Which of the following will not be reported in the statement of changes in equity?

Select one:
-Proceeds from the sale of the building
Temporary accounts would include:

Select one:

a.
Capital, drawing and income

b.
Drawing, income and expenses

c.
Capital, drawing and expenses
An item NOT generally classified as a current asset is:
-Patent
The employees of Neat Clothes work Monday through Friday. Every other Friday the company
issues payroll checks totaling P32,000. The current pay period ends on Friday, July 3. Neat
Clothes is now preparing quarterly financial statements for the three months ended June 30.
What is the adjusting entry to record accrued salaries at the end of June?
-Salaries expense22,400
Salaries payable22,400
______represent those economic resources owned and/or controlled by the enterprise, and which
are expected to have future usefulness to the business.
-Assets
The journal is often referred to an the book of original entry because

Select one:
-The business transaction is first recorded in this book
Which of the following would NOT be a current asset?

Select one:
-Land
On December 31, 2015, Typical Fashions had balances in its Accounts receivable and Allowance
for uncollectible accounts of P48,400 and P940, respectively. During 2016, Typical Fashions
wrote off P820 in Accounts receivable and determined that there should be an Allowance for
uncollectible accounts of P1,140 at December 31, 2015. Bad debt expense for 2016 would be:
-P1,020.

Which of the following is NOT considered revenue?

Select one:
-Deferred Revenue
Which of the following is the reason why adjusting entries are prepared?
-Matching concept

Which of the following items may appear in a balance sheet?

Select one:
-Capital, drawing, and net income
The liabilities that are payable in more than a year and are not be liquidated from current assets.
-Fixed liabilities
Amount generated from sales in a business is called:

Select one:
-Income
A journal entry must have the following parts, except

Select one:
-Signs of the monetary unit, or peso signs

Probable future sacrifices of economic benefits arising from past transactions are known as:

-Liabilities
Which of the following items may appear in a balance sheet?

-Capital, drawing, and net income

All of the following are cash and cash equivalents, EXCEPT

-Money market replacement

A business can use a general journal without using special journals, or vice versa.

-False

The period covered by the prepared financial statements:

-Cannot be longer than 12 months.

Which of the following accounts is a non-current liability

-Bank loan

A journal entry in which two or more account is debited or credited is referred as

-Compound entry
If the tenant who is occupying a space owned by the enterprise has not paid the rent for May,
the enterprise would have ________ as of May 31?

-Accrued Rent income

Retained earnings will change over time because of several factors. Which of the following
factors would explain an increase in retained earnings?

-Net income

_____these represents the present economic obligations of an entity that would require some
form of future settlement.

-Liabilities
The net income of a reporting period is equal to:

-Income - expenses

________ It is also often called a book of original entry.

-Journal
Which of the following accounts is a non-current liability

Select one:
-Bank loan
Which of the following is not true of a liability of the business?

- The obligation involves a responsibility to settle with a definite or known party.

Which of the following statement is incorrect?

-The settlement of a liability requires cash payment.

Permanent accounts would include:

-Liability

General journals is a book of _____entities.

-Original

Which of the following is noncurrent liabilities?

-Bonds payable

A process that involves transferring of journal entries to the ledger accounts in order to bring
together the effect of the transactions to the individual accounts of the company.

-Posting

An item NOT generally classified as a current liability is:

-Bonds payable

The process of recording transactions in different journals is called

-Journalizing

The residual equity over the assets of a business enterprise is also called.

Select one:
-All of the answers correct
Owner's interest
What is a firm's payment to a supplier for merchandise inventory recorded?

-Sales journal

Cash Receipts Journal

-Purchases Journal

Which of the following statements is incorrect?

-An asset does not always have physical attributes

The debts which are to be repaid within a short period (year or less) are known as

-Current liabilities

A transaction is first recorded in a record called

-Journal

Which of the following statements is false?

-Owner's equity can be bigger than the total assets.

