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Actg101 101alongtestmidtermforstudentsrtf PDF Free
Actg101 101alongtestmidtermforstudentsrtf PDF Free
Multiple Choice
Identify the choice that best completes the statement or answers the question.
____ 1. Statement 1: The chart of accounts for a merchandising entity differs from that of a service entity
Statement 2: The difference between revenues from sales and cost of sales is operating income
a. Both statements are true c. Statement 1 only is true
b. Both Statements are false d. Statement 2 only is true
____ 2. Statement 1: Discounts offered to the buyer to encourage early payment are trade discounts.
Statement 2: Cash discounts are called purchases discounts from the buyer’s viewpoint.
a. Both statements are true c. Statement 1 only is true
b. Both Statements are false d. Statement 2 only is true
____ 3. Statement 1: The purchase of equipment not for resale should be debited to the purchases account.
Statement 2: If the seller is to shoulder the cost of delivery, the term is stated as F.O.B. Destination.
a. Both statements are true c. Statement 1 only is true
b. Both Statements are false d. Statement 2 only is true
____ 4. Statement 1: Two main systems for accounting for merchandise are periodic and perpetual
Statement 2: There is no need for a physical inventory count in the perpetual inventory system
a. Both statements are true c. Statement 1 only is true
b. Both Statements are false d. Statement 2 only is true
____ 5. Statement 1: A physical inventory is usually taken at the end of the accounting period
Statement 2: Under the period inventory system, purchases of merchandise are not recorded int eh
Merchandise Inventory account
a. Both statements are true c. Statement 1 only is true
b. Both Statements are false d. Statement 2 only is true
____ 6. Statement 1: Sales returns and allowances is described as a contra-revenue account
Statement 2: The income statement of an entity that provides services only will not have cost of goods sold
a. Both statements are true c. Statement 1 only is true
b. Both Statements are false d. Statement 2 only is true
____ 7. Statement 1: Transportation out is included in the cost of goods sold calculation
Statement 2: Terms 2/10, n/30 is an example of a trade discount
a. Both statements are true c. Statement 1 only is true
b. Both Statements are false d. Statement 2 only is true
____ 8. Statement 1: Ending merchandise inventory is included in the calculation of cost of goods available for sale
Statement 2: The Merchandise Inventory account is not affected when a sales allowance is granted
a. Both statements are true c. Statement 1 only is true
b. Both Statements are false d. Statement 2 only is true
____ 9. Statement 1: The term freight prepaid or collect will dictate who shoulders the transportation costs
Statement 2: The ending inventory of one period is the beginning inventory of the next
a. Both statements are true c. Statement 1 only is true
b. Both Statements are false d. Statement 2 only is true
____ 10. Statement 1: If Input Tax is higher, difference should be debited as an asset called Deferred Tax which could
be applied against other future output taxes or other forms of tax liability.
Statement 2: If Output Tax is greater than Input Tax, there is a tax liability to the government
a. Both statements are true c. Statement 1 only is true
b. Both Statements are false d. Statement 2 only is true
____ 11. Statement 1: Input Tax is a tax imposed on Sales
Statement 2: Output tax is a tax imposed on Purchases
a. Both statements are true c. Statement 1 only is true
b. Both Statements are false d. Statement 2 only is true
In addition, beginning merchandise inventory was P55,000 and ending merchandise inventory was P35,000.
____ 12. If Sales were P750,000, Net sales for the period were
a. P755,000 c. 735,000
b. P725,000 d. 775,000
____ 13. If purchases were P170,000, Net purchases for the period were:
a. P150,000 c. P210,000
b. P180,000 d. P430,000
____ 14. If Sales is P750,000 and Purchases is P170,000,what is Cost of Goods Sold for the period?
a. P525,000 c. P250,000
b. P450,000 d. P175,000
____ 15. If Sales is P750,000 and Purchases is P170,000,what is Profit for the period?
a. P235,000 c. P200,000
b. P160,000 d. P175,000
____ 16. If beginning and ending merchandise inventories were ignored in computing profit, then profit would be?
a. overstated by P20,000 c. understated by P35,000
b. understated by P55,000 d. understated by P20,000
____ 17. The entry to record a sale of P7,500 with terms 2/10, n/30 would include a
a. credit to Accounts Receivable for P7,500 c. debit to Sales Discounts for P150
b. credit to Sales for P7,500 d. debit to Sales for P7,350
____ 18. The collection of P4,000 account within the 2% discount period would result in a
a. credit to Accounts Receivable of P3,920 c. debit to Accounts Receivable for P3,920
b. credti to Cash for P3,920 d. debit to Sales Discounts for P80
____ 19. The collection of a P5,000 account beyond the 2% discount period would result in a
a. credit to Accounts Receivable for P5,000 c. debit to Cash for P4,900
b. credit to Cash for P5,000 d. debit to Sales Discount for P100
____ 20. Under a periodic inventory system, the entry to record a purchase of P60,000, with terms 2/10, n/30 would
include a
a. credit to Accounts Payable for P60,000 c. debit to Accounts Payable for P58,800
b. credit to Purchases for P60,000 d. debit to Purchases Discounts for P1,200
____ 21. Who should pay for transportation cost if term is FOB Shipping Point
a. Buyer b. Seller
____ 22. Who pays for transportation cost if term is freight prepaid
a. Buyer b. Seller
A VAT registered person purchased an article from another VAT registered person for P134,400. He sells the
same article for P224,000.
