Version A

Name ________________________ Date ________________

1st Year Quiz

Basic Accounting, and Cost Accounting

1. What account is debited when direct materials and indirect materials are issued to the
producing department? (1 point)
Work in process in both cases

Work in process and FOH respectively

FOH and Work in process respectively

FOH in both cases

2. Which is not true with regards to accrual concept? (1 point)
Sales add gross profit equal to revenue

Revenue less profit equal to expenditure

Revenue equal to profit add expenditure

Revenue less expenditure equal to profit

3. Accounting is a service activity and its function is to provide quantitative information,
primarily financial in nature, about economic entities, that is intended to be useful in making
economic decision. The accounting definition is given by (1 point)
Accounting Standards Council

International Accounting Standards Board

American Accounting Association

AICPA
4. On Sept 1, the company pays rent for one year in advance and debits an asset account. At
year-end, the adjusting entry on the worksheet would (1 point)
Decrease a liability account

Decrease an expense account

Increase an expense amount

Increase an asset account

5. To record the purchase of P100,000 with terms of 2/10, n/30 and a trade discount of 25%
would include an entry under periodic inventory system (1 point)
Credit to purchase discount for 2,000

Credit for accounts payable for 75,000

Debit to purchases for 100,000

Credit to purchases for 75,000

6. Prior to the adjusting process, accrued expense has: (1 point)
Been incurred, not paid, but has been recorded

Not yet been incurred, paid and recorded

Not yet been incurred but paid

Been incurred, not paid and not recorded

7. In the statement of cash flows, interest income received is presented under (1 point)
Operating activities

Financing activities

Investing activities

Either operating or investing

8. Which of the following is a characteristic of a perpetual inventory? (1 point)
Cost of goods sold is determined as the amount of purchases less the change in
inventory

Inventory records are not kept for every item

Cost of goods sold is recorded with each sale

Inventory purchases are debited to Purchase account

9. A partner who is not known to the public as a partner and is not taking active part of the
business is called (1 point)
Dormant partner

Silent partner

Nominal partner

Secret partner
10. During the year, there were no beginning inventories of raw materials and work in process,
but the finished goods inventory decreased by P10,000. If purchases of raw materials were
P500,000 and conversion costs amounted to P500,00, the total manufacturing cost would
be (1 point)
1,100,000

Cannot be determined

1,000,000

990,000
11. What is the difference between revenue, gain, and income? (1 point)
Revenue encompasses gain and income

All are synonymous

Income encompasses revenue and gain

Gain encompasses revenue and income

12. How many are composing the FRSC? (1 point)
14

13

12

15
13. On Oct 1, the company collects revenue in advance for the next twelve months and credits a
liability account. The adjusting entry at year end on the worksheet would (1 point)
Decrease an asset account

Decrease a revenue account

Increase a liability account

Decrease a liability account

14. Statement 1: Accrued interest expense is an expense account
Statement 2: Allowance for uncollectible account is an expense account (1 point)
Only statement 1 is false

Both statements are true

Only statement 1 is true

Both statements are false

15. Prior to the adjusting process, accrued revenue has: (1 point)
Not been earned but recorded

Been earned but not recorded

Been earned and received

Not been recorded but has been received

16. Manong Magbabalut sells “balut”. At the beginning of the day, Manong had 50 baluts unsold
from yesterday. During the day, Manong purchased additional 160 baluts. Each balut has a
unitcost of P7 and unit price to sell of P16. At the end of the day, Manong Magbabalut has 18
baluts left. How much is the gross profit? (1 point)
P1,478

P1,728

P1,278

P1,828
17. X and Y are partners who share income ratio of 2:1 and have capital balances of 50,000 and
30,000 respectively. With the consent of Y, A buys one half of X’s interest for 30,000. For
what amount will X’s capital account debited to record the admission of A? (1 point)
15,000

25,000

40,000

30,000
18. Sales return would be recorded in which journal? (1 point)
Cash receipts journal

Cash disbursements journal

General Journal

Sales journal
19. The year-end balance of the retained earnings account appears in (1 point)
Both the statement of retained earnings and balance sheet

Both the statement of retained earnings and income statement

Both the statement of retained earnings and cash flow statement

Only the statement of retained earnings

20. A type of cost system that accumulates costs for each of the various departments within a
manufacturing entity (1 point)
Absorption costing

Job order costing

Process costing

ABC costing
21. Statement 1: For every transaction, there is at least one account affected.
Statement 2: One disadvantage of a partnership over a corporation is the unlimited liability of
partners (1 point)
Only statement 1 is true

Both statements are true

Both statements are false

Only statement 1 is false

22. 11. The ZSS company uses job order costing system and provides you the following data for
the current period:
Direct materials issued to production: P180,000
Indirect materials issued to production: 16,000
Direct labor cost: 214,000
Manufacturing overhead cost – applied: 226,000
Manufacturing overhead cost – actual: 250,000

There was no beginning and ending work in process and finished goods inventory. The
company uses a predetermined overhead rate to apply manufacturing overhead to work in
process (WIP) inventory.
What is the cost of goods manufactured of GSM Company?
(1 point)
620,000

604,000

644,000

660,000
23. MM Company paid P12,960 for a 4-year insurance policy on September 1, 2021 and recorded
it using the asset method. Which of the following is correct regarding adjusting entry on
December 31, 2021? (1 point)
Credit to insurance expense of 3,240

Debit to prepaid insurance of 810

Debit to insurance expense of 1,080

Debit to insurance expense of 3,240

24. 57. Lori Manufacturing Co. is using perpetual inventory system. In the materials inventory,
the beginning inventory is P275,000, the other debits to the account is P825,000, and the
excess of ending inventory over beginning inventory is P55,000. How much is the cost of
materials used in production? (1 point)
1,045,000

