MID-TERM EXAMINATION

Instructions:
1. USE the Official Answer Sheet attached.
2. SAVE your answer sheet as PDF with a file name as:

FINACO1 MTE (Insert your full name)

3. UPLOAD your answer to MS Teams
 FINACO1 MID-TERM EXAMINATION

Official Answer Sheet

Name Signature
Student No: Section

1. 26. 51. 76.

2. 27. 52. 77.
3. 28. 53. 78.
4. 29. 54. 79.
5. 30. 55. 80.
6. 31. 56. 81.
7. 32. 57. 82.
8. 33. 58. 83.
9. 34. 59. 84.
10. 35. 60. 85.
11. 36. 61. 86.
12. 37. 62. 87.
13. 38. 63. 88.
14. 39. 64. 89.
15. 40. 65. 90.
16. 41. 66. 91.
17. 42. 67. 92.
18. 43. 68. 93.
19. 44. 69. 94.
20. 45. 70. 95.
21. 46. 71. 96.
22. 47. 72. 97.
23. 48. 73. 98.
24. 49. 74. 99.
25. 50. 75. 100.
MULTIPLE CHOICE
Instruction: Choose the letter corresponding to the correct answer for each of the questions
provided below. On the Official Answer Sheet, WRITE the CAPITAL LETTER of your choice.
1. Accounts
A. do not reflect money amounts
B. are not used by entities that manufacture products
C. are records of increases and decreases in individual financial statement items
D. are only used by large entities with many transactions
2. A group of related accounts that comprise a complete unit is called a
A. Journal
B. Liability
C. Ledger
D. Transaction
3. Accounts are classified in the ledger
A. Chronologically
B. Alphabetically
C. in accordance with their appearance in the financial statements
D. so that accounts used most often are listed first
4. Revenue should be recognized when
A. cash is received
B. the service is performed
C. the customer places an order
D. the customer charges an order
5. Which of the following accounts is an owner's equity account?
A. Cash
B. Accounts Payable
C. Prepaid Insurance
D. Julia Davis, Capital
6. The gross increases in owner's equity attributable to business activities are called
A. Assets
B. Liabilities
C. Revenues
D. Net income
7. A chart of accounts is
A. the same as a statement of financial position
B. usually a listing of accounts in alphabetical order
C. usually a listing of accounts in financial statement order
D. used in place of a ledger
8. Which statement(s) concerning cash is (are) true?
A. cash will always have more debits than credits
B. cash will never have a credit balance
C. cash is increased by debiting
D. all of the above
9. A debit may signify a(n)
A. decrease in asset accounts
B. decrease in liability accounts
C. increase in the capital account
D. decrease in the drawing account
10. Which of the following types of accounts have a normal credit balance?
A. assets and liabilities
B. liabilities and expenses
 C. revenues and liabilities
D. capital and drawing
11. Which of the following groups of accounts have a normal debit balance?
A. revenues, liabilities, capital
B. capital, assets
C. liabilities, expenses
D. assets, expenses
12. Which one of the statements below is not a purpose for the journal?
A. to show increases and decreases in accounts
B. to show a chronological order by date
C. to show a complete transaction in one place
D. to help locate errors
13. A credit signifies a decrease in
A. Drawing
B. Liabilities
C. Capital
D. Revenue
14. Which of the following describes the classification and normal balance of the fees earned account?
A. asset, credit
B. liability, credit
C. owner's equity, debit
D. revenue, credit
15. The classification and normal balance of the accounts payable account is
A. an asset with a credit balance
B. a liability with a credit balance
C. owner's equity with a credit balance
D. revenue with a credit balance
16. The classification and normal balance of the supplies expense account is a(n)
A. asset with a debit balance
B. asset with a credit balance
C. expense with a debit balance
D. liability with a credit balance
17. In which of the following types of accounts are increases recorded by credits?
A. revenues, liabilities
B. drawing, assets
C. liabilities, drawing
D. expenses, liabilities
18. In which of the following types of accounts are decreases recorded by debits?
A. Assets
B. Revenues
C. Expenses
D. Drawing
19. A credit balance in which of the following accounts would indicate a likely error?
A. Fees Earned
B. Salary Expense
C. Peter Penn, Capital
D. Accounts Payable
20. Randomly listed below are the steps in the accounting cycle:
(1) Prepare the financial statements
(2) Post the journal entries to the ledger
(3) Record journal entries
(4) Prepare a trial balance
 What is the proper order of these steps?
A. (3), (2), (4), (1)
B. (2), (3), (4), (1)
