PILOT TEST
I. MCQ :
1. Collection of a $800 Accounts Receivable
a. increases an asset $800; decreases an asset $800
b. increases an asset $800; decreases a liability $800
c. decreases an asset $800; decreases a liability $800
d. decreases a liability $600; increases capital $600
2. If total liabilities increased by $7,000, then
a. assets must have decreased by $7,000
b. capital must have increased by $7,000
c. assets must have increased by $7,000, or capital must have decreased by $7,000
d. assets and capital each increased by $3,500
3. Capital is increased by
a. goods purchases. c. expenses.
b. revenues. d. liabilities.
4. XYZ Inc. had the following figures in its income statement:
Sales: 800,000
Cost of goods sold: 350,000
Salaries: 100,000
Rent received: 200,000
Other expenses: 50,000
What is the amount of net profit?
A. 100,000
B. 450,000
C. 500,000
D. 300,000
5. If a business rent out a van for a day at the price of $50 cash. What happens to
capital?
a. Does not change c. Decrease by $100
b. Increase by $50 d. Decrease by $50
6. Book keeping is a systematic records of all ______ transaction.
A. Personal
B. Financial
C. Non-financial
D. All of the above
7. The liabilities of a firm are $3000, the capital of the proprietor is $7000. The
total assets are:
A. $7000
B. $10,000
C. $4,000
D. $21,000
8. What transaction can be explained for double entry Dr Purchases $100, Cr
Payable $30, Cr Cash $70?
A. Bought $100 of inventory, paying $70 in Cash and the remaining paying later
B. Bought goods of $100, paying $30 from Bank and $70 in Cash
C. Goods bought of $200, in which $100 of inventory and the remaining paying
later
D. Goods sold for $70 Cash and $30 on time
9. XYZ company has the following transactions for the month of October:
Sold goods on time to M. Kate $780; M. Kate returned goods to XYZ $560;
Bought goods on time from A. David $720. Returned goods to A. David $320.
The balance of creditor account is
A. $220
B. $620
C. $1,500
D. $400
10. The difference in balances of debit and credit checked by preparing:
A. Balance sheet
B. Income statement
C. Trial balance
D. General journal
II. Short question :
What is the primary purpose of the trial balance in accounting?
III. Long question
Helen Ortega opened a small tax-preparation service. At the end of its second year
of operation, Ortega Tax service has the trial balance that appears below:
Ortega Tax Service
Trial Balance
01/12/20X8
Cash $3,700.00
Account Receivable 1099
Office Supplies 780
Account Payable 635
Capital 6939
Withdrawals 6000
Tax Fees Revenue 4655
Advertising Expense 650
$12,229.00 $12,229.00
The following information is also available:
1. Office supplies on hand, December 31, 20X8, $225
2. Purchase an equipment by cash, $200
3. Paid electricity for December by cash $150
4. Received money from customer $250 by cash
5. Paid supplier by cash, $500
Requirement:
a. Record above transactions
b. Prepare Trial Balance as at 31/12/20X8
c. Prepare the Income Statement as at 31/12/20X8
d. Prepare the Financial Position as at 31/12/20X8