The accounting elements in the Balance sheet include:

-Assets, liabilities and equity

The process of recording is done

-Frequently during the accounting period

The elements of Accounting equation are

-
I, II and IV

II, III and IV

I, II and IV
d.
I. Assets
II. Liabilities
III. Trial balance
IV. Capital
The Cash Receipts Journal is used in journalizing
-All cash received (including cash sales)
Books of accounts include:

-Journals and ledgers

Which of the following is not a characteristics of an economic resource so that it could be

classified as an asset of the business?

-The economic resource has physical existence.

Arise from those ordinary activities that are directly related to the normal operations of the
business.

-Revenues

Which of the following is not included in other revenues and expenses?

-Interest expenses

Rent expense

The long-term assets that have no physical existence but are right that have value is known as:

-Intangible assets

Which of the following transactions would increase Cash and cash equivalents and increase
Non-current liabilities?

-Bank loan

The account of a supplier would be found in:

Select one:
-Purchase ledger

________ are the finance records, ledgers, and journals that compose the company's accounts.

-Book of accounts

The cost of chairs and tables of the Manager's office will be:

Select one:
-A capital expenditure
Posting references indicate:

-Both the sources and destinations of the postings.

It is a good practice to post all the debits of all the journal entries of the month before posting
all the credits of the same period.

-False

All of these are done in the pre-recording phase of the accounting cycle, EXCEPT

-Journalizing

Which of the following is true about the journal?

-Entries are arranged in chronological order.

Only transactions involving cash can be journalized.

-False

Which of the following is NOT a step in the summarizing phase of the accounting process?

-Analyzing business transactions

One of the following business organizations would ordinarily be classified as a service firm.
Which is it?

-Massage parlor
All the expense related to the revenue can be identified and measured.

The marketability and the market price of the products are assured.

This is the process of transferring amounts from the journals to the ledgers.

-Posting

A business can use a general ledger without using subsidiary ledgers, or vice versa.

-False

A loan can be described as a short-term loan of the period is:

-Less than 1 year

The process of incorporating an accounting element or item in the financial statements is called:

-Recognition

On September 1, 2003, Time Magazine sold 600 one-year subscriptions for P81 each. The total
amount received was credited to Unearned subscriptions revenue. What would be the required
adjusting entry at December 31, 2015?
-Unearned subscriptions revenue16,200
Subscriptions revenue16,200

Which of the following is not an acceptable basis of recognizing expenses?

-Critical measurement

Pink Insurance collected premiums oP18,000,000 from its customers during the current year. The
adjusted balance in the Unearned premiums account increased from P6 million to P8 million
dollars during the year. What was Pink's revenues from earned insurance premiums for the
current year?

-P16,000,000.

The adjusting entry required when amounts previously recorded as unearned revenues are
earned includes:

-A debit to a liability

This is referred to as the side of an account where increases in the balance of such account are
recorded.

-Trial balance

It is usually used in connection with activities and events that result to the inflow of assets
and/or outflow of liabilities.

-Income

A transaction that involves an increase in an asset and a decrease in a liability would not affect
the equality of the fundamental accounting equation.

-False

Which of the following lists the steps of the accounting process in the correct order??

-Analyzing, journalizing, posting, preparing a trial a balance

Which of the following best describes a debit?

-A change in the balance of an account

An increase in the balance of an account

A journal entry in which two or more account is debited or credited is referred as

-Compound entry
Blend Foods purchased a two-year fire and extended coverage insurance policy on August 1,
2015, and charged the P4,200 premium to Insurance expense. At its December 31, 2015, year-
end, Bland Foods would record which of the following adjusting entries?

-Prepaid insurance3,325
Insurance expense3,325

Which of the following is not included in other revenues and expenses?

-Interest expenses

Rent income

Permanent accounts would include:

-Assets, liabilities and equity

At the end of an accounting period, adjusting journal entries are made to:

-Bring the accounts up to date

If the trial balance does not balance, what would the accountant least likely do?

-Check for unrecorded transactions.

This is the process of entering information in the journals which occurs immediately after the
analysis phase of the accounting cycle.

