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FABM2121 Fundamentals Grade 12 1st Quarter Exam
FABM2121 Fundamentals Grade 12 1st Quarter Exam
A: Accounts Receivable
A: False
Cash basis accounting relies entirely on the payment and receipt of cash.
A: True
A: False
A: P140,000
A: True
A: True
The transactions falling under operating activities does not primarily involve
cash received from customers and paid to suppliers, lenders, or employees.
A: False
Investments made by the owner may represent the original investment made at
the start of business, and any additional investments thereafter.
A: True
Net sales is P450,000, sales discounts is P35,000, and sales returns and
allowances is P15,000. Compute for the gross sales.
A: 500,000
SFP is an acronym for Statement of Financial Position, which is also known as the
Balance Sheet.
A: True
A: False
A: True
A: True
The firm can create as many capital accounts as there are owners in a
corporation.
A: True
A: False
This is derived from the income statement and is also added to the beginning
capital and additional investments done during the year.
A: investment
Owner's equity usually consists of the owner's investment and the earned profit
less any withdrawals made during a given period.
A: True
The following are cash flow transactions under the direct method except
A: Decrease of P50,000
A: True
A: True
If the firm has been operating in the past year, the beginning capital of the
current year is the same as the ending capital of the previous year.
A: False
A: True
If the beginning capital of Mrs. Castro is P200,000 and she made an additional
investment during the year of P100,000 with a net profit of P52,000, how much
is the ending capital?
A: P352,000
A: True
A: False
Cash flows are categorized into three types; these activities does not determine
the purpose for which the cash has been used.
A: True
A: False
A: Notes Payable
A: True
A: FALSE
Owner's equity represents the right of the owner over the resources of the firm.
A: True
A: True
A: True
A: False
A: False
Cash receipts from customers is P200,000, cash paid to suppliers is P10,000 and
cash paid to employees is P25,000, how much is the net cash from operating
activities.
A: P165,000
A: False
A: False
A: True
Gross profit is P150,000, total selling expenses is P39,000, and total general and
administrative expenses cost P52,000. Compute for the operating income.
A: P59,000
Withdrawals or drawings are resources of the firm which were taken by the
owner for personal use.
A: True
A: False
Operating expenses and operating income or operating loss are items which can
be found in an income statement prepared in a multi-step approach.
A: False
A: True
2. Losses are outflows that result from the main activity of the business.
3. Owner's equity represents the right of the owner over the resources of the firm.
4. Cash withdrawal of an owner for personal use falls in what cash flow category?
6. Accrual basis of accounting is a basic accounting principle that states that income shall only be
recognized when cash is received, and expenses shall only be recorded when cash is paid.
7. Cash flows are categorized into three types: operating, investing, and financing activities.
8. The following are cash flow transactions under the direct method except
a. Cash paid to creditors b. Cash receipts from customers c. Income taxes paid d. Depreciation of old
building The correct answer is: Cash paid to creditors
12. It is a voluntary association of at least 15 persons having a common bond of interest for the purpose
of generating capital from among themselves through a systematic and continuous savings program in
order to grant loans to each other at reasonable rates of interest.
a. partnership b. cooperative c. corporation d. single proprietorship The correct answer is: single
proprietorship
16. Cash basis accounting relies entirely on the payment and receipt of cash.
20. Accrual basis of accounting records income when earned regardless of when cash is received.
21. Operating expenses and operating income or operating loss are items which can be found in an
income statement prepared in a multi-step approach.
22. SFP is an acronym for Statement of Financial Position, which is also known as the Balance Sheet
24. The acquisition and disposal of long-term assets, including investments not considered cash
equivalents are parts of an investing activities.
True False The correct answer is 'True'.
27. In cash basis accounting, income shall only be recognized when cash is received, and expenses shall
only be recorded when cash is paid.
29. The following are cash flow transactions under the direct method except
a. Depreciation of old building b. Cash receipts from customers c. Income taxes paid d. Cash paid to
creditors The correct answer is: Cash paid to creditors
30. Owner's equity usually consists of the owner's investment and the earned profit less any withdrawals
made during a given period.
