UNIVERSITY OF THE EAST - CALOOCAN CAMPUS

Basic Education Department

SY 2018 - 2019
HBA111 - Fundamentals of Accountancy, Business and Management 1

NAME DATE
GUARDIAN’S SIGNATURE
SECTION OVER PRINTED NAME

QUIZ 1

Short Problem

1. Indicate whether the following error would cause the adjusted trial balance totals to be unequal. If the
error would cause the adjusted trial balance totals to be unequal, indicate whether the debit or credit
total is higher and by how much.

The adjustment for accrued fees of P1,170 was journalized as a debit to Accounts Receivable for
P1,170 and a credit to Fees Earned for P1,107.
2. For each of the following errors, considered individually, indicate whether the error would cause the
adjusted trial balance totals to be unequal. If the error would cause the adjusted trial balance total to be
unequal, indicate whether the debit or credit total is higher and by how much.
A) The adjustment for unearned fees of P3,260 was journalized as a debit to
Accounts Payable for P3,260 and a credit to Fees earned of P3,260.
B) The adjustment for supplies expense of P425 was journalized as a debit to
Supplies Expense for P542 and a credit to Supplies for P425.
3. For the year ending December 31, 2018, Nathan Clinical Supplies Co. mistakenly omitted adjusting
entries for (1) P8,900 of unearned revenue that was earned, (2) earned revenue that was not billed of
P10,200, and (3) accrued wages of P7,000. Indicate the combined effect of the errors on (a) revenues,
(b) expenses, and (c) net income for 2018.
4. Depreciation on equipment for the year is P900.
(a) Record the journal entry if the company adjusts its account once a year.
(b) Record the journal entry if the company adjusts its account on a monthly basis.
5. Protonix Corp has a payroll of P6,000 for a five-day workweek. Its employees are paid each Friday for
the five-day workweek. The adjusting entry on December 31, 2019 assuming the year ends on
Thursday would be:
6. On January 2nd, Dog Mart prepaid P15,000 rent for the year and recorded the prepayment in an asset
account. Prepare the January 31st adjusting entry for rent expense.
7. The balance in the unearned fees account, before adjustment at the end of the year, is P10,250.
Journalize the adjusting entry required if the amount of unearned fees at the end of the year is P3,125.
8. The prepaid insurance account had a beginning balance of P6,600 and was debited for P2,300 of
premiums paid during the year. Journalize the adjusting entry required at the end of the year assuming
the amount of unexpired insurance related to future periods is P4,100.
9. A one-year insurance policy was purchased on October 1, 2019 for P4,200. The adjusting entry on
December 31, 2018 would be:

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Name: ________________________ ID: C

10. For the year ending June 30, Island Clinical Services mistakenly omitted adjusting entries for P1,200 of
supplies that were used, (2) unearned revenue of P6,000 that was earned, and (3) insurance of P5,000
that expired. What is the combined effect of these errors on (a) revenues, (b) expenses, and (c) net
income for the year ending June 30?
11. At January 31, the end of the first month of the year, the usual adjusting entry transferring expired
insurance to an expense account is omitted. Which items will be incorrectly stated, because of the
error, on (a) the income statement for January and (b) the balance sheet as of January 31? Also
indicate whether the items in error will be overstated or understated.
12. Depreciation on Office Equipment is P3,300. The adjusting entry on December 31, 2019 would be:
13. On March 1, a business paid P3,600 for a twelve month liability insurance policy. On April 1 the same
business entered into a two-year rental contract for equipment at a total cost of P18,000. Determine the
following amounts:
(a) insurance expense for the month of March
(b) prepaid insurance as of March 31
(c) equipment rent expense for the month of April
(d) prepaid equipment rental as of April 30
14. A one-year insurance policy was purchased on June 1, 2019 for P1,500. The adjusting entry on
December 31, 2019 would be:
15. Requirement: Make the journal entries for both of the following:

(a) On December 1, P12,500 was received for a service contract to be performed from December 1
through until April 30.

