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Far Reviewer For Finals
Far Reviewer For Finals
Financial accounting
emphasizes special
purpose information
Which of the following is not true?
based on presumption
that significant numbers
of users need similar
information.
a. Quantifiability –
transactions are recorded
What are the two characteristics of the monetary unit in terms of money
assumption? b. Stability of the currency
– purchasing power of the
dollar is stable
The income statement shows which of the following? Income and Expenses
Gross profit is equal to revenue less which item? Cost of goods sold
A boundary is drawn
around each
What is the entity concept? organization. This means
personal assets and
expenses are not part of
the company
Gross profit is equal to revenue less which item? Cost of goods sold
Quiz 1
18. It refers to the process of transferring the debit and credit amounts from
journals to the ledgers.
ANSWER: Posting
22.In the annual report, where would a financial statement reader find out if the
company’s financial statements give a fair depiction of its financial position
and operating results?
ANSWER: Balance Sheet
24.Johnny’s Car Repair Shop started the year with total assets of P60,000 and total
liabilities of P40,000. During the year the business recorded P100,000 in car
repair revenues, P55,000 in expenses, and dividends income from his personal
investment amounting to P10,000.
The net income reported by Johnny’s Car Repair Shop for the year was
ANSWER: P45,000
25.If beginning capital was P25,000, ending capital is P37,000, and the owner's
withdrawals were P23,000, the amount of net income or net loss for the period
was:
ANSWER: net income of P35,000
26. External user of financial information include all of the following except:
ANSWER: managers
27.A partnership
ANSWER: requires one or more owners.
28.
PART 1
1.
ANSWER: I, II, IV
7. The body of rules and principles which govern accounting practices is referred
to as
ANSWER: Accounting theory
8. The normative attitudes or ideas of the accounting profession also what ought
to represent good accounting practice and which modify the application of
accounting principles are known as
9. The general guidelines used in accounting practice that are based on substantial
authoritative support are called
11.The accounting entity is assumed to be separate and distinct from other entities
and from the owners, managers and employees which constitute the firm. This
postulate is referred to as
12.Unless there is specific evidence to the contrary, the firm will continue to be in
existence in the foreseeable future. This postulate is referred to as
15.The life of the business firm can be segmented into short run time periods in
order to provide timely financial information to aid in financial decision
making: hence, periodic reporting implies the use of accrual accounting and use
of estimates (approximations) and informed judgement by accountants. This
postulate is referred to as
16.The point of sale when goods are delivered or services are rendered, is the time
at which revenue is to be recognized. This postulate is referred to as
17.Goods and services used (expenses) during the fiscal period can be associated
with the revenue earned during the same fiscal period. This postulated referred
to as
ANSWER: Matching
18.Exceptions to the application of accounting theory are permitted if the amount
involved is not material; financial reporting is concerned only with That is
significant enough to affect evaluation or decisions. This invention is called
ANSWER: Materiality
19.The same accounting procedures for a given entity should be used from one
period to the next. Changes may however be made if it will result in more
accurate or useful information for decision-making provided it is disclosed. The
convention is called
ANSWER: Consistency
ANSWER: Comparability
ANSWER: Objectivity
22.The accountant should recognize all possible losses but anticipate no profit.
where alternative courses of action or available, he should choose the
alternative least favorable to owners’ equity
ANSWER: conservatism
23.The first step in accounting cycle is to
24.Which of the following steps in the accounting cycle are listed in logical order
25.The manner in which the accounting records are organized and employed
within a business is referred to as
27.A journal entry that contains more than two accounts is called
ANSWER: Recording
29.Which of the following documents does not initiate and entry to be made in the
accounts
ANSWER: Assets, expenses, and drawing accounts are debited for increases
ANSWER: Classifying
37.Which of the following transactions does not affect the balance sheet totals?
39.The receipt of rental is recorded by debiting cash and crediting rent income this
approach is known as
40.The phase of accounting that deals with collecting and controlling the cost of
producing a given product or service is called
ANSWER: budgeting
ANSWER: Bookkeeping
43.Which of the following statements is false regarding sole proprietorship
45.Which of the following errors will cause and imbalance in the trial balance
ANSWER: listing the balance of an account with a debit balance in the credit
column of the trial balance?
