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FUNDAMENTALS OF ACCOUNTANCY, BUSINESS AND MANAGEMENT II
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.
True
False
Account form is more commonly used form of an SFP.
True
False
Increase in assets is recorded as a Debit.
True
False
The following are examples of non-current assets except

~Property, plant and equipment.
Intangible asset
Long-term investment
Accounts Receivable
Owner's equity represents the right of the owner over the resources of
the firm.
True
False
We technically call recording as bookkeeping or journalizing because

we use the book we call _________________.
Worksheet
Trial Balance
General journal
General ledger
The financial statement that reports the revenues and expenses for a
period of time such as a year or a month is the ___________.
Statement of Cash Flow

Statement of Financial Position
Income Statement
Statement of Owner's Equity
This concept states that the activities of a business are recorded

separately from the activities of the stakeholders.
cost concept
reliability or objectivity principle
business entity concept
going concern concept
Accounting is based on the single-entry bookkeeping.
True
False
What type of accounts are Interest Receivable and Fees Receivable?
Asset
Revenue
Equity
Liability erroneous answer; they’re both ASSETS
The income statement summarizes the profitability of the business over

a specified period of time.
True
False
Income statement covers a period of time.
True
False
Wages are considered expenses.
True
False
CPA means Certified Public Accountant.
True
False
The difference between net sales and the cost of goods sold.
Net profit
Gross profit
Net loss
Operating income
The firm can create as many capital accounts as there are owners in a
corporation.
True
False
Manufacturing business converts raw materials to finished goods.
True
False
If Revenue is greater expenses, there is a Gain.
True
False
Type of business activities that generates profit from the conversion

of raw materials to finished products for sale.
Sole proprietorship
Service
Manufacturing
Merchandising
A sole proprietor's equity account is written as follows: name of

owner, capital.
True
False
It is the difference between net sales and the cost of goods sold.
Operating Expenses
Cost of Goods Available for Sale
Net Income
Gross Profit
The transactions falling under operating activities does not primarily
involve cash received from customers and paid to suppliers, lenders,
or employees.
True
False
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.
Merchandizing
Service business
Cooperative
Manufacturing
Ownership of a cooperative is divided into shares of stock.
True
False
ABC Store records the transaction by a debit to Accounts Receivable

for P1,000 and a credit to Service Revenues for P1,000. What is the
effect of this entry upon the accounting equation for ABC Store?
Asset Decrease, No Effect

Asset Increase, Equity Increase
Equity Decrease, Equity No Effect
Owner's (or Stockholders')
Liabilities Increase, Equity Increase
The T-account is the simplest form of account.
True
False
In this concept, accounts assume that the business will continue

operating at a foreseeable future.

cost concept
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.
Sole proprietorship
Cooperative
Partnership
Corporation
Going-concern is a concept where accountants assume that the business

will continue to operate for a foreseeable future.
True
False
Management accounting is also referred to as General Information

Financial Accounting.
True
False
Examples of real accounts are revenues, expenses, and drawing

accounts.
True
False
The owner invests trucksto be used in the business.

The following are known as Balance Sheet accounts except:
Liability
Income
Equity
Asset erroneous answer; INCOME is actually the correct one
The Income Statement is composed of the revenues and expenses.
True
False
Accrual basis of accounting recognizes income regardless of when cash
is received.
True
False
A debit account in excess of credits would possess a credit balance.
True
False
Owner's Equity is to sole proprietorship as Capital is to corporation.
True
False
Investing activities cannot be presented in direct or indirect method.
True
False
Credits always reduce account balances.
True
False
This is derived from the income statement and is also added to the
beginning capital and additional investments done during the year.
Net profit
withdrawal
None of the choices
Investment
When the owner makes withdrawal from the business for personal use,
only the asset decreases.
True
False
In this principle, it is assumed that the business owners or managers

are separate from the business enterprise.
Business entity principle
Going concern principle
Dual effect principle
matching principle
Mr. Robie paid his obligation to the supplier.
Equity Decrease, Liability Increase

Asset Increase, Equity Decrease
Asset Decrease, Liability Decrease
Asset Increase, Liability Increase
Single proprietorship is concerned with the manufacture of goods into

finished product.
True
False
Owner's equity usually consists of the owner's investment and the

earned profit less any withdrawals made during a given period.
True
False
Services businesses offer products.
True
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?
P248,000
P300,000
P352,000
P252,000
In the statement of changes in equity of a sole proprietor, this is

deducted from the beginning capital to arrive at the ending capital
Net profit
None of the choices
investment
withdrawal
A liability is a present obligation arising out of past events.
True
False
Cash basis accounting relies entirely on the payment and receipt of

cash.
True
False
Meaning of GAAP
Financial Character
General Accepted Accounting Principles
Partnership
Government Accounting
In cash basis accounting, income shall only be recognized when cash is

received, and expenses shall only be recorded when cash is paid.
True
False
An asset is a present obligation arising out of past events.
True
False
Withdrawals decrease equity.
True
False
Withdrawals are also known as "drawings".
True
False
Long-term debts are noncurrent.
True
False erroneous answer; TRUE, long term debts are non-
current
Liabilities
Long-term liabilities are noncurrent.
True
False
Assets minus Liabilities is equal to Equity is also considered an

Accounting Equation.
True
False
This principle has two aspects, the quantifiability and stability of

peso.
Stable monetary unit

Accrual
Matching
Going concern
In the account form of SFP, the assets, liabilities and equity are
written in a downward sequence. In the report form of SFP, the assets
a written on the left side while the liabilities and equity on the
right side.
Both statements are true

Both statements are false
The 2nd statement is false
The 2nd statement is true
The 1st statement is true
The 1st statement is false
This shows relationship between the inflows and outflows of resources

within the firm is an indicator of how successful the business
operation was for a given period.
None of the choices

Statement of Income
Balance Sheet
We could find the period covered by the statement at the

