LICEO del VERBO DIVINO, INC.

Avenida Veteranos, Tacloban City

BASIC EDUCATION DEPARTMENT- SENIOR HIGH SCHOOL

School Year 2021-2022

FUNDAMENTALS OF ACCOUNTANCY, BUSINESS AND MANAGEMENT 1

Prefinal Examination Set B

General Directions:
1. This is a multiple choice type of test that is composed of 30 items.
2. Flag the question if you have a problem about the item.
3. During the exam you are encourage not to open any other browsers o tabs.
4. If ever you are using a PC or a laptop you are encourage not to use a mobile phone while taking the exam.
5. Proceed to the next item if the question confuses you but make sure not to leave it unanswered.
6. Review your answers before submitting the test.
7. Failure to follow any of the given directions below will result to losing the mark for that item.
8. This is an online exam. If ever you encounter any problem with the internet connection or the system immediately contact your
adviser or the subject teacher.
9. Your teachers can’t see you. Let us test your honesty.
10. CHEATING IS A SERIOUS OFFENSE

TEST I. MULTIPLE CHOICE

DIRECTIONS: Read each item carefully and choose the correct answer.
1. In bookkeeping, posting a transaction means:
A. Entering items in a cash book
B. Making the first entry of a double entry system
C. Transferring the debit and credit items from the journal to their respective accounts in the ledger
D. None of the above
2. Which of the following is the so-called “book of final entry”?
A. Ledger C. Worksheet
B. Journal D. Trial Balance
3. Every entry in a ledger should have _______________________.
A. Amount C. Explanation and Amount
B. Date and Explanation D. Date, Explanation, and Amount
4. A simple journal entry _______________________.
A. Is a memorandum entry C. Consists of one debit and two credits
B. Consists of one debit and one credit D. Consists of two debits and one credit
5. The normal balance of an account is on the _______________________.
A. Debit side of the account
B. Credit side of the account
C. Side represented by increase in the account balance
D. Side represented by decrease in the account balance
6. What function do accounting journals serve in the accounting process?
A. Reporting C. Classifying
B. Recording D. Summarizing
7. Which of the following is the so-called “book of original entry”?
A. Ledger C. Worksheet
B. Journal D. Trial Balance
8. This captures all the movements in each account which were initially reflected in the journal entries.
A. Ledger C. Worksheet
B. Journal D. Trial Balance
9. It is the process of entering a business transaction in the form of an accounting entry in the journal.
A. Posting C. Journalizing
B. Interpreting D. Summarizing
"May the Holy Triune God live in our hearts and in the hearts of all."
Your Home for Excellence and Christian Formation
10. It refers to the procedure of transferring journal entries to the ledger accounts.
A. Posting C. Journalizing
B. Interpreting D. Summarizing
11. The company pays its creditors by cheque. What is the effect on assets and liabilities?
Effect on Assets Effect on Liabilities Effect on Assets Effect on Liabilities
A. Increase Increase C. Decrease Increase
B. Increase Decrease D. Decrease Decrease
12. Which of the following statements is correct?
A. When assets increase, they are debited
B. When assets increase, they are credited
C. When assets increase, they are debited and credited
D. When assets increase, they are not entered into the books
13. After recording a credit purchase of supplies, which of the following is true?
A. There was no entry.
B. There has been a credit to cash.
C. There has been a credit to supplies.
D. There has been a credit to accounts payable.
14. Which of the following accounts has a credit normal balance?
A. Equipment C. Rent Expense
B. Withdrawals D. Accounts Payable
15. Which of the following accounts has a normal debit balance?
A. Art revenues C. Unexpired insurance
B. Mortgage payable D. Unearned art revenues
16. A purchase of office supplies results in recording a decrease in cash and which of the following?
A. A debit to Office Supplies C. An increase in Office Supplies
B. A credit to Office Supplies D. Both A and C
17. The following two T-accounts illustrate a transaction.
Cash in Bank
Ᵽ12,000

Advertising Expense
Ᵽ12,000

Which of the following statements describes the information given by the accounts?
A. Advertising was paid for cash for Ᵽ12,000.
B. There was a decrease in Advertising for Ᵽ12,000.
C. There was an increase in Cash in Bank for Ᵽ12,000.
D. There was a deposit of cash in the bank for Ᵽ12,000.
18. Below is the ledger for the account Cash.
Cash
Ᵽ40,000 Ᵽ10,000
15,000 20,000

Which of the following figures represents the balance of the account above?
A. Ᵽ25,000 debit balance C. Ᵽ25,000 credit balance
B. Ᵽ55,000 debit balance D. Ᵽ30,000 credit balance
19. If accounts payable has debit posting of Ᵽ170,000 credit postings of Ᵽ140,000 and a normal ending balance of
Ᵽ60,000 which of the following was its beginning balance?
A. Ᵽ30,000 Debit C. Ᵽ30,000 Credit
B. Ᵽ90,000 Debit D. Ᵽ90,000 Credit