Problem
31. The partial income statements of two different companies are as follows:
1 2
Net Sales a d
Merchandise Inventory, 1/1/2015 b 50,000
Net Cost of Purchases 80,000 e
Good Available for Sale 110,000 160,000
Merch. Inventory, 1/31/2015 40,000 f
Cost of Goods Sold c 140,000
Gross Profit 50,000 40,000
32. The Ledger accounts of the Christine Sousa Bags for the year ended Dec 31, 2015 are as follows:
Accum. Depreciation - Office Bldg 100,000 Notes Payable due in 2 years 200,000
Accum. Depreciation - Office Eqpt 150,000 Office Building 1,610,000
Accounts Receivable 136,000 Office Equipment 570,000
Accounts Payable 74,000 Office Supplies 42,000
Cash 72,000 Prepaid Advertising 75,000
Transportation In 72,000 Purchases Discounts 172,000
Insurance Expense 25,000 Purchases Rets & Allow 133,000
Interest Expense 208,000 Purchases 2,643,000
Sousa, Capital 1,510,000 Salaries Expense 862,000
Sousa, Withdrawals 200,000 Sales Discounts 161,000
Land 400,000 Sales Returns and Allow. 187,000
Merchandise Inventory, beginning 598,000 Sales 460,000
Mortgage Payable 1,100,000 Travel Expense 188,000
MULTIPLE CHOICE
1. ANS: C PTS: 1
2. ANS: D PTS: 1
3. ANS: D PTS: 1
4. ANS: C PTS: 1
5. ANS: A PTS: 1
6. ANS: A PTS: 1
7. ANS: B PTS: 1
8. ANS: B PTS: 1
9. ANS: A PTS: 1
10. ANS: A PTS: 1
11. ANS: B PTS: 1
12. ANS: B
Sales = P750,000 - 15,000 - 10,000
PTS: 1
13. ANS: B
P170,000 + 30,000 - 20,000 = P180,000
PTS: 1
14. ANS: A
P725,000 - 180,000 + 35,000 - 55,000 = P525,000
PTS: 1
15. ANS: D
P725,000 - 180,000 + 35,000 - 55,000 = P525,000 - 75,000 - 275,000 = P175,000
PTS: 1
16. ANS: A PTS: 1
17. ANS: C PTS: 1
18. ANS: D PTS: 1
19. ANS: A PTS: 1
20. ANS: A PTS: 1
21. ANS: A PTS: 1
22. ANS: B PTS: 1
23. ANS: B
P224,000/1.12 = 200,000 x 12% = P24,000
PTS: 1
24. ANS: A
P134,400/1.12 = 120,000 x 12% = P14,400
PTS: 1
25. ANS: D
P24,000 - P14,400 = P9,600
PTS: 1
26. ANS: B PTS: 1
27. ANS: A PTS: 1
28. ANS: A PTS: 1
29. ANS: B PTS: 1
30. ANS: A PTS: 1
PROBLEM
31. ANS:
b= P110,000 - 80,000 = P30,000
c= P110,000 - 40,000 = P70,000
a= P50,000 + 70,000 = P120,000
f= P160,000 - P140,000 = P20,000
e= P160,000 - 50,000 = P110,000
d= P140,000 + 40,000 = P180,000
h= P230,000 - 30,000 = P200,00
i = P250,00 - 230,000 = P20,000
g= P200,000 - 70,000 = P130,000
l= P290,000 - 160,000 = P130,000
k= P130,000 + 70,000 = P200,000
j= 200,000 - 160,000 = P40,000
1 2 3 4
Net Sales 120,000.00 180,000.00 250,000.00 290,000.00
Merchandise Inventory, 1/1/2015 30,000.00 50,000.00 70,000.00 40,000.00
Net Cost of Purchases 80,000.00 110,000.00 130,000.00 160,000.00
Good Available for Sale 110,000.00 160,000.00 200,000.00 200,000.00
Merch. Inventory, 1/31/2015 40,000.00 20,000.00 30,000.00 70,000.00
Cost of Goods Sold 70,000.00 140,000.00 230,000.00 130,000.00
PTS: 1
32. ANS:
DR CR
Cash 72,000
Accounts Receivable 136,000
Merchandise Inventory 598,000
Prepaid Advertising 75,000
Office Supplies 42,000
Land 400,000
Office Building 1,600,000
Accum. Depreciation - Office Bldg 100,000
Office Equipment 570,000
Accum. Depreciation - Office Eqpt 150,000
Accounts Payable 74,000
Mortgage Payable 1,100,000
Notes Payable due in 2 years 200,000
Sousa, Capital 1,510,000
Sousa, Withdrawals 200,000
Sales 4,600,000
Sales Discounts 161,000
Sales Returns and Allow. 187,000
Purchases 2,643,000
Transportation In 72,000
Purchases Discounts 172,000
Purchases Rets & Allow 133,000
Insurance Expense 25,000
Interest Expense 208,000
Salaries Expense 862,000
Travel Expense 188,000
8,039,000 8,039,000
PTS: 1