DIVINE CHILD JESUS SCHOOL

1st Quarter Exam in Fundamentals of Accountancy, Business, and Management 2

Name: _____________________________________________________ Date: _______________________
I. Multiple Choice. Encircle the letter of the correct answer.
1. It is described as a “for the period” report.
a. Statement of Financial Position
b. Statement of Comprehensive Income
c. Statement of Changes in Equity
d. Statement of Cash Flows
2. It is a statement that explains some of the changes that occur between two SFP’s
taken one year apart.
a. Statement of Financial Position
b. Statement of Comprehensive Income
c. Statement of Changes in Equity
d. Statement of Cash Flows
3. It refers to those incomes generated from the primary operations of the business.
a. Expenses c. Revenues
b. Gains d. Sales

4. It refers to those incomes derived from other activities of the business.

a. Expenses c. Revenues
b. Gains d. Sales

5. It refers to the primary operations of the business.

a. Expenses c. Revenues
b. Gains d. Sales

6. It describes revenue derived from rendering of service.

a. Expenses c. Sales
b. Losses d. Service Income

7. It describes revenue derived from selling of goods.

a. Expenses c. Sales
b. Losses d. Service Income

8. It collects the cost of merchandise sold.

a. Cost of Sales c. Inventory
b. Freight-In d. Operating Expenses

9. It refers to the shipment cost to bring the goods to the premises of the company.
a. Cost of Sales c. Inventory
b. Freight-In d. Operating Expenses

10. It refers to all other expenses related to the operation of the business other
than cost of sales.
a. Cost of Sales c. Inventory
b. Freight-In d. Operating Expenses
II. True or False. Write T if the statement is True and F if the statement is False.
________ 11. The SCI is an action-packed financial statement.
________ 12. There are three kinds of revenues.
________ 13. There are two kinds of expenses.
________ 14. Financial statements are a set of interconnected reports.
________ 15. Revenue from sales of goods is recognized when goods have been delivered.
________ 16. Accountants have two ways of keeping records of inventory.
________ 17. Bad debt expense is an operating expense related to accounts receivable.
________ 18. The single-step SCI is generally used because it is more complicated.
________ 19. Expense is recorded in the same period of the revenue it was able to
generate.
________ 20. Accrual is one of the fundamental concepts of financial accounting.
________ 21. The major elements of SCI are income and expenses.
________ 22. Expenses decrease assets and therefore have credit normal balance.
________ 23. Goods returned by customers are immediately deducted to the Sales
Revenue account.
________ 24. In periodic inventory accounting, inventory is determined by conducting a
physical count of merchandise owned.
________ 25. Expense recognition strictly requires the matching of expenses against
revenue.

III. Identification. Identify the following.

26-29. Formula to find the Net Sales.
30-32. Formula to find the Net Purchases
33-35. Formula to find the Cost of Goods Sold

IV. Modified Matching Type. Classify the line accounts on the table as to single-step /
nature of expense or multi-step / function of expense SCI’s. (36-50)
Net Sales Rent Expense Utilities expense
Net Purchases Cost of Sales Interest income
Depreciation and Bad debt expense Interest Expense
Amortization
General and administrative Selling Expense Gain from sale of PPE
expense
Salaries Expense Advertising expense Decrease in inventory

Single-Step SCI
 Multi-Step SCI

V. Computation. Solve the following using the table below.

The following are taken from the records of the ABC company for the year
ended December 31, 20x2:
DEBIT CREDIT
Sales 764 985
Purchase discount 8200
Purchase return and allowances 5465
Purchases 459
990
Freight-in 9 180
Sales discount 13 300
Sales return and allowances 5 455
Depreciation expense 25 000
Amortization expense 10 000
Salaries expense 80 000
Utilities expense 55 000
Advertising expense 35 000
Rent expense 60 000
Interest income 5 444
Interest expense 5 677
Gain on sale of PPE 5 465
Bad debt expense

Determine the following:

51-55. Net Sales 56-60. Net Purchases

61-65. Cost of Goods Sold 66-70. Bad debt Expense