C. (3), (2), (1), (4)
D. (4), (3), (2), (1)
21. Which of the following entries records the receipt of a utility bill from the water company?
A. debit Utilities Expense; credit Accounts Payable
B. debit Utilities Payable; credit Accounts Receivable
C. debit Accounts Payable; credit Cash
D. debit Accounts Payable; credit Utilities Payable
22. Office supplies were sold by J's Appliance Repair at cost to another repair shop, with cash received. Which of the
following entries for J's Appliance Repair records this transaction?
A. Cash, debit; Sales, credit
B. Office Supplies, debit; Accounts Payable, credit
C. Cash, debit; Office Supplies, credit
D. Accounts Payable, debit; Office Supplies, credit
23. Office supplies purchased by J's Appliance Repair on account were returned to the vendor. Which of the following
entries for J's Appliance Repair records this transaction?
A. Cash, debit; Office Supplies, credit
B. Office Supplies, debit; Accounts Receivable, credit
C. Accounts Payable, debit; Office Supplies, credit
D. Office Supplies, debit; Accounts Payable, credit
24. Cash was paid by J's Appliance Repair to creditors on account. Which of the following entries for J's records this
transaction?
A. Cash, debit; J's, Capital, credit
B. Accounts Payable, debit; Cash, credit
C. Accounts Receivable, debit; Cash, credit
D. Accounts Payable, debit; Account Receivable, credit
25. Which of the following entries records the receipt of cash from patients on account?
A. Accounts Payable, debit; Fees Earned, credit
B. Accounts Receivable, debit; Fees Earned, credit
C. Accounts Receivable, debit; Cash, credit
D. Cash, debit; Accounts Receivable, credit
26. Which of the following entries records the billing of patients for services performed?
A. Accounts Receivable, debit; Fees Earned, credit
B. Accounts Payable, debit; Cash, credit
C. Fees Earned, debit; Accounts Receivable, credit
D. Fees Earned, debit; Cash, credit
27. The process of rewriting the information from the journal into the ledger is called
A. Sliding
B. Transposing
C. Journalizing
D. Posting
28. Proof that the peso amount of the debits equals the peso amount of the credits in the ledger means
A. all of the information from the journal was correctly transferred to the ledger
B. all accounts have their correct balances in the ledger
C. only the journal is accurate; the ledger may be incorrect
D. only that the debit peso amounts equal the credit peso amounts
29. The verification that the total peso amount of the debits equals the total peso amount of the credits in the ledger is called
a
A. Ledger
B. trial balance
 C. Account
D. Statement of Income
30. A trial balance is prepared to
A. prove that there were no errors made in recording transactions into the journal
B. prove that no errors were made in posting to the ledger
C. prove that each account balance is correct
D. summarize the account balances to help prepare financial statements
31. If the two totals of a trial balance are not equal, it could be due to
A. failure to record a transaction
B. recording the same erroneous amount for both the debit and the credit parts of a transaction
C. an error in determining the account balances, such as a balance being incorrectly computed
D. recording the same transaction more than once
32. When a transposition error is made on the trial balance, the difference between the debit and credit totals on the trial
balance will be
A. Zero
B. twice the amount of the transposition
C. one-half the amount of the transposition
D. divisible by 9
33. Which of the following errors, each considered individually, would cause the trial balance totals to be unequal?
A. a transaction was not posted
B. a payment of P96 for insurance was posted as a debit of P46 to Prepaid Insurance and a credit of P46 to Cash
C. a payment of P311 to a creditor was posted as a debit of P3,111 to Accounts Payable and a debit of P311 to
Accounts Receivable
D. cash received from customers on account was posted as a debit of P140 to Cash and a credit of P140 to Accounts
Payable
34. Supplies purchased on account were incorrectly recorded as Office Equipment. The correcting entry would be
A. Supplies, debit; Office Equipment, credit
B. Accounts Receivable, debit; Supplies, credit
C. Office Equipment, debit; Supplies Expense, credit
D. Supplies, debit; Accounts Payable, credit
35. Accounts
A. do not reflect money amounts
B. are not used by entities that manufacture products
C. are records of increases and decreases in individual financial statement items