33. The firm can create as many capital accounts as there are owners in a corporation.
34. Accounting is defined in part as the art of ____________, ___________, and ____________ in a
significant manner and in terms of money, transactions and events.
36. Cash withdrawal of an owner for personal use falls in what cash flow category?
True False The correct answer is 'True'. MY ANSWER IS FALSE- CASH & CASH EQUIVALENTS ARE
CURRENT ASSETS, BUT IN OED IT IS TRUE ☹
38. The following are the advantages of forming a partnership except Minimal regulatory requirements
than corporation.
a. Exempt from paying corporate tax b. more capital from partners c. Can exist for a period of 50 yrs
True False The correct answer is 'False'. MY ANSWER IS TRUE BUT IN OED FALSE. ☹
41. Cash receipts from customers is P200,000, cash paid to suppliers is P10,000 and cash paid to
employees is P25,000, how much is the net cash from operating activities.
a. P175,000 b. P190,000 c. Cannot be determined from the data given d. P165,000 Correct
a. Cannot be determined from the given data b. P59,000 Correct c. P163,000 d. P241,000
43. It is a voluntary association of at least 15 persons having a common bond of interest for the purpose
of generating capital from among themselves through a systematic and continuous savings program in
order to grant loans to each other at reasonable rates of interest.
45. Financing activities are the common transactions happening in the organization.
46. The following are examples of non-current assets, except-Property, plant and equipment.
a. investment b. Net profit c. None of the choices d. withdrawal The correct answer is: withdrawal
48. The cash in a financing activity mostly involve current assets or income and expense accounts
49. Withdrawals or drawings are resources of the firm which were taken by the owner for personal use.
50. This is derived from the income statement and is also added to the beginning capital and additional
investments done during the year.
51. Investments made by the owner may represent the original investment made at the start of business,
and any additional investments thereafter.
52. Cash flows are categorized into three types; these activities does not determine the purpose for
which the cash has been used.
53. In this principle, it is assumed that the business owners or managers are separate from the business
enterprise.
a. Going concern principle b. Dual effect principle c. Business entity principle d. matching principle
55. Operating activities may be presented using either the direct method or indirect method.
57. The owner's equity is also called capital, net assets, or net worth.
62. Cash basis accounting relies entirely on the payment and receipt of cash.
64. Net sales is P450,000, sales discounts is P35,000, and sales returns and allowances is P15,000.
Compute for the gross sales.
66. Owner's equity usually consists of the owner's investment and the earned profit less any withdrawals
made during a given period.
67. Among all the activities, only financing activities have different ways of being presented.
68. Beginning inventory is P50,000, net cost of purchases is P125,000, and ending inventory is P35,000.
Compute for the cost of goods sold.
74. The acquisition and disposal of long-term assets, including investments not considered cash
equivalents are parts of an investing activities.
Accrual basis of accounting records income when earned regardless of when cash is received.
Select one:True
The firm can create as many capital accounts as there are owners in a corporation.
Select one:True
Select one:True
The cash in a financing activity mostly involve current assets or income and expense accounts.
Select one:True
SFP is an acronym for Statement of Financial Position, which is also known as the Balance Sheet.
Select one:True
Select one:false
Select one:True
Among all the activities, only financing activities have different ways of being presented.
Select one:True
The transactions falling under operating activities does not primarily involve cash received from
customers and paid to suppliers, lenders, or employees.
Select one:false
Select one:false
Select one:true
Select one:true
Select one:false
Select one:true
Cash flows are categorized into three types: operating, investing, and financing activities.
Select one:false
Accrual basis of accounting is a basic accounting principle that states that income shall only be
recognized when cash is received, and expenses shall only be recorded when cash is paid.
Select one:false
Cash flows are categorized into three types; these activities does not determine the purpose for which
the cash has been used.
Select one:true
The following are cash flow transactions under the direct method except
Select one:false
The owner's equity is also called capital, net assets, or net worth.