-Journalizing

Which of the following would not be used as an adjusting entry?

-Cash
Unearned revenue

Which trial balance lists all the business accounts before year-end adjusting journal entries are
made.

-Unadjusted trial balance

Which of the following expenses is recognized under the direct association with revenue
criterion?

-Salesmen's commission

The business carried out work for a customer and was paid in cash, is the entry to the revenue
account a debit or a credit?

-Credit

All entries must be supported by a source document.

-True

A business transaction can affect two accounts on the same side of the accounting equation and
still leave the equation in balance.

-True

Insurance for the next year was paid in advance in cash, is the double entry bookkeeping entry
to the cash account a debit or a credit?

-Credit

The top of the T account is used for account titles. Credits are entered on the left side of the T;
debits, on the right.

-False

Probable future economic benefits.

-Assets

Generally, revenues is recognized:

-At the point of delivery of the goods to the customers.

Rent is prepaid for an office for the business, is the accounting entry to the to the prepaid rent
account a debit or a credit?

-Debit

Work was completed and invoiced to a customer for payment within 30 days, is the posting to
accounts receivable a debit or a credit?

-Debit

Which of the following accounts is not an asset?

-Unearned commission

Which of the following accounts is not liability?

-Prepaid insurance

The income statement shows which of the following?

-Income and expenses

Inventory and accounts receivable are classified in the balance sheet as?

-Current assets
Office equipment is purchased on account from a supplier, is the double entry to the equipment
account a debit or a credit?

-Debit

The owner of the business invest P100,000 is the double-entry posting to the capital account a
debit or a credit?

-Credit

Which of the following is a current asset?

-Unused supplies

The accounting cycle begins by recording _____________ in the form of journal entries.

-Business Transactions

The difference between the debit and credit amounts in an account is the account balance.

-True

Debit and credit rules for accounts on one side of the accounting equation are mirror images of
those on the other side.

-True

Which of the following is an asset account?

-Prepaid insurance

An asset account appears on the right side of the accounting equation and is also increased on
the right side of its T account.

-False

This refers to probable future sacrifices of economic benefits due to present obligations.

-Liabilities

The purchase of a new delivery truck to be used in the business is an example of which of the
following?

-Investing

A chart of accounts is limited to 50 accounts.

-False

Which of the following is never debited when making closing entries?

-Expenses
The difference between the total current assets and the total current liabilities.

-Net working capital

The term operating, financing and investing are used to categorize what type of item?

-Cash flow

Refers to an increase in the balance in Accounts payable.

-Supplemental

Equity is shown in which financial statement?

-Balance sheet

 Resources that are expected to be converted to cash, sold, or consumed in the normal course of
operations of the business or in twelve months.

-Current assets

A credit to an account always increases it: a debit to an account always deceases it.

-False

Which of the following transactions should be entered in the petty cash book.

-Travelling expenses

Under the general rule, revenue is recognized when:

-The earning process is complete or virtually complete.

Every transaction affects two or more accounts and is recorded by equal amounts of debits and
credits.

-True

An average length of time needed for cash to become goods, services, and then back to cash.

Cash paid to a supplier for goods supplied by them on credit terms, is the entry to accounts
payable a debit or credit entry?

-Debit

In which journal are debit notes received from suppliers are entered?

-Purchases

Which of the following account titles will not appear in the balance sheet of a single
proprietorship?
-Share capital

Supplies are purchased for cash, is the double entry posting to the supplies on hand account a
debit or credit entry?

-Debit

If beginning inventory is P60,000, cost of goods purchased is P380,000, and ending inventory is
P50,000, cost of goods sold is:

-P390,000

The purchase of a new delivery truck to be used in the business is an example of which of the
following?

-Investing

A supporting document prepared by a seller that is used as an evidence of a downward

adjustment in the amount that is due from a customer is known as:

-Credit memorandum

In determining cost of goods sold:

-Freight-in is added to net purchases.

Which of the following would be classified in a statement of earnings as a non-operating

activity?

