TRUE or FALSE ad iy Instructions: Encircle the téwer T if the siatemeni is true and the leer F if the ‘Statement is false. @) F 1, “Accounting is service sctivity whose function is to provide ‘quantitative information about economic entities (D .F 2, “The records used for the initial fecording of business transactions are journals (4) F 36 The mules for debit and credit and the normal balance of liabilities 7 are the same as for Capital (DF 4y-Special journals ere used to record usual and frequent transactions. 1 (©) 5. The preprntion of work sheet eliminates te need wo jounalize ane pos btn xin T (E) — be-The accounting process vonsisté of the recording phase and the reporting phase Core © s¢rewumulaed depreciation ean exarpieof an adjunct account ‘The general ledyor includes all accounts appearing in the tinancial statements, while subsidiary ledgers provide details in support of ‘certain general ledger balances. @ > F 10, -Borering a debit Bande in an recount as a credit will cause the tial balance to be out of balance by an amount that is divisible by wo Q). T CP) WAdjusting ents are made to correct eros made in the recording, 1@ 2 Ave entry to record depreciation expense is an example of an adjustment that would be reversed f reversing entries are made. (FP) 15. this sometimes comect for a compound entry's debit totals and credit toast be unequal T (14. The trial balance is used to prepare the statement of comprehensive ~ income while the general ledger iy used to prepare tha statement of financial position, (DF 1SL-The recording of an accrued expense will always result to an increase in an expense account and a liability account. T @) 16. The balances of all the acsounis in the general ledger must be < seme sed St the end of the geccey aati @ F _17--The asset and liability accounts are known as real accounts. 1 Q Both adjusted til balance is prepared afer the financial statements are pepe @ _F _ 49 Oumer’s equity i the excess ofan entity's asset over ie liabilities, 20, sveralIedger account that summarizes i (3) “Tne general ledger account that the detailed. Infooaton na ub i a mm imaMULTIPLE CHOICE ~ Theory Instructions: Encircle the leter that corresponds to the best answer. 1 Adjusting entries are necessary aio rmeasie property he come fr the prod bi tout the lanes at acount 8. to opiate the balance of tabi accoms @ focal te sbove reasons 2, Which of the following isa distinguishing characteristic ofa contra account? ag Ttalways has a credit balance ts normal balance matches that of its companion account ©. Italways decreases the balance of is companion accoun 4. [always inoreass the balance of its companion account 3. The carying amount (book value) of an item of property, plant and equipment is determined by _/” 4. dedueting depreciation expense during the period from: the original balance of the asset account ‘adding the contra account balance tothe original balance of the asset socount deducting the contre account halance from the original balance of the asset account 44, an indopendent appreiser 4, Recording the expiration of a prepaid expense that was originally recorded in an asset account would require a a, debit co the appropriate prepaid asset account to the appropriae expense account credit to cash credit. accounts payable nee juting ety for unarmed even requ Besa cash rexved Go ieee tenet there evn ered © Stvevense i eamed Laer te alae sex date ‘An aut ny fr ace expese eure Because ash paid Peto ihscxpereewinpred aferthe apes icured te theexpet cured ert lane shen dete 5. 6 Anenty requiring a debit to an expense acount anda ere oan ase account is ‘sample of an ajsting ety chose as GO tccwed expense prep expense b Depreciation 4. Uneoletbe ne:ounts ¢z. §. Theposcciosng til blancs is prepared 2 Mince preping the nancial statements A atercompietng the work het @) aterpreparng the closing enies “Latany time inthe accounting cycle 9.9 Depresition the process oF ‘a saving money fo purchase nev assets systematically allocating th ens of plant assets over their useful life ‘systematically recording the current market value of plant assels d, recording the physical deterioration of plant assets 10. Whiol of the following accounts would not be used in an adju: Accum depen eigenen om ea oh Salts pbsComputations in good form in a separate work sheet. Fr {Instrucons: Encirclethe leer shat corresponds te your answer. Present supporting ies for the debit and credit totals of g tial balance were P249,000 and an {entry was recorded and posted far the purchase of P10,000 of office supp ‘each, what would be the new’ debit and credit totals for the nal balance after 8 entry is made a 230,000 ¢, P245,000 -@ P240,000 4, P250,000 ‘A trial balance has debit and credit totals of P240,000. The purchase of P10,000 Croce spies onerous oted fom te cig journal tes. ACT the recording tod posting of is alta, he mew deb a credit al fore tn blanco would be paso g. asoom brat. & risus ‘Aquino Service Company billed P1,200,000 for services to clients on account and hhad expenses of P§00,000 on ageount. Accounts receivable bag a beginning balance of P120,000 and an ending balance of P80,000. How much cash dic Aquino collect on accounts receivable and what type of entry to accounts recsivable was made? A a. 740,000; debit fe) P1,240,000; debit 'b, P740,000; edit @ —P1,240,000; credit Bonifacio Co. pays eash for thee sont of reat in advance, ata rate of P50,000 per month, The balance ofthe Prepaid Rent account two months Jater woul! be eh oii (Fats ose pi ost being nf 1 Ae cl a ‘accountng period, it had a balance: of P9,000. Accumulated Depreciat beginning balance of P30,000 and an end-ol-period balance of 45,000. The change in the acconnt balances of these two accounts resulted in total expenses ‘changing by « (an) a, docrease of P36,000 decrease of 5,000 'b, increase of P39,000 increase ofP51,000 Carlos Company paid four months rent of August | and debited Rent Expense for 'P80,000. On August 31, Carlos should debit Prepaid Rent for P20,000 . credit Prepaid Rent for P20,000 ‘redit Rent Expense for P20,000 credit Rent Expense for P60,000 aoe Dagohoy Organizers purchased an equipment costing P100,000 on July 1, 2014, “The equiproent has an estimated useful life of 10 years with an estimated residual “value of P10,000, The balance of the Accumulated Depreciation account on, December 31, 2015 is . a P4500 ® 13,500 b. 5,000 Piso ‘The Unearned Service Revenve account shows an adjusted end-of-year balance of 300,000. ‘The adjusting entry to Unearned Service Revenue indicated P400,000 in service revenve was eamed during the accounting period. What was the balance of the Uncamed Service Revenue account before the adjusting entry was recorded?” ~ 4 P100,000 credit @_P700,000 ex ‘5. P100,000 debit ‘P700,000 debit Emeves Company has a P180,000, 10%, 90-day note receivable outstanding ax December 3 The note is dated December 1, 2014, The appropriate adjusting entry 18 made 10 record accrued inlerest on the note at yearend. "What i ihe _soect reversing entry of Jeniary | ofthe following year? ~ GI batt ces Reve eit ere Real, $00 Debit Interest Receivable and eed Interest Revenue, PIs0p ©. Debit Interest Revenue and credit tnterest Receivable, Ps Debi tnrest Receivable and ered interes even: baie