Answer Sheet

Name: Mark Joseph M. Calimlim

Subject: BSA-1101

1 C 26 A
2 A 27 D
3 D 28 A
4 A 29 A
5 B 30 A
6 B 31 D
7 B 32 A
8 A 33 A
9 A 34 C
10 C 35 B
11 B 36 C
12 A 37 A
13 B 38 A
14 C 39 C
15 A 40 B
16 A 41 C
17 A 42 A
18 C 43 A
19 A 44 B
20 A 45 B
21 B 46 D
22 B 47 D
23 D 48 C
24 D 49 A
25 B 50 B
Instructions: Write the letter of the correct answer
1. ABC Co. has total liabilities of P20M and total equity of 30M. ABC Co has total assets of
a. P10M
b. P40M
c. P50M
d. None of these.

2. It is a resource controlled by the entity as result of past events and from which future economic
benefits are expected to flow to the company.
a. Assets
b. Liability
c. Equity
d. Income

3. A resource that provides economic benefits only in the current period but not in future periods
is a(an)
a. Assets
b. Liability
c. Equity
d. Income

4. An event that resulted to the obtaining control over a resource or the incurrence of present
obligation is called a
a. past event
b. current event
c. future event
d. special event

5. Expenses could not possibly result from/to

a. A decrease in assets
b. Decrease in liabilities
c. increase in liabilities
d. a decrease in equity

6. A business has total liabilities of P220,000 and equity of P90,000. How much is the total assets?
a. P300,000
b. P310,000
c. P130,000
d. P220,000

7. A business has a total assets of P780,000 and total liabilities of P220,000. How much is the total
equity?
 a. P650,000
b. P560,000
c. P530,000
d. P1,000,000

8. A business had a total expenses of P29,000 and reported a profit of P30,000. How much is the
total income?
a. P1,000
b. P59,000
c. P130,000
d. P100,000

9. A business had ending total assets of P67,000, ending total liabilities of P15,000 and beginning
equity of P8,000. If the total expenses for the period amounted to P29,000, how much is the
total income?
a. P37,000
b. P73,000
c. P103,000
d. P83,000

10. A business had a beginning equity of P62,000 and ending equity of P87,000. If the total income
for the period is P98,000, how much is the total expenses?
a. P67,000
b. 73,000
c. 76,000
d. 149,000

11. Receivables that are supported only by oral or informal promises to pay
a. Cash
b. Accounts payable
c. Accounts receivable
d. Notes receivable

12. Salaries earned by employees but not yet paid

a. Salaries expense
b. Salaries payable
c. Employee points
d. Employee credits

13. Salaries earned by employees whether paid or not

a. Salaries expense
b. Salaries payable
c. Employee points
d. Employee credits
14. Revenue earned from the sale of goods
a. Inventory income
b. Goods income
c. Sales
d. Service fees

15. Entity A sells an asset that is not an inventory for P100.. The carrying amount of the asset is P80.
The P20 difference represents a
a. Gain
b. Loss
c. Revenue
d. Interest income

16. Investments or contributions by the business owner and the profit and losses are recorded in
this account
a. Owner’s capital
b. Owner’s drawing
c. Sales
d. Service fees

17. Income collected in advance but not yet earned.

a. Unearned income
b. Early income
c. Sales
d. Service fees

18. Obligations supported by oral or informal promises to pay by the debtor

a. Cash
b. Accounts receivable
c. Accounts payable
d. Notes payable

19. The structure owned and being used by a business in its operations
a. Building
b. Base
c. Castle
d. Kingdom

20. Interest incurred by a borrower but not yet paid

a. Interest expense
 b. Interest payable
c. Notes payable
d. Notes receivable

21. You are a business owner. You provided cash to your business as the initial capital. Which of
the following accounts is increased by this transaction?
a. Owner’s payable
b. Owner’s capital
c. Accounts receivable
d. Accounts payable

22. You obtained a P1M loan from a financing company. The financing company made you sign a
contract promising to repay the loan after a year. Which of the following accounts is increased
by this transaction?
a. Accounts payable
b. Notes payable
c. Accounts receivable
d. Notes receivable

23. From the point of view of the financing company who lent you the loan in number 32 above,
which of the following accounts is increased?
a. Accounts payable
b. Notes payable
c. Accounts receivable
d. Notes receivable

24. After journalizing, the next step in the accounting cycle is

a. Preparation of T-accounts
b. Preparation of adjusting entries
c. Preparation of unadjusted trial balance
d. Posting to the ledger

25. Which of the following accounting terms connotes posting to the ledfer?
a. Recording
b. Legering
c. Classifying
d. Summarizing