Select one:true
Select one:false
Select one:false
Select one:false
Select one:true
Select one:true
Select one:true
Select one:false
In cash basis accounting, income shall only be recognized when cash is received, and expenses shall only
be recorded when cash is paid.
Select one:true
Owner's equity represents the right of the owner over the resources of the firm.
Select one:true
Select one:true
Select one:true
Select one:true
The Statement of Financial Position is commonly prepared at the year ended December 31.
Select one:false
Select one:true
Select one:true
Select one:false
Select one:true
Cash basis accounting is not acceptable in the accounting industry though we need to understand this in
order to prepare our cash flow statement.
Select one:true
If the firm has been operating in the past year, the beginning capital of the current year is the same as
the ending capital of the previous year.
Select one:false
Select one:false
Operating activities may be presented using either the direct method or indirect method.
Select one:true
Select one:false
The acquisition and disposal of long-term assets, including investments not considered cash equivalents
are parts of an investing activities.
Select one:true
Select one:false
Select one:false
Select one:true
If the beginning capital of Mrs. Castro is P200,000 and she made an additional investment during the
year of P100,000 with a net profit of P52,000, how much is the ending capital?
Select one:P352,000
If additional investment of the owner is P650,000 and payment of long-term loan to the bank is
P700,000, how much is the net cash increase or decrease from financing activities?
Select one:true
Select one:true
Beginning inventory is P50,000, net cost of purchases is P125,000, and ending inventory is P35,000.
Compute for the cost of goods sold.
Select one:P140,000
Withdrawals or drawings are resources of the firm which were taken by the owner for personal use.
Select one:true
Select one:false
Operating expenses and operating income or operating loss are items which can be found in an income
statement prepared in a multi-step approach.
Select one:false
Losses are outflows that result from the main activity of the business.
Select one:false
Investments made by the owner may represent the original investment made at the start of business,
and any additional investments thereafter.
Select one:true
Account form is more commonly used form of an SFP.
Select one:true
It is a voluntary association of at least 15 persons having a common bond of interest for the purpose of
generating capital from among themselves through a systematic and continuous savings program in
order to grant loans to each other at reasonable rates of interest.
The following are cash flow transactions under the direct method except
In the statement of changes in equity of a sole proprietor, this is deducted from the beginning capital to
arrive at the ending capital
Select one:withdrawal
This occurs whenever the enterprise purchased goods or received services on account issuing a
promissory note to settle the account in a specified future date.
Branch of accounting solely for government purposes such as collecting of taxes, computing of national
income, fixing the gross national product target, ascertaining the balance of payments position, etc..
Select one:true
Select one:true
Select one:false
Noncurrent assets are assets that are expected to be used within 12 months.
Select one:false
Select one:false
Asset is equal to Liability plus Capital. Liability is equal to Asset minus Capital.
A Statement of Financial Position is a formal statement presenting the three accounting elements which
are?
Select one:false
A form of business organization which has unlimited liability for any debt of the business which may
extend up to the owner's personal properties.
Select one:false
Select one:Periodicity
AICPA means
A business organization where two or more persons join together to contribute money, property or
industry for purposes of dividing the profits (or loss) among themselves.
Select one:Partnership
Which of the following will cause owner's equity to increase?
Select one:Revenue
What is the effect on accounting equation of Triple A when it records the transaction as a debit to Rent
Expense for P8,000 and a credit to Accounts Payable for P8,000?Owner's (or Stockholders')
When the owner makes withdrawal from the business for personal use, only the asset decreases.
Select one:false
Select one:true
If revenue increases and cost of goods sold remains constant, gross profit also increases.
Select one:trueThe financial statement that reports the assets, liabilities, and stockholders' (owner's)
equity at a specific date is the __________.
Select one:true
Cash, Accounts receivable and Office supplies are examples of current assets.
Select one:true
Increases in the assets are recorded on the right side of the account.
Select one:false
Select one:false
Select one:true
Debit entries with a larger number would always possess a debit balance.
