MIDTERM EXAMINATION Q3

Fundamentals of ABM 1-11

Name: Grade & Section: Score:

INSTRUCTIONS: Select the best answer from the choices given. Write your answer on the left
side of the item number.

1. It is involved in providing professional services particularly in performing tasks by making

financial reports regarding the financial activities of economic entities. What nature of
accounting is it?
a. An Art and a Science
b. A Language of Business
c. Discipline
d. A Service Activity
2. What function of accounting is considered to be the basic function of accounting?
a. Identifying, Recording, and Communicating
b. Recording, Measuring, and Communicating
c. Measuring, Identifying and Communicating
d. Communicating, Identifying and Measuring
3. Luca Pacioli is the father of modern accounting and ____________________.
a. An Accountant
b. A Merchant
c. A Mathematician
d. A Priest
4. Who introduced the use of three books in doing accounting – memorandum where the
transactions are noted; the journal where the debits and credits of transactions are listed;
and the ledger where posting are done.
a. Andrea Barbarigo
b. Eugen Schmalenbach
c. Jacques Savary
d. Luca Pacioli
5. According to AICPA, Accounting is the art of recording, classifying and summarizing in a
significant manner and in terms of money, transactions and events which are in part at
least of financial character and interpreting the results thereof. In this definition, what is
being centered on the long-established bookkeeping functions of accountants?
a. To classify and summarize business transactions and events and afterward to
interpret their outcome.
b. To record and summarize business transactions and events and afterward to
interpret their outcome.
c. To record, classify, and summarize business transactions and events and afterward
to interpret their outcome.
d. To record and classify business transactions and events and afterward to interpret
their outcome.
6. External financial reports are usually prepared for those who have _____________.
a. Direct access to the management of the business.
b. For the efficient operation and control of the business.
c. No direct access to the management of the business.
d. For the effective operation and control of the business.
7. They use the financial statement of their suppliers to assess the latter’s continuity in
business because some of them are dependent on the existence of their supplier to insure
the availability of supplies that will sustain their business operations.
a. Employees
b. Customers
c. Investors
d. Lenders
8. Statement 1: The T-account or Ledger of our present accounting system has derived its
accounting form from the “Massari Ledgers of commune Genoa”.
Statement 2: The oldest evidence of records keeping was the clay tablet of Mesopotamia,
60% of which dealt with commercial transactions, accounts payable, and receivables.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
9. Which of the following external users of accounting information is perceived to be the
most important user in a macro-user-oriented accounting system?
a. Creditors
b. Government and its agencies
c. Investors
d. Employees
10. The statement of financial condition reports the following, EXCEPT:
a. Financial position
b. Liquidity
c. Profitability
d. Solvency
11. A company requires that expenses must be matched with revenues.
a. Accrual Concern Concept
b. Going Concern Concept
c. Materiality Principle
d. Matching Principle
12. Aling Aljon Oh sold a piece of cupcake to her neighbor. Apparently, her customer is out
cash so Aling Aljon Oh had to consider it as credit but still recorded it in her books. What
concept of accounting was observed?
a. Accrual Concern Concept
b. Going Concern Concept
c. Materiality Principle
d. Matching Principle
13. Gale started a business assuming that it will not enter into a liquidation and the
business will run forever.
a. Accrual Concern Concept
b. Going Concern
 c. Going Concern
d. Matching Principle
14. A professional judgement is needed to decide if an amount is insignificant or immaterial.
a. Accrual Concern Concept
b. Going Concern Concept
c. Materiality Principle
d. Matching Principle
15. An entrepreneur considers the original amount of the item bought regardless of the time
of purchase to be shown in the financial statements.
a. Economic Entity Concept
b. Historical Cost Principle
c. Monetary Unit Concept
d. Time Period Concept
16. When creating a business, the entity of the owner must be separated from the business.
What concept is being identified in the statement given?
a. Economic Entity Concept
b. Historical Cost Principle
c. Monetary Unit Concept
d. Time Period Concept
17. A fundamental concept that uses a Philippine peso for economic activities which allows
the accountants to add and subtract peso amounts as though each peso has the same
purchasing power as any other peso at any time.
a. Economic Entity Concept
b. Historical Cost Principle
c. Monetary Unit Concept
d. Time Period Concept
18. The life of a business may be reported either monthly or yearly depending on the period
of the business.
a. Economic Entity Concept
b. Historical Cost Principle
c. Monetary Unit Concept
d. Time Period Concept
19. Sufficient information must be disclosed in the financial statements.
a. Full Disclosure
b. Monetary Unit Concept
c. Objectivity
d. Time
20. In order to Bookkeeping must be free of bias and prejudice.
a. Full Disclosure
b. Monetary Unit Concept
c. Objectivity
d. Time
21.Which of the following is NOT a feature of an asset?