770,000

880,000

1,100,000
25. The entry to record a payment on a P15,000 account within the 2% discount period would
include a: (1 point)
Credit to cash for P15,000

Debit to accounts payable for P14,700

Credit to purchases discounts for P300

Credit to accounts payable for P15,000

26. You are the business owner of Maxx Company. You have 10 employees earning P20,000 each
per month. You pay salaries on a bi-monthly basis. During January 2021, none of your
employees were absent, late or have rendered overtime. When will you recognize the salaries
expense and at what amount for the first payday in the month of January. (1 point)
January 1; P20,000
 January 30; P200,000

January 15, P100,000

January 15; P20,000

27. Which of the following is an expense of the partnership? (1 point)
Both A and B

Interest on loans from partnership to the partners

Interest on loans from partners to the partnership

Interest on partner’s capital account balances

28. An entity has P1,500 of supplies on hand at the end of 2018. During 2019, P2,750 of supplies
were purchased. A count of supplies on hand at the end of 2019 found an inventory of P875.
What was the amount of supplies expense for 2019? (1 point)
P4,250

P1,875

P3,375

P5,125
29. Statement 1: The company is using the “liability method” if the account appearing on the
unadjusted trial balance relating to pre collection is an income account.
Statement 2: The adjusting entry to record pre collection under the “income method” will
require a debit to liability and credit to an income account. (1 point)
Only statement 1 is true

Only statement 1 is false

Both statements are true

Both statements are false

30. Koi and Iko share income equally. During the current year the partnership net income was
40,000. Koi made withdrawals of 12,000 and Ethel made withdrawals of 17,000. At the
beginning of the year, the capital account balances were 42,000 for Koi and 58,000 for Iko.
Koi’s capital account balance at year end is (1 point)
76,500

34,000

61,000

50,000
31. Failure to record the unexpired portion of insurance premium paid would (1 point)
Understate profit

Overstate total liabilities

Overstate owner’s equity

Understate expense
32. Statement 1: The company is using “expense method” if the account appearing on the
unadjusted trial balance relating to prepayment is an expense account.
Statement 2: The adjusting entry to record prepayments under the “expense method” will
require a debit to expense and credit to an asset account. (1 point)
Both statements are true

Only statement 1 is true

Only statement 1 is false

Both statements are false

33. I. Cash acquisition of computer will cause the total assets to increase.
II. The word “debit” means to increase and the word “credit” means to increase.
II. Accountable events are those events that affect the accountant.
IV. The left side of an account is always the debit side and the right side is always the credit
side. (1 point)
All statements are false

Both statements 2 and 4 are true

Only statement 1 is false

Only statement 4 is true

34. The primary responsibility for properly applying Generally Accepted Accounting Principles lies
with (1 point)
Accountant

External Auditor

Management

Internal Auditor
35. The account credited whenever a partner withdraws an amount of money with the intention of
repaying in the future. (1 point)
Loans receivable – partner

Partner’s capital account

Loans payable – partner

Cash
36. Well Company reported the following in in their financial statements:

Net income P100,000

Depreciation expense 10,000
Increase in accounts receivable 30,000
Decrease in accounts payable 20,000

What is the company’s net cash flow from operating activities? (1 point)
60,000

100,000

120,000

80,000
37. Leeann Co. has the following amount on the trial balance: Purchases of 10,000; beginning
inventory of 7,000; purchase discount of 1,200; freight out of 700, and ending inventory of
1,200. What amount is the cost of goods available for sale? (1 point)
15,800

15,100

16,300

17,000
38. Xavier Trading has these unadjusted account balances on December 31:

Inventory, beginning P188,250

Purchases 142,700
Transportation in 12,880
Purchase discounts 2,140
Purchase returns 26,710

Assuming that the ending inventory is P97,900, the entry to adjust the inventory accounts
would be: (1 point)
Debit to cost of goods of P217,080
 Credit to purchase discounts of P26,710

Credit to purchase discounts of P2,140

Debit to inventory of P90,350

39. Which of the following is not a real account? (1 point)
Land

Cash

Purchases

Prepaid expense
40. An asset was purchased for 100,000 with a downpayment of 20,000 and notes accepted for
80,000. What would be the effect on the total assets and liabilities in the balance
sheet? (1 point)
Asset decreased by 80,000 and liabilities increased by 80,000

Asset increased by 80,000 and liabilities increased by 80,000

Asset increased by 100,000 and liabilities increased by 80,000

Asset increased by 80,000 and liabilities decreased by 80,000

 Version A

Answer Sheet

1st Year Quiz

Basic Accounting, and Cost Accounting

1. Work in process and FOH respectively

2. Sales add gross profit equal to revenue

3. Accounting Standards Council

4. Increase an expense amount

5. Credit for accounts payable for 75,000

6. Been incurred, not paid and not recorded

7. Operating activities

8. Cost of goods sold is recorded with each sale

9. Dormant partner

10. 1,000,000

11. Income encompasses revenue and gain

12. 15

13. Decrease a liability account

14. Both statements are false

15. Been earned but not recorded

16. P1,728

17. 25,000

18. General Journal

19. Both the statement of retained earnings and balance sheet

20. Process costing

21. Only statement 1 is false

22. 620,000

23. Debit to insurance expense of 1,080

24. 770,000

25. Credit to purchases discounts for P300

26. January 15, P100,000

27. Interest on loans from partners to the partnership

28. P3,375
29. Both statements are false

30. 50,000

31. Understate profit

32. Only statement 1 is true

33. Only statement 4 is true

34. Management

35. Cash

36. 60,000

37. 15,800

38. Debit to cost of goods of P217,080

39. Purchases

40. Asset increased by 80,000 and liabilities increased by 80,000