ILOCOS SUR POLYTECHNIC STATE COLLEGE

Santa Maria Campus

MODULE

Practice Set III-1

Name: ___________________________________ Date: ________________________
Course/Year/Section: _______________________ Score: _______________________

I. True or False:
1. A worksheet is a mandatory report attached to the financial statements.
2. Companies are not obliged to prepare reversing entries.
3. It is a common practice to post adjusting entries to the worksheet in lieu of posting them
to ledger.
4. The balance of the unearned revenues account will appear in the income statement
credit column of the worksheet.
5. The capital account balance shown in the adjusted trial balance is as of the beginning
of the accounting period.
6. The general ledger accounts that appear on the balance sheet have zero balances after
the adjusting and closing entries have been journalized and posted.
7. The income summary account has a normal debit balance.
8. The most important step in the accounting cycle is the preparation of the post-closing
trial balance.
9. To simplify the recording of regular transactions in the next accounting period, all
adjusting entries are reversed.
10. When a company receives cash, revenue has been earned.
11. Entering transactions into the journal is called posting.
12. When payment is received for services not yet rendered, no entry is recorded until that
service has been rendered.
13. Normally, income accounts have debit balances.
14. The journal is a chronological record of all transaction.
15. The accounting cycle begins with the recording of the transactions and ends with the
preparation of the financial statements.
16. The normal balance of any account refers to the side of the account – debit or credit –
where decreases are recorded.
17. When revenue has been earned, no entry is recorded until the related cash has been
collected.
18. Every business transaction affects a minimum of two accounts.
19. A journal entry may include debits to more than one account and credits to more than
one account, but the total of the debits must always equal to the total of the credits.
20. A trial balance may balance but may not be correct.
21. Another name for the ledger is the book of original entry.
22. A decrease in owner’s equity is recorded with a debit.
23. An increase in revenue is recorded with a credit.
24. When the owner makes an investment, the owner’s Capital account is debited.
25. A decrease in liability is recorded by debit.
26. The chart of accounts makes finding accounts in the ledger easier.
27. A basic storage unit for accounting data is account.
28. A credit entry to an expense account will increase it.
29. An increase in an asset is recorded by a debit.
30. When a withdrawal is made, the owner’s Withdrawal is debited and cash is credited.

Course Code: ABM 2 Units: 3 Units

Descriptive Title: Fundamentals of Accounting
Instructor:
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Santa Maria Campus

MODULE

II. Identification
1. Entries made at the end of the accounting period that set the stage for the next
accounting period by clearing the temporary accounts of their balances, and that
summarize a period’s revenues and expenses.____________________________
2. A temporary account used during the closing process that holds a summary of all
revenues and expenses before the net income or loss is transferred to the capital
account._____________________________
3. Trial balance prepared at the end of the accounting period after all adjusting and closing
entries have been posted to ensure that all temporary accounts have zero balances and
that total debits equal total credits.__________________________
4. Trial balance prepared after all adjusting entries have been recorded and posted to the
accounts.____________________________
5. Entry dated the first day of the new accounting period that is the exact opposite of an
adjusting entry made on the last day of the prior accounting
period.___________________________
6. Entries made to apply accrual accounting to transactions that span more than one
accounting period. _______________________________
7. Expenses that have been incurred but are not recognized in the accounts.
_________________________
8. Expenses paid in advance that have not been expired. _____________________
9. Revenues received in advance for which the goods have not yet been delivered or the
services performed. ________________________
10. Revenues for which a service has been performed or goods delivered but for which no
entry has been made. _____________________________

Course Code: ABM 2 Units: 3 Units

Descriptive Title: Fundamentals of Accounting
Instructor:
ILOCOS SUR POLYTECHNIC STATE COLLEGE
Santa Maria Campus

MODULE

Practice Set III-2

Name: ___________________________________ Date: ________________________
Course/Year/Section: _______________________ Score: _______________________

Analysis of Transaction: Journal Entry

Martin V. Sandoval, an architect, opened his own office on July 1, 2021. During the
month, he completed the following transactions connected with his professional practice:

a. Transferred cash from personal bank account to an account to be used for the business,
P 1,200,000.

b. Paid July rent for office, P 20,000.

c. Purchase service vehicle for P 690,000, paying P 150,000 cash and giving a note
payable for the balance.

d. Purchased office and computer equipment on account, P 165,000.

e. Paid cash for supplies, P 7,500.

f. Paid cash for annual insurance policies, P 26,250.

g. Received cash from clients for finished plans delivered, P 155,000.

h. Paid cash for miscellaneous expenses, P 1,125.

i. Paid cash for creditors on account, P 88,500.

j. Paid installment due on notes payable, P 24,000.

k. Received invoice for blue print service, due in August, P 10,500.

l. Recorded fee earned on plans delivered, payment to be received in August,

P 207,500.

m. Paid salary of assistant, P 18,000.

n. Paid gasoline, oil and repairs on service vehicle for July, P 12,000.

Required:
Make a journal entry on each of the following transaction. (refer on Illustration pp.32)

Course Code: ABM 2 Units: 3 Units

Descriptive Title: Fundamentals of Accounting
Instructor: