1.

The area of accounting aimed at serving the decision-making needs of internal

users is:

A. Financial
Accounting

B. Managerial
Accounting

C. External
auditing

D. SEC
Reporting

2. The best definition of an accounting

system is:

A. Journals, ledgers,
worksheets.

B. Manual or computer-based records used in developing information about an entity

for use by managers and also persons outside the organization.

C. The personnel, procedures, devices, and records used by an entity to develop

accounting information and communicate this information to decision-makers.

D. The concepts, principles, and standards specifying the information which should be
included in financial statements, and how that information should be presented.

3. The important points made in the definition of accounting include all of the following,
except

A. Accounting information is
quantitative.

B. Accounting information is both quantitative and

qualitative.

C. Accounting information is financial in

nature.

D. Accounting information is useful in

decision-making.

4. It is the standard-setting body in the Philippines at the

present time.

A. Accounting Standards
Council

B. Auditing and Assurance Standards

Council

C. Philippine Accounting Standards

Council

D. Financial Reporting Standards

Council
5. It is the global phenomenon intended to bring about transparency and a higher
degree of comparability in financial reporting in order to achieve the goal of one
uniform and globally accepted financial reporting standards.

A.
IFRS

B. Borderless
Accounting

C. World
trade

D. Information
technology

6. External users include the following

except
A.
Creditors

B. Government
agencies

C. Board of
Directors

D.
Suppliers

7. The "watchdog" of financial

reporting

A.
FASB

B.
IFRS

C.
SEC

D.
BSP

8. Career opportunities in accounting may be divided into four broad areas. Which
of these consists of majority of the opportunities?

A. Public
Accounting

B. Private
Accounting

C. Governmental
Accounting

D.
Academe

9. Financial Accounting can be broadly defined as the area of accounting that

prepares

A. General purpose financial statements to be used by parties internal to

the entity.
B. Financial statements to be used by
investors.

C. General purpose financial statements to be used by parties both internal and

external to the entity.

D. Financial statements to be used primarily by

management.

10. It is the body authorized by the law to promulgate rules and regulations affecting
practice of the accountancy profession in the Philippines.

A. Board of
Accountancy

B. Philippine Institute of Certified Public

Accountants

C. Securities and Exchange

Commission

D. Financial Reporting Standards

Council

11. One of the following does not report correctly the performance of the business.
Which is it?

A. Expenses > Revenue =

Profit

B. Revenue < Expenses =

Loss
C. Profit = Revenue >
Expenses

D. Loss = Revenue <

Expenses

12. The events that affect the entity and in which other entities participate are
known as

A. Internal
Events

B. External
Events

C. Current
Events

D. Obligating
Events

13. Public Accounting involves the following major area or work

except

A.
Auditing

B.
Taxation

C.
Budgeting

D. Management
Consulting

14. Statement 1: The primary function of accounting is to prepare the financial

reports and provide them for the economic decision makers.
Statement 2: The purpose of accounting is to help financial users see the true
picture of the business in social and psychological terms.

A. Only statement 1 is
correct.

B. Only statement 2 is
correct.

C. Both statements are

correct.

D. Both statements are not

correct.

15. A business may choose a fiscal year that

corresponds to

A. The calendar
year

B. The natural business

year

C. Any twelve-month
period

D. Any of
these

Q16. A balance sheet that shows assets on top and liabilities and owner's equity
below is called

Report
form

Q17. When revenue is 500,000 and expenses is 300,000, the owner's equity is
increased by? ​200,000
Q18. The Financial Statement prepared as of a certain date? ​Balance Sheet/
Statement of Financial Position

Q19.The process of grouping like transactions and events is called?

Classifying

Q20. The process of explaining the relationships of the different items in the financial
statements is called ​Interpreting

1. The financial statements that are prepared for the business are separate and
distinct from the financial statements of the owners.

A. Going concern
assumption

B. Matching
principle

C. Economic entity
assumption

D. Accounting period
assumption

2. During the lifetime of an entity, accountants produce financial statements at arbitrary

points in time in accordance with what basic accounting concept?