________________ of the statement of the account.
None of the choices
Heading
Body
Both A and B
Its use varies depending on the form of business organization.
Equity Accounts
Equity
Capital
Statement of Changes in Equity
An income statement for _________________ could be written using a

single-step approach.
Both A and B
Merchandising Business
Service Business
All of the choices
These are added to the capital beginning to arrive at the total

investments used during the year.
Ending Capital
Investments
Withdrawals and drawings
Net Profit
The ________________represents the total capital at the start of the

business.
investment
Beginning capital
net profit
Ending capital
Additional credit sales to Mrs. Santillan is an example of transaction

using what method of accounting?
Cash basis accounting

Accrual basis of accounting
The __________________are added to the capital beginning to arrive at

the total investments used during the year.
Investments
Net loss
Net profit
Withdrawal
In preparing the income statement in a single-step approach, the

expenses are added to the revenues to arrive at the net profit.
True
False
It is the usual account title used for corporations.
Capital
None of the choices
Stockholder's Equity
Both of the given choices correct
These are deducted in the purchase price either because of returns or

reductions due to defects or damages of goods purchased.
Purchase discounts
Sales Returns
Purchase returns and allowances
Sales Allowances
The equation for cost of goods sold is:
None of the choices

Beginning inventory - Net cost of goods purchased - Ending inventory
Beginning inventory + Net cost of goods purchased - Ending inventory
Beginning inventory + Net cost of goods purchased + Ending inventory
It represents the right of the owner over the resources of the firm.
All of the choices

Equity
Assets
Stocks
It is a basic accounting principle that states that income is earned

regardless of when cash is received, and expenses are incurred
regardless of when cash is pai~
Accrual basis
Cash basis
The heading of a statement of income usually consists of the following
except:
Business Name
Period covered by the statement
Statement of Income
None of the choices
Revenues or gains less expenses or losses is equal to net profit or

net loss.
True
False
Stockholder's equity is the account title used by what form of

business organization?
Sole proprietorship
corporation
None of the choices
Partnership
Mr. Alvarez , capital is an example of account title used for the

equity of the owner in what form of business organization?
corporation
Sole proprietorship
partnership
None of the choices
In preparing the income statement for service businesses, expenses are

deducted from the revenue to arrive at the net profit or loss.
True
False
The statement of income of a service business is composed of the

following elements except:
Net Profit/Net Loss

Expenses
Revenues
Cost of goods sold
The legal tender being used in exchange for a good, debt, or service.
Fund
Check
Capital
Cash
How many sections do income statement for merchandising businesses

usually have?
7
8
5
10
It represents the residual claim of the owner on the total resources

or assets of the firm after deducting the claims of creditors.
Beginning Capital
Net Profit
Net Loss
Ending Capital
How many parts does the Statement of Changes in Equity have?
8
3
7
5
These are reductions in the price because of possible defects or

damages in the products sold.
None of the choices

Sales Discounts
Sales Returns
Sales Allowances
It represents the total amount of inventory on hand.
Net Sales
Merchandise Inventory
Net cost of goods purchased
Beginning Inventory
The following consists an income statement for merchandising
businesses except:
Gross Profit
Net Profit or Net Loss
None of the choices
Cost of goods sold
What is the effect of cash paid to supplier of P20,000 to the cash

beginning of P100,000?
increase of P20,000
decrease of P20,000
no effect
not a cash flow item
This accounting principle relies entirely on the payment and receipt

of cash.
Cash basis
Accrual basis
"Equity" generally means?
Total assets plus liabilities

Current assets plus current liabilities
Total assets minus total liabilities
Current assets minus current liabilities.
The statement of income of a service business is simpler than

merchandising business. Merchandising business' statement of income is
composed of revenue, expense and net profit/net loss.

The 1st statement is false.The 2nd statement is true.
The 1st statement is true. The 2nd statement is false.
It is the total or gross purchases less any purchase discounts and

purchase returns and allowances.
Sales discounts
Cost of goods sold
Net cost of goods purchased
Income of a merchandising business comes from _________________.
Sales of the product

None of the choices
Both A and B
Rendered Services
These are resources of the firm which were taken by the owner for
personal use.
Ending Capital
Net Loss
Investments
Withdrawals
If the firm has been operating in the past year, the beginning capital
of the current year is _____________ the ending capital of the
previous year.
Equal to
The same
None of the choices
Different
These are reductions in the total sales price given to the customer if
the account will be paid within a short period of time.
Sales returns and allowances

Net Sales
Cost of goods sold
Sales discount
The Fiscal year always ends in December.
True
False
_____________________ involves transactions showing those related to

gross cash receipts and gross cash payments.
expense method
asset method
indirect method
direct method
Mr. Jobs invests personal cash in his computer business as a start up
capital.

Capital are claims by creditors against the company's assets.
True
False
Every time a business transaction occurs like purchase of supplies,

payment of receivables, granting credit, payment of utilities, etc.,
we assume that for every value received there is an equivalent value
parted with.
Going Concern
Matching Principle
Accrual Principle
Dual Effect
Expense is one of the elements of the Statement of Financial Position.
True
False
The Statement of Financial Position has two forms.
True
False
Bank loans are credited to Loans Payable or Mortgage Payable.
True
False
Transactions which are financial in nature, such as payment and

purchases in cash.
Partnership
Financial Character
Net sales is P450,000, sales discounts is P35,000, and sales returns
and allowances is P15,000. Compute for the gross sales.
P400,000
500,000
Cannot be determined from the given data
P430,000
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.
Accounts Payable
Notes Payable
Bonds Payable
Mortgage Payable
Liabilities are company's obligations.
True
False
Income statement is another term for the Statement of Financial

Position.
True
False
This is the type of business which offers services for a fee
Fiscal year
Corporate code
Accounting
Service business
Capital is equal to Asset minus Liability. Asset is equal to Liability

minus Capital.
The 1st statement is false.

The 2nd statement is true.
The 1st statement is true.
The 2nd statement is false.
Losses are added to the income statement credit column and the balance
sheet debit column in the worksheet.
True
False
Cash and Accounts Receivable are two examples of accounts that are
reported on the classified balance sheet under the heading __________.
Contra Asset
Current Asset
Current Liability
Equity
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..
True
False
Losses from trading investments of a law firm are not considered

expenses.
True
False
Manufacturing business converts raw materials to finished goods.
True
False
Which of the following is a current liability?
Long-term deferred revenue

Accounts payable
Long-term obligations of company officers
Deferred tax liability
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..
Partnership
Financial Character
Entity principle separate business from personal transactions.
True
False
The income statement format that segregates the operating revenues and
expenses from the non-operating revenues and expenses is the
___________.
Single-step
Multi-step
Dual-step
none of the choices
The Statement of Financial Position commonly adopts the Calendar Year.
True
False
The following are cash flow transactions under the direct method
except
Income taxes paid

Depreciation of old building
Cash paid to creditors
Cash receipts from customers
Stockholders are the owners of a corporation.
True
False
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?
Increase of P50,000
Increase of P650,000
Decrease of P50,000
Decrease of P700,000
The following are current assets, except::

Long-term liabilities
Accounts receivable
Prepaid expense
Cash
What is the effect on Single Lady's accounting equation when it pays

the account to the supplier P22,500? And which accounts are affected?

