Professional Documents
Culture Documents
FAR First Grading Examination
FAR First Grading Examination
College of Accountancy
First Grading Examination
Instructions:
This is a multiple choice question (MCQ). Read each question and answer choice
carefully and choose the ONE best answer.
Try to answer all the questions. In general, if you have some knowledge about a
question, it is better to try to answer it. You will not be penalized for guessing.
8. CCDC’s equipment was lost due to theft. How will CCDC record this event?
a. Recognize the carrying amount of the lost equipment as gain.
b. Charge the carrying amount of the lost equipment as loss.
c. Go to the police station and record the event in the police officer’s logbook.
d. This event is not recorded.
11.This account is used to record the cost of purchased goods that are intended for
resale.
a. Building
b. Inventory
c. Accounts receivable
d. Owner’s capital
12.The business acquires equipment. The business allocates the equipment’s cost
over the equipment’s useful life, instead of expensing it right away. The portion
of the equipment’s cost that is expensed during the period is recorded as
a. Bad debts expense.
b. Equipment.
c. Allowance for bad debts.
d. Depreciation expense.
15.This account is used to record the investments of the business owner to the
business.
a. Owner’s capital
b. Owner’s drawings
c. Salaries expense
d. Loss
19.A business has total assets, liabilities, and equity of ₱10,000, ₱7,000 and
₱3,000, respectively, at the beginning of the period. During the period, total
liabilities decreased to ₱4,000 while profit was ₱5,000. How much is the ending
total assets?
a. 12,000
b. 11,000
c. 9,000
d. 7,000
20.The business makes a ₱1.5M sale to a customer who orally promises to pay for
the purchase price after 15 days.
a. Accounts receivable c. Cash
Sales Sales
b. Accounts receivable d. Cost of sales
Owner’s capital Accounts receivable
28. The general ledger account that summarizes the detailed information in a
subsidiary ledger is known as a
a. summary account. c. balance sheet
b. controlling account d. any of these
29. If total assets is ₱100 while total liabilities is ₱80, owner’s equity must be
a. ₱180 c. ₱20
b. ₱120 d. My calcu says syntax error
30. A business sells goods in Year 1 but collects the sale price only in Year 2.
According to the accrual basis and time period concepts, the business should
include the sale in its income statement in
a. Year 1 c. Year 3
b. Year 2 d. Every year
33. At the beginning of the period, Entity A’s notes payable had a balance of ₱1,200.
During the period, Entity A obtained an additional loan of ₱800 and made total
payments of ₱500. How much is the ending balance of Entity A’s notes payable?
Show your solutions.
a. 1,800 c. 1,200
b. 1,500 d. 900
35. A business sells goods on cash basis. This transaction is most likely recorded in
which of the following special journals?
a. Sales journal c. Cash receipts journal
b. Purchases journal d. Diary journal
36. Which of the following special journal is used when a business purchases
inventory on cash basis?
a. Cash disbursements journal c. Inventory journal
b. Purchases journal d. Cash receipts journal
37. The beginning balance of “Cash” is placed on which side of the T-account?
a. Left side
b. Right side
c. Bottom side
d. Every side
39.This account is used to record payments received from customers prior to the
delivery of goods or rendering of services.
a. Accrued income
b. Unearned income
c. Prepaid asset
d. Accounts receivable
40.A chart of accounts is
a. a listing of all accounts and their balances.
b. a subsidiary ledger.
c. a special journal.
d. a listing of all account titles.
42. ABC Company’s total sales during the period were ₱100M. Of that amount,
₱60M was on credit. If the total business expenses were ₱70M, how much is the
profit (loss)?
a. 30M
b. (30M)
c. 10M
d. (10M)
43.The beginning equity is ₱5,000. If total income for the period is ₱8,000 while
total expenses are ₱6,000, how much is the ending balance of equity?
a. 7,000
b. 5,000
c. 3,000
d. 1,000
44.The ending equity is ₱9,000. If total income for the period is ₱5,000 while total
expenses are ₱8,000, how much is the beginning balance of equity?
a. 12,000
b. 9,000
c. 6,000
d. 0
45.If the beginning equity is ₱50,000 while the ending equity is ₱70,000, how much
is the profit (loss) for the period?
a. 20,000
b. (20,000)
c. 10,000
d. (10,000)
46. XYZ Company’s total assets, liabilities and equity were ₱10,000, ₱7,000 and
₱3,000, respectively, at the beginning of the period. During the period, total
liabilities decreased by ₱4,000 while profit was ₱5,000. How much is the ending
total assets of XYZ Company?
a. 12,000
b. 11,000
c. 9,000
d. 7,000
47.At the start of the period, a business has total assets of ₱500,000 and total
liabilities of ₱300,000. During the period, the business earned total income of
₱1,000,000 and total expenses of ₱640,000. No additional investments or
withdrawals were made by the owner. Total assets at the end of the period were
₱830,000. How much is the total liabilities at the end of the period?
a. 280,000
b. 270,000
c. 260,000
d. 240,000
57. The system of recording transactions based on dual aspect concept is called
a) Double account system
b) Double entry system
c) Single entry system