Question 1

1 / 1 pts
Accounting is
 
I. A service activity and its function is to provide quantitative information, primarily
financial in nature, about economic entities, that is intended to be useful in making an
economic decision
 
II. 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 a financial character and
interpreting the results thereof.
 
III. The process of identifying, measuring and communicating economic information to
permit informed judgment and decision by users of the information

  
II only
 

  
I, II, and III
 

  
I only
 

  
III only
 

 
IncorrectQuestion 2
0 / 1 pts
Which is not the purpose of the ASC framework?

  
To assist the ASC in its review and adoption of existing International Accounting
Standards
 
   
To assist the ASC in developing accounting standards that represent generally
acceptedaccounting principles in the Philippines
 

  
To assist the Board of Accountancy in promulgating rules and regulations affecting
thepractice of accountancy in the Philippines
 

  
To assist auditors in forming an opinion as to whether financial statements
conformwithPhilippine GAAP
 

 
IncorrectQuestion 3
0 / 1 pts
The ASC framework deals with (choose the incorrect one)

  
Generally accepted accounting principles
 

  
Qualitative characteristics
 

  
Objective of financial statements
 

  
Definition, recognition and measurement of the basic elements of financial statements
 

 
Question 4
1 / 1 pts
When an item of revenue is collected and recorded in advance it is normally called

  
prepaid revenue
 
   
Accrued revenue
 

  
Cash
 

  
unearned revenue
 

 
Question 5
1 / 1 pts
The statement of financial position is useful for all of the following, except

  
to analyze cash flows and outflows for the period
 

  
to assess future cash flows
 

  
to compute rate of return
 

  
to evaluate capital structure
 

 
Question 6
1 / 1 pts
Assets to be sold, consumed or realized as part of the entity’s normal operating cycle are

  
Non current Assets
 

  
Classified as current or non current in accordance with other criteria liability
 
   
Current Assets
 

  
Non current investment
 

 
Question 7
1 / 1 pts
These users require information on risk and return on investment

  
Investors
 

  
Lenders
 

  
Employees
 

  
Customers
 

 
IncorrectQuestion 8
0 / 1 pts
the statement of financial position

  
Omits many items that are of financial value
 

  
uses fair value for most assets and liabilities
 

  
All of the choices are correct
 
   
makes very limited use of judgment and estimate
 

 
Question 9
1 / 1 pts
The worksheet is a

  
Working paper used by the accountant to summarize adjusting entries
 

  
Formal statement issued to creditors
 

  
Replacement for the ledger
 

  
Replacement for a set of financial statement
 

 
Question 10
1 / 1 pts
Which of the following appears in the Balance sheet column of the work sheet?

  
Salaries expense
 

  
Unearned revenue
 

  
Service revenue
 

  
Rent expense
 
 
Question 11
1 / 1 pts
A P800 credit item is accidentally posted as a debit. The trial balance column totals will,
therefore, differ by

  
P800
 

  
P400
 

  
0
 

  
P1,600
 

 
Question 12
1 / 1 pts
Leign Shoe Company signed a four month note payable for the amount of P8,000 on
September 1, the note requires interest payable at an annual rate of 12%. The amount of
interest to be accrued at the end of September

  
320
 

  
80
 

  
107
 

  
960
 
 
Question 13
1 / 1 pts
The unearned rent account has a balance of P40,000. If P3,000 of the P40,000 is
unearned at the end of the accounting period, the amount of the adjusting entry is

  
3,000
 

  
43,000
 

  
40,000
 

  
37,000
 

 
Question 14
1 / 1 pts
Statement 1: In the fundamental accounting equation, assets are added to liabilities
Statement 2: Income increases owner’s equity and is recorded by a debit

  
Both statement is true
 

  
only statement 2 is true
 

  
only statement 1 is true
 

  
Both statement is false
 
 
Question 15
1 / 1 pts
A credit may result in

  
A decrease in the capital account
 

  
A decrease in a liability account
 

  
An increase in an assets accounts
 

  
An increase in a liability account
 

 
Question 16
1 / 1 pts
The accrued balance is a revenue account represents an amount which is