Asset Decrease, Liability Decrease
Merchandising business are charging fees for rendered services.
True
False
Accrual basis of accounting records income when earned regardless of

when cash is received.
True
False
Current assets are obligations expected to be settled after a year.
True
False
This concept states that assets and services that are acquired should
be recorded at their actual cost.

cost concept
Two or more people join together to contribute money, property or

industry for purposes of dividing the profits (or loss) among
themselves.
Partnership
Financial Character you can choose either of the two, but
theoretically, government accounting should
not be an answer as the definition only
applies to partnership, but OEd has two
answers.
Operating expenses and operating income or operating loss are items

which can be found in an income statement prepared in a multi-step
approach.
True
False
Capital is also known as a residual asset..
True
False
SFP is also the Balance sheet.
True
False
Accounting is just all about recording.
True
False
Noncurrent assets are assets that are expected to be used within 12

months.
True
False
The Calendar year ends on January 01.
True
False erroneous answer; FALSE, it ends on
December 31 and starts in January 01
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.
P175,000
P190,000
Cannot be determined from the data given
P165,000
A mortgage payable is a noncurrent liability.
True
False erroneous answer; should be TRUE
Residual asset is the result of combining liabilities and equity.
True
False
AICPA means
Corporate code
Service business
American Institute of Certified Public Accountants
Fiscal year
Accounting is the language of business.
True
False
Prepaid rent is an asset..
True
False
The following are the advantages of forming a partnership except

~Minimal regulatory requirements than corporation.
Can exist for a period of 50 yrs

more capital from partners
Exempt from paying corporate tax
The following are the advantages of forming a partnership except
Can exist for a period of 50 yrs

more capital from partners
Exempt from paying corporate tax
Minimal regulatory requirements than corporation
Cash and cash equivalents are current assets.
True
False
Cash and cash equivalents are noncurrent assets.
True
False erroneous answer; FALSE, they’re Current Assets
roperty, plant, and equipment are assets.
True
False
The language of business
Corporate code
Fiscal year
Service business
Accounting
Property, plant, and equipment are assets.
True
False
Property, plant, and equipment are not assets.
True
False
Increase in assets is recorded as a Debit..
True
False
Also known as Time Period Concept
Fiscal year
Accounting
Service business
Periodicity
Capital is another term for equity.
True
False technicality wise, there are two kinds of equity, OWNER’S
EQUITY (CAPITAL) and CREDITOR’S EQUITY (LIABILITIES)
Any twelve-month period starting from any month other than 01 January
Fiscal year
Corporate code
Service business
Accounting
The law that manages Corporations
Fiscal year
Corporate code
Accounting
Service business
Noncurrent assets are kept principally for trading.
True
False
Operating activities may be presented using either the direct method

or indirect method.
True
False
To compute for the net purchases we deduct purchase returns and

allowances and what other item?
Purchase Invoice
Purchase Discount
Purchase Journal
Purchase Rebate
A form of business organization whose statement of income does not

include sales.
merchandising business
service business
Sale of equipment for P500,00 is an example of what activity?
Investing
Financing
Developing
Operating
The following are cash flow transactions under the direct method
except:
Cash receipts from customers

Income taxes paid
Cash paid to creditors
Depreciation of old building
Land is a current asset.
True
False erroneous answer; FALSE, land is NON-
CURRENT
Losses are outflows that result from the main activity of the
business.
True
False
Current assets are expected to be used after 12 months.
True
False
The cash in a financing activity mostly involve current assets or

income and expense accounts.
True
False erroneous answer; FALSE, operating activity
Among all the activities, only financing activities have different

ways of being presented.
True
False
Investing activities are activities related to revenue-producing
activities.
True
False
The income statement for merchandising businesses usually has the

following sections, namely: revenue, expenses and net profit or loss.
True
False
It states that income shall only be recognized when cash is received,

and expenses shall only be recorded when cash is paid.

Cash basis of accounting
None of the choices
Financing activities
It relies entirely on the payment and receipt of cash.

All of the choices
Among all the activities, only ___________________ have different ways

of being presented.
None of the choices
Operating activities
Investing activities
Cash withdrawal of an owner for personal use falls in what cash flow
category?
Operating
Assessing
Financing
Investing erroneous answer; should be FINANCING
SFP is an acronym for Statement of Financial Position, which is also

known as the Balance Sheet.
True
False
The cost accountant handles Management Accounting.
True
False
Financing activities are the common transactions happening in the

organization.
True
False
Capital is also known as a residual asset.
True
False
The owner's equity is also called capital, net assets, or net worth.
True
False
The Statement of Financial Position is commonly prepared at the year

ended December 31.
True
False
Cash flows are categorized into three types: operating, investing, and
financing activities.
True
False
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.
True
False
Gains increase the income of the business.

True
False
There are common account titles between assets and liabilities.
True
False
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.
P140,000
P210,000
P110,000
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.
cooperative
corporation
partnership
single proprietorship erroneous answer; should be
COOPERATIVE
Investing activities cannot be presented in direct or indirect method.
True
False
A mortgage payable is a noncurrent liability.
True
False erroneous answer; should be TRUE
Cash flows are categorized into three types; these activities does not
determine the purpose for which the cash has been used.
True
False
and is a current asset.

True
False erroneous question
Investments made by the owner may represent the original investment

made at the start of business, and any additional investments
thereafter.
True
False
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.
P163,000
P59,000
P241,000
Net loss indicates that the business is doing well.
True
False
Manufacturing business changes the basic inputs into products that are
sold to individual customers.
True
False
The acquisition and disposal of long-term assets, including

investments not considered cash equivalents are parts of an investing
activities.
True
False
The combination of Selling Expenses and Administrative Expenses is

referred to as
General Expense
Total Expense
Operating Expense
Other Expense
This is arrived at when the revenues and gains are greater than the
expenses and losses, indicating successful business operations during
the period.
Cost Goods Available for Sale

Cost of Goods Sold
Net Loss
Net Income
Net income is a result of expenses higher than revenues.
True
False
Revenue is synonymous to Gains.
True
False
This principle requires that "those costs and expenses incurred in

earning a revenue should be recorded and reported in the same period".
Going Concern
Matching Principle
Accrual Principle
Dual Effect
The business bought furniture for office use on account.