ANSWER: Revenues are recognized in the period they are earned, regardless
of the time period the cash is received
47.47. An accounting time that is 1 year in length, but does not begin on January
1, is referred to as
PART 2
ANSWER: TRUE
3. If a payment for rent was debited to the cash in bank account and credited from
the rent expense, what is its effect on total assets, and to expenses
5. The manner in which the accounting records are organized and employed
within a business is referred to as
7. Utilities payment of 7800 was recorded in both utilities expense account and
cash on hand account as 8700. what is the journal entry to correct the error?
ANSWER: debit cash on hand 900 and credit utilities expense 900
11. Which of the following documents does not initiate an entry to be made in the
accounts?
16. Which of the following steps in the accounting cycle are listed in logical
order?
ANSWER: post the journal entries to the ledger accounts, prepare a
worksheet, and then take a trial balance
22. The company collected in full and account receivable. considering this
transaction alone
ANSWER: total assets will not be affected
23. Journal entry that contains more than just two account is called
ANSWER: a compound journal entry
24. Which of the following will cause the trial balance to be out of balance?
ANSWER: posting only the debit part of the transaction, leaving the credit
part not posted
26. Which of the following transactions does not affect the balance sheet totals?
ANSWER: Partial collection of accounts receivable
27. Bank charges ok 800 has been debited to the rent expense account. the credit
was correctly stated. what journal entry is necessary to correct the error
ANSWER: debit bank charges 800, credit rent expense 800.
PART 3
1. Paid the bill for supplies bought last accounting period. What account is
debited?
ANSWER: Accounts Payable
2. Received cash from customers on account, P25,440
ANSWER: Increase an asset, decrease another asset
3. At the beginning of the year, Calling Station had liabilities of P100,000 and
Owner’s Equity of P96,000. If assets increased by P40,000 and liabilities
decreased by P30,000, By how much did the owner's equity increase during the
year?
ANSWER: P70, 000
ANSWER: INCREASE
8. What are the accounting entries to record the invoicing of a credit customer for
services provided?
ANSWER: DR Accounts Receivable/ CR Revenue
9. At the beginning of the year, the assets of Arib Services were P360,000 and it’s
Owner’s Equity was P200,000. During the year, assets increased by 120,000
and liabilities increased by P20,000. By how much what's the owner's equity
increase during the year
ANSWER: P100,000
12. At the beginning of the year, the asset Arib services were P 360,000 and it's
owner’s equity was P 200,000. During the year, assets increase by P 120,000
and liabilities increased by P 20,000. What was the owner's equity at the end of
the year?
ANSWER: 300,000
15. The liabilities of LL stylist equal one-third of the total assets, and the owner's
equity is P300,000. what is the amount of the liabilities?
ANSWER: 150,000
16. At the beginning of the year, calling station head liabilities of 100,000 and
owners equity of 96,000. if assets increased by 40,000 and a liabilities
decreased by 30,000, How much is the total assets at year end?
ANSWER: 236,000
In June , Company X received 5,000. what is the effect on this entry to assets
upon the accounting equation for Company X.
ANSWER: No effect
18. Paid 48,000 of salaries of employees incurred last accounting. what accounts
are affected and how they are affected?
ANSWER: decrease in liabilities, decrease in cash
19. what is the credit entry if an entity bought a service vehicle from CDO
motors paying 20% in cash and the balance, on account?
ANSWER: CASH, ACCOUNTS PAYABLE
20. What is the accounting entry to record the investment of cash by the owner of
a business?
ANSWER: DR CASH/ CR CAPITAL
23. What is the accounting entry to record the purchase of fixed assets on credit
from a supplier?
ANSWER: DR Fixed assets/ CR Accounts Payable
29. What is the accounting entry to record the receipt of cash from a credit account
customer?
ANSWER: DR Cash/ CR Accounts Receivable
ANSWER: INCREASE
2. Which of the following will be included in the adjusting entry to accrue interest
expense?
ANSWER: A Credit to Interest Payable
3.
