, DAZED Co. discounted its own note of ₱200,000 with a bank at 10% for one year. How
much net proceeds did DAZED Co. receive from the transaction?
···/1

200000
 
 
On December 29, 20x2 (trade date), HOPPER Co. enters into a contract to sell a financial asset for its
current fair value of ₱4,040 to POPPEER Co. The asset was acquired one year earlier for ₱4,000 and its
carrying amount on December 29, 20x2 is ₱4,000. On December 31, 20x2 (financial year-end), the fair value
of the asset is ₱4,024. On January 4, 20x3 (settlement date), the fair value is ₱4,052.49. 50.If the financial
asset sold was classified as held for trading security and the sale is accounted for under the settlement date
accounting, the entry on December 29, 20x2 in HOPPER’s books will include
1/1
a.a credit to “Held for trading securities” for ₱4,000.
b.a credit to “Unrealized gain” for ₱40.
 
c.a ₱4,000 debit to a receivable account.
d.No entry will be made on this date
 
On December 29, 20x2 (trade date), HOPPER Co. enters into a contract to sell a financial asset for its
current fair value of ₱4,040 to POPPEER Co. The asset was acquired one year earlier for ₱4,000 and its
carrying amount on December 29, 20x2 is ₱4,000. On December 31, 20x2 (financial year-end), the fair value
of the asset is ₱4,024. On January 4, 20x3 (settlement date), the fair value is ₱4,052.49.If the financial asset
sold was classified as held for trading security and the sale is accounted for under the trade date accounting,
the entry on December 29, 20x2 in HOPPER’s books will include
0/1
a.a ₱4,000 credit to the “Held for trading securities” account.
b.a ₱40 debit to unrealized gain.
 
c.a ₱4,000 debit to a receivable account.
d.No entry will be made on this date.
 
How much is ending inventory under the weighted average – perpetual cost flow formula?
···/1

 
 
On January 1, 20x1, TXT Co. sold transportation equipment with a historical cost of ₱12,000,000 and
accumulated depreciation of ₱7,000,000 in exchange for cash of ₱100,000 and a noninterest-bearing note
receivable of ₱4,000,000 due in 4 equal annual installments starting on January 1, 20x1 and every January
1 thereafter. The prevailing rate of interest for this type of note is 12%. How much is the interest income in
20x1?
1/1

288220
 
 
What factor should you use for a ₱2,000 note receivable that is collectible in full after five years?
1/1
a. Present value of 1
 
b. Present value of an ordinary annuity of 1
c. Present value of an annuity due of 1
d. Any of these
 
LICKERER Co. should report what amount related to the securities transactions in its 20x2 profit or loss?
0/1
a. 0
b. 2,000 unrealized loss
 
c. 10,000 unrealized loss
d. 12,000 unrealized loss
 
Which of the following is not a debt security?
1/1
a. Convertible bonds
b. Commercial paper
c. Loans receivable
 
d. All of these are debt securities.
 
All of the following costs should be expensed in the period they are incurred except for
0/1
A. manufacturing overhead costs for a product manufactured and sold in the same accounting period.
B. costs which will not benefit any future period.
C. depreciation of idle manufacturing capacity resulting from an unexpected plant shutdown.
 
D. storage costs that are necessary in bringing the asset to its intended condition.
 
On January 1, 20x1, CIRCLE Co. sold transportation equipment with a historical cost of ₱12,000,000 and
accumulated depreciation of ₱7,000,000 in exchange for cash of ₱100,000 and a noninterest-bearing note
receivable of ₱4,000,000 due in 4 equal annual installments starting on January 1, 20x1 and every January
1 thereafter. The prevailing rate of interest for this type of note is 12%. How much is the carrying amount of
the receivable on December 31, 20x1?
1/1

2690051
 
 
Which of the following cost flow formulas can be applied by an entity whose inventories that are purchased
last are sold first?
0/1
a. LIFO
 
b. FIFO
c. Weighted average cost
d. b or c
e. None of these
 
Which of the following is not a common disclosure for inventories?
1/1
a. Inventory composition.
b. Inventory location.
 
c. Inventory financing arrangements.
d. Inventory costing methods employed.
 
