Professional Documents
Culture Documents
PRE-ASSESSMENT
MULTIPLE CHOICE:
Choose the correct answer from the choices provided. Write the answer beside the
number.
1. A statement that shows the financial condition of the business as of a particular date:
a. Balance Sheet
b. Profit and Loss Statement
c. Statement of Changes on Owner’s Equity
d. Statement of Cash Flow
2. Which of the following equation is the fundamental accounting equation?
a. Assets - Liabilities = Owner’s Equity
b. Assets = Liabilities + Owner’s Equity
c. Assets – Owner’s Equity = Liabilities
d. Assets + Liabilities = Owner’s Equity
3. Amounts owed by a business are referred to as:
a. Assets
b. Capital
c. Expenses
d. Liabilities
4. It represents the interest in the assets of the business after deducting its liabilities:
a. Capital
b. Net Worth
c. Owner’s Equity
d. All of the above
5. The following can be found in an income statement except:
a. Assets
b. Expenses
c. Income
d. All of the above
6. The left-hand side of an account refers to:
a. Debit side
b. Credit side
c. Increase side
d. Decrease side
7. Freight-out is recorded in the book of the business – seller:
a. As an expense
b. As an asset c. As n liability
d. As cost
8. Which of the following is not considered an account?
a. Accounts Payable
b. Accounts Receivable
c. Cash
d. Revenues
9. A current asset which includes coins, currencies, and bank deposits is called:
a. Cash
b. Cash Equivalent
c. Notes Receivable
d. Acount Receivable
10. Which of the following is not subject to depreciation?
a. Equipment
b. Machinery
c. Building
d. Land
Activity/Evaluation
Exercise 1: Transaction Analysis
The following transactions of Ms. Hanna Dela Cruz are narrated below:
1. Ms. Dela Cruz invest cash in the business where she opened an account with Bank
of the Philippine Islands, P 300,000
2. Withdraw cash from the bank to pay for a business permit to the city government
P5,000
3. Received cash for services rendered and deposited in the bank, P10,000
4. Bought office supplies on account from SMDC Mall, P 3,000.
5. Withdraw cash from the bank for payment of salaries to her employees, P 10,000.
6. Withdraw cash from the bank for her personal use, P 5,000.
ANALYSES
Transaction Value Received Value Parted With
No. or Debit Amount or Credit Amount
1 Cash 300,000 Capital 300,000
2 Taxes and Licenses 5,000 Cash 5,000
3 Cash 10,000 Service Revenue 10,000
4 Office Supplies 3, 000 Accounts Payable 3, 000
5 Salaries Expense 10, 000 Cash 10, 000
6 Ms. Dela Cruz 5, 000 Cash 5, 000
Drawings
1. How much was the owner’s equity balance of Mr. De Jesus at he beginning of the
quarter?
a. P 470,000
b. P 650,000
c. P 700,000
d. P 850,000
2. How much was profit earned at the end of the quarter?
a. P 85,000
b. P 135,000
c. P 140,000
d. P 150,000
3. How much were the total assets after considering th transactions for the quarter?
a. P 470,000
b. P 555,000
c. P 605,000
d. P 7000,000
4. How much was the calculated owner’s equity balance of Mr. De Jesus at the end of
the quarter?
a. P 500,000
b. P 555,000
c. P 605,000
d. P 700,00
5. How will you state the owner’s equity?
A = L + OE
a. P 470,000 = 50,000 + 420,000
b. P 555,000 = 50,000 + 505,000
c. P 605,000 = 50,000 + 555,000
d. P 700,000 = 50,000 + 650,000
Reinforecement/Assignment:
Familiarize yourselves with the accounting equation, expanded accounting equation and
the analysis of business transanctions by identifying the effects of such transactions.
Give the effects of each transaction to total assets, total liabilities and total
owner’s equity by writing + for the increase, - for the decrease and NE for no
effect after each transaction.