Republic of the Philippines

Department of Education
REGION XII
DIVISION OF GENERAL SANTOS CITY

FUNDAMENTALS OF ACCOUNTING 2
First Quarter Examination
Name:_________________________________ Score: ________________________
Grade & Section: ________________________

TEST I: Multiple Choice 10. It is a statement to be used in merchandising

Directions: Read each question carefully. Encircle business under” periodic inventory system”.
the letter of the correct answer. a. Periodic Statement b. Single-step Form
c. Multiple-step Form d. Balance sheet
1. These are financial obligations of the business to
its creditors. They have the claim over the assets of 11. An entity whose assets, liabilities, income and
the business. expenses are centered or owned by itself being a
a. Current Liabilities c. Accounts Payable legally separate entity from its owners. Owners are
b. Non-current Liabilities d. Liabilities called shareholders or stockholders of the company
a. Single c. Corporation
2. These are long-lived assets or all other assets that b. Partnership d. Joint Venture
do not qualify as current assets
a. Current Liabilities c. Accounts Payable 12. An entity whose assets, liabilities, income and
b. Non-current Liabilities d. Liabilities expenses are centered or owned by two or more
persons.
3. These are all resources controlled by the business a. Single c. Corporation
as a result of past transactions and events in which b. Partnership d. Joint Venture
economic benefits are derived.
a. Assets c. Non- current Assets 13. An entity whose assets, liabilities, income and
b. Current Assets d. Income expenses are centered or owned by only one person.
a. Single c. Corporation
4. This statement includes the amounts of the b. Partnership d. Joint Venture
company’s total assets, liabilities, and owner’s equity
which in totality provides the condition of the 14. It is the means the corporation distributes the
company on a specific date. income to the shareholders based on the shares that
a. Income Statement they have.
b. Balance Sheet a. Dividends c. Initial Investment
c. Statement of Owner’s Equity b. Net Income/Loss d. Additional Investment
d. None of the these
15. The very first investment of the owner to the
5. It is the residual interest in assets of the business company in order to start the business operations.
after deducting all its liabilities. Investments can be made in the form of cash, or
a. Owner’s Equity c. Liabilities other assets whether current assets any non-current
b. Assets d. Income assets.
a. Dividends c. Initial Investment
6. Refers to the 3rd and the last element that will b. Net Income/Loss d. Additional Investment
completely form part of the Statement of
Comprehensive Income. 16. Increases to owner’s equity by adding the newer
a. Operating Expenses c. Liabilities investments made by the owner to the business.
b. Operating Income d. Capital a. Dividends c. Initial Investment
b. Net Income/Loss d. Additional Investment
7. Refers to cost of manufacturing or selling the
merchandise of goods or products. 17. It is an activities of an entity related to sales and
a. Sales c. Selling Price purchase of long- term assets and other investment.
b. Cost of Sales d. Capital a. Investing c. Cash Flow
b. Operating d. Financing
8. It e is a financial statement that shows the “results”
of operation of the business for a given period of 18. It is an entity related to their main revenue
time. generating activities of providing goods and services.
a. Cash Flow Statement a. Investing c. Cash Flow
b. Balance Sheet b. Operating d. Financing
c. Statement of Owner’s Equity
19. It is activities of an entity related to changes in
d. Statement of Comprehensive Income
non-current liabilities and owner’s equity.
9. Refers to proceeds from the sale of merchandise. a. Investing c. Cash Flow
a. Revenue c. Cash b. Operating d. Financing
b. Sales d. Accounts Receivable

Address: Santol Street, General Santos City

Telephone No: 083-552-9986
Email: jaypee.callaga@deped.gov.ph
 Republic of the Philippines
Department of Education
REGION XII
DIVISION OF GENERAL SANTOS CITY

