UNIVERSITY OF SAINT ANTHONY

College of Accountancy

ACCOUNTING 1 (Reviewer)

PRE-FINAL QUIZ NUMBER 4

Question 1: The income summary account

a) Generally has a credit balance after all the accounts that should be
closed have been closed
b) Summarizes changes in assets, liabilities, and net earnings or loss
for the accounting period
c) Summarizes revenue, expense, and net income or loss for
the accounting period
d) Is used to close the retained earnings account

Question 2: An adjusting entry to accrue wages incurred but not yet

paid is an example of
a) Reflecting unrecorded revenue earned during an accounting
period
b) Reflecting unrecorded expenses incurred during an
accounting period
c) Aligning recorded costs with appropriate accounting periods
d) Aligning recorded revenue with appropriate accounting periods

Question 3: If an entity uses special journals, in which journal would

the sale of merchandise for cash be recorded?
a) General journal
b) Sales journal
c) Cash receipts journal
d) Cash disbursements journal

Question 4: In the preparation of the worksheet, if the total debits are

greater than total credits under the balance sheet column
a) Assets are overstated
b) There is net loss
c) There is net income
d) Liabilities are understated
 UNIVERSITY OF SAINT ANTHONY
College of Accountancy

ACCOUNTING 1 (Reviewer)

Question 5: Which of the following is an example of an accrued

expense?
a) Property tax incurred during the year to be paid next year
b) Depreciation expense
c) Equipment purchased at the beginning of the year and debited to
an expense account
d) Rent earned during the current year to be received at the end of
next year

Question 6: On May 1, 2020, the business paid for a one-year insurance

premium of P2,400 for the registration of the delivery truck. The entry
made was a debit to the Prepaid Insurance account and a credit to the
Cash account, both for P2,400.

What is the adjusted balance of the Prepaid Insurance account on

December 31, 2020?

Answer 1: 800 (2400 x 8/1290= 1600, 2400-1600=800)

Question 7 : On April 15, 2020, the business paid for a one-year

insurance premium of P3,600 for the registration of the delivery truck.
The entry made was a debit to the Insurance Expense account and a
credit to the Cash account, both for P3,600.

What is the adjusted balance of the Insurance Expense account on

December 31, 2020?

Answer 1: 1050 (3600 x 8.5/12=2550, 3600-2550=1050)

Question 8: If the business operations of a single proprietorship entity

resulted to a loss, the income summary account will be closed by
a) Debiting cash and crediting income summary
b) Debiting income summary and crediting owner’s capital
c) Debiting income summary and crediting cash
 UNIVERSITY OF SAINT ANTHONY
College of Accountancy

ACCOUNTING 1 (Reviewer)

d) Crediting income summary and debiting owner’s capital

Question 9: An entity initially records prepayments in nominal

accounts. Which of the following year-end adjusting entries should be
reversed?
a) The adjusting entry to record amortization of patent
b) The adjusting entry to record doubtful accounts
c) The adjusting entry to record inventory at year-end
d) The adjusting entry to record the portion of rental received
in advance that is unearned at year-end

Question 10: Which of the following statements is correct regarding

the post-closing trial balance?
a) It shows that the accounting equation is in balance at the end of
the current accounting period
b) All of these statements are correct regarding the post-
closing trial balance
c) It will balance even if a transaction is not journalized and posted or
if a transaction is journalized and posted twice
d) It is a trial balance that consists of real accounts only

Question 11: Which of the following is not a possible combination of

journal entry?
a) Decrease in equity and increase in liability
b) Decrease in liability and decrease in asset
c) Increase in asset and increase in liability
d) Increase in asset and decrease in equity

Question 12: A reversing entry should never be made for an adjusting

entry that
a) Adjusts unexpired costs from an expense account to an asset
account
b) Accrues unrecorded revenue
c) Accrues unrecorded expenses
 UNIVERSITY OF SAINT ANTHONY
College of Accountancy

ACCOUNTING 1 (Reviewer)

d) Adjusts expired costs from an asset account to an expense

account

Question 13: Reversing entries apply to all

a) Closing entries
b) Adjusting entries
c) Deferrals
d) Accruals

Question 14: The following data are taken from the records of OMG
Store:
Accounts receivable – P1,250,000
Credit balance of Allowance for bad debts – P12,000
Estimated uncollectible accounts – 4%

How much is the required Allowance for Bad Debts?

