PRACTICE EXAMINATION

BAINTE1L

1. Which of the following will you expect to find in an income statement?

Choices: Accounts Payable, Professional Fees, Cruz, Capital, Accounts Receivable
2. T/F. Net income is the excess of expenses over revenues.
3. Unpaid water bill was not recorded. Owner’s equity will be __________.
4. Accrual method records revenue when _______________.
5. Heading of an income statement.
6. Issued when service of merchandise is given to a customer or client.
7. Issued when cash is received by the entity.
8. Document used when cash is paid, or a check is issued.
9. A negotiable instrument used as a substitute for cash, the payment for which is drawn against the
entity’s or individual’s current account.
10. A written promise to pay a certain sum of money at a future date.
11. A bill presented to a customer for service rendered or merchandise given for which payment is
demandable.
12. A device used to record the increases and decreases affecting each of the different assets,
liabilities, and owner’s equity.
13. A listing of account titles that guides the bookkeeper in the recording of the transactions.
14. Increases in assets are recorded on the ________ side, while decreases are recorded on the
________ side.
15. Process of transferring the debits and credits from the journal is called ________.
16. Subsidiary ledger is also called the _____________________.
17. ________ represents compensation paid to employees and workers.
18. Employees are paid ________ while workers are paid ________.
19. Pag-IBIG means: Pagtutulungan sa ___________: Ikaw, ________, Industriya, at Gobyerno.
20. HDMF Law 2009 is also known as RA ______.
21. Maximum monthly compensation of Pag-IBIG is set at Php_______.
22. ________ is an internal control procedure for cash transactions.
23. The notes payable is for 60 days at 18% due to republic finance dated December 1, 2018. Find the
accrued interest from December 1 to December 31. Php____.
24. Heading of trial balance sheets.
25. Lists down the economic resources being controlled by the firm, and from which liquidity and
solvency are determined.
26. Shows how cash was affected by the operating, investing, and financing activities of the business.
27. Means bringing the temporary or nominal accounts to zero balance by transferring them to the
capital account or owner’s equity.
28. T/F. Income statements are called nominal or temporary accounts.
29. An account used to close the nominal values and bring them to the capital account.
30. In closing entries, income accounts are (credited, debited), and expense accounts are (credited,
debited).
31. What is the journal entry in closing the profit to capital? (Closing Entries)
32. To bring forward the accounts with balances to the next accounting period, an
________________ should be prepared based on the post-closing trial balance.
33. Opposite of adjusting entry.
34. Prepaid expenses under the ________ method and deferred income under the ________ method
are the accounts that need reversing.
35. Ability of the company to enhance owner’s equity through profit. The relevant information are
the revenues earned, the net income obtained, the assets used in the operation, the investment
made by the owner.
36. ________ is the ability of the business to pay for its short-term obligations.
37. ________ is long-term liquidity and is measured based on the ability of the business to pay for
long-term obligations when they fall due.
38. A ___________is a person who buys and sells goods.
39. A ________buys merchandise from the manufacturer/wholesaler and sells them by piece to
ultimate consumers.
40. While the service provider uses the title service fees revenue for receipts coming from clients, the
merchandiser uses the title _____________.
41. ____________ is a major expense representing the cost of the merchandise sold.
42. ___________________ refers to goods purchased for resale in the normal course of business.
43. This recording method is usually adapted by a business which sells high price – low volume
goods such as cars and appliances.
44. T/F. In AIS 2 income statement presentation format, the title used was Change in Inventory to
record the ending inventory.
45. A ____________ which is a percentage reduction from a published list price may be granted to
retailers or wholesalers for buying large quantities of goods or for regularly patronizing the
business.
46. The credit term ________ means that the gross amount is payable within 30 days from the date of
sale.
47. T/F. Sales discount is a contra account.
48. A business document issued by the seller informing the buyer that his account was decreased
accordingly for the return made or for the reduction of price requested.
49. T/F. If it’s the buyer who issues the document, instead of the seller, it is called a debit memo
since an account payable is decreased on the debit side.
50. The maritime terms used when the cost, insurance, and freight must be paid by the buyer and
seller must pay for the loading cost.
51. T/F. In case of an owner’s withdrawal of merchandise, the entry will be as follows: Dr. Owner’s
Drawing, and Cr. Purchases.
52. Each time a sale of good or service is made by a VAT registered business or practitioner, a 12%
VAT is charged to the customer or client increasing the amount to be collected which is credited
to the title ________________.
53. ________________________ is a book of original entry where all cash receipt transactions are
recorded such as cash investment, loans, cash sales, collections of customer’s accounts and cash
refund.
54. T/F. Cash Sales is both a sales transaction and a cash receipts transaction so it should be recorded
twice: In the cash receipts journal and in the purchases journal.
55. Payments of accounts and other liabilities are recorded in the ________________________.