Asset Increase, Equity Decrease
Asset Increase, Liability Increase
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')

Decreases in liabilities and owner's equity are recorded by debits.
True
False
A cash withdrawal was made by the owner from the business for personal
use.
Asset Decrease, Equity Decrease

Which of the following names is NOT associated with the income

statement?
P & L
Statement of Operations
Statement of Gains and Losses
Inflows of resources arising from the sale of goods and services.
Gains
Expenses
Losses
Revenues
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.
Sole Proprietorship
Partnership
Corporation
Cooperative
It refers to total or gross sales less any sales discounts, and sales
returns and allowances.
Cost of Goods Sold

Net Sales
Net Operating Income
Net Income
The difference between revenues and gains, and expenses and losses
when the expenses and losses are greater than the revenues and gains.
Net loss
Net assets
Net worth
Net profit
Merchandising business usually does activities that converts raw

materials into finished products, and sells this to other firms or to
individuals.
True
False
Capital is the account title used for____________________.
Partnership
Sole proprietorship and Corporation
Corporation
Partnership and Corporation
Sole proprietorship and Partnership
Sole proprietorship
These are activities related to the acquisition and disposal of long-

term assets, including investments not considered cash equivalents.
investing activities
Developing activities
financing activities
These are activities related to the acquisition and disposal of long-

term assets.
All of the choices

Investing activities
Transactions falling under this activities does not primarily involve

cash received from customers and paid to suppliers, lenders, or
employees.
Investing
Financing
All of the choices
Operating
The heading of the statement of changes in equity will have to show

the following except:

Address of the business
Statement of changes in equity
Name of business
The merchandising business uses the single-step approach in preparing

the statement of income. The merchandising business' income statement
is more complicated that the service business.
The 1st statement is false. The 2nd statement is true.

An accounting principle where in income shall only be recognized when

cash is received, and expenses shall only be recorded when cash is
paid.
Cash Basis Accounting

Accrual Basis Accounting
The statement of cash flows starts with cash on hand, beginning and
ends with ________________?
Ending inventory
Cash on hand, end
Cost of goods sold
Net Profit
Which one does not form part of cost of goods sold?
owner's equity
Merchandise inventory
Purchases
Payment of Aling Susan of her credit to us last week is an example of

transaction under what method of accounting?

Cash basis accounting
The following are types of cash flows except:
All of the choices

Direct
None of the choices
Indirect
Financing activities are those which involve changes in the equity and
liability accounts in the accounting records.
True
False
The income statement for merchandising businesses usually has eight

sections: Net sales, Cost of goods sold, Gross profit, Operating
expenses, Operating income or operating loss, Other revenues and gains
(expenses and losses), Net profit or net loss.
True
False
It details the movement of cash in the business.
Cash flow statement

Statement of Income
If the company's revenue is P100,000 and an expense of P50,000, how

much is the net profit/net loss?
net loss of P50,000

net profit of P50,000
cannot be determined from given data
P150,000
Among all the activities, only ____________________ have different

ways of being presented.
Financing Activities
None of the choices
Operating Activities
Investing Activities
_____________________ is acceptable in the accounting industry.

None of the choices
Both A and B
Additional investment of the owner in the business is an example of?
Net Profit is derived from:
Journal
Statement of Income
Balance Sheet
The corporation uses this account title for the equity of the owner or
owners.
None of the choices

Name of owner, capital (create as many capital accounts as there are
owners)
Stockholder's equity
Name of owner, capital
It is the common account title in the financial statement.
Equity
Investment
Cash
Capital
This is the common transaction happening in the organization.
All of the choices

Investing
Financing
Operating
The service business' statement of income is composed of revenues,
expense and net profit/net loss. The merchandising business' statement
of income is composed of eight sections.

The statement of income describes the revenues and gains, expenses and
losses along with the resulting net income or net loss of the business
due to its operating activities for a given period of time.
True
False
We use the account title "name of owner, capital" for the equity of
the owner or owners considering what form of business organization?
corporation
partnership
None of the choices
Sole proprietorship
The customer paid his account to us. This represents:
not a cash flow item

Cash payments
Cash receipts
Investment
Which transaction represents accrual basis of accounting?
None of the choices

Interest paid
Cash paid to suppliers
Depreciation of old service vehicle
These are the common transactions happening in the organization.
Both A and C
Investing Activities
Financing Activities
Operating Activities
In cash basis accounting, companies who sell their goods on credit
will record the said transactions as sales even if they have not paid
cash.
True
False
The following are terms pertaining to Owner's Equity except:
Net Gross
Net Worth
Capital
Net Assets
We use a multi-step approach in preparing a statement of income for

______________________.
Both A and C
Service Business
Merchandising Business
None of the choices
The single-step approach could be used in writing the income statement

for _______________.
All of the choices

Manufacturing business
Service Business
Merchandising business
Income statement for merchandising businesses usually have how many

sections?
5
7
8
3
Merchandising business' statement of income include the following

except:
Operating Expenses
Cost of goods sold
Sales
Drawing
Cash flows are categorized as follows except:
The story of the success, or failure, of operations is shown in the

_______________________.
All of the choices

Balance Sheet
Report
Statement of Income
The account title used for corporations:
Shareholders' Equity
All of the choices
Stockholders' Equity
Owner's Equity actually, SHAREHOLDER’S EQUITY and
STOCKHOLDER’S EQUITY are the same
This could be deducted to the beginning capital and additional

investments done during the year.
Net Profit
Ending Capital
Withdrawals and drawings
Net Loss
It is an accounting method of computing the cash flow which starts

with the profit earned using the accrual basis of accounting.
indirect method
asset method
direct method
expense method
If all business transactions uses cash, then income between accrual

basis and cash basis of accounting shall be _____.
Either A or B
None of the choices
Different
Same
It refers to the right of the owner over the resources of the firm
after deducting the claims of creditors.
Capital
Investment
Equity
Cost of goods sold items can be found in a multi-step approach of

preparing the income statement.
True
False
The following are included in the income statement for merchandising

businesses except:
Net Sales
Other revenues and gains
Operating Expenses
Business name
The owner's equity is usually consists of ___________________.
Owner's investment and the earned profit equal to any withdrawals made
during a given period
Owner's investment and the earned profit add any withdrawals made
during a given period
Owner's investment and the earned profit less any withdrawals made
during a given period.
None of the above
It is the difference arrived at after deducting withdrawals from the

sum of the beginning capital, additional investments, and profit.
Net Profit
Ending Capital
Investments
Beginning Capital
The following are parts of the heading of the Statement of Changes in

Equity except:
Net Profit
Name of Business
It is a financial Statement that focuses on the residual interest of

the owner in the business.