20. A statement generally present the a. liquidity c. profitability

generating/sources and utilization/used of a b. solvency d. none of these
business’s cash and cash equivalent for the specified
32. It is a common-size statement analysis or
period of time.
proportional analysis of a financial statement.
a. Income Statement
a. vertical analysis c. horizontal analysis
b. Balance Sheet
b. diagonal analysis d. ratio analysis
c. Cash Flow Statement
d. Financial Statement 33. It is the comparison of two or more financial
statements over the time.
21. These are tools in the decision making process.
a. vertical analysis c. horizontal analysis
It contains financial information of how the business
b. diagonal analysis d. ratio analysis
runs throughout its life.
34. It is a method of financial evaluation whereby the
a. Income Statement c. Cash Flow Statement
relationship between the items found in the
b. Balance Sheet d. Financial Statement
Statement of Financial Position, Statement of
22. It is the company’s ability to generate higher Comprehensive Income or both are being
profit. established.
a. Liquidity c. Solvency a. Liquidity Ratio c. Solvency Ratio
b. Profitability d. Comparability b. Ratio Analysis d. Profitability Ratio
23. It is the company’s capability to pay its long-term 35. It measures the ability of the business to pay its
obligations as they fall due. current obligations arising from operations.
a. Liquidity c. Solvency a. Liquidity Ratio c. Solvency Ratio
b. Profitability d. Comparability b. Ratio Analysis d. Current Ratio
24. It is the company’s ability to pay its short-term 36. It is a stricter test or measurement of the liability
obligations. of the business to remove its non-cash current
a. Liquidity c. Solvency assets such as inventory and prepaid expenses in
b. Profitability d. Comparability payment of its current obligations.
a. Liquidity Ratio c. Solvency Ratio
25. When accounting standards and policies are
b. Acid Test or Quick Ratio d. Profitability Ratio
applied and consistently from one period to another.
a. Liquidity c. Solvency 37. It indicates the number of times the Accounts
b. Profitability d. Comparability Receivable were collected from its customers.
a. Accounts Receivable Turn over
26. The company’s financial statements are being
b. Ratio Analysis
compared within the industry.
c. Solvency Ratio
a. Industry Standard c. Intracomparability
d. Profitability Ratio
b. Comparability Standard d. Intercomparability
38. This ratio assess an entity's ability to pay long
27. The company’s financial statements are being
term obligations as they become due.
compared against a direct competitor.
a. Liquidity Ratio c. Solvency Ratio
a. Industry Standard c. Intracomparability
b. Ratio Analysis d. Profitability Ratio
b. Comparability Standard d. Intercomparability
39. These ratios are used to select right investment
28. The company’s financial statements for the
opportunities.
current period are being compared with the financial
a. Liquidity Ratio c. Solvency Ratio
statements of the past periods.
b. Ratio Analysis d. Profitability Ratio
a. Industry Standard c. Intracomparability
b. Comparability Standard d. Intercomparability 40. This ratio indicates how much of the company’s
assets were given to creditors.
29. It is the capability of a company to pay its current
a. Liquidity Ratio c. Solvency Ratio
obligations.
b. Debt to Total Assets Ratio d. Profitability Ratio
a. liquidity c. profitability
b. solvency d. none of these
30. The following ratios are used in measuring
liquidity position of a company, except
a. quick ratio c. current ratio
b. acid-test ratio d. gross profit ratio
31. It is the capability of a company to pay non-
current liabilities as they fall due.

Address: Santol Street, General Santos City

Telephone No: 083-552-9986
Email: jaypee.callaga@deped.gov.ph
 Republic of the Philippines
Department of Education
REGION XII
DIVISION OF GENERAL SANTOS CITY

TEST II. Solving

A.
Current Assets Current Liabilities
Year A P 100,000 Year A P 50,000
Year B 130,000 Year B 20,000

1. The amount of increase (decrease) in the Current Assets is _________________.

2. The percent of increase (decrease) in the Current Assets is _________________.
3. The amount of increase (decrease) in the Current Liabilities is _____________.
4. The percent of increase (decrease) in the Current Liabilities is ______________.
5. The current ratio for Year A is __________. For year B is ___________________.

B. Make a vertical analysis.

Sales P 73,000 __________
Less: Sales Returns & Allowances 3,000 __________
Net Sales P 70,000 __________
Less: Cost of Sales 55,000 __________
Gross Profit P 15,000 __________
Less: Operating Expense 12,000 __________
Profit P 3,000 __________

C. Inventories Sales Accounts Receivable

Beginning P 80,000 Credit Sales P 220,000 Beginning P 50,000
Ending 60,000 Cost of Sales 210,000 Ending 90,000

Assume 365 days in a year.

1. Inventory Turn-over _____________________
2. Average age of Inventory _____________________
3. Receivable Turn-over _____________________
4. Average Collection Period _____________________

Address: Santol Street, General Santos City

Telephone No: 083-552-9986
Email: jaypee.callaga@deped.gov.ph