(b) If the service work for this contract is performed evenly and on a regular basis throughout this
period, prepare the adjusting journal entry as of year-end, December 31.
16. On January 1, DogMart Company purchased a two-year liability insurance policy for P22,800 cash. The
purchase was recorded to Prepaid Insurance. Prepare the January 31 adjusting entry.
17. On January 1, the Newman Company estimated its property tax to be P5,100 for the year.

(a) How much should the company accrue each month for property taxes?
(b) Calculate the balance in the Property Tax Payable account as of August 31.
(c) Prepare the adjusting journal entry for the month of September.
18. Indicate whether the following error would cause the adjusted trial balance totals to be unequal. If the
error would cause the adjusted trial balance totals to be unequal, indicate whether the debit or credit
total is higher and by how much.

The entry for P560 of supplies used during the period was journalized as a debit to Supplies Expense of
P560 and credit to Supplies of P650.
19. The Supplies account had a beginning balance of P1,750. Supplies purchased during the period totaled
P3,500. At the end of the period before adjustment, P350 of supplies were on hand. Prepare the
adjusting entry for supplies.
20. The company determines that the interest expense on a note payable for period ending December 31st
is P775. This amount is payable on January 1st. Prepare the journal entries required on December 31st
and January 1st.

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Name: ________________________ ID: C

21. At the end of April, the first month of the year, the usual adjusting entry transferring rent earned to a
revenue account from the unearned rent account was omitted. Indicate which items will be incorrectly
stated, because of the error, on (a) the income statement for April and (b) the balance sheet as of April
30. Also indicate whether the items in error will be overstated or understated.
22. Accrued salaries of P600 owed to employees for December 29, 30, and 31 are not taken into
consideration in preparing the financial statements for the year ended December 31. Indicate which
items will be erroneously stated, because of the error, on (a) the income statement for the year and (b)
the balance sheet as of December 31. Also indicate whether the items in error will be overstated or
understated.
23. Salaries of P6,400 are paid for a five-day week on Friday. Prepare the adjusting journal entry that is
required if the month ends on Thursday.
24. DogMart Company records depreciation to Office Equipment and Production Equipment. Depreciation
for the period ending December 31 is P1,400 for Office Equipment and P2,650 for Production
Equipment. Prepare two entries to record the Office Equipment and Production Equipment depreciation.
25. On January 1st, Great Designs Company had a debit balance of P1,450 in the Office Supplies account.
During the month, Great Designs purchased P115 and P160 of office supplies and journalized them to
the Office Supplies asset account upon purchasing. On January 31st, an inspection of the office
supplies cabinet shows that only P350 of Office Supplies remains in the locker. Prepare the January
31st adjusting entry for Office Supplies.
26. On January 1st, Power House Co. prepays the year’s rent, P10,140 to its landlord. Prepare the journal
entry by recording the prepayment to an asset account.
27. At the end of the current year, P3,700 fees have been earned but have not been billed to clients.
Journalize the adjusting entry to record the accrued fees.
28. Ski Master Company pays weekly salaries of P18,000 on Friday for a five-day week ending on that day.
Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period
ends on Wednesday.
29. On December 31, the balance in the Office Supplies account is P1,385. A count shows P435 worth of
supplies on hand. Prepare the adjusting entry for supplies.
30. The estimated amount of depreciation on equipment for the current year is P5,300. Journalize the
adjusting entry to record the depreciation.

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QUIZ 1
Answer Section

OTHER

1. The total will be unequal with a debit total higher by P63 (P1,170 - P1,107).
2.
A) The trial balance totals will still be equal, but the balances of Unearned Fees
and Accounts Payable will be incorrect as the debit should have been made to
Unearned Fees instead of Accounts Payable.
B) The debit total exceeds the credit total by P117.
3. (a) Revenues were understated by P19,100 (P8,900 + P10,200).
(b) Expenses were understated by P7,000.
(c) Net income was understated by P12,100 (P19,100 - P7,000).
4. (a)
Depreciation Expense 900
Accumulated Depreciation-Equipment 2400