All of the choices
Statement of Income
The Statement of Changes in Equity have ___________ elements from

Statement of Financial Position and Statement of Income.
Same
Few common
None of the choices
Different
Total is synonymous to ___________.
Gross
Net
None of the choices
Both A and B
It is consists of the owner's investment and the earned profit less

any withdrawals made during a given period.
Ending Capital
Capital
Beginning Capital
Investments
A Statement of Financial Position is a formal statement presenting the

three accounting elements which are?
Net sales, cost of goods sold, net income

Revenue, expense and profit
Cash, accounts receivable, prepaid expense
assets, liabilities and equity
The business provided service to customers on account.

This type of business is concerned with buying and selling of goods

for profit.
Merchandizing
Manufacturing
Cooperative
Service business erroneous answer; should be MERCHANDISING
A promissory note issued by the customer is an evidence of the notes

receivable account.
True
False
Cash basis accounting only records transaction when cash is received

or paid.
True
False
This form of business organization has limited liability, meaning

creditors cannot go after their personal property in case of
bankruptcy.
Cooperative
Partnership
Single Proprietor
Corporation
In August 2016, ABE Store receives the P4,000 for services rendered.
What is the effect on the accounting equation and which accounts are
affected?

As compared to the corporation, single proprietorship is easier to

form because of its simplicity in operation.
True
False
Cash, Accounts receivable and Office supplies are examples of current

assets.
True
False
The financial statement that reports the assets, liabilities, and

stockholders' (owner's) equity at a specific date is the __________.
Income Statement
Statement of Cash Flow
Statement of Owner's Equity
This principle requires that life of the enterprise be subdivided into

time periods or accounting periods which may be a calendar year or
fiscal year.
Stable monetary Unit

Going Concern
Periodicity
Business Entity
Asset are resources owned and/or controlled by the enterprise.Asset

are acquired by an enterprise as a result of a past transaction or
event.
The 2nd statement is true

The 1st statement is true
The 2nd statement is false
The 1st statement is false
This concept ensures that accounting information is current and is

reported at regular intervals.
time-period concept
stable monetary unit concept
Asset is equal to Liability plus Capital. Liability is equal to Asset

minus Capital.
The 2nd statement is false.
The 2nd statement is true.
The 1st statement is false.
The 1st statement is true.
Report form is where assets are listed on the left side.
True
False
Income from the sale of an equipment of a machine business is

considered a gain.
True
False
Accounting is defined in part as the art of ____________, ___________,

and ____________ in a significant manner and in terms of money,
transactions and events.
recording, classifying, summarizing

processing, computing, finalizing
analyzing, evaluating, assessing
journalizing, synthesizing, reporting
Withdrawals or drawings are resources of the firm which were taken by

the owner for personal use.
True
False
Liabilities are present obligations arising from past events.
True
False
Revenues are also known as income.
True
False erroneous answer; FALSE, they are often
used interchangeably, but they’re technically different. Revenue
represents the totality exclusive of expenses while income is net of
expense.
Liabilities are company's obligations.
True
False
Cash basis accounting is not acceptable in the accounting industry

though we need to understand this in order to prepare our cash flow
statement.
True
False
Sole proprietorships mostly managed by their owners.
True
False
GAAP is Generally Applicable Accounting Principles.
True
False
Merchandising business are charging fees for rendered services.
True
False
This is prepared after all adjustments have been recorded and posted.
Financial statement
Adjusted trial balance
worksheet
unadjusted trial balance
Checks are not considered as cash.
True
False
What is the effect to cash if a debit balance in the general journal

is posted as credit to the general ledger?
decrease cash
No effect
Increase cash
Zero Balance
Give the correct answer.Acronyms only.

It is the most common type of Business Tax. VAT
Freight out is included in the cost of goods.
True
False
Tax imposed on the privilege to sell products and services are called
"sin tax".
True
False
Certificate of Final Income Tax Withheld and Payment Form are kinds of
BIR Forms.
True
False
It means how quickly you can get your hands on your cash.
growth
Stability
profitability
Liquidity
This technique highlights computations that allow the reader to

understand how the company performs and positions itself financially.
vertical analysis
none of the choices
Horizontal analysis
Ratio analysis
The entry to record the 3 months insurance paid in advance is?
dr prepaid insurance cr cash

dr insurance cr accounts payable
dr cash cr insurance
What is the effect to equity if a credit balance in the general
journal is posted as debit to the general ledger?
No effect
Increase equity
Zero Balance
decrease equity
The bank sends a bank statement to a depositor every month.
True
False
The ratio analysis is the most commonly- used technique among all
three is the analysis.
True
False
________________ makes use of common size financial statements to

convert each financial statement item to its base year.
Vertical Analysis
Both of the given choices correct
Ratio Analysis
Horizontal Analysis
Give the correct answer.

