Quiz No. 7: A. MULTIPLE CHOICE: Write The Correct Letter Choice Before

QUIZ NO.
A. MULTIPLE CHOICE: Write the correct letter choice before

each number.
___C___ 1. The company’s assets are ₱ 12,000,000 of which 1/3 represents

owner’s equity. How
much is total liabilities?
A. ₱ 6,000,000 B. ₱ 3,000,000 C. ₱ 8,000,000 D. ₱

4,000,000
___A___ 2. The assets of the business at the start of the month totaled ₱
1,000,000 with owner’s
equity at ₱ 800,000. Before the month ended equipment worth ₱

500,000 were
purchased, with a down payment of ₱ 150,000, the balance on

credit.
At the start of the month, liabilities are
A. ₱ 200,000 B. ₱ 1,800,000 C. ₱ 1,200,000 D.

Zero
___B___ 3. Refer to No. 2, at the end of the month, liabilities are
A. ₱ 1,150,000 B. ₱ 5,500,000 C. ₱ 800,000 D. ₱

1,000,000
___A___ 4. A transaction caused a ₱ 10,000 decrease in total assets. This

could have due to a/an
A. Payment of a loan C. Cash investment

made by the owner
B. Purchase of equipment on account D. Purchase of

equipment for cash
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___D___ 5. Allen Nature Trip, a travel agency, purchased equipment for ₱
120,000, made a down
payment of ₱ 50,000 and signed a note for the balance. This

transaction will
A. Increase total assets by ₱ 120,000 C. Increase total liabilities

by ₱ 500,000
B. Not affect owner’s equity D. All of the above

choices are correct
___C___ 6. On January 1, the assets were ₱ 500,000 and the liabilities were ₱
200,000. During
the year the assets increased by ₱ 100,000 and the liabilities

decreased by ₱ 50,000.
Owner’s equity on January 1 was:
A. ₱ 800,000 B. ₱ 700,000 C. ₱ 300,000 D.

None
___B___ 7. Refer to no. 6. Owner’s equity on December 31 was:
A. ₱ 300,000 B. ₱ 350,000 C. ₱ 250,000 D. ₱

450,000
__C___ 8. The firm regularly prepares and presents financial statements for
two periods – the
current year and the preceding year. It follows the qualitative

characteristic of
A. Consistency B. Neutrality C. Comparability D.

Relevance
__A___ 9. The accountant submitted audited financial statements to the

stakeholders duly
certified by an independent CPA that these are in conformity with

generally accepted
accounting principle. It follows the qualitative characteristic of
A. Reliability B. Neutrality C. Objectivity D.
Relevance
__B__ 10. The accountant prepares and distributes general purpose reports
common to all
users based on the qualitative characteristic of
A. Consistency B. Neutrality C. Comparability D.

Relevance
__A___ 11. In preparing performance reports, the accountant uses a cut-off of

5% and reports
only those cost and expenses over and above this percentage
following the rule of
A. Materiality B. Neutrality C. Comparability D.

Relevance
__C___ 12. Controlled resources of an enterprise resulting from past events

and for which
economic benefits are expected to flow to the enterprise.
A. Revenues B. Expenses C. Assets D.

Debts
__D___ 13. Present obligations of a firm arising from the past events,
expected to decrease the
assets when it will be the liquidated in the future.
A. Equity B. Assets C. Net worth D.

Liabilities
___C___ 14. The owner wrote on a piece of paper electric bill that supposedly
was incurred by
the firm. The accountant refused to reimburse the owner and

record this as business
expense.
A. Reliability B. Neutrality C. Objectivity D.

Relevance
B. From the following information, prepare a balance sheet as at
December 31, 2014 for Super Sports Club owned and operated by
Cora Ann Basa:
Cash deposited in the name of Super Sports Club ₱

