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3.5 multiple choices.

Which of the accounts is a liability?

a. Accrued income c. Prepaid expense
b. Accrued expense d. Deferred expense
The owner's equity is computed as follow:
a. Revenues less expense c. Ending capital less beginning capital
b. Assets less liabilties d. Cash inflows less cash outflows
Which of the following is not included under the Operating Activities in the Cash Flow Statement?
a. Expenses paid in advance c. Payment of salaries
b. Collection of Accts. Rec'bles d. Payment of mortgage payable
Which of the following is not included under the Investing Activities in the Cash Flow Statement?
a. Purchase of the office supplies c. Sale of old furniture
b. Purchase of furniture d. Collection of advances to employees
Which of the following is not included under the Financing Activities in the Statement of Cash Flow?
a. Long term borrowing c. Additional investment
b. Short term borrowing d. Partial payment of equipment bought
Accounts recievable less allowance for Impairment Loss equals
a. Carrying amount c. Net realizable value
b. Liquidation value d. Appraised value
Office equipment less Accumulated Depreciation equals
a. Carrying amount c. Appraised value
b. Net realizable value d. Liquidation value
If the debit in the adjusting entry is Prepaid Advertising, the corresponding credit should be
a. Accrued advertising c. Advertising payable
b. Advertising expense d. Deferred advertising
In the adjusting entries,
a. Real accounts are affected c. Real & nominal accounts are affected
b. Nominal accounts are affected d. Real & nominal accounts are not affected
The worksheet id prepaid to facilitate the preperation of the following except
a. Income Statement c. Balance Sheet
b. Statement of Changes in Equity d. Statement of Cash Flows
On December 31, the end of the accounting period, Maricall Center has an outstanding Accounts Recievable of P 72,000 and a
Allownace fo Impairment Loss balance of P 600 prior to the year-and adjustments. Bad debt are estimates 2% of the accounts
recievable. How much is teh bad debts expense to be charged to impairment Loss account?

a. P 840 c. P 1,440
b. P 1,428 d. P 2,040
Lydia Trucking Service has Accounts Recievable and Allowance for Impairment Loss balances of P 40,000 and P 800, repectively
allowance is to be increased to P 1,200, how much is the net realizable value ?

a. P 39,000 c. P 38,800
b. P 39,200 d. P 38,000
A machine costing P 650,000 wa acquired on February 1 of the current year. It is estimated to have a useful life of 15 years wit
value P 50,000. The end of the fiscal year is June 30 of the current year. How much depreciation is to be charged for the curren
a. P 13,333 c. P 36,667
b. P 16,667 d. P 40,000
On January 1 of the current year, the furnuture account had a balance of P 24,000 with accumulated depreciation of P 2,400. O
additional furniture costing P 12,000 was bought. The furniture is depreciation at the rate 10% per annum. What is the carryin
(book value) of the furniture on December 31, the end of the accounting period?

On December 1, 200C, Rico, a tenant, paid P 18,000 to puno, owner of the D' Best Barber Shop, representing the rent for 3 mo
Rent income was credited on his date. What amount should be recognized as liability on December 31, the end of the accounti
period?

a. P 3,000 c. P 16,000
b. P 12,000 d. P 18,000
 E. Lucille Ball is the owner of Speedy Trucking Company. On March 31, 200F, after three months of operations, the fol
balances were obtained from the trial balance.
L. Ball Capital Salaries Expense
P280,000
Office Equipment 48,290 P15,000
Gas & Oil Expenses
Loan Payable (short term) 16,600 Supplies Expense
Cash 18, Recievable from Employee
Tools 21, Tel. & Telegrams Expense
L. Ball Drawing 10,00 Truck
Trucking Service Fees 145,500 Taxes & Licenses
Furniture & Fixture 28,900 Micellaneous Expense

All transactions were purely on a cash basis.

REQUIRED:
1 Income Statement
2 Statement of Changes in Owner's Equity
3 Balance Sheet
months of operations, the following

6,19
3,150
ployee 350
pense 1,250
284
4,010
se 210

.
IDENTIFICATION

1 A discount given to customers for early payment

2 An outright deduction from the invoice price.
Terms of shipment, where the freight charges are shouldered by the buyer but pai
3 seller.
Terms of shipment, where the freight charges are shouldered by the seller but pai
4 buyer.
5 Terms of shipment where the freight charges are shouldered and paid by the seller
6 Terms of shipment where the freight charges are shouldered and paid by the buye
7 The cost transporting the goods incurred by the seller.
Is a business from which shows the goods or items sold together with the price, qu
8 and terms of sale.
9 A business from evidencing returns or allowances given to the customer.
10 The difference between net sales and cost of sales.
11 The format of the Income Statement where the expenses are classified as to their f
The manner of presention of the Income Statement where the expenses are classifi
12 to their name.
13 The cost paid by the buyer for transporting the goods bought.
14 Goods unsold at the end of an accounting period.
Costs generally incurred in ralation to borrowing such as interest, bank charges, do
15 stamps and other costs.
ouldered by the buyer but paid by the

ouldered by the seller but paid by the

uldered and paid by the seller.

uldered and paid by the buyer.
r.
old together with the price, quantity, VAT

en to the customer.

nses are classified as to their function.

where the expenses are classified according

s bought.

h as interest, bank charges, documentary