How much is the cost of goods sold under the weighted average – periodic cost flow formula?
···/1

99760
 
 
On January 1, 20x1, EOMMA Bank extended a 12%, ₱1,000,000 loan to XYZ, Inc. Principal is due on
January 1, 20x5 but interests are due annually every January 1. EOMMA Bank incurred direct loan
origination costs of ₱88,394 and indirect loan origination costs of ₱18,000. In addition, EOMMA Bank
charged XYZ a 2.5-point nonrefundable loan origination fee. How much is the interest income in 20x2?
···/1
 
 
How much is cost of goods sold under the weighted average – perpetual cost flow formula?
···/1
 
 
How much is the ending inventory under the weighted average – periodic cost flow formula?
1/1

120080
 
 
Which of the following factors would show the largest value for an interest rate of 12%for six periods?
1/1
a. Present value of 1
b. Present value of an ordinary annuity of 1
c. Present value of an annuity due of 1
 
d. Answer cannot be determined
 
On July 1, 20x1, DRUNK Co. discounted a 90-day, ₱800,000, 12% note, received from a customer on June
1, 20x1, with a bank at 16% on with recourse basis. The discounting is treated as conditional sale. The bank
uses 365 days per year in computing for discounts. On August 30, 20x1 (maturity date), the maker of the
note defaulted and the bank charged DRUNK Co. the maturity value of the note plus a ₱3,000 protest fee.
How much is transferred to accounts receivable due to the dishonor?
···/1
 
 
On March 1, 20x1, DOOG Co. assigned its ₱1,000,000 accounts receivable to DIG Bank in exchange for a
2-month, 12% loan equal to 75% of the assigned receivables. DOOG Co. received the loan proceeds after a
2% deduction for service fee based on the assigned notes. During March, ₱500,000 were collected from the
receivables. Sales returns and discounts amounted to ₱150,000. How much net cash is received from the
assignment transaction on March 1, 20x1?
···/1
 
 
What factor should you use for a ₱1,000 note receivable that is collectible in five annual installments of ₱200
starting one year hence?
1/1
a. Present value of 1
b. Present value of an ordinary annuity of 1
 
c. Present value of an annuity due of 1
d. Any of these
 
How much are the ending inventory under the FIFO – periodic cost flow formula?
1/1

122368
 
 
On January 1, 20x1, LANY Co. sold a transportation equipment with a historical cost of ₱1,000,000 and
accumulated depreciation of ₱300,000 in exchange for cash of ₱100,000 and a noninterest-bearing note
receivable of ₱800,000 due on January 1, 20x4. The prevailing rate of interest for this type of note is 12%.
How much is the interest income in 20x1?
1/1

68331
 
 
According to PFRS 9, which of the following represents a cessation of a financial asset’s impairment
accounting?
0/1
a.Reclassification of the financial asset from Amortized cost to FVPL
b.Reclassification of the financial asset from FVPL to Amortized cost
c.Reclassification of the financial asset from Amortized cost to FVOCI
 
d.Reclassification of the financial asset from FVOCI to Amortized cost
 
The approximate cost of the ending inventory by the conventional retail method is
···/1

95200
 
 
An entity determines that the credit risk on a loan receivable has not increased significantly since initial
recognition. The entity should recognize loss allowance equal to
0/1
a.the 12-month expected credit losses on the instrument.
b.the lifetime expected credit losses on the instrument.
c.sum of a and b
 
d.none; credit losses should be recognized only when there is objective evidence of a loss event.
 