"May the Holy Triune God live in our hearts and in the hearts of all."
Your Home for Excellence and Christian Formation
20. Mang Juan is a carpenter. He earned Ᵽ30,000 remodelling a garage recently. The owner of the house paid him in
cash. When Mang Juan records this transaction, which accounts will be debited and credited and for what amount?
A. Debit Cash by Ᵽ30,000 and Credit Service Revenue by Ᵽ30,000
B. Debit Accounts Receivable by Ᵽ30,000 and Credit Cash by Ᵽ30,000
C. Debit Cash by Ᵽ30,000 and Credit Accounts Receivable by Ᵽ30,000
D. Debit Accounts Receivable by Ᵽ30,000 and Credit Service Revenue by Ᵽ30,000
21. JM Services provides accounting services and billed the client for Ᵽ20,000. What will be the entry in JM Services’
book of original entry?
A. Debit to Cash for Ᵽ20,000 and Credit to Service Income for Ᵽ20,000
B. Debit to Accounts Receivable for Ᵽ20,000 and Credit to Cash for Ᵽ20,000
C. Debit Service Income for Ᵽ20,000 and Credit to Accounts Receivable for Ᵽ20,000
D. Debit to Accounts Receivable for Ᵽ20,000 and Credit to Service Income for Ᵽ20,000
22. Mr. C borrowed cash from a bank and issued a note of Ᵽ25,000. In this transaction, what is the effect in the
accounting equation?
A. Increases Assets and Increases Liabilities
B. Increases Assets and Decreases Liabilities
C. Decreases Liabilities and Increases Owner’s Equity
D. Decreases Owner’s Equity and Decreases Liabilities
23. Mr. Angelo invests cash in the business where he opened a current account with China Bank, Ᵽ300,000. The effect
in the accounting equation is ______________________
A. Increases Assets and Owner’s Equity
B. Decreases Assets and Increases Liabilities
C. Decreases Assets and Decreases Liabilities
D. Increases Liabilities and Increases Owner’s Equity
24. The following are the steps in posting journal entries, EXCEPT _____________________________.
A. In the ledger, enter the account title and its corresponding account number.
B. Enter in the appropriate columns of the account/s debited the date, explanation, journal page, and debit
amount shown in the journal.
C. In the ledger, enter in the appropriate columns of the account/s credited the date, explanation, journal page,
and credit amount shown in the journal.
D. None of the above
25. Which of the following is the arrangement of the balance sheet accounts in the ledger?
A. Assets, Liabilities, and Owner’s Equity C. Liabilities, Assets, and Owner’s Equity
B. Assets, Owner’s Equity, and Liabilities D. Owner’s Equity, Liabilities, and Assets
26. If an account has a debit entries totalling Ᵽ6,000 and credit entries totalling Ᵽ5,000, its closing balance is said to be
__________________________
A. A debit balance of Ᵽ1,000 C. A debit balance of Ᵽ11,000
B. A credit balance of Ᵽ1,000 D. A credit balance of Ᵽ11,000
27. Which of the following would prevent your Trial Balance from being “in balance”?
A. Service income of Ᵽ1,000 on credit has completely omitted from the books of accounts.
B. A debit balance of Ᵽ7,500 on the Salaries account has been incorrectly posted in the trial balance as Ᵽ750
debit.
C. A debit balance of Ᵽ10,000 in the Cash account has been posted to the trial balance as a debit balance of
Ᵽ10,000 in the Machinery account.
D. A debit balance of Ᵽ10,000 in the Cash account has been posted to the credit column of the trial balance.
At the same time, a credit balance of Ᵽ10,000 in the Mortgage Payable account has been posted to the
debit column of the trial balance.
28. The total assets of Chan firm is Ᵽ350,000 of which Ᵽ50,000 is accounts receivables. Subsequently, Ᵽ22,500 of
accounts receivables was collected. What is the new balance of its accounts receivable account?
A. Ᵽ22,500 C. Ᵽ322,500
B. Ᵽ27,500 D. Ᵽ377,500
29. If an account has a debit entries totalling Ᵽ7,500 and credit entries totalling Ᵽ4,300, its closing balance is said to be
__________________________
A. A debit balance of Ᵽ3,200 C. A debit balance of Ᵽ11,800
B. A credit balance of Ᵽ3,200 D. A credit balance of Ᵽ11,800

"May the Holy Triune God live in our hearts and in the hearts of all."
Your Home for Excellence and Christian Formation
 30. The beginning balance of the accounts payable of ZyJEn Enterprises is Ᵽ200,000. Subsequently, Ᵽ88,500 of them
was paid. What is the new balance of its accounts payable account?
A. Ᵽ111,500 C. Ᵽ288,500
B. Ᵽ115,000 D. Ᵽ291,500 Prepared by:

ZYBEL F. ROSALES
Subject Teacher

Fundamentals of Accountancy, Business and Management 1 | Prefinal Examination Set B

ANSWER KEY

TEST I. MULTIPLE CHOICE

1. C
2. A
3. D
4. B
5. C
6. B
7. B
8. A
9. C
10. A
11. D
12. A
13. D
14. D
15. C
16. D
17. A
18. A
19. D
20. A
21. D
22. A
23. A
24. D
25. A
26. A
27. B
28. B
29. A
30. A

"May the Holy Triune God live in our hearts and in the hearts of all."
Your Home for Excellence and Christian Formation