Select one:true
Manufacturing business changes the basic inputs into products that are sold to individual customers.
Select one:true
Select one:false
Select one:true
Wages are considered expenses.
Select one:true
A promissory note issued by the customer is an evidence of the notes receivable account.
Select one:true
Select one:true
Examples of this type of business are laundry shops, salons, spas, dress shops, barber shops, appliance
repair shops, vulcanizing shops, computer/internet shops, printing and photocopying.
Select one:false
Select one:true
Select one:false
Losses from trading investments of a law firm are not considered expenses.
Select one:true
Accounting is the system of measuring business activities of financial character.
Select one:true
Any twelve-month period starting from any month other than 01 January
Select one:true
As compared to the corporation, single proprietorship is easier to form because of its simplicity in
operation.
Select one:true
This principle has two aspects, the quantifiability and stability of peso.
Refers to the outflows of resources usually paid in cash or incurred on credit resulting from the main
operating activities of the business.
Select one:Expenses
Select one:false
Rent Expense, Wages Expense and Utilities Expense are nominal accounts.
Select one:true
The accounts in the report form of SFP are arranged in a single column wherein assets are listed first,
followed by the liabilities and owner's equity..
Select one:true
Select one:false
Select one:false
What form of the SFP wherein the assets are listed on the left side and the liabilities and equity are on
the right side, and the two sides must equal?
Meaning of GAAP
Select one:true
Losses are outflows that result from the main activity of the business.
Select one:false
Select one:false
Select one:true
In this concept, accounts assume that the business will continue operating at a foreseeable future.
Select one:true
It is the difference arrived at after deducting withdrawals from the sum of the beginning capital,
additional investments, and profit.
The following are parts of the heading of the Statement of Changes in Equity except:
These are resources of the firm which were taken by the owner for personal use.
Select one:Withdrawals
It represents the residual claim of the owner on the total resources or assets of the firm after deducting
the claims of creditors.
Select one:service businessIt is the usual account title used for corporations.
Select one:5
Income statement for merchandising businesses usually have how many sections?
Select one:7
These are added to the capital beginning to arrive at the total investments used during the year.
Select one:investment
Select one:Owner's investment and the earned profit less any withdrawals made during a given period.
These are deducted in the purchase price either because of returns or reductions due to defects or
damages of goods purchased.
It is the total or gross purchases less any purchase discounts and purchase returns and allowances.
Refers to total or gross sales less any sales discounts, and sales returns and allowances.
It is the difference arrived at after deducting withdrawals from the sum of the beginning capital,
additional investments, and profit.
Select one:7
This could be deducted to the beginning capital and additional investments done during the year.
It is the total or gross purchases less any purchase discounts and purchase returns and allowances.
These are reductions in the total sales price given to the customer if the account will be paid within a
short period of time.
Operating expenses and operating income or operating loss are items which can be found in an income
statement prepared in a multi-step approach.
Select one:False
A: False
Merchandising business are charging fees for rendered services.
A: False
A: True
A: False
A: False
Cash flows are categorized into three types; these activities does not determine
the purpose for which the cash has been used.
A: True
A: True
Manufacturing business converts raw materials to finished goods.
Answer: True
Among all the activities, only financing activities have different ways of being
presented.
A: True
A: False
If the beginning capital of Mrs. Castro is P200,000 and she made an additional
investment during the year of P100,000 with a net profit of P52,000, how much
is the ending capital?
A: P352,000
A: False
The cash in a financing activity mostly involve current assets or income and
expense accounts.
A: True
A: True
SFP is an acronym for Statement of Financial Position, which is also known as the
Balance Sheet.
A: True
Answer: False
The firm can create as many capital accounts as there are owners in a
corporation.
Answer: True
The following are cash flow transactions under the direct method except
A: True
A: False
The following are examples of non-current assets except
~Property, plant and equipment.
A: Accounts Receivable
Net sales is P450,000, sales discounts is P35,000, and sales returns and
allowances is P15,000. Compute for the gross sales.
-mikedanieladaure