On January 1, 20x1, STAR Co. sold machinery with historical cost of ₱3,000,000 and accumulated
depreciation of ₱900,000 in exchange for a 3-year, ₱2,100,000 noninterest-bearing note receivable due in
equal semi-annual payments every July 1 and December 31 starting on July 1, 20x1. The prevailing rate of
interest for this type of note is 10%. How much is the interest income in 20x1?
1/1

164591
 
 
On January 1, 20x1, UMBRELLA Co. sold machinery with historical cost of ₱3,000,000 and accumulated
depreciation of ₱900,000 in exchange for a 3-year, ₱2,100,000 noninterest-bearing note receivable due in
equal semi-annual payments every July 1 and December 31 starting on July 1, 20x1. The prevailing rate of
interest for this type of note is 10%. How much is the carrying amount of the receivable on December 31,
20x1?
1/1

1241083
 
 
Which securities are purchased with the intent of selling them in the near future?
1/1
a. Financial assets measured at amortized cost
b. FVOCI securities
c. Held for trading securities
 
d. Held-for-sale securities
 
The average days to sell inventory is computed by dividing
0/1
a. 365 days by the inventory turnover ratio.
b. the inventory turnover ratio by 365 days.
c. net sales by the inventory turnover ratio.
d. 365 days by the cost of goods sold.
 
 
On January 1, 20x1, COLDPLAY Co. sold a transportation equipment with a historical cost of ₱1,000,000
and accumulated depreciation of ₱300,000 in exchange for cash of ₱100,000 and a noninterest-bearing note
receivable of ₱800,000 due on January 1, 20x4. The prevailing rate of interest for this type of note is 12%.
How much is the carrying amount of the receivable on December 31, 20x2?
1/1

714286
 
 
A shorter period results to
1/1
a. increased amount of present value.
 
b. decreased amount of present value.
c. same amount of present value.
d. shorter accountant.
 
How much is the ending inventory under the FIFO – perpetual cost flow formula?
···/1

 
 
What factor should you use if you want to determine the value now of a ₱1,000 payment due in three years’
time?
1/1
a. Future value of 1
b. Present value of 1
 
c. Present value of an ordinary annuity of 1
d. Present value of an annuity due of 1
 
How much is the cost of goods sold under the FIFO – periodic cost flow formula?
···/1

 
 
On October 1, 20x1, AMEE Co. discounted a one-year, ₱600,000, 12% note, received from a customer on
January 1, 20x1, with a bank at 14% on a without recourse basis. How much is the loss on discounting?
···/1

77520
 
 
On August 31, 2002, STINGER Company purchased the following equity securities and irrevocably elected
to measure them at fair value through other comprehensive income: (REFER TO THE TABLE) On
December 31, 2002, STINGER reclassified its investment in security F from fair value through other
comprehensive income to held for trading securities. What total amount of loss on reclassification should be
included in STINGER's income statement for the year ended December 31, 2002?
···/1

P2-ACC106 Quiz#1(Part 1 of 2)

After impairment testing, interest income on a credit-impaired note receivable is computed by *
multiplying the present value of the note by the current market rate at year-end.
multiplying the present value of the note by the rate used in impairment testing.
multiplying the face value of the note by the rate used in impairment testing.
no interest income will be recognized because the note is already impaired.

During 2004, Howell Corporation transferred inventory to Elway Corporation and agreed to repurchase the
merchandise early in 2005. Elway then used the inventory as collateral to borrow from Norwalk Bank,
remitting the proceeds to Howell. In 2005 when Howell repurchased the inventory, Elway used the proceeds
to repay its bank loan. On whose books should the cost of the inventory appear at the December 31, 2004
balance sheet date? *
Elway Corporation
Howell Corporation
Norwalk Bank
Howell Corporation, with Elway making appropriate note disclosure of the transaction

During 2004, Howell Corporation transferred inventory to Elway Corporation and agreed to repurchase the
merchandise early in 2005. Elway then used the inventory as collateral to borrow from Norwalk Bank,
remitting the proceeds to Howell. In 2005 when Howell repurchased the inventory, Elway used the proceeds
to repay its bank loan. This transaction is known as a(n) *
consignment
installment sale
assignment for the benefit of creditors
product financing agreement

Trade discounts are *

not recorded in the accounts; rather they are a means of computing a price.
used to avoid frequent changes in catalogues.
used to quote different prices for different quantities purchased.
all of the above.

