Republic of the Philippines

Department of Education
REGION III – CENTRAL LUZON
SCHOOLS DIVISION OF TARLAC PROVINCE
TARLAC NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL

__________________________________________________________________________________________________
I. MULTIPLE CHOICE

Instruction: Encircle the letter corresponding to the correct answer for each of the questions provided below.

1. What are the end-products of the accounting process?

A. Books of Accounts B. Budgets C. Financial Statements D. Tax Returns

2. What is the classification of the account Unused Supplies?

A. Current Assets B. Current Liabilities C. Non-Current Assets D. Non-Current

3. These are accounts deducted from their related asset accounts.

A. Adjunct B. Balance C. Contra D. Deductions

4. What is the difference of Accounts Receivable and Allowance for Bad Debts?
A. Net Allowance Value B. Net Book Value C. Net Realizable Value D. Net Stock Value

5. Comparing the amount of a balance sheet item in one year to the amount for the same item in a prior year is
A common-size analysis. . B vertical analysis. C horizontal analysis D ratio analysis.

6. If long-term liabilities are ₱300,000 and total assets are ₱2,100,000, what % of total assets are long-term liabilities?

A. 7% B. 16.7 % C. 12.5 % D. 14.3 % .

7. What is the statement called that measures activities involving cash receipts and cash payments over an interval of
time?
A. Balance Sheet B. Cash Flows C. Income Statement D. Worksheet

8. What is the classification of the account Land in the SFP?

A. Current Assets B. Current Liabilities C. Non-Current Assets D. Non-Current Liabilities

9. An entity begins its accounting period in August 1 and ends it on July 31 of the succeeding year. What type of year
does the business adopt?
A. Calendar B. Current C. Fiscal D. Normal

10. What is stockholders' equity? A. Sales of products or services B. Owners' claims to resources
C. Resources owned D. Costs of selling products or services E. Amounts owed

11. What is the difference of the cost of a fixed asset and its accumulated depreciation?
A. Net Allowance Value B. Net Book Value C. Net Realizable Value D. Net Stock Value

12. The following are classified under noncurrent liability, EXCEPT:

A. Bonds Payable B. Income tax payable C. Long-term debts D. Notes payable due in 15 months

13. The following assets have a debit normal balance, EXCEPT:

A. Accounts Receivable B. Amortization C. Property, Plant and Equipment D. Supplies

14. A business reported total assets of P500,000 and total owner’s equity of P200,000. How much is total liabilities?
A. 200,000 B. 300,000 C. 500,000 D. 700,000

15. A business has P100,000 payable to a supplier. The amount is due on April 5, 2021. What is the classification of this
on the SFP as of December 31, 2019?
A. Current Assets B. Current Liabilities C. Non-Current Assets D. Non-Current Liabilities

16. Accounts receivable or the amount to be received when a customer orders on account is an example of what
account? A. Asset B. Liability C. Equity D. All of the above

17. What's revenue? A. Costs of selling products or services B. Expense to run business
C. Sales of products or services D. Distributions to stockholders E. Assets purchased to run business

18. What are expenses? A. Costs of selling products or services B. Sales of products or services
C. Amounts owed D. Distributions to stockholders E. Owners' claims to resources

19. The ending balance of the equity account appears on these financial statements
A. SCI and SFP B. SFP and SCE C. SCE and SCF D. SCF and SCI

20. If current assets are ₱270,000 and total assets are ₱810,000, what percentage of total assets are current assets?
A. 3.5 percent B. 30 percent C. 25 percent D. 33 percent

Address: San Roque, Tarlac City

Telephone Number: (045) 800 7735, (045) 982 3565
Email Address: tarlacnhs@deped.gov.ph
 Republic of the Philippines
Department of Education
REGION III – CENTRAL LUZON
SCHOOLS DIVISION OF TARLAC PROVINCE
TARLAC NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL

__________________________________________________________________________________________________

21. The ledger of the equity of ABC Trading showed a beginning balance of P100,000 and an ending balance of P
80,000. There were no additional investment or personal drawings made by the owner during the period. What could
have caused the decrease?
A. Net income of P 20,000 B. Net income of P 80,000 C. Net loss of P 20,000 D. Net loss of P 80,000

22. What are the two methods of presenting the CFS?

A. Current and non-current B. Direct and indirect C. Inflow and outflow D. Short and long term

23. The initial investment of the owner in his business is ₱75,000. At the end of each year, the total assets of the
business amounted to ₱100,000, which consists of ₱50,000 cash and ₱50,000 equipment. The equipment has an
unpaid balance of ₱20,000, the only liability of the business. How much is the owner‟s equity at the end of the year?
A. P225,000 B. 255,000 C. P155,000 D. P195,000

24. What special journal shows the cash inflows?

A. Cash Disbursement Journal B. Cash Receipt Journal C. Purchase Journal D. Sales Journal

25. What is the effect of a negative net cash flow to the ending balance of cash compared to beginning balance?
A. Ending balance is greater than beginning balance B. Ending balance is lesser than beginning balance
C. Ending balance is the same as the beginning balance D. Effect cannot be determined

26. Which of the following statements is not valid?

A. Income increases equity; thus, it has a normal credit balance. B. Expense decreases equity, thus, it has a
normal debit C. Expense is an addition on the right side of the accounting equation. D. Asset has a normal
debit balance

27. The following are the types of special journals except?

A. Cash disbursement journal B. General journal C. Cash receipt journal D. Purchases journal

28. What are the two ways of financing a business?

A. Debt and Equity B. Direct and Indirect C. Investment and Withdrawal D. Trade and Non-Trade

29. Which of these is a cash inflow related to investing activity?

A. Acquisition of inventories B. Depreciation of fixed assets C. Disposal of fixed asset D. Loss on writing
off receivables

30. What are the two activities that are similar in presentation under the two methods of presenting the CFS?
A. Financing and operating B. Operating and investing C. Investing & financing D. Non-operating & operating

31. It represents steps or procedures used to record transactions and prepare financial statements.
a. Journalizing b. Posting c. Accounting cycle d. Adjusting entries

32. It refers to the information from the journal being transferred to the ledger.
a. Journalizing b. Posting c. Accounting cycle d. Adjusting entries.

33. The net cash flow from operating activities is P300,000; investing activities is P (50,000); and financing activities is P
100,000. How much is the net increase in cash?
A. P 300,000 B. P 350,000 C. P 400,000 D. P 450,000

34. It is a document issued by a buyer to a seller indicating the types, quantities and agreed prices for products or
services that the buyer intends to purchase.
A. Sales invoice B. Delivery receipt C. Official receipt D. Purchase order

35. It is a document signed by the receiver of the shipment indicating the fact that the goods were actually received by
the intended recipient.
A. Sales invoice B. Delivery receipt. C. Official receipt D. Purchase order

36. What accounts are affected by operating activities?

A. Balance sheet accounts B. Income statement accounts C. Long-term accounts D. Owner’s Equity accounts

37. What method of analyzing financial statements uses a comparative financial statement?
A. Diagonal B. Horizontal C. Ratio D. Vertical

38. The net cash flow from operating activities is P300,000; investing activities is P (50,000); and financing activities is
P100,000. How much is the net increase in cash?
A. P 300,000 B. P 350,000 C. P 400,000 D. P 450,000

Address: San Roque, Tarlac City

Telephone Number: (045) 800 7735, (045) 982 3565
Email Address: tarlacnhs@deped.gov.ph
 Republic of the Philippines
Department of Education
REGION III – CENTRAL LUZON
SCHOOLS DIVISION OF TARLAC PROVINCE
TARLAC NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL

