Module 6

EVALUATION

Problem 1: The ledger of BB Co. on November 30, 2020, includes these selected accounts before adjusting
entries are prepared:
Debit Credit
Prepaid Insurance P 3,800
Supplies 3,000
Equipment 25,000
Accumulated Depreciation – Equipment 5,000
Unearned Service Revenue 10,000
An analysis of the accounts shows the following:
1. Insurance expires at the rate of P200 per month.
2. Supplies on hand total P2,000.
3. The equipment depreciates P200 a month.
4. One-half of the unearned service revenue was recognized in March.
Requirement: Prepare the adjusting entries for the month of March.
Write your Journal Entries here: (20 points)

GENERAL JOURNAL Page No. ______

2020 Particulars F Debit Credit
Nov. 30 Insurance expenses P 200
Prepaid insurance P 200
To record insurance expense for the month
of November 2020
30 Supplies expense 1,000
Supplies 1,000
To record supplies used
30 Depreciation expense 200
Accum. Depreciation equipment for the month 200
of November 2020

30 Unearned service revenue 5,000

Service revenue 5,000
To record service
Income for November

II.True or False. Write C if the statement is true and X if it is false.

___X___1. Under the periodic inventory system, there is no need to conduct a physical count at the end of
the accounting period in order to compute for the cost of goods sold.
___C___2. Under the perpetual inventory system, a physical count is required at the end of the accounting
period in order to compute for the cost of goods sold.
___C___3. Under the perpetual inventory system, in every purchase of merchandise on account, the entry is
to debit merchandise inventory and credit accounts payable.
___C___4. Under the periodic inventory system, the entry to record the purchase of merchandise on account
is debit purchases and credit accounts payable.
___C___5. Merchandise inventory on hand at the beginning of the account period is called beginning
inventory.
 Module 3

III. Read each item carefully. Encircle the letter that corresponds to the correct answer.
1. Each of the following is a basic source of adjusting entries except:
a. Accrued expense
b. Prepaid expenses
c. Accrued revenues
d. Recognized revenues
2. Which of the following statements is incorrect concerning the adjusted trial balance?
a. The adjusted trial balance lists the account balances segregated by assets and liabilities.
b. The adjusted trial balance provides the primary basis for the preparation of financial statements.
c. The adjusted trial balance is prepared after the adjusting entries have been journalized and
posted.
d. An adjusted trial balance proves the equality of the total debit balances and the total credit
balances in the ledger after all adjustments are made.
3. The trial balance shows Supplies P0 and Supplies Expense P2,000. If P500 of supplies are on hand at
the end of the period, the adjusting entry is:
a. Debit Supplies Expense P500 and credit Supplies P500.
b. Debit Supplies P500 and credit Supplies Expense P500.
c. Debit Supplies P1,500 and credit Supplies Expense P1,500.
d. Debit Supplies Expense P1,500 and credit Supplies P1,500.
4. Love Co. computes depreciation on office equipment at P2,000 for the month of February. The
Adjusting entry to record this depreciation is:
a. Depreciation Expense 2,000
Accumulated Depreciation 2,000
b. Depreciation Expense 2,000
Equipment 2,000
c. Accumulated Depreciation 2,000
Depreciation Expense 2,000
d. Equipment Expense 2,000
Accumulated Depreciation 2,000

5. Vea Vunda earned a salary of P10,000 for the last week of September. She will be paid on October 1.
The adjusting entry for Vea’s employer at September 30 is:
a. Salaries and Wages Payable 10,000
Salaries and Wages Expense 10,000
b. Salaries and Wages Expense 10,000
Salaries and Wages Payable 10,000
c. Salaries and Wages Expense 10,000
Cash 10,000
d. Salaries and Wages Payable 10,000
Cash 10,000