HILLCREST PERIWINKLE SCHOOL TANZA BRANCH INC.

SENIOR HIGHSCHOOL EXAMINATION S.Y.2023-2024

Fundamentals of Accounting & Business Management 1

NAME: _______________________________________________ DATE: ________________________

Strand: ______________________________ Score: _________________________

Test I: Identification
Direction: Read the following statements carefully. Write your answer on the space provided
before each number.

___________________ 1. A legally established entity that can enter into contracts, own assets and
incur debt, as well as sue and be sued—all separately from its owner(s).
___________________ 2. It is a language of business that communicates firm’s financial and
economic information to the end users.
___________________ 3. This financial statement tells you how well did the organization
perform.
___________________ 4. An organization which basic resources such as materials and labor are
assembled and processed to provide goods and services to customers.
___________________ 5. It can be owned by 2 or more persons who binds themselves in order to
achieve one objective.

Test II: Identifying the accounts affected

Direction: Identify the ACCOUNT TITLES that are affected by the transaction described below.

Account Titles Affected

Transactions
Debit Credit
1. Owner’s cash
investment to the
business
2. Purchase of
equipment on cash
basis.
3. Sale of goods in cash
basis (Disregard costs
of sale)
4. Charging the cost of
goods sold in #3
above as expense
5. Purchase of inventory
for cash

Internal
 6. Payment of utilities
expense
7. Purchase of inventory
on cash basis
8. Payment of various
small expenses that do
not warrant separate
presentation
9. Payment of local taxes
10. Payment of taxi fare
of employees working
night shirt

Test III: Identification (Rules of Debit/Credit)

Direction: Indicate how the accounts listed below are increased, i.e., DEBIT or CREDIT

Account Titles Increased by a

1. Cash
2. Sales
3. Accumulated Depreciation
4. Depreciation
5. Inventory
6. Owner’s capital
7. Rent expense
8. Rent income
9. Interest receivables
10. Interest expense
11. Prepaid rent
12. Owner’s drawings
13. Accounts payable
14. Unearned income
15. Cost of sales

Test IV: Essay.

From your point of view, answer the following questions.
1. If you were to establish a sole proprietorship, what services or goods will you provide
or sell? Why? (10 points)

2. What are the functions of a manager? Briefly explain each. (10 points)

Internal