AEC 12: Practice Midterm Exam Answer Key

I. True or False
1) T
2) T
3) F
4) T
5) T
6) T
7) F
8) T
9) T
II. Multiple Choice
1) D
2) C
3) D
4) C
5) D
6) D
7) C
III. Problem Solving
1)
ASSETS LIABILITIES EQUITY INCOME EXPENSES
1. ₱ 920,000 ₱710,000 ₱290,000 ₱440,000 ₱520,000
2. 870,000 310,000 240,000 470,000 150,000
3. 890,000 240,000 240,000 600,000 190,000
4. 740,000 530,000 170,000 1,900,000 1,860,000
5. 1,440,000 780,000 470,000 860,000 490,000

2)
ACCOUNT TITLES COLUMN A COLUMN B
1. Taxes and Licenses EXPENSE INCOME STATEMENT
2. Furniture and Fixture ASSET BALANCE SHEET
3. Supplies Expense EXPENSE INCOME STATEMENT
4. Interest Expense EXPENSE INCOME STATEMENT
5. Inventory ASSET BALANCE SHEET
6. Land ASSET BALANCE SHEET
7. Accounts Payable LIABILITY BALANCE SHEET
8. Notes Receivable ASSET BALANCE SHEET
9. Prepaid Insurance ASSET BALANCE SHEET
10. Loss EXPENSE INCOME STATEMENT
11. Prepaid Supplies ASSET BALANCE SHEET
12. Rent Payable LIABILITY BALANCE SHEET
13. Sales INCOME INCOME STATEMENT
14. Interest Receivable ASSET BALANCE SHEET
15. Transportation ASSET BALANCE SHEET
Equipment

3)
ACCOUNT TITLES COLUMN A COLUMN B
1. Notes Receivable ASSET DEBIT
2. Salaries Expense EXPENSE DEBIT
3. Owner’s Drawings CONTRA-EQUITY DEBIT
4. Building ASSET DEBIT
5. Service Fees INCOME CREDIT
6. Advances from customers LIABILITY CREDIT
7. Gains INCOME CREDIT
8. Interest expense EXPENSE DEBIT
9. Unearned Income LIABILITY CREDIT
10. Equipment ASSET DEBIT
11. Interest Receivable ASSET DEBIT
12. Owner’s Capital EQUITY CREDIT
13. Equipment ASSET DEBIT
14. Freight-out EXPENSE DEBIT
15. Losses EXPENSE DEBIT
16. Service Fees INCOME CREDIT
17. Allowance for Bad Debts CONTRA-ASSET CREDIT
18. Inventory ASSET DEBIT
19. Depreciation EXPENSE DEBIT
20. Utilities Payable LIABLILTY CREDIT

4)
ACCOUNTS EFFECTS
1. Owner’s contribution to the business. Cash Increase
Owner’s Equity Increase
2. Purchase of Inventory for Cash. Inventory Increase
Cash Decrease
3. Sale on Cash basis and the charging of cost Cash Increase
of the goods sold as an expense. Sales Increase
Cost of Goods Sold Increase
Inventory Decrease
4. Purchase of Equipment for Cash. Equipment Increase
Cash Decrease
5. Payment of Interest Expense. Interest Expense Increase
Cash Decrease

5)
IV. Worksheet Preparation
1)
2) Chap 10 - Problem 11