A.
Accrual

B.
Periodicity

C. Unit of
measure
D.
Continuity

3. The valuation of a promise to receive cash in the future at present value is valid
because of the accounting concept of

A.
Entity

B. Time
period

C. Going
concern

D. Monetary
unit

4. It is a decrease in economic benefit during the accounting period related to a

decrease in asset or an increase in liability that results in decrease in equity other than
distribution to owners.

A.
Asset

B. Liability

C.
Income

D.
Expense
5. Which accounting concept satisfy the valuation
criteria

A. Going concern, Realization,

Cost

B. Going concern, Cost, Dual

aspect
C. Cost, Dual aspect,
Conservatism

D. Realization, Conservatism, Going

concern

6. Profit and loss is calculated at the

stage of

A.
Recording

B.
Posting

C.
Classifying

D.
Summarizing

7. What is the quality of information the enables users to better forecast future
operations?

A. Faithful
representation

B.
Materiality

C.
Comparability

D.
Relevance

8. Which of the following factor is not considered while selecting accounting

policies?
A.
Prudence

B. Substance over
form

C.
Accountancy

D.
Materiality

9. Which of the following transactions will result to a decrease in asset and

liability?

A. A sale of an
inventory

B. A payment of accounts
payable

C. A collection of accounts
receivable
D. Adjusting the unearned revenue account for the earned
revenue

10. Working capital is a

measure of

A.
Consistency

B.
Solvency

C.
Profitability

D.
Liquidity
11. Accounting information is considered as relevant
when it

A. Can depend on to represent the economic conditions and events that it intended to
represent

B. Is understandable by reasonably informed users of accounting

information

C. Is capable of making a difference in a

decision

D. Is verifiable and
neutral

12. These users of financial information are interested in the stability and
profitability of the entity

A. Existing and potential

investors

B.
Customers

C.
Employees

D. Lenders and other

creditors

13. To be a perfectly faithful representation, a depiction should have these

characteristics except

A.
Materiality

B. Free from
error
C.
Neutrality

D.
Completeness

14. It is a present economic resource controlled by the entity as a result of

past events

A.
Income
B.
Equity

C. Liability

D.
Asset

15. The following are the missions of International Accounting Standards Board
(IASB) in developing accounting standards except

A. Contribute to
transparency

B. Serve the public

interest

C. Contribute to economic
efficiency

D. Strengthen
accountability

Q16. The following are some of the accounts of XYZ co., a real estate business,
from their Financial Statements for the year ended December 31, 2018.

Bonds receivable -
200,000

Bond sinking fund -

400,000

Dividends -
900,000

Accounts payable -
250,000

Notes receivable (due 18 months) -

600,000

Land for sale - 500,000 Supplies Expense - 30,000 Retained Earnings -

1,000,000

Compute for the total current

assets.

500,000​. Since XYZ Co. is a real estate company, the Land account is
considered as an inventory, thus making it the only total current asset from the
following accounts.

Q17
.

Cash-
500,005

Accounts Receivable-
543,321

Accounts Payable-
123,345

What is the net

assets?
919,981​. Net assets is synonymous to equity, thus, accounts payable is subtracted
from cash + accounts receivable.
Q18. A company began the accounting period with Php 50,000 in owner's capital,
ended with Php 75,000 in owner's capital, and the owner withdrew Php 30,000
during the period for personal use. What was the company's net income or loss for
the period?

50,000 (beginning) - 30,000 (withdrawal) + X (net income) = 75,000

(ending) X = ​55,000, net income

Q19. The liabilities of KIB Store equal to one-third (1/3) of the total assets and the
owner's equity is Php 3,563,211. What is the amount of liabilities?

= 5,344,816.5 (Total Assets) – 3,563,211 (Owner’s Equity) =

3,563,211 ÷ 2​​ 3 ​
1781605.50

Q20. At the end of the accounting period, the business had Php 4,500 of office
supplies on hand. At the beginning of the period, the amount of supplies on hand was
Php 3,000. If the business purchased Php 12,000 of office supplies during the year,
what amount of office supplies were used during the year?

3,000 + 12,000 – X =
4,500

X=
10,500

Q1. A work sheet is useful for all except of the

following?