-Selling expense
Interest expense

The sales discount is based on:

-Invoice price less return and allowances

If the term of the sale is F.O.B destination. goods that are in transit by the end of the year
belongs to the:

-Seller

A company with merchandise that has a high unit value would probably use a:

-Perpetual inventory system

Supplies are purchased for cash, is the double entry posting to the supplies on hand account a
debit or credit entry?

-Debit

Which of the following is the reason why adjusting entries are prepared?
-Matching concept

When credit terms of 1/10, n/30 are offered, the discount period is:

-10 days

Which of the following is NOT part of the cost of inventory purchased?

-Freight out

Sales returns:

-Refer to merchandise that customers return to the seller after the sale.

A form of discount granted by a retailer to encourage a customer to buy the goods is called:

-Trade discount

Which of the following is an asset account?

-Prepaid insurance

The difference between the debit and credit amounts in an account is the account balance.

-True

A closing entry would close any debit balance in:

- Sales discounts
Sales Returns and Allowances?

Which of the following accounts will normally appear in the ledger of a merchandising company
that uses a perpetual inventory system?

-Cost of goods sold

Debit and credit rules for accounts on one side of the accounting equation are mirror images of
those on the other side.

-True

Every transaction affects two or more accounts and is recorded by equal amounts of debits and
credits.

-True

Which of the following would appear on both a single-step and a multiple step statement of
earnings?

-Gross profit

The credit terms 2/10, n/30 are interpreted as:

-2% cash discount if the amount is paid within 10 days, with the balance due in 30 days.

Which of the following would have an effect on the operating expenses to sales ratio?

-A decrease in sales discount

Which is NOT a type of adjusting entry?

-Unearned revenues or Unearned expenses

A company has the following accounts balance: Sales P2,000,000; Sales Return and Allowances
P250,000; Sales Discounts P50,000; and Cost of Goods Sold P1,275,000. The gross profit rate is:

-25%

All entries must be supported by a source document.

-True

Which of the following transactions should be entered in the petty cash book.

-Travelling expenses

A supporting document prepared by a buyer that is used as an evidence of a downward

adjustment in the amount that is due to the seller is known as:

-Credit memorandum or Receiving report or Purchase order

Which of the following is a current asset?

-Unused supplies

Which of the following would be classified in a statement of earnings as an operating activity?

-Selling expense

To record the sale of merchandise which cost P34,000 for cash of P60,000, the following journal
entry(ies) are required:

-Debit cash P60,000; Credit Sales P60,000

Debit Cost of goods sold P34,000; Credit Inventory P34,000

Assume that sales are P450,000, sales discounts are P10,000, net earnings are P35,000, and cost
of goods sold is P320,000. Gross Profit and operating expenses are respectively:

-P120,000 and P85,000

Which of the following is NOT part of the inventory of the business?

-Goods that are ready for shipment to the customer.

Goods held for sale on behalf of Monte Company, a consignor.

Office equipment is purchased on account from a supplier, is the double entry to the equipment
account a debit or a credit?

-Debit

If an item has an invoice price of P12,500 and the seller had a gross profit of 25% of cost, what
was the cost of dales?

-P9,375

Which of the following appears on both a single-step and a multi-step income statement?

-Cost of goods sold

A customer purchased product that has a catalog price of P20,000. The term of the purchase
was: 10%, 15%, 1/10, n/15. How much would be the invoice price of the purchase?

-P20,000 x 90% x 85%

The steps in the accounting cycle for a merchandising company are the same as those a service
company except:

-An additional adjusting journal entry for inventory may be needed in a merchandising
company.

Which of these is not a Financial Statement?

-Cash book

The payment of a liability is recorded by a debit to the liability account and a credit to the
owner's capital account.

-False

A merchandising company:

-Earns net income by buying and selling merchandise.

Which cost method is not suited for use under the periodic system?

-Weighted average method or First-in, first-out method

If a retailer buys item at an acquisition cost of P200 and later sells it at a 25% mark-up, the
selling price of the item is:

-P250

Sales Returns and Allowances:

-All of the answers are correct