An entity sells goods either on cash basis or on 6-month installment basis. On January 1, 20x1, goods with
cash price of ₱50,000 were sold at an installment price of ₱75,000. Which of the following statements is
correct? *
Net receivable of ₱75,000 is recognized on the date of sale.
Net receivable of ₱50,000 is recognized upon full payment of the total price.
The ₱20,000 difference between the cash price and installment price is recognized as interest income on
the date of sale.
Net receivable of ₱50,000 is recognized on the date of sale.

A shorter period results to *

increased amount of present value.
decreased amount of present value.
same amount of present value.
shorter accountant.

When the required balance of the loss allowance decreases, *

the entity recognizes gain.
the entity recognizes loss.
the entity recognizes unearned interest to be amortized over the remaining term of the instrument.
the entity recognizes a deferred charge to be amortized over the remaining term of the instrument.

A Cash Over and Short account *

is not generally accepted
is debited when the petty cash fund proves out over.
is debited when the petty cash fund proves out short.
is a contra account to Cash.

Which of the following most likely does not result to the derecognition of a financial asset? *
The contractual rights to the cash flows from the financial asset expire.
The creditor cancels the financial asset.
The cash flows from the financial asset become uncollectible because of loss events.
The entity transfers the contractual rights to receive the cash flows of the financial asset but retains the
obligation to repurchase the financial asset at a future date.

Which of the following factors would show the largest value for an interest rate of 12% for six periods?  *
Present value of 1
Present value of an ordinary annuity of 1
Present value of an annuity due of 1
Answer cannot be determined

Which of the following statements is incorrect regarding the classification of accounts and notes
receivable? *
Segregation of the different types of receivables is required if they are material.
Disclose any loss contingencies that exist on the receivables.
Any discount or premium resulting from the determination of present value in notes receivable transactions
is an asset or liability respectively.
Valuation accounts should be ap¬propriately offset against the proper receivable accounts.

A higher interest rate results to *

increased amount of present value.
decreased amount of present value.
same amount of present value.
Answer cannot be determined due to insufficient data
An entity sells goods for ₱150,000 to a customer who was granted a special credit period of 1 year. The
entity normally sells the goods for ₱130,000 with a credit period of one month or with a ₱10,000 discount for
outright payment in cash. How much is the initial measurement of the receivable if the entity does not use
the practical expedient allowed under PFRS 15? *
150000
130000
120000
110000

An entity determines that the credit risk on a loan receivable has not increased significantly since initial
recognition. The entity should recognize loss allowance equal to *
the 12-month expected credit losses on the instrument.
the lifetime expected credit losses on the instrument.
sum of a and b
none; credit losses should be recognized only when there is objective evidence of a loss event.

Present value is *

the value now of a future amount.
the amount that must be invested now to produce a known future value.
always smaller than the future value.
all of these.

Eller Co. received merchandise on consignment. As of January 31, Eller included the goods in physical
inventory but did not record the transaction. The effect of this on its financial statements for January 31
would be *
net income or profit and retained earnings were overstated.
net income or profit, current assets, and retained earnings were overstated.
net income or profit was correct and current assets were understated
net income or profit and current assets were overstated and current liabilities were understated.

Interest income is computed on the net carrying amount (i.e., gross carrying amount less loss allowance) of
an instrument that is under which stage of the ‘three-bucket’ approach of PFRS 9’s expected credit loss
model? *
Stage 1
Stage 2
Stage 3
Stage 4

The present value of 1 for a period of zero equals *

.1
1
0
.999

According to PFRS 9, it refers to the expected credit losses that result from all possible default events over
the expected life of a financial instrument. *
12-month expected credit losses
Lifetime expected credit losses
Loss allowance
Absolute loss

A VAT-registered entity purchases inventory. The invoice price of the inventory includes payment for VAT.
The entity should *
include the VAT paid as part of the cost of the inventory.
exclude the VAT paid and record it under the VAT payable account.
exclude the VAT paid and record it under the Input VAT account.
ignore the VAT payment and disclose it only in the notes to the financial statements.