  
Earned but not collected
 

  
Not earned and not collected
 

  
Earned and collected
 

  
Revenue in the month collected
 

 
Question 17
1 / 1 pts
If a prepayment is initially  recorded as an asset, part of the year end adjusting entry will
be a

  
Credit to revenue
 

  
Credit to liability
 

  
Debit to expense
 

  
Debit to asset
 

 
Question 18
1 / 1 pts
Closing entries reduce the following type of account to a zero balance at the end of the
period

  
Income summary
 

  
All of the above
 

  
Income and expense
 

  
Withdrawals
 

 
Question 19
1 / 1 pts
Which of the following account will appear on the post closing trial balance
   
Owner withdrawal
 

  
Building
 

  
Depreciation expense
 

  
Service revenue
 

 
IncorrectQuestion 20
0 / 1 pts
In preparing closing entries, which of the following columns of the work sheet are the
most helpful?

  
Income statement columns
 

  
Adjusted trial balance columns
 

  
Balance sheet columns
 

  
Adjustment columns
 

 
Question 21
1 / 1 pts
If the adjusted balance of Service Revenue on December 31, 2015 is P 215,000. Two
adjusting entries were made on December 31, 2015, one for unearned service revenue
of P 50,000 and another for accrued service revenue for P 36,000. How much is the
balance of Service Revenue account balance before adjustments?
   
251,000
 

  
165,000
 

  
201,000
 

  
229,000
 

 
Question 22
1 / 1 pts
The net income reported on the income statement is P 90,000. However, adjusting
entries have not been made at the end of the period for supplies expense of P 2,700 and
accrued salaries of P 1,300. Net income as corrected is

  
88,700
 

  
87,300
 

  
90,000
 

  
86,000
 

 
Question 23
1 / 1 pts
A company purchases a one year insurance policy on June 1 for P840. The adjusting
entry on December 31 is Debit
   
Prepaid Insurance P720
 

  
Insurance expense P280
 

  
Insurance expense P350
 

  
Insurance expense P490
 

 
Question 24
1 / 1 pts
The following information is available from Dell Company’s accounting records for the
current year
Purchases                                                     P5,300,000
Purchase discounts                                                100,000
Beginning inventory                                               1,600,000
Ending inventory                                         2,150,000
Freight out                                                     400,000
 
Dell’s cost of goods sold for the current year is

  
4,750,000
 

  
4,650,000
 

  
5,050,000
 
   
5,850,000
 

 
Question 25
1 / 1 pts

 
If the balance in the Cash account were used to pay part of Accounts payable then total
liabilities and owner’s equity would

  
Increase by P80,000
 

  
Decrease by P80,000
 

  
Decrease by P160,000
 

  
Increase by P160,000
 

 
Question 26
1 / 1 pts
 
If the equipment were sold for P130,000, then the Panganiban, Capital account would

  
Decrease byP130,000
 

  
Increase by P130,000
 

  
Increase by P370,000
 

  
Stay the same
 

 
Question 27
1 / 1 pts

 
If the balance in the cash account were used to buy more equipment, then the total
assets would

  
Increase by P80,000
 

  
Increase by 210,000
 

  
Decrease by P80,000
 

  
Remain unchanged
 

 
Question 28
1 / 1 pts

 
If the balance of the Dela Cruz Capital account was P210,000,what would be the
balance of the Building account

  
P90,000
 

  
P210,000
 

  
P40,000
 
   
P250,000
 

 
IncorrectQuestion 29
0 / 1 pts

 
If the balance of the Building account was P170,000, what would be the total of
liabilities and owner’s equity?

  
P270,000
 

  
P350,000
 

  
P320,000
 

  
P170,000
 

 
Question 30
1 / 1 pts
 
If the balance of building account was P140,000 and P30,000 of Accounts Payable
account was paid in Cash, what would be the balance of the Dela Cruz, Capital account?