D. are only used by large entities with many transactions
36. Preparing a worksheet involves
A. two steps
B. three steps
C. four steps
D. five steps
37. The adjustments entered in the adjustments columns of a worksheet are
A. not journalized
B. posted to the ledger but not journalized
C. not journalized until after the financial statements are prepared
D. journalized before the worksheet is completed
38. The information for preparing a trial balance on a worksheet is obtained from
A. financial statements
B. general ledger accounts
C. general journal entries
D. business documents
39. After the adjusting entries are journalized and posted to the accounts in the general ledger, the balance of each account
 should agree with the balance shown on the
A. adjusted trial balance
B. post-closing trial balance
C. the general journal
D. adjustments columns of the worksheet
40. If the total debit column exceeds the total credit column of the income statement columns on a worksheet, then the
company has
A. earned net income for the period
B. an error because debits do not equal credits
C. suffered a net loss for the period
D. to make an adjusting entry
41. A worksheet is a multiple column form that facilitates the
A. identification of events
B. measurement process
C. preparation of financial statements
D. analysis process
42. Which of the following companies would be least likely to use a worksheet to facilitate the adjustment process?
A. Large company with numerous accounts
B. Small company with numerous accounts
C. All companies, since worksheets are required under generally accepted accounting principles
D. Small company with few accounts
43. A worksheet can be thought of as a(n)
A. permanent accounting record
B. optional device used by accountants
C. part of the general ledger
D. part of the journal
44. The account, Supplies, will appear in the following debit columns of the worksheet.
A. Trial balance
B. Adjusted trial balance
C. Balance sheet
D. All of these
45. When constructing a worksheet, accounts are often needed that are not listed in the trial balance already entered on the
worksheet from the ledger. Where should these additional accounts be shown on the worksheet?
A. They should be inserted in alphabetical order into the trial balance accounts already given
B. They should be inserted in chart of account order into the trial balance already given
C. They should be inserted on the lines immediately below the trial balance totals
D. They should not be inserted on the trial balance until the next accounting period
46. When using a worksheet, adjusting entries are journalized
A. after the worksheet is completed and before financial statements are prepared
B. before the adjustments are entered on to the worksheet
C. after the worksheet is completed and after financial statements have been prepared
D. before the adjusted trial balance is extended to the proper financial statement columns
47. Assuming that there is a net loss for the period, debits equal credits in all but which section of the worksheet?
A. Income statement columns
B. Adjustments columns
C. Trial balance columns
D. Adjusted trial balance columns
48. Adjusting entries are prepared from
A. source documents
 B. the adjustments columns of the worksheet
C. the general ledger
D. last year's worksheet
49. The net income (or loss) for the period
A. is found by computing the difference between the income statement credit column and the balance
sheet credit column on the worksheet
B. cannot be found on the worksheet
C. is found by computing the difference between the income statement columns of the worksheet
D. is found by computing the difference between the trial balance totals and the adjusted trial balance
totals
50. The worksheet does not show
A. net income or loss for the period
B. revenue and expense account balances
C. the ending balance in the owner's capital account
D. the trial balance before adjustments
51. If the total debits exceed total credits in the balance sheet columns of the worksheet, owner's equity
A. will increase because net income has occurred
B. will decrease because a net loss has occurred
C. is in error because a mistake has occurred
D. will not be affected
52. The statement of income and statement of financial position columns of Pine Company's worksheet reflects the
following totals:
Pine Company
Worksheet
December 31, 20XX
Statement of Income Statement of Fin Pos
Account Titles
Debit Credit Debit Credit