P2-ACC106 Quiz#1(Part 2 of 2)

On March 1, 2020, BMG sold goods to TWO Company. BMG signed a non-interest bearing note requiring
payment of P60,000 annually for seven years, The first payment was made on March 31, 2020. The
prevailing rate of interest for this type of note at the date of issuance was 10%. Information on present value
factors is as follows: How much should BMG report as sales revenue in March 2020? *

321600

Bonus Question: Give the Complete Name of CMA Dean. Follow the format (Dean First Name, M.I., Last
Name) *

Teofila S. Albay

On July 31, 2020, BMG Co. discounted at the bank a customer's P600,000, 6-month, 10% notes receivable
dated May 31, 2020. The bank discounted the note at 12%. How much is the proceeds BMG received from
this discounted note? *

604800

On October 1, 2020, BGM Company consigned 50 sewing machines to ONE Company for sale at P20,000
each and paid P40,000 in transportation cost. On December 31, 2020, ONE reported the sale of 30 sewing
machines and remitted P510,000. The remittance was net of the agreed 15% commission. What amount
should BGM recognize as consignment sales revenue for 2014? *

600000

BGM Company's inventory at December 31, 2020 was P5,000,000 based on the physical count priced at
cost and before any necessary adjustment for the following: What amount should BGM report as inventory in
its December 31, 2020 balance sheet? *
5200000

On December 31, 2017, BMG finished consultation services and accepted in exchange a promissory note
with a face value of P200,000, a due date of December 31, 2020, and a stated rate of 5%, with interest
receivable at the end of each year. The fair value of the services is not readily determinable and the note is
not readily marketable. Under the circumstances, the note is considered to have appropriate imputed rate of
interest at 10%. The following interest factors are provided: What is the present value of the note? *

160264

The balance in BGM company's inventory account on December 31, 2020 was P1,225,000 before the
following information was considered: What amount on inventory should be reported in the December 31,
2020 statement of financial position? *

1285000

BGM, a computer store in CMA Mall, UPANG, specializes in the sale of IBM compatibles and software
packages and had the following transactions with one of its suppliers: Purchases were made throughout the
year on terms 3/10, n/60. All returns and allowances took place within 5 days of purchase and prior to
payment of account. How much is the discount lost? *

9600
BGM Company had the following consignment transactions during the year 2014: How much should BGM
include as consigned inventory in its December 31, 2020 statement of financial position? *

640000

On April 1, 2020, BMG Company sold equipment with a carrying amount of P480,000 in exchange for a
P600, 000, non-interest bearing note due April 1, 2023. There was no established exchange price for the
equipment. The prevailing rate of interest for the note of this type at April 1, 2020 was 10%. The present
value of 1 at 10% for three periods is 0.7513. How much should BGM report as interest income in its fiscal
year ended March 31, 2021 profit or loss? *

45078

On December 28, 2020, BGM Company purchased goods costing P1,000,000. The terms were FOB
Destination. Shown below are costs incurred in connection with the sale and delivery of the goods. In BGM's
December 31, 2020 statement of financial position, how much of these goods should be included in
inventory? *

1000000

BMG Co. accepted from a customer a P400,000, 90-day, 12% interest-bearing note dated March 31, 2020.
On April 30, 2020, BMG discounted the note at ONE Bank at 15%. However, the proceeds were not received
until May 1, 2020. If the discounting is treated as borrowings, what total amount of receivable due from the
maker of the note should BMG report in its April 30, 2020 statement of financial position? *

On April 1, 2020, BMG Company sold equipment with a carrying amount of P480,000 in exchange for a
P600, 000, non-interest bearing note due April 1, 2023. There was no established exchange price for the
equipment. The prevailing rate of interest for the note of this type at April 1, 2020 was 10%. The present
value of 1 at 10% for three periods is 0.7513. What is the carrying value of the notes receivable as of
December 31, 2020 statement of financial position? *

554922