100,000
Personal Savings Account of Basa

140,000
Office Furniture and Fixture

35,000
Residential House and Lot of Basa

2,100,000
Salaries Payable to employees

18,000
Mortgage Payable on residential house and lot of Basa

1,200,000
Accounts Payable for repair of sports equipment

12,000
Unpaid household bills

15,000
Personal Car of Basa

500,000
Office Supplies
10,000
Sports Equipment
1,250,000
SUPER SPORTS CLUB
Balance Sheet
December 31, 2014
ASSETS
Current Assets
Cash ₱ 100,000
Office Supplies 10,000
Total Current Asset ₱ 110,000
Non-Current Asset
Sports Equipment ₱ 1,250,000
Furniture and Fixture 35,000
Total Non-Current Asset ₱ 1,285,000
Total Asset ₱ 1,395,000
LIABILITIES
Salaries Payable ( ₱ 18,000 )
Accounts Payable (₱ 12,000 )
Total Liabilities (₱ 30,000 )
Equity ₱ 1,365,000
Total Liabilities and Owner’s Equity ₱ 1,395,000
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QUIZ NO.

A. MULTIPLE CHOICE: Write the correct letter choice before

___C___ 1. The company’s assets are ₱ 12,000,000 of which 1/3 represents

much is total liabilities?

A. ₱ 6,000,000 B. ₱ 3,000,000 C. ₱ 8,000,000 D. ₱

equity at ₱ 800,000. Before the month ended equipment worth ₱

purchased, with a down payment of ₱ 150,000, the balance on

At the start of the month, liabilities are

A. ₱ 200,000 B. ₱ 1,800,000 C. ₱ 1,200,000 D.

___B___ 3. Refer to No. 2, at the end of the month, liabilities are

A. ₱ 1,150,000 B. ₱ 5,500,000 C. ₱ 800,000 D. ₱

___A___ 4. A transaction caused a ₱ 10,000 decrease in total assets. This

A. Payment of a loan C. Cash investment

B. Purchase of equipment on account D. Purchase of

payment of ₱ 50,000 and signed a note for the balance. This

A. Increase total assets by ₱ 120,000 C. Increase total liabilities

B. Not affect owner’s equity D. All of the above

the year the assets increased by ₱ 100,000 and the liabilities

Owner’s equity on January 1 was:

A. ₱ 800,000 B. ₱ 700,000 C. ₱ 300,000 D.

___B___ 7. Refer to no. 6. Owner’s equity on December 31 was:

A. ₱ 300,000 B. ₱ 350,000 C. ₱ 250,000 D. ₱

current year and the preceding year. It follows the qualitative

A. Consistency B. Neutrality C. Comparability D.

__A___ 9. The accountant submitted audited financial statements to the

certified by an independent CPA that these are in conformity with

accounting principle. It follows the qualitative characteristic of

users based on the qualitative characteristic of

A. Consistency B. Neutrality C. Comparability D.

__A___ 11. In preparing performance reports, the accountant uses a cut-off of

A. Materiality B. Neutrality C. Comparability D.

__C___ 12. Controlled resources of an enterprise resulting from past events

economic benefits are expected to flow to the enterprise.

A. Revenues B. Expenses C. Assets D.

assets when it will be the liquidated in the future.

A. Equity B. Assets C. Net worth D.

the firm. The accountant refused to reimburse the owner and

A. Reliability B. Neutrality C. Objectivity D.

Cash deposited in the name of Super Sports Club ₱

Personal Savings Account of Basa

Office Furniture and Fixture

Residential House and Lot of Basa

Salaries Payable to employees

Mortgage Payable on residential house and lot of Basa

Accounts Payable for repair of sports equipment

Unpaid household bills

Personal Car of Basa

December 31, 2014

Office Supplies 10,000

Total Current Asset ₱ 110,000

Sports Equipment ₱ 1,250,000

Furniture and Fixture 35,000

Total Non-Current Asset ₱ 1,285,000

Total Asset ₱ 1,395,000

Salaries Payable ( ₱ 18,000 )

Accounts Payable (₱ 12,000 )

Total Liabilities (₱ 30,000 )

Total Liabilities and Owner’s Equity ₱ 1,395,000

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_C_ 1. The company’s assets are ₱ 12,000,000 of which 1/3 represents

_B_ 3. Refer to No. 2, at the end of the month, liabilities are

_A_ 4. A transaction caused a ₱ 10,000 decrease in total assets. This

_B_ 7. Refer to no. 6. Owner’s equity on December 31 was:

A_ 9. The accountant submitted audited financial statements to the

A_ 11. In preparing performance reports, the accountant uses a cut-off of

C_ 12. Controlled resources of an enterprise resulting from past events