Totals P58,000 P48,000 P34,000 P44,000

The net income (or loss) for the period is

A. P48,000 income
B. P10,000 income
C. P10,000 loss
D. not determinable
53. Refer to #52. To enter the net income (or loss) for the period into the above worksheet requires an entry to the
A. income statement debit column and the balance sheet credit column
B. income statement credit column and the balance sheet debit column
C. income statement debit column and the income statement credit column
D. balance sheet debit column and the balance sheet credit column
54. The steps in the preparation of a worksheet do not include
A. analyzing documentary evidence
B. preparing a trial balance on the worksheet
C. entering the adjustments in the adjustment columns
D. entering adjusted balances in the adjusted trial balance columns
55. Maxwell Tax Planning Service bought communications equipment for P10,200 on January 1, 2019. The equipment has
an estimated useful life of five years and zero residual value. Maxwell uses the straight-line method to calculate
depreciation and records depreciation expense in the books at the end of each month. As of June 30, 2019, the balance
 in the Accumulated Depreciation account for this equipment is ________.
A. P2,040
B. P170
C. P1,020
D. P850

Problem solving on the next page

PROBLEM SOLVING
Instruction: Complete the Worksheet below. After completing the worksheet, answer the
questions that follow. WRITE your final answers on the Official Answer Sheet.

PROBLEM 1 (Numbers 56, 57, and 58) total of 10 points

The worksheet for Vietti Rental Company appears below. Using the adjustment data below, complete the
worksheet. Add any accounts that are necessary.

Adjustment data:
(a) Prepaid rent expired during August, P2.
(b) Depreciation expense on office equipment for the month of August, P8.
(c) Supplies on hand on August 31 amounted to P6.
(d) Salaries expense incurred at August 31 but not yet paid amounted to P10.

VIETTI RENTAL COMPANY

Worksheet
For the Month Ended August 31, 2008
Trial Balance Adjustments
Adjusted Trial Income Balance
Balance Statement Sheet
Account Titles Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash 20
Accounts Receivable 12
Prepaid Rent 8
Supplies 10
Office Equipment 50
Accum. Depreciation— Equipment 10
Accounts Payable 20
Vietti, Capital 25
Vietti, Drawing 2
Rent Revenue 77
Depreciation Expense 6
Rent Expense 4
Salaries Expense 20
Totals 132 132

Totals ……. ..56.. ..57.. ……..

Net Income/Net Loss 58
Totals

Determine the following values:

56. Adjustments Credit column total (3.333 pts)
57. Adjusted Trial Balance Debit column total (3.333 pts)
58. Net Income or Net Loss (3.333 pts)
 PROBLEM 2 (#59) total of 10 points
The unadjusted trial balance of Albert Business Consulting at December 31, 2018, and the data for the adjustments
follow:
Albert Business Consulting
Unadjusted Trial Balance
December 31, 2018

Account Title Debit Credit

Cash 22,000
Accounts Receivable 12,000
Prepaid Insurance 7,500
Office Supplies 6,000
Land 18,000
Accounts Payable 15,000
Salaries Payable 5,000
Unearned Revenue 9,000
Albert, Capital 36,000
Albert, Withdrawals 5,000
Service Revenue 24,500
Salaries Expense 15,000
Advertising Expense 4,000
Totals 89,500 89,500

Albert is preparing financial statements for the year ending December 31, 2018.

Adjustment data at December 31 follows:

a. Albert pays its employees each Friday. December 31, 2018 falls on a Monday. The employees will earn
P1,250 for the five-day work week.
b. On August 31, 2018, Albert agreed to provide consulting services to Smith Company for 6 months, beginning
on September 1, 2018, at P1,500 per month. Smith paid P9,000 on August 31, 2018. Albert treats deferred
revenues initially as liabilities.
c. Albert prepaid 6 months of business insurance on September 30, 2018. The insurance begins on October 1.
Albert treats deferred expenses initially as assets.
d. On December 31, 2018, Albert received a bill for the November and December advertising in a local
newspaper, P800. This bill will be paid on its due date, which is January 10, 2019.
e. As of December 31, 2018, Albert had performed services for Alliance Company for P5,000. The invoice will
be sent on January 5, 2019 and payment is due on January 15, 2019. Albert received the payment on its due
date.

Determine the following values:

59. Net Income or Net Loss (10 pts)
End of Examination