A. recording transactions from source

documents

B. recording adjusting
entries

C. recording closing
entries

D. preparing financial
statements

Q2. The purpose of ledger

is to

A. Chronologically record the day-to-day

transactions

B. Keep a record of documentation to support each

transaction

C. Maintain a separate account for each asset, liability, and

equity.

D. Make sure that all assets, liabilities, etc., have normal balances at
all times

Q3. Adjusting entries are normally

prepared

A. After the statement of financial position date but dated as of

that date

B. After the statement of financial position date and dated after

that date

C. Before the statement of financial position date but dated as of

that date

D. Before the statement of financial position date and dated after

that date

Q4. Which of the following is an optional step in the accounting

cycle?

A. Reversing
entry

B. Preparing a post-closing trial

balance

C. Preparing a
worksheet

D. All of the
above

Q5. What is the process of adding the items in vertical

column?

A.
Cross-footing
B. Footing
C.
Columning
D. Indexing

Q6. Which of the following criteria must be met before an event should be
recorded for accounting purposes?

A. The event must be an arm's-length

transaction.

B. The event must be repeatable in a future

period.

C. The event must be measurable in financial

terms.

D. The event must be disclosed in the reported

footnotes.

Q7. The preparation of adjusting

entries
A. Is easy because they are simply copied from the
worksheet

B. Typically precedes the preparation of financial

statements

C. Typically precedes the preparation of financial

statements

D. Is difficult, and therefore they must first be entered into the general journal
by pen.

Q8. Which of the following accounts will have an amount in the Adjustment
columns of the worksheet but probably not in the Trial Balance?

A. Owner's
Capital

B. Utilities
Expense

C. Depreciation
Expense

D. Revenue from
Services

Q9. A subsidiary ledger

is

A. A backup system to protect against record

destruction

B. A listing of accounts of a
subsidiary

C. A listing of account balances just before closing entries are

prepared

D. A listing of the components of account

balances
Q10. If there are no adjustments needed for a particular
company, its

A. Post-closing trial balance will be identical to its trial

balance

B. Trial balance will be identical to its adjusted trial

balance

C​. ​Adjusted trial balance will be identical to its post-closing trial

balance

D. Trial balance, adjusted trial balance, and post-closing trial balance will be
identical

Q11. A $15 credit to Revenue was posted as a $51 credit. What kind of
error is this?

A.
Transpcription

B.
Slide

C.
Transposition

D. Error of
commission

Q12. The steps in the accounting cycle are different for a merchandising business
than they are for a service business.

A. The statement is always

false

B. The statement is never

false

C. The statement is true, but not

always

D. The statement is neither true nor

false

Q13. The term “recognized” is synonymous with the

term

A.
recorded

B.
realized

C.
matched

D.
allocated

Q14. Which of the following statement is

incorrect?

A. Financial statements shall be based on historical cost rather than market

value.

B. The elements directly related to the measurement of financial performance are

income and expenses
C. Under the Conceptual Framework, the term “income” is
synonymous to “comprehensive income”

D. An outflow of assets from an entity based on an activity that represents the entity’s
major operations is called expense

Q15. Which of the following is not a nominal

Account?

A. Outstanding salaries
Account
B. Salaries
account

C. Interest
paid

D. Commission
received

Q16. Which is not true concerning the rules of debit and

credit?

A. The left side of an account is always the debit side and the right side is always the
credit side.

B. Increases in assets and expenses are debit entries and increases in liabilities,
equity and revenue are credit entries.

C. The normal balance of any account appears on the side for recording
increases.

D. The word debit means to increase and the word credit means to
decrease.

Q17. Accounts receivables not collectible within 12 months after reporting date is
classified as noncurrent assets.

A. The statement is always

false

B. The statement is never

false

C. The statement is true, but not

always

D. The statement is neither true nor

false
Q18. Which of the following is not a possible combination of a journal
entry?

A. Increase in asset and increase in

liability.

B. Increase in asset and decrease in

equity.

C. Decrease in liability and decrease in

asset.
D. Decrease in equity and increase in liability.