a. Provide future economic benefits
b. Value cannot be measured
c. Controlled by business
d. As a result of a past event
22. Which of the following item is NOT an asset to a company?
a. Cash
b. Building
c. Debt
d. Vehicle
23. Which of the following is the BEST description of capital or owner's equity?
a. It is the amount owed by the owner.
b. It is the net assets of the business.
c. It is contributed by the owners.
d. It is earned by the business.
24. Which of the following statement is NOT a settlement method of a present obligation?
a. Provision of service
b. Delivery of goods
c. Borrowing cash
d. Paying cash
25. Retained earnings can be increased by ____________?
a. Borrowing
b. Drawing
c. Owner’s investment
d. Profitable operation
26. According to the accounting equation, when there is an increase in assets, which of the
following statement is correct?
a. There is an increase in liabilities
b. There is a decrease in liabilities.
c. There is a decrease in capital
d. There is an increase in assets
27. Given the following information: Assets= 50,000.00, Liability= 30,000.00, how much
would be the capital?
a. 10,000.00
b. 20,000.00
c. 30,000.00
d. 40,000.00
28. Which of the following is a correct accounting equation?
a. Capital= Liabilities + Assets
b. Liabilities= Assets + Capital
c. Liabilities= Capital - Assets
d. Capital= Assets- Liabilities
29. Mr. Lee started his business on February 1 and deposited P 50,000.00 into the
company's account. Which of the following statement is correct?
a. Liabilities will decrease P 50,000.00
b. Liabilities will increase P 50,000.00
c. Capital will increase P 50,000.00
d. Capital will decrease P 50,000.00
30. Yuya Franzia opened a driving school and borrowed from Biyaya Rural Bank P
200,000.00 for her business. What is its effect on the liabilities?
a. Decrease
b. Increase
 c. Either A or B
d. Neither A or B
31. What is the principal classification of liabilities?
a. Accrued Income and Prepaid Expense
b. Current and Non-current Liabilities
c. Mortgage and Loans Payable
d. Current Liabilities
32. What type of account is prepaid insurance?
a. Assets
b. Expense
c. Income
d. Owner’s Equity
33. What type of account is accrued income?
a. Assets
b. Expense
c. Liabilities
d. Owner’s Equity
34. Which of the following best describes Prepaid Rent?
a. It represents to the amount of money owed by the customers to the business.
b. It refers to advanced payment made by the business to cover future rental
payments.
c. It is the physical structure owned and used by the business to conduct its business
operation.
d. It refers to the amount of money owed by the customer or debtor to the business
evidenced by a promissory note.
35. What account title represent the cost being incurred by the business in generating
revenues?
a. Assets
b. Expenses
c. Liabilities
d. Revenues
36. What account title should be use if the business entity collects advance payment for a
service or goods that is yet to be rendered or delivered?
a. Accrued Income
b. Accounts Payable
c. Prepaid Income
d. Unearned Revenue
37. Which of the following is NOT a current asset among the following items?
a. Cash and cash equivalents
b. Inventory under production
c. Prepaid insurance to be used up this year.
d. A company’s office building bought this year.
38. Which of the following is NOT an asset account?
a. Accrued Income
b. Account Receivable
c. Building
d. Unearned Income
39. Which of the following is a liability account?
a. Building
b. Interest Income
c. Interest Payable
d. Prepaid Rent
40. Which of the following does NOT belong to income account?
a. Accrued Income
b. Interest Income
c. Sales Income
d. Unearned Income
41. What is to be recorded in a purchase book?
a. All cash purchases
b. All credit purchases
c. All collections
d. All purchases
42. All collections from debtors are to be recorded in what book?
a. Cash Receipt Journal
b. General Journal
c. Purchase Journal
d. Sales Journal
43. Those transactions for which there is no separate book are recorded in the?
a. Cash Receipts Journal
b. General Journal
c. Purchase Journal
d. Sales Journal
44. The Person from whom the goods are purchased on credit are called:
a. Creditor
b. Debtor
c. Purchaser
d. Seller
45. Which of the following statements is FALSE with regard to a Cash Receipts Journal?
a. All receipts of cash from customers are recorded in it.
b. Receipts of cash from the owner should NOT be recorded in it.
c. Receipt of cash from cash sales should be recorded in it.
d. Receipts of cash from borrowings should be recorded in it.
46. When special journals are used, do you still require a general journal?
a. Not needed
b. Still required
c. Used only to record purchases
d. Used only to record sales
47. Supplies were purchased on credit and the entry was recorded in the Purchases Journal.
When you return some of these supplies to the vendor, what will be the journal entry for
this return to be recorded in the general journal?
a. Debit cash and credit supplies
b. Debit supplies and credit cash
c. Debit accounts payable and credit supplies
d. Debit supplies and credit accounts payable
48. The general journal is the book of _______entries?
a. First
b. Generic
c. Original
d. Secondary
49. How many times recording of transaction is to be done?
a. At the end of the accounting period
b. Frequently during the accounting period
c. Once a year only
d. Semi-annual only
50. What do you call the process of recording transactions to the different journals?
a. Adjusting
b. Entry Writing
c. Journalizing
d. Posting
ANSWERS KEY: FUNDAMENTALS OF ABM 1

