LESTER SOURCE

FUNDAMENTALS OF ACCOUNTING THEORY AND PRACTICE 1B

Question 1
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The statement of owner's equity of a partnership includes capital reserves.

Select one:
True
False

Question 2
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The positive bottom line figure in the income statement is called ____.

Select one:
a. Financial statements
b. Net income
c. Revenues
d. None of the choices

Question 3
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Purchase of plant assets is a financing activity.

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True
False

Question 4
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The most liquid asset of a company is cash.

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True
False

Question 5
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A disclosure on ____ shows the company's recognition policies.

Select one:
a. None of the choices
b. Deposit in transit
c. Financing
d. Revenue recognition

Question 6
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When using the fluctuation fund system in petty cash fund accounting, disbursements out
of the fund are credited to Cash in Bank.

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True
False

Question 7
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_____are the capsulized reports that show the financial health of a business entity.

Select one:
a. None of the choices
b. Revenues
c. Financial statements
d. Financial reporting
Question 8
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Share Premium is the term used for the excess of issue price over the ______of shares.

Select one:
a. Financing
b. Par vale
c. Revenues
d. None of the choices

Question 9
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Capital is for sole proprietorship and partnership, _____is for corporation.

Select one:
a. Revenues
b. Retained earnings
c. None of the choices
d. Shareholders' Equity

Question 10
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The primary objective of financial reporting is to provide information about the firm that will
be beneficial to all stakeholders.

Select one:
True
False

Question 1
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The following selected accounts are taken from the ledger of XYX Merchandising on June
30, 2017: Sales, P 550,000; Sales Discount, 5%; Gross profit, P209,000; operating expenses,
P150,000; merchandise inventory, Jan 1, 2017 , P75,000; merchandise inventory, June 30,
2017, P50,000; Accounts Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.
The operating profit margin(ratio) is

Select one:
a. 40%
b. 28.23%
c. 10.72%
d. 11.29%

Question 2
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The following selected accounts are taken from the ledger of XYX Merchandising on June
30, 2017: Sales, P 550,000; Sales Discount, 5%; Gross profit, P209,000; operating expenses,
P150,000; merchandise inventory, Jan 1, 2017 , P75,000; merchandise inventory, June 30,
2017, P50,000; Accounts Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.
The cost of sales is

Select one:
a. P522,500
b. P313,500
c. P341,000
d. P359,000

Question 3
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Quick assets equals

Select one:
a. Total assets less non-current assets
b. Current assets minus inventory
c. All current assets
d. Cash and Accounts receivable only.

Question 4
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Current liabilities is P30,000 and the current ratio is 1.9, the current assets is

Select one:
a. P41,211
b. P27,000
c. P15,789
d. P57,000

Question 5
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The following are quick assets except;

Select one:
a. Accounts Receivable
b. Short-term investments
c. Merchandise Inventory
d. Cash

Question 6
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Question text

Liquidity ratios include the following except;

Select one:
a. Receivable turnover
b. Times interest-earned ratio
c. Inventory turnover
d. Working capital ratio

Question 7
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The following selected accounts are taken from the ledger of XYX Merchandising on June
30, 2017: Sales, P 550,000; Sales Discount, 5%; Gross profit, P209,000; operating expenses,
P150,000; merchandise inventory, Jan 1, 2017 , P75,000; merchandise inventory, June 30,
2017, P50,000; Accounts Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.
The inventory turnover is

Select one:
a. 2.51 times
b. 4.18 times
c. 6.27 times
d. 5.02 times

Question 8
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The following are liquidity ratios except

Select one:
a. Quick ratio
b. Earnings per share
c. Receivable turnover
d. Working capital ratio

Question 9
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The formula for Accounts Receivable turnover is

Select one:
a. 360 days / average accounts receivable
b. Net Sales / average accounts receivable
c. Net Sales / average merchandise inventory
d. Cost of goods sold / average accounts receivable

Question 10
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Which of the following belong to the profitability ratios?

Select one:
a. Gross Profit Margin
b. All of the above
c. Rate of return on assets
d. Rate of return on equity