Q19. Which definition is correct relating to financial

performance?

A. Gains are increases in equity from major

operations

B. Expenses are outflows of assets or liabilities incurred from peripheral or

incidental transactions.

C. Revenues are inflows or other enhancements of assets or settlements of

liabilities from major operations.

D. Losses are all decreases in equity other than transactions with

owners.

Q20. It is the process of determining the monetary amounts at which the

elements of the financial statements are recognized and carried in the financial
statements.

A. Measurements

B. Recognition

C. Presentation
D. Recording

Q21. At the end of the current year, a fully depreciated asset has an accumulated
depreciation balance of 750,000. The net income for the current year is 500,000 and it
is computed that 25% of the net income is the depreciation expense. What is the
useful life of the asset?

500,000 x .25 = 125,000 (Annual depreciation) 750,000/125,000 = ​6

years

Q22. The gross profit rate based on cost is equivalent to 20%. What is the gross profit
rate based on sales?

Since it is based on gross profit based on cost, the CGS is 100% and the
Sales is 120%.

For gross profit on

cost:

20% 100%
= 20%
(CGS) ​

For gross profit on

sales:

20% 120% (Sales)

= 16.67%

Q23. A machinery is acquired at the cost of 650,000. The salvage value is equivalent
to 80,000 and the useful life is 5 years. The entity uses the straight-line method of
depreciation. If the fair value of the machinery at the date of acquisition is 720,000,
what amount should be debited on machinery account at the date of acquisition?

650,000. ​It should be recorded at historical

cost.
Q24. The revenue for the current year is 455,000 and the expenses for the current year
is 800,000. The balance of the unadjusted retained earnings account for the current
year is 950,000. What is proper journal entry to adjust the retained earnings account?

455,000 – 800,000 =
(345,000)

Retained Earnings 345,000

Income Summary 345,000

Q25. The Fast Company purchases land for 12000. It makes a down payment in
cash of 3000 and promises to pay the remaining in the future. What is the proper
journal entry?

Land 12,000
Cash 3,000 Accounts
Payable 9,000

Q26. On December 17, the company collected a receivable from a customer, 1,650.
However, the bookkeeper made an error by recording it Dr. Cash 1,560 and Cr.
Accounts Receivable 1,560. What is the correcting entry?

1,650 – 1560 =
90

Cash 90
Accounts Receivable 90

Q27
.

Cash
13,450

Store supplies
4,140

Prepaid insurance
2,200

Equipment
33,000
Acc. Depreciation
9,000

Accounts payable
1,000

Wages payable
3,200

P. Holt Capital
32,000

P. Holt Withdrawal
16,000

Repaired fees earned

62,000

Depreciation expense
3,000

Wages expense
28,400

Insurance expense
1,100

Store supplies expense

1,300

Itilities expense
1,860

Using the data above, what is the balance of the income summary account to be
included in the post-closing trial balance?
0. ​There is no income summary account in a post-closing trial
balance.

Q28
.

Current liabilities -
200000

Non-current liabilities -
250000

Owner's Equity - twice as much as total

liabilities

Current Assets - 40% of total

assets

What is the total non-current

asset?

(200,000+250,000) = 450,000 + (450,000 x 2) = 1,350,000 x .6 =

810,000

Q29. ABC Company, a proprietorship reported the following transactions for

September 2019.

a. The company opened the business with cash of P23,500. It was credited
to capital.

b. The company purchased office equipment for P11,500. The company paid P2,500
down and put the balance on a note payable.

c. The company purchased a prepaid insurance policy for

P1,350 cash.
d. The company paid a utility bill for P980
cash.

e. The company paid P2,000 cash for

September rent.
f. The company had sales of P15,000 in September. Of these sales, 60% were cash
sales, and the balance was credit sales.

g. The company paid P9,700 cash for office

furniture.

What is the total amount in the cash account at the end of

September 2019?

23,500 – 2,500 – 1,350 – 980 – 2,000 + (15,000 x .6) – 9700 =

15970

Q30. Fra Luca Bartolomeo de Pacioli, “The Father of Accounting and Bookkeeping”,
was born in what country? ​Italy