INAC FINALS ASSESSMENT

ASSESSMENT 5 10/10

1. In layman, cash simply means – Money

2. Is the standard medium of exchange in a business transaction. It refers to the currency and coins

which are in circulation and legal tender. – Money

3. Includes the money and any other negotiable instrument that is payable in money and

acceptable by the bank for deposit and immediate credit. – Cash in Accounting

4. The following are classified under cash in accounting, except – Postdated checks

5. Example of cash equivalent: - All of the above

6. The caption “cash and cash equivalents” should be shown as the first item among the – Current

Assets

7. Accordingly, excess cash may be invested in time deposits, money market instruments, and

treasury bills for the purpose of – Interest Income

8. Cash is measured at – Face value

9. Is a practice of opening the books of accounts beyond the close of the reporting period for the

purpose of showing a better financial position and performance. – Window Dressing

10. Consist of misappropriating a collection from one customer and concealing this defalcation by

applying a subsequent collection made from another customer. – Lapping

ASSESSMENT 6 – 15/20

1. A deposit of P 35,000 is placed in an investment earning 3.5% annual simple interest. How much

will the investment be worth in 15 years? – P53,375

2. Is the interest you earn on interest. – Compound Interest

 3. Ms. Kirsten makes an initial investment of P 45,000 for five years. Find the value of the

investment after the five years if the investment earns a return of 8 % compounded monthly. –

67,043.06

4. The percentage of an amount of money charged for its use per some period of time – Interest

Rate

5. The method of calculating the interest amount for a particular principal amount of money at

some rate of interest – Simple Interest

6. The money originally invested or loaned, on which basis interest and returns are calculated. –

Principal

7. A loan is taken for an initial amount of P15, 000 at a 5% annual simple interest rate. How much

money will be owed in five years? – 18,750

8. The process of determining how much money paid/received in the future is worth today. –

Discounting

ASSESSMENT 8 – 25/25

1. It also referred to as accounts receivable, are debts owed to a company by its customers for

goods or services that have been delivered or used but not yet paid for. – Receivables

2. is the length of time betweens sale and its due date – Discount Period

3. A contra account that nets against the total receivables presented on the balance sheet to

reflect only the amounts expected to be paid. - allowance for doubtful accounts

4. A company accepts a 90-day, 8%, P15,000 note, what is the maturity value of the notes

receivable? – 15,295.89

5. A note receivable on which interest rate is not specified but the total interest amount

is deducted on advance – Non interest bearing notes

6. Notes are usually sold (discounted) with recourse, which means the company discounting

the note agrees to pay the financial institution if the maker dishonors the note. – True

7. This receivable has a physical form of a formal letter. – Notes Receivable

8. A company accepts a 90-day, 8%, P15,000 note, If the company immediately discounts

with recourse the note to a bank that offers a 10% discount rate, the bank's discount is

- 377.15

9. The annual percentage rate that the financial institution charges for buying a note and

collecting the debt – Discount rate

10. Under generally accepted accounting principles (GAAP), expenses must be recognized in the

same accounting period that the related revenue is earned, rather than when payment is

made.

– True

11. The discount on notes receivable account is a asset account. – False

12. An obligation to pay an amount in the future, if and when an uncertain event

occurs. – Contingent Liability

13. November 1, the company JRH receives a P10,000 promissory note from one of its customers

in exchange for the goods it sells to that customer. The promissory note has a maturity of 3

months, in which it will be honored by the customer after 3 months pass. The promissory

note that the company receives is the type of non-interest-bearing note. The appropriate

discount rate is 10% per annum. How much is the Interest on the first month? – 81.28
ASSESSMENT 11 (20/20)

1. If a company continues to use equipment past the useful life that was assumed in

determining the depreciation, there will be no Depreciation Expense in those additional

years. – TRUE

2. Over the life of an asset subject to depreciation, the total Depreciation Expense using the

accelerated method will be more than the total Depreciation Expense using the straight-line

method. – FALSE

3. A company may depreciate equipment over 10 years on a straight-line basis for its financial

statements, but might use an accelerated method of depreciation over a shorter time period

on its income tax return. – TRUE

4. Depreciation Expense reflects an allocation of an asset's original cost rather than an

allocation based on the economic value that is being consumed. – TRUE

5. Depreciation Expense shown on a company's income statement must be the same amount as

the depreciation expense on the company's income tax return. – FALSE

6. One company might depreciate a new computer over three years while another company

might depreciate the same model computer over five years...and both companies are right. –

TRUE

7. If a company revises the estimated useful life of one of its assets being depreciated, the

company will need to reissue its earlier financial statements as the earlier depreciation was

incorrect. – FALSE

8. When a company purchases real estate consisting of a 10-acre parcel of land and a building,

the company will depreciate the entire cost over the useful life of the building. – FALSE
 9. The book value of an asset indicates the asset's fair market value at that time. – FALSE

10. A company purchases equipment for $30,000 on July 1, 2021. It estimates that the

equipment will have a salvage value of $2,000 and its useful life will be 7 years. Assuming

that the company's accounting year ends on December 31 of each year, what will be the

Depreciation Expense for the years 2021 and 2022 assuming straight-line depreciation? -

YEAR 2021: $2000 YEAR 2022: $4000

11. Depreciation Expense is shown on the income statement in order to achieve accounting's

matching principle. – TRUE

12. Which of the following depreciation methods is NOT an accelerated method? – STRAIGHT-

LINE METHOD

13. Depreciation Expense shown on the financial statements is a precise amount that is

continuously refined. – FALSE

14. Accumulated Depreciation will appear as a deduction within the section of the balance sheet

labeled as Property, Plant and Equipment. – TRUE

15. The book value of an asset is defined as – COST MINUS ACCUMULATED DEPRECIATION

16. An asset's useful life is the same as its physical life. – FALSE

17. Generally, Land and Land Improvements are depreciated – FALSE

18. The purpose of depreciation is to have the balance sheet report the current value of an asset.

– FALSE

19. Depreciation Expense is sometimes referred to as a noncash expense. – TRUE

ASSESSMENT#11

1. On January 1, 2017 an asset was acquired for $30,000. Its useful life was expected to be 10

years and the salvage value is expected to be $0. After four years of use, the company
 realized the asset would be useful for only three more years. (In other words, the total useful

life of the asset will be seven years instead of the original 10 years.) The company uses the

straight-line method of depreciation. The Depreciation Expense in each of the years 2021,

2022, and 2023 will be - 6000

2. To calculate the rate per unit, one needs to consider the total cost less salvage value then

divide it by a ___ TOTAL NUMBER OF ESTIMATED UNITS

3. There are factors which affect the depletion base except: - AMORTIZATION

4. _____is the allocation of the cost of acquiring natural resources over its estimated useful life

– DEPLETION

5. The formula for calculating depletion is: Annual depletion charge is equal to (Total capitalized

cost of resource less salvage value/Total extraction capacity in units) × No. of units extracted

each year – TRUE

6. Charging off depletion expense helps management and other stakeholders to determine

actual profits earned during an accounting period - TRUE