ANSWER: The fees Received in Advance which are not yet earned
5. Accumulated Depreciation is a:
ANSWER: contra asset account
8. Which of the following will be included in the adjusting entry to accrue interest
income or interest revenues?
ANSWER: A debit to Interest Receivable
9. The adjusting entry that reduces the balance in Prepaid Insurance will also
include which of the following?
ANSWER: A debit to Insurance Expense
11.A law firm has billed their clients for services performed. They subsequently
received payments from their clients. What entry will the law firm make upon
receipt of the payments?
ANSWER: Debit cash and credit Accounts Receivable
12.On July 1 the Fisher shoe Store paid 24,000 to Acme Realty for 6months rent
beginning July 1. Prepaid Rent was debited for the full amount. If financial
statement are prepared on July 31, the adjusting entry to be made by the Fisher
Shoe Store is:
ANSWER: debit Rent Expense, 4,000; credit Prepaid Rent, 4,000
13.The adjusting entry that reduces the balance in Deferred Revenues or Unearned
Revenues will also include which of the following?
ANSWER: A credit to Fees Earned
14.Which type of adjusting entry is often reversed on the first day of the next
accounting period?
ANSWER: Deferral
15.If a company fails to adjust an Unearned Rent Revenue account for rent that
has been recognized, what effect will this have on that month’s financial
statements?
ANSWER: Liabilities will be overstated and revenues will be understated.
16.On September 1, 20x1, Entity A entered into an agreement to rent office space
for a year and paid P36,000 for a six-month rent. If the asset method is used for
initial recognition, adjustment on December 31, 20x1 would require a debit to
_______, for ______.
ANSWER: rent expense, 24,000
18.Which of the following entries records the utility bill incurred but not paid from
the water company?
19.A liability account that reports amounts received in advance of providing goods
and services?
26.Expenses whose benefit has not yet been received but whose payment has been
made are called:
27.What will be the book value of asset if its original cost is P50,000; accumulated
depreciation is P20,000; and depreciation expense for the year is P10,000?
ANSWER: P30,000
28. What is an expense that a business has incurred but has not ye paid?
33.If a business pays for only 11 months rent during a financial year, what
accounting term is given to the outstanding one month's rent?
ANSWER: payable
ANSWER: Liability
ANSWER: Expense
ANSWER: Adjustments
37.Adjusting Entries?
ANSWER: Assign revenue to the period in which they are earned; Help to
properly measure the period’s Net Profit / Loss; Bring asset and liability account
to correct balances
38.The revenue receipt is shown in income statement as a?
ANSWER: Income
PART 1
1. The managing partner is a partner who takes active participation in the film and
the running of the business. he carries on the daily business on behalf of all the
partners. this means he acts as an agent of all the other partners on a day-to-
day basis and with regards to all ordinary business of the firm.
ANSWER: TRUE
3. this is a partner that does not participate in the daily functioning of the
partnership firm, he does not take an active part in the daily activities of the
firm. he is however bound by the action of all the other partners.
ANSWER: Sleeping partner
4. This is a partner that does not have any real or significant interest in the
partnership. So, in essence, he is only leading his name to the partnership. he
will not make any capital contributions to the firm, and so he will not have a
share in the profits either.
ANSWER: nominal partner
5. A person who is not a partner but he represents himself as such. either by his
words, actions or conduct
ANSWER: partner by Estoppel
11.A partner who is not known as a partner but who participates actively in the
management of the partnership is called a managing partner
ANSWER: FALSE
13.An oral agreement may still bind the partners forming the partnership
ANSWER: TRUE
PART 2
2. Claim to the partners personal assets by creditors if the partnership cannot pay
its debts refers to
ANSWER: Unlimited liability
3. A partner will not bind the partnership to an outside purchase contract when
the
ANSWER: item purchase is not within the normal scope of the business
5. When a partner invest assets other than cash into a partnership, those assets
should be listed on the balance sheet at
ANSWER: the fair market value
13.In a partnership liquidation, the final cash distribution to the partners should be
made in accordance with the
ANSWER: Balances of the partners’ capital accounts