__________________________________________________________________________________________________
39. The cash ledger has a beginning balance of P 60,000. Based on the CFS, there is a net decrease of P20,000. How
much is the ending balance of cash?
A. P 40,000 B. P 60,000 C. P 80,000 D. P 100,000

40. If long-term liabilities are ₱300,000 and total assets are ₱2,100,000, what percentage of total assets are long-term
liabilities? A 7% B 16.7 % C. 12.5 % D 14.3 %

41. When comparing the values in a comparative financial statement in the years 2017 and 2018, what serves as the base
year? A. 2017 B. 2018 C. 2019 D. 2020

42. The net increase in cash is P50,000. How much is the ending balance if the beginning balance is P75,000?
A. P 25,000 B. P 50,000 C. P 75,000 D. P 125,000

43. The total cash inflow from operating activities is P50,000 while the total cash outflow is P70,000; on the other hand,
the total cash outflow from investing activities is P 30,000 while there are no cash inflows; and financing activities
reported a cash inflow of P40,000 with no cash outflow. How much is the net increase/ decrease in cash ?
A. 5,000 B. (5,000) C. 10,000 D. (10,000)

44. Which of the following will cause owner's equity to increase?

A. Expenses B. Owner’s Draws C. Revenue D. NOTA

45. Which of the following will cause owner's equity to decrease?

A. Net Income B. Net Loss C. Revenue D. Expenses

II. Perform horizontal and vertical analysis. Use the following data to answer items 46 - 50.
The financial statements of Smiths Marketing Ltd. are given below:
2014 2013 2014
Cash and Cash Equivalents 12,250 10,470 Sales 104,705
Receivables 9,065 8,055 Cost of Sales 32,275
Inventory 6,620 5,300 Gross Profit 69,430
Prepaid Expenses 8,545 10,600 Selling Expenses 35,325
Total Curent Assets 36,480 34,425 Administrative Expenses 12,815
Other Assets 92,500 78,685 Operating Income 21,290
Total Assets 128,980 113,110 Interest Expense 1,050
Total current liabilities 36,150 42,335 Net Income 20,240
Long-term Liabilities 23,990 18,960
Mercedes Aldana, Capital 68,840 51,815
Total Liabilities and Equity 128,980 113,110
1. Horizontal analysis of 2014 Merdana’s balance sheet would report
A. Cash as 9.50% of total assets B.17% increase in Prepaid Expenses. C. 19% increase in Cash. D. All of the above.
2. Vertical analysis of 2014 Merdana’s balance sheet would report
A. Cash as 9.50% of total assets. B.17% increase in Prepaid Expenses. C. 19% increase in Cash. D. All of the above
3. A common-size income statement for Merdana would report (amounts rounded)
a Net income of 19%. b. Sales of 100%. c. Cost of sales at 34%. d All of the above
4. A common-size balance sheet for Merdana would report (amounts rounded)
a Current liabilities as 28% of total assets c Receivables is 7% of total liabilities and equity b Owner’s capital is
53% of total liabilities & equity d All of the above

5. Trend analysis will show which of the ff.? A. 15% increase in Current Liabilities B. 33% increase in Owner’s Capital.
. B. 19% increase in Long Term Liabilities D. All of the above
Prepared by:

ROSSANO C. DAVID, CPA, PhDba (H)

Subject Teacher

Checked and Reviewed by:

MARK ANTHONY C. PIMENTEL, PhD

Assistant Principal II

Approved by:

Address: San Roque, Tarlac City

Telephone Number: (045) 800 7735, (045) 982 3565
Email Address: tarlacnhs@deped.gov.ph
 Republic of the Philippines
Department of Education
REGION III – CENTRAL LUZON
SCHOOLS DIVISION OF TARLAC PROVINCE
TARLAC NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL

__________________________________________________________________________________________________
YOLANDA M. GONZALES, EdD

Principal IV

Address: San Roque, Tarlac City

Telephone Number: (045) 800 7735, (045) 982 3565
Email Address: tarlacnhs@deped.gov.ph