It is the tax shouldered by the buyer when purchasing the goods.
Answer: Input Tax
It is the tax shouldered by the buyer when purchasing the goods.
Value-Added Tax
Input Tax
Output Tax
Excise Tax
It is utilized by the government to sustain the needs of the

territory.
Taxation
Pork Barrel
Income
Tax
The depositor will record bank transactions in a _________________.
Cash in a bank account

Savings account
Deposit account
Current account
The transactions recorded in the Cash in Bank is not reflected in the

Current Account.
True
False
Amusement tax is under Percentage tax.
True
False
If on the base year 2015 total assets is P200,000 and P400,000 on

2016, what is the percentage increase(decrease)?
Increase by 100%
decrease by 50%
decrease by 100%
Increase by 50%
The balances shown in the bank statement and in the accounting records
are both adjusted for any unrecorded transactions.
True
False
Account is used to summarize the increases and decreases in the asset,

liability and proprietorship of the business.
True
False
Percentage tax is the most common type of business tax.
True
False
A journal is composed of a group of accounts.
True
False
If the total assets amounts to P100,000, which is the base item, what
percent is the current assets of P20,000?
20%
80%
50%
5%
What is the ratio to test ability to meet sudden & immediate demands
on current assets?
quick assets/current liabilities

Working capital/total assets
current assets/current liabilities
Current assets - current liabilities
A savings account is only supported by an ATM car~
True
False

BIR Form 0605 is also known as ______________.
Answer: Payment Form
Only the errors of the depositor could create differences in the Cash
in Bank and Current Account.
True
False
All the accounts below have debit normal balance except
prepaid rent
Salaries payable
Miscellaneous expense
Tools
A bank statement is a document that is issued annually by the bank.
True
False
Freight refers to costs incurred for transportation.
True
False
Purchases, unlike sales, does not have discounts.
True
False
FOB shipping point means that if the good is lost or damaged while in
transit, such shall be borne by the buyer.
True
False
This account shows the balance at the beginning of the month, the
deposits and other additions (credits), the checks paid and other
deductions (debits) during the month, and the ending balance.
Cash in a Bank
Current Account
Savings Account
Deposit Account
Service business have tangible products.
True
False
In the operation of law, corporations are artificial beings thus, BIR

forms and taxes paid by the company is under the Corporation's name
and not under the owners'.
True
False
A merchandising business has two different systems in accounting for

their sales and purchases.
True
False
It helps to determine transactions that must be recorded to update or

correct the depositor's accounting records and to determine the actual
amount of the cash deposit balance at the end of the month.
Bank Reconciliation Statement

Financial Report
Bank Statement
Financial Statement
The bank on the other hand keeps record of the depositor's

transactions in a _____________.
Cash in a Bank Account

Deposit Account
Savings Account
Current Account
The depositor keeps record of bank transactions in a

___________________
Cash in a Bank Account

Current Account
Saving Account
Deposit Account
Purchase have discounts.
True
False
The balances between the Cash in Bank and the Current Account-
Depositor accounts _______________.
Equal
Seldom equal
Undetermined
Unequal
Depositor accounts are always _____________
Unequal
Either A or C
Undetermined
Equal
are:
Unadjusted and uncorrected

Unadjusted and corrected
Adjusted and corrected
Adjusted and uncorrected
VAT in the Philippines is set to how many percent?
15
12
7
10
Inventory is exclusive only to merchandising business.
True
False
Amusement tax is under _________________.
Percentage Tax
Value-Added Tax
Excise Tax
None of the choices
The most common tax rate system is ______________.
Progressive
Proportionate
Regressive
All of the choices
Percentage Tax is applied on which type of product?
Tobacco
Alcohol
Precious Metals
None of the choices
__________________________ is the department that is tasked to collect
taxes.
Bureau of Internal Revenue

Department of Budget and Management
Securities and Exchange Commission
Bureau of Customs
This type of tax is also a common transaction in accounting.
Percentage Tax
Business Tax
Value Added-Tax
Excise Tax
Donor's Tax and Estate Tax are types of _______________.
Transfer Tax
Income Tax
Business Tax
Luxury Tax
Income from a merchandising business is entered in the journal entries

as sales.
True
False
These are taxes imposed on specified goods manufactured or produced in

the Philippines.
Percentage Tax
Excise Tax
Business Tax
Value-Added Tax
It is the one recorded by the seller upon the sale of the good or
service.
Input Tax
R-VAT
Value-Added Tax
Output Tax
In accounting, this type of tax is also a common transaction.

Business Tax
Value-Added Tax
Percentage Tax
Excise Tax
Purchases are assets that shall produce income for the benefit of the
seller.
True
False
A merchandising business uses periodic inventory system for their

sales and purchases.
True
False
You always pay for it.
Value-Added-Tax
Excise Tax
Percentage Tax
All of the choices
Purchases account is only seen in the periodic inventory system.
True
False
The Philippines implements what type of tax system?
Proportionate
Progressive
None of the choices
Regressive
In a proportionate tax system, when an individual earns more, the

taxable income _________________.
Increases
Depending on the situation
Decreases
Same
The government agency assigned to collect taxes from the people.

BIR
BoC
DBM
SEC
BIR Form 2306 is known as _______________________.
Certificate of Final Tax Withheld at Source

Payment Form
None of the choices
Application for Tax Identification Number
In the operation of law, corporations are artificial beings thus, BIR

forms and taxes paid by the company is under the ___________________.
Either A or B
None of the choices
Owner's name
Corporation's name
These are receipts by the depositor that reached the bank too late to
appear in the bank statement for the current month.
Deposits in transit
None of the Above
Outstanding Checks
Service Charges
The depositor will keep _____________.
An asset
Both A and B
None of the choices
Liability
The depositor will record bank transactions in a _________________.
Cash in a bank account

Savings account
Current account
Deposit account
Other miscellaneous bank charges like fees for printing checks,

handling collections of notes receivable, and processing NSF checks
falls under __________________.
Deposits in transit
Outstanding checks
Service chargers
Charges for NSF check
Credit and debit memoranda are _______________________.
Receipts by the depositor that reached the bank too late to appear in
the bank statement for the current month.
Adjustments in the unadjusted book balance.
The asset account maintained by the depositor to record deposits and
withdrawals in the bank.
Adjustments in the unadjusted bank balance.
A manufacturing business does not need to alter completely the

materials they purchased before selling it to the public.
True
False
These are caused by timing differences and errors committed by the

depositor or the bank.
None of the choices

Differences in the Cash in Bank and the Current Account
Issuance of Bank Statement
Preparation of Bank reconciliation
Who should prepare a bank reconciliation?
Bank
Neither A nor B
Both A and B
Depositor
Income from a merchandising business is entered in the journal entries

as revenues.
True
False
Value-added taxes fall under _________________.
Personal deductions
Income Tax
Business Tax
Transfer Tax
These are applied only on certain businesses and transactions
Value-Added Tax
Business Tax
Excise Tax
Percentage Tax
The following consists the Principles of a Sound Tax System except:
Fiscal Adequacy
Equality
Consistency with economic goals
Unity
The cost of goods sold determines the value of the inventory that was
sold for the year.
True
False
Estate tax falls _________________.
Transfer Tax
Business Tax
None of the choices
Income Tax
These are removed first from the total annual income.
Personal deductions and exemptions