1. D 18. D 35. B
2. A 19. A 36. A
3. B 20. C 37. D
4. A 21. B 38. D
5. D 22. C 39. C
6. C 23. A 40. D
7. D 24. C 41. B
8. A 25. C 42. A
9. C 26. A 43. B
10. A 27. B 44. A
11. D 28. D 45. B
12. A 29. C 46. B
13. B 30. B 47. C
14. C 31. B 48. C
15. B 32. A 49. B
16. A 33. C 50. C
17. C 34. B

Prepared by: Noted by: Approved by:

RUPERT NICHO P. JARADAL NOE L. POMENTIL ELMER R. PONTICA

Subject Teacher Assistant Principal 2 School Principal 2
Date: ___________ Date: __________ Date: __________
 TABLE OF SPECIFICATIONS
MIDTERM EXAMINATION QUARTER 3
FUNDAMENTALS OF ABM 1
Grade 11
S.Y. 2022-2023

Item Allocation/Placement
No. of NUMBER
MOST ESSENTIAL LEARNING Factual Conceptual Procedural Metacognitive
Days OF
COMPENTENCIES Knowledge Knowledge Knowledge Knowledge ITEMS
Taught
70% 20% 10%

1. Define accounting 1 1 2 2

2. Describe the nature of accounting 1 3,4 2

3. Narrate the history/origin of accounting 1 5 6 2
4. Define external users and give examples 1 7 8 2
5. Define internal users and give examples 1 9 10 2
6. Explain the varied accounting concepts and principles 2 11 13 12 3
7. Solve exercises on accounting principles as applied in
2 14 15 16 3
various cases
8. Illustrate the accounting equation 2 19 17,18 3
9. Perform operations involving simple cases with the use
2 21,22 20 3
of accounting equation
10. Discuss the five major accounts 1 23,24 2
 11. Prepare a chart of accounts 2 26,27 28,29 30 25 4
12. Illustrate the format of a general and special journals 2 31,32 33 34 3
13. Illustrate the format of a general and subsidiary ledger 2 36,37 35 3
14. Analyze common business transactions using the
2 38,39 40 3
rules of debit and credit.
15. Solve simple problems and exercises in the analyses
2 43 42 41 3
of business transactions
16. Describes the nature of transactions in a service
2 44,45 2
business
17. Records transactions of a service business in the
2 47 46
general journal
18. Posts transactions in the ledger 2 48 49 50
32 20 15 10 5 50

Prepared by: Noted by: Approved by:

RUPERT NICHO P. JARADAL NOE L. POMENTIL ELMER R. PONTICA

Subject Teacher Assistant School Principal II School Principal II
Date: ___________ Date: __________ Date: __________