SH1663

Name: Rossana Gonzaga Section: ABM12A

Date: October 26, 2021 Score:

Financial Statements
Directions: Read and analyze each item. Write the letter of the correct answer in the space
provided. (10 items x 2 points)

B 1. How will an increase in expenses affect the income statement of an organization?

A. Increase in the income statement C. Income statement is not affected
B. Decrease in the income statement D. Insufficient data
A 2. Which of these would most likely cause the assets of an organization to increase?
A. Increase in liabilities and capital C. Increase in liabilities, decrease in capital
B. Decrease in liabilities and capital D. Decrease in liabilities, increase in capital
C 3. Which type of firm uses finished goods inventory?
A. Service firms C. Manufacturing firms
B. Trading firms D. Non-profit firms
D 4. Which of these is NOT included in the total manufacturing cost?
A. Direct materials C. Manufacturing overhead
B. Direct labor D. Total goods available for sale
A 5. This is the difference between net sales and cost of goods sold.
A. Net income C. Gross profit
B. Income before taxes D. Operating profit
B 6. New Line Cinema bought new software for their company using a loan. How will the
balance sheet be affected?
A. Decrease in assets, increase in liabilities C. Increase in assets, increase in equity
B. Increase in assets, increase in liabilities D. Decrease in assets, decrease in equity
A 7. Which of these is a non-current asset?
A. Cash C. Prepaid utilities
B. Accounts receivable D. Patents
A 8. What are the two (2) ways to report the balance sheet?
A. Account and report form C. Report and activity form
B. Account and standard form D. Report and standard form
B 9. If the company’s assets are P500,000 and its liabilities are P200,000, what is the owner’s
equity?
A. P700,000 C. P200,000
B. P300,000 D. P500,000
C 10. Which of these is the correct way to present the time period of a balance sheet?
A. For the year ended Dec. 31, 2016 C. As of December 31, 2016
B. For the years 2015 and 2016 D. As of 2016

02 Quiz 1 *Property of STI

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