(b)
Depreciation Expense (P900/12) 75
Accumulated Depreciation-Equipment (P900/12) 75
5. P6,000/5 = P1,200 x 4 = P4,800

Date Description Post Debit Credit

Ref
12/31/11 Wages Expense 4,800
Wages Payable 4,800

6.
Jan 31 Rent Expense (P15,000/12) 1,250
Prepaid Rent 1,250

7.
Unearned Fees (P10,250 - P3,125) 7,125
Fees Earned 7,125
8.
Insurance Expense 4,800
Prepaid Insurance 4,800
Insurance expired.

P6,600 + P2,300 - P4,100 = P4,800

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9. P4,200/12 = P350 x 3 = P1,050

Date Description Post Debit Credit

Ref
12/31/11 Insurance Expense 1,050
Prepaid Insurance 1,050

10. (a) Revenues were understated by P6,000.

(b) Expenses were understated by P6,200 (P1,200 + 5,000).
(c) Net Income was overstated by P200 (P6,200 - 6,000).
11.
(a) Insurance expense (or expenses) will be understated. Net income will be
overstated.
(b) Prepaid insurance (or assets) will be overstated. Owner's equity will be
overstated.
12.
Date Description Post Debit Credit
Ref
12/31/11 Depreciation Expense 3,300
Accumulated Depreciation-
Office Equipment 3,300

13.
(a) P300 (P3,600/12 = P300 )
(b) P3,300 (P3,600 - P300 = P3,300)
(c) P750 (P18,000/24 = P750)
(d) P17,250 (P18,000 - P750 = P17,250)
14. P1,500/12 = P125 per month x 7 months = P875

Date Description Post Debit Credit

Ref
12/31/11 Insurance Expense 875
Prepaid Insurance 875

15.
12/1 Cash 12,500
Unearned Fees 12,500

12/31 Unearned Fees 2,500

Fees Earned 2,500
(12,500 / 5 months =
P2,500)

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16. P22,800/24 = P950

1/31 Insurance Expense 950

Prepaid Insurance 950

17. (a) P425 (P5,100/12)

(b) P3,400 (P425 x 8)

(c) Property Tax Expense 425

Property Tax Payable 425
Record Property Tax Accrual for the month of September
18. The total will be unequal with a credit total higher by P90 (P650 - P560).
19. P1,750 + P3,500 - P350 = P4,900

Supplies Expense 4,900

Supplies 4,900
20.
Dec 31st Interest Expense 775
Interest Payable 775

Jan 1st Interest Payable 775

Cash 775
21.
(a) Rent revenue (or revenues) will be understated. Net income will be
understated.
(b) Owner's equity at the end of the period will be understated. Unearned rent (or
liabilities) will be overstated.
22.
(a) Salary expense (or expenses) will be understated. Net income will be
overstated.
(b) Salaries payable (or liabilities) will be understated. Owner's equity will be
overstated.
23.
Salaries Expense (P6,400/5 x 4) 5,120
Salaries Payable 5,120
24.
12/31 Depreciation Expense - Office Equipment 1,400
Accumulated Depreciation - Office Equipment 1,400

12/31 Depreciation Expense - Production Equipment 2,650

Accumulated Depreciation - Production Equipment 2,650

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25.
Jan 31 Office Supplies Expense 1,375
Office Supplies 1,375
Adjusting entry - Office Supplies

Beginning balance P1,450

Plus purchases P115
160 275
Available 1,725
Less ending balance 350
Period expense P1,375
26.
Jan 1 Prepaid Rent 10,140
Cash 10,140
Prepaid annual rent and capitalized the value.
27.
Accounts Receivable 3,700
Fees Earned 3,700
28.
Salaries Expense (P18,000/5 x 3) 10,800
Salaries Payable 10,800
29. P1,385 - P435 = P950

12/31 Office Supplies Expense 950

Office Supplies 950
30.
Depreciation Expense 5,300
Accumulated Depreciation 5,300
Depreciation on equipment