All of the choices
Discounts
Taxpayer's due
It is the leading country in Asia who has the highest percentage of

income tax.
Taiwan
Korea
China
Philippines
The most common tax rate system is _________________
Proportionate
Progressive
Regressive
All of the choices
FOB destination retains the ownership with the seller until the goods
reach the destination.
True
False
Materials could be altered before selling in merchandising business.
True
False
Freight out is included in the cost of goods.
True
False
Freight refers to costs incurred for transportation.
True
False
Inventory is a tangible product.
True
False
The transactions recorded in the Cash in Bank is not reflected in the

Current Account.
True
False
If the total liabilities is P200,000, it being the base item, what

percent is current liabilities of 20,000?
20%
15%
10%
5%
If on the base year 2016 the current assets is P300,00 and P100,00 on
2017, how much is the increase/decrease?
Increase by P100,000
decrease by P100,000
decrease by P200,000
Increase by P200,000

In the Philippines, Excise tax is also called as Sin Tax
Excise Tax are taxes on property.
True
False
Credit is the normal balance of purchases.
True
False
Output tax is the tax shouldered by the buyer when purchasing the
goods.
True
False
VAT are imposed on the privilege to sell products and services.
True
False
A bank statement is also referred as statement of account.
True
False
A bank statement is also referred as

Statement of account
Bank record
Statement of Income
To effect increase in equity we credit capital and post to what side

of the ledger?
Right
left
Middle
Depositor accounts are always equal
True
False
The adjusted trial balance is the last report prepared before the
____________ is made.
General journal
financial statement
General ledger
Worksheet
This is the book used in recording the business transaction. It is

also known as the book of original entry.
General journal
Trial balance
general ledger
worksheet
Bank statement is the same as a passbook account in terms of content.
True
False
The general ledger contains accounts which were taken from the general
journal.
True
False
It is the most common type of deposit account.
Deposit Account
All of the choices
Current Account
Savings Account
To enumerate the different categories of financial information. There

are ____ main categories of financial information.
5
3
2
7
What is true about savings account?
All of the choices

Least type of deposit account
You earn interest out of it
Supported by check
Static analysis means that:
Interprets the relationship among the different accounts found in the

financial statements.
None of the choices
Only looks at financial statement information one period at a time.
Compares the company's financial statements from one period to another
Which account has a credit normal balance?
mortgage payable
Salaries and wages
gas and oil
Repairs and maintenance
The depositor should prepare a bank reconciliation each month to

verify that these independent set of records are in agreement.
True
False
General journal is the book where transactions are recorded? What book
do we use to post the transactions?
trial balance
balance sheet
Worksheet
General ledger
The depositor should prepare a bank reconciliation each month to
verify that these independent set of records are in agreement.
True
False
When do we prepare the unadjusted trial balance?
After posting
Either A or B
Before posting
After Journalizing
Decrease in liabilities falls under:
Equities
None of the choices
Accounts debited
Accounts credited
This column of the general ledger is a very important part because it

is where the page number of the journal in which the information was
taken from is place~
Credit
Folio
Date
Debit
When office supplies are purchased on credit, a liability account is

increase~
True
False
To apply the concepts of Vertical and Horizontal analysis on the given

financial data. _____________________ makes use of common size
financial statements to convert each financial statement item to its
base year.
Vertical Analysis
Horizontal Analysis
Both B and C
Ratio Analysis
The balance of Liability, Equity, or Income Account increases when the
amount is entered in the credit or Right Side Column.
True
False
Why are checks considered as cash?
None of the choices

They can be deposited or encashed
They share the same function
All of the choices
Horizontal analysis only looks at financial statement information one

period at a time. Vertical analysis is the comparison of a company's
financial statements from one period to another.

This account shows the cash balance at the beginning of the month,
cash receipts and deposits (debits), cash payments and withdrawals
(credits), and the new balance at the end of the month.
Savings Account
Cash in a Bank
Current Account
Deposit Account
These are adjustments in the unadjusted bank balance.
Credit and Debit Memoranda

Deposits and Outstanding checks
All of the choices
None of the choices
This means VAT is already included in the selling price.
VAT-inclusive
VAT-exclusive
Both A and B
None of the choices
Purchases account is only seen in the periodic inventory system.
True
False
are ________________________.
Adjusted and corrected

Unadjusted and corrected
Unadjusted and uncorrected
Adjusted and uncorrected
These are adjustments in the unadjusted book balance.
Outstanding checks
Service Charges
Deposits in transit
Credit and Debit memoranda
When should depositors prepare a bank reconciliation?
Everyday
Every month
Every year
Anytime
Freight in refers to costs incurred in transporting inventory that are

sold.
True
False
A merchandising business needs to alter completely the materials they

purchased before selling it to the public.
True
False
A service business relies on time, effort, and skill.
True
False
These are usually representing fees for handling small accounts.
Service Charges
Debit and Credit memoranda
NSF checks
Outstanding checks
These are taxes imposed on the earnings of businesses deriving income

in the country.
Percentage Tax
Business Tax
Value-Added Tax
Excise Tax
It is an internal control tool that helps the company identify and

check for irregularities in their cash in bank.
Statement of account
Balance Inquiry
Bank reconciliation
Bank statement
This kind of tax system is the easiest to compute.
Regressive Tax
Proportionate Tax
Progressive Tax
Income Tax
Wealthy nations implement a ___________________ tax system.
Proportionate
Progressive
Regressive
Transfer
Dealers of cars, retail shops, and sari-sari stores are examples of

manufacturing business.
True
False
It is the most common business tax in the country.
Excise Tax
Percentage Tax
Donor's Tax
Value-Added Tax
These are taxes on property.
Percentage Tax
Input Tax
Excise Tax
Output Tax
How much is the tax due if the taxable income is not over P 10,000?
5%
6%
7%
Non-taxable

financial data. Horizontal analysis confines itself in a period of
time and compares its components with a base item in the financial
statement.
Horizontal Analysis
Vertical Analysis
All of the choices
Ratio Analysis
___________ highlights computations that allow the reader to

