RJDAMA CHRISTIAN ACADEMY INC.

San Jose, Gonzaga, Cagayan

S.Y. 2021-2022

FUNDAMENTALS OF ACCOUNTING AND BUSINESS MANAGEMENT I

(ABM 11)

2nd SUMMATIVE TEST

Name: SCORE:

I. MULTIPLE CHOICE
Direction: Encircle the correct answer.
1. Under this method, advanced collections of income are initially credited to an income
account.
a. Income method b. Expense method c. Liability method
2. Entries made prior to the preparation of financial statements to update certain accounts so
that they reflect correct balances as of the designated time.
a. Adjusting entries b. Journalizing c. Reversing entries
3. An analytical device used to facilitate the gathering of data for adjustments, the
preparation of financial statements, and closing entries.
a. Financial Statement b. Balance sheet c. worksheet
4. The third step in the accounting cycle, is the process of transferring data from the journal
to the appropriate accounts in the ledger.
a. Posting b. Adjusted trial balance c. Post-trial balance
5. This is prepared after adjusting entries but before the financial statements are prepared.
a. Posting b. Adjusted trial balance c. Post trial balance
6. The end product of the accounting process.
a. Recording b. Financial statement c. Posting
7. The amount in the Adjusted trial balance (or Income statement and Balance sheet
columns) are crossed-footed with the amounts in the Closing entries columns.
a. Posting b. Closing entries c. Post-closing trial balance
8. An account that has no balance.
a. Closed account b. open account c. Closing entries
9. Entries usually made on the first day of the next accounting period to reverse certain
adjusting entries in the immediately preceding period.
a. Reversing entries b. closing entries c. balance sheet
10. The process of recording a business transaction in the form of an accounting entry.
a. Recording b. Posting c. Journalizing
11. A chronological record of all company’s events or business transactions showing all the
effects of each transaction listed by date.
a. Ledger b. Recording c. General journal
12. Account that are not closed at the end of the accounting period. These are extended to the
next accounting period.
a. Account Title b. Real accounts c. Nominal accounts
13. Costs that are directly associated with the earning of revenue are recognized as expenses
in the same period in which the related revenue is recognized.
a. Immediate recognition b. Matching c. Systematic & rational allocation
14. The procedure to compute for the adjusted balances of accounts in the adjusted trial
balance.
a. Book of accounts b. book of the original entry c. Cross-footing
15. The first step in accounting cycle.
a. Recording b. Posting c. Identifying and analyzing
 II. TRUE OR FALSE
Direction: Write TRUE if the statement is correct and write FALSE if its not.
Write your answer on the space provided before the number.
________ 1. A business is an activity carried out with the intention of earning the profit.
________ 2. Balance sheet is the process of transferring data from the journal to the appropriate
accounts in the ledger.
________ 3. The difference between the total debits and total credits in that account is called
“total”.
________ 4. Adjusting entries are entries made prior to the preparation of financial statements to
update certain accounts so that they reflect correct balances as of the designated time.
________ 5. As the equipment is used, a portion of the cost is recognized as expense on a
piecemeal basis (or little by little). This portion is called depreciation.
________ 6. Real accounts (Permanent accounts) are accounts that are closed at the end of the
accounting period.
________ 7. Mixed accounts are accounts that have both real and nominal account components.
These accounts are subject to adjustment.
________ 8. Adjusted trial balance is prepared after the closing process.
________ 9. Expense method are the prepayments of expenses are initially debited to an expense
account.
________ 10. Worksheet is an analytical device used to facilitate the gathering of data for
adjustments, the preparation of financial statements, and closing entries.
________ 11. T-account is a list of general ledger accounts and their balances. It is prepared to
check the equality of total debits and total credits in the ledger.
________ 12. Accounts in the ledger resemble a “T-accounts”.
________ 13. The purpose of posting is to classify the effects of transactions on specific asset,
liability, equity, income and expense accounts in order to provide more meaningful information.
________ 14. Any commercial organization engaged in an activity that provides service to
clients for profit is called a “merchandising business”.
________ 15. The simplest journal is the General Journal.

III. FINANCIAL STATEMENT

Direction: Prepare what is being asked.

Entity A started operations on January 1, 20x1. A summary of the transactions during the
year is provided below:
a. The owner invested 2,000,000 to the business.
b. Acquired equipment for 1,000,000 cash.
c. Obtained a 12% one-year bank loan of 500,000.
d. Paid one-year insurance amounting to 160,000 on September 30, 20x1. Entity A uses
the “asset method” in recording repayments.
e. Total service fees earned amounted to 6,000,000, one-third of which was on cash
basis.
f. Collected 1,800,000 accounts receivable.
g. Total salaries expense paid amounted to 1,200,000.
h. Total utilities expense paid amounted 500,000.
i. Total supplies purchased on cash basis amounted to 120,000.
j. Total owner’s drawings amounted to 1,400,000.

Requirements:
1. Provide the journal entries for the transaction.
2. Post the entries to the ledger using T-account.
3. Prepare a trial balance using a worksheet.
Note: Use yellow paper in answering Test III.

“Sana kapag nagmahal tayo parang DEBIT-CREDIT RULE, “For every DEBIT there must be a
CREDIT”, para kapag minahal kita, mahalin mo rin ako!”

Prepared by:

ALMA ANGELIE D. AGRESOR

Adviser/FABM 1 Instructor