  
P210,000
 

  
P320,000
 

  
P260,000
 

  
P240,000
 

 
Question 31
1 / 1 pts

If the balance of Building account was P80,000 and P30,000 of Accounts Payable were
paid in Cash, What would be the total Liabilities and Owner’s Equity?

  
P140,000
 

  
P180,000
 

  
P230,000
 
   
P190,000
 

 
Question 32
1 / 1 pts
Income increases owner’s equity and is recorded by a debit.

  
True
 

  
False
 

 
Question 33
1 / 1 pts
Decrease in an expense account is the equivalent of a decrease in owner’s equity

  
True
 

  
False
 

 
Question 34
1 / 1 pts
Accumulated depreciation accounts may be referred ta as contra-assets accounts.

  
True
 

  
False
 

 
IncorrectQuestion 35
0 / 1 pts
Accounts appear on the left side of the accounting equation usually have credit balance.

  
True
 

  
False
 

 
Question 36
1 / 1 pts
A debit entry always decreases the balance of an account.

  
True
 

  
False
 

 
Question 37
1 / 1 pts
Which of the following accounts has a normal debit balance

  
Owner’s withdrawals
 

  
Owner’s capital
 

  
Salaries payable
 

  
Unearned revenue
 

 
Question 38
1 / 1 pts
Withdrawals’ by the proprietor has all of the following effects except

  
reduction of owner’s equity
 

  
reduction of total assets
 

  
reduction of profit for the period
 

  
reduction of cash balance
 

 
Question 39
1 / 1 pts
The decrease in uselfulness of property and equipment as time passes is called

  
Deterioration
 

  
Consumption
 

  
Contra Assets
 

  
Depreciation
 

 
Question 40
1 / 1 pts
The Periodic Inventory system is used most commonly by companies that sell

  
High-priced, Low-volume merchandise
 

  
High-priced, high-volume merchandise
 

  
Low-priced, high-volume merchandise
 

  
Low-priced, low-volume merchandise
 

 
Question 41
1 / 1 pts
Assuming that net purchases was P900,000 during the year and that ending
merchandise inventory was P20,000 less than the beginning merchandise inventory of
P250,000, how much was cost of goods sold?

  
P1,130,000
 

  
P920,000
 

  
P670,000
 

  
1,170,000
 

 
Question 42
1 / 1 pts
The entry to record the return of goods from a customer would include a

  
Debit to Sales
 

  
Credit to Sales Returns and Allowances
 

  
Debit to Sales Returns and Allowances
 

  
Credit to Sales
 

 
Question 43
1 / 1 pts
An amount deducted from the catalog price for an item of merchandise is called a

  
Trade discount
 

  
Sales discount
 

  
Customer discount
 

  
Purchases discount
 

 
IncorrectQuestion 44
0 / 1 pts
If a company uses the periodic inventory system, what is the impact on net income of
including goods in transit f.o.b. shipping point in purchases, but not ending inventory?
   
Not sufficient information to determine effect on net income
 

  
Overstate net income
 

  
Understate net income
 

  
No effect on net income
 

 
Question 45
1 / 1 pts
Which of the following goods would not be included in merchandise inventory for a
purchasing company?

  
Goods on hand in the showroom
 

  
Goods ordered and received from the suppliers
 

  
Goods in transit shipped FOB shipping point
 

  
Goods in transit shipped FOB destination
 

 
Question 46
1 / 1 pts
A credit term of 2/10,n/30 means that the buyer may deduct 2% from the invoice if
payment is made within 10 days from the end of the month.

  
True
 

  
False
 

 
Question 47
1 / 1 pts
Purchases return and allowances is a deduction from purchases.

  
True
 

  
False
 

 
IncorrectQuestion 48
0 / 1 pts
Ending inventories is included in the calculation of cost of goods available for sale.

  
True
 

  
False
 

 
Question 49
1 / 1 pts
Transportation-In is treated as a deduction in the cost of goods sold section of the
income statement.

  
True
 

  
False
 

 
Question 50
1 / 1 pts
Taking a physical inventory refers to making a count of all merchandise on hand at a
particular time.

  
True
 

  
False