Answer 1: 50,000 (1,250,000 x 4%=50000)

Question 15: Reversing entries

a) Must be made at year-end
b) Are desirable to exercise consistency and establish
standardized procedures
c) Are necessary to achieve a proper matching of revenue and
expense
d) Are normally prepared for accruals and prepayments

Question 16: The records of Makabebe Enterprises at the end of the

period reveal the following with regard to its accounts receivable:
 UNIVERSITY OF SAINT ANTHONY
College of Accountancy

ACCOUNTING 1 (Reviewer)

Experience
A Store B Store C Store Other Customers
rate

0 – 30 1% P80,000 P63,500 P- P123,800

31 – 60 4% 12,000 - - 86,700

61 – 90 10% 3,000 - - 35,600

91 – 180 15% - - 23,500 14,600

Over 189 25% - - - 25,900

Required: Compute for the uncollectible amount.

Answer 1: 21,667

Question 17: The income statement showed utilities expense of

P24,000 and the balance sheet showed utilities payable of P4,000.
How much was the utilities paid?

Answer 1: 28,000 (24,000 plus 4,000= 28000)

Question 18: The trial balance

a) In used to prepare the statement of financial position while the
general ledger is used to prepare the income statement
 UNIVERSITY OF SAINT ANTHONY
College of Accountancy

ACCOUNTING 1 (Reviewer)

b) Is a listing of all the accounts and their balances in the order the
accounts appear in the statement of financial position
c) Can be used to uncover errors in journalizing and posting
d) Has as the primary purpose of proving that all journal entries were
made for the period

Question 19: The post-closing trial balance

a) Will balance if a transaction is not journalized and posted, or if a
transaction is journalized and posted twice
b) All of the choices are correct regarding the post-closing
trial balance
c) Consists of statement of financial position accounts only
d) Shows that the accounting equation is in balance at the end of the
accounting period

Question 20: Adjusting entries that should be reversed include those

for prepaid or unearned items that
a) Were originally entered in a revenue or expense account
b) Neither
c) Were originally entered in an asset or liability account
d) Both

Question 21: In the preparation of the worksheet, if the total debits

are greater than total credits under the income statement column
a) There is net income
b) Income is understated
c) Expense is overstated
d) There is net loss

Question 22: A general ledger is defined as

a) The entire group of accounts
b) A group of all statement of financial position accounts
c) A group of transactions
d) A group of all statement of comprehensive income accounts
 UNIVERSITY OF SAINT ANTHONY
College of Accountancy

ACCOUNTING 1 (Reviewer)

Question 23: An account which represents unpaid expenses at the end

of the account period.
a) Expenses
b) Accrued expense
c) Prepaid expense
d) Deferred charges

Question 24: Which of the following statement/s is/are true about

reversing entries?
I. Income under accrual basis can be reversed
II. Expenses under cash basis can be reversed
III. Prepaid expense recorded under expense method can be reversed
IV. Unearned income recorded under liability method can be
reversed

a) I and III
b) I, II, and IV
c) I, III, and IV
d) II and IV

Question 25: Which of the following is/are true?

I. Statement of cash flows shows the balances of an entity’s assets,
liabilities, and equities
II. Statement of changes in equity shows the movements of an
entity’s cash account
III. Statement of comprehensive income shows the list of real
accounts
IV. Notes to financial statements shows the supporting details for the
accounts being show in other components of financial statement

a) I, II, III, and IV

b) IV only
c) III and IV
d) I, II, and IV
UNIVERSITY OF SAINT ANTHONY
College of Accountancy

ACCOUNTING 1 (Reviewer)