26. The collection of accounts receivable is posted as

a. A debit to the accounts receivable ledger account
b. A credit to the cash ledger account
c. A credit to the accounts receivable ledger account
d. Public with tag to friends.
27. The journal entry to record the revenue earned from rendering of services on cash basis is
posted to the ledger as
a. Credit to cash
b. Credit to service fees
c. Debit to cash
d. B and C

28. The account that is debited every time a business receive money is
a. Cash
b. Receivables
c. Money
d. Wallet

29. The source document that evidences the sale of goods is

a. Sales invoice
b. Official receipt
c. Bank statement
d. Check

30. You have a business. Every time your business makes disbursement you will credit which of the
following accounts?
a. Cash
b. Accounts payable
c. Disbursements
d. Pocket

31. Receivables that are supported by written or formal promises to pay in the form of promisory
notes.
a. Inventory
b. Accounts receivable
c. Notes payable
d. Notes receivables

32. It refers to the money held and bank deposits that are available for unrestricted use by the
business
a. Cash
b. Accounts receivable
c. Notes payable
d. Notes receivables

33. The unused portion of rent paid in advance

a. Prepaid rent
b. Rent expense
c. Cash
 d. Inventory

34. The lot on which the building of the business has been constructed.
a. Building
b. Lot
c. Land
d. Earth

35. Interest earned by the lender whether collected or not.

a. Interest receivable
b. Interest income
c. Notes payable
d. Notes receivable

36. Mr. A owns a coffee shop. When Mr. A drinks coffee from his coffee shop he pays for it even
though he is the owner. Mr. A is most likely to be applying which of the following accounting
concepts?

a. Prudence
b. Accrual basis
c. Separate entity
d. Coffee drinking concept

37. To most people, this form of business organization has the impression of being small.
a. Sole proprietorship
b. Corporation
c. Partnership
d. Cooperative

38. In this type of a business organization, you are the only boss.
a. Sole proprietorship
b. Corporation
c. Partnership
d. Cooperative

39. You finished your studies, topped both the CPA and Bar examinations, and now a Cpa Lawyer.
You want to put up an office so you can practice your profession and contribute to society. Your
business would most probably be a
a. Buy and sell business
b. Manufacturing business
c. Service business
d. Monkey business

40. A business that produces goods in large quantities can save on fixed cost. This is called
 a. Economy of motion
b. Economies of scale
c. Mass production
d. Chinese style

41. The accounting concepts states that for every change in financial transaction, there will always be a
two-sided effect to the extent of the same amount recorded in the books of accounts.

a. Debit and credit sides.

b. Dual aspect concept
c. Double entry system
d. T-account

42. The difference of the totals of the debit and credit accounts is called

a. account balance
b. debit balance
c. credit balance
d. normal balance

43. To close the revenue account, it must be placed on what side of the T-account?

a. debit balance because the normal balance of the revenue account is on the credit side.
d. credit because the normal balance of the revenue account is on the credit side
c. Either debit or credit because revenue account is a nominal account
d. No entry is to be made.

44. Which of the following is the correct sequence of listing the accounts in the chart of accounts

a. Assets, owners equity, liabilities, revenue, expenses

b. Assets, liabilities, owner’s equity, revenue, expenses
c. Assets, liabilities, owners equity, expenses, revenue
d. Revenue, expenses, owner’s equity, liabilities

45. The following are their normal balances, except

Debit Credit

a. Notes payable Yes

b. Cost of sales Yes
c. Accounts receivable Yes
d. Depreciation Expense Yes.
46. It is journal entry which has multiple debits and credits

a. Multiple journal entry

b. Single journal entry
c. Special journal entry
d. Compound journal entry

47. Which of the following is not part of the general journal

a. Date of the transaction

b. Debit value
c. Credit value
d. Account balance

48. Statement 1. The journal is the book of original entry

Statement 2. The ledger serves as an accounting tool to sort and summarize the effects of
accounting of the transactions

a. Only statement 1 is correct

b. Only statement 2 is correct
c. Both statements are correct
d. Bothe statements are wrong.

Items 49 to 50

M Servicing acquired P3,000 worth of supplies on account. The business used P2,000 supplies for
rendering service to client. The client was billed for P30,00 of which P20,000 was collected.

49. The net effect of change in asset is

a. P21,000 increase
b. P30,000 increase
c. PP31,000 increase
d. P51,000 increase

50. The net effect in change of owner’s capital is

a. P2,000 decrease
b. P10,000 increase
c. P28,000 increase
d. P30,000 increase