understand how the company performs and positions itself financially.
Ratio Analysis
All of the choices
Vertical Analysis
Horizontal Analysis
A journal contains a list of accounts with open balances in the

general ledger for a given period.
True
False
Analysis based on the changes on the amounts from one period to

another.
none of the above
Horizontal analysis
Ratio analysis
vertical analysis
It is necessary to understand the normal balances of accounts to know

if they shall be debited or credited
True
False
Excise tax is a form of Business Tax.
True
False
You always pay for VAT.
True
False
The liability account will increase if a credit to this account is

posted as credit also to the general ledger.
Prepaid insurance
Accounts payable
Cash
Office supplies
Business transactions affects the assets, liabilities and

proprietorship of the business
True
False
When a depositor open an account with a bank, the relationship

existing between the parties is a lender (the bank), and a borrower
(the depositor) relationship.
True
False
Banks in the Philippines usually credit the depositor's account once

the check is cleare~
True
False
In accounting, Value-added Tax is a common transaction.
True
False
It contains accounts transferred from the general journal.
Balance sheet
worksheet
General ledger
trial balance
Give the correct answer. Numbers only.

How much is the Value-added Tax in the Philippines? 12
The entry to record the advance collection of service revenue is?
dr unearned service revenue cr cash

dr cash cr unearned service revenue
dr unearned service revenue cr service revenue
none of the choices
In T-account, Credit or CR can be seen on the:
Right
Depends on the one who is writing it
Bottom
Left
This type of analytical technique is considered "static".
All of the choices

Ratio Analysis
Vertical Analysis
Horizontal Analysis
Which is written first?
Folio
Amount to be debited
Explanation
Amount to be credited
Credit is on the _________ side of the T-account.
Bottom
Center
Right
Left
What is the accounting equation?
Asset
Liability + Equity + Income - Expense
Asset
None of the choices
Equities (Liability - Equity)
Liability - Equity
Asset
You can choose any of these
To enumerate the different categories of financial information.

Solvency is also known as:
Profitability
Liquidity
Adaptability
Stability
All transactions are initially recorded in the _____________.
General Journal
Balance Sheet
General Ledger.
Financial Statements
To total is to ___________.
Foot
Net
Summarize
Gross
The process where we transfer the information from the journal to the
general ledger.
Journalizing
Posting
None of the choices
Ledgering
These are used to asses' financial information.
Analytical techniques
All of the choices
Financial statement
Financial information
It is used to summarize the increases and decreases in the asset,

liability and proprietorship of the business.
Account
Liability
Equity
Assets
It is done after analyzing the business transaction.
Preparing financial statements

Journalizing
Writing in the General Ledger
Preparing an Income statement
The reference column is also known as:
Debit
Date
Folio
Account number
In preparing the trial balance, the account should be arranged

according to _____________.
Profitability
Stability
Liquidity
None of the choices
What should be done first?
Take the difference between the totals of the debits and credits.
Prepare the trial balance
Prepare the unadjusted trial balance
Foot the accounts
__________________ is used to interpret the relationship among the

different accounts found in the financial statements.
All of the choices

Horizontal Analysis
Ratio Analysis
Vertical Analysis
The General Ledger is known for:
Consolidating daily transactions into different individual account

titles.
All of the choices
Used in journalizing
"Book of original entry"
What do we do during the posting phase?
We prepare a trial balance.

Transfer information from ledger to the journal
Transfer information from the journal to the general ledger
We prepare an unadjusted trial balance
What is true about the general journal?
Used in journalizing
All of the choices
Book of original entry
Contains 5 columns
Confines itself in a period of time and compares its components with a

base item in the financial statement.
Ratio Analysis
Vertical Analysis
All of the choices
Horizontal Analysis
What is true about the General Ledger?
All of the choices

It is used for posting
Composed of a group of accounts.
It is the book of final entry
The dates of the transactions could be
Written in a chronological order

Written in any manner.
Written in an ordinal manner
Both B and C
It shows the fair measure of assets, liabilities and owner's equity.
None of the choices

Adjusting Entries
Unadjusted Trial Balance
Posting
Posting is the _______ step in the accounting process.
1st
3rd
2nd
4th
How many main categories does a financial information have?
7
5
8
3
How many columns does a general journal consists of?
7
2
3
5
To differentiate the different techniques of financial analysis. It is

the widely used among the 3 analytical techniques.
Horizontal Analysis
Vertical Analysis
All of the choices
Ratio Analysis
______________refers to how easily can an individual convert an asset
into cash.
Liquidity
Sustainability
Profitability
Stability
The following consists a journal except:
Debit column
Account titles
Folio
Business name

financial data. Changes in the company's financial amounts = ?
Select one:
a.
(Amount of base year) - (Amount in the New Year)
b.
(Amount in the New Year) + (Amount in the base year)
c.
(Amount of base year) + (Amount in the New Year)
d.
(Amount in the New Year) - (Amount in the base year)
Investments
Financial statements
Net Loss
Net Profit
Comprises the claims of the owners on the assets of the firm after
deducting the claims of the creditors.
Liability
Equity
Asset
Expense
Identification:
1. All transactions are initially recorded in this document.

General Journal
2. Equities (Liability + Equity) = Assets
3. Journalizing is the second step in the accounting cycle.
4. It is the book of original entry. Journal
5. Increase in liabilities is an account to be credited.
6. Debit is on the left side of the T-account.
7. Folio is also known as the Debit or DR.
8. How many columns does a General Journal have? 5
9. Equity comprises the claims of the owners on the assets of the
firm after deducting the claims of the creditors, known as
their liabilities.
10. Are increase in asset debited or credited? Debited
The commonly-used technique is ________________.
Vertical Analysis
All of the choices
Horizontal Analysis
Ratio Analysis
Formula for changes in the company's financial amounts would be:
The Amount in the New Year minus the Amount in the base year.
The Amount in the New Year plus the Amount in the base year.
The Amount in the base year plus the Amount in the New Year
The Amount in the base year minus the Amount in the New Year
The most common analytical technique:
Profitability
Stability
Liquidity
None of the choices
The credit accounts are posted on which side of the ledger?
Center
Left
Right
Bottom
This is where we write the page number of the journal in which the
information is taken from.
Explanation
Account No.
Folio
Date
The accounting equation is followed in arranging accounts according to
_______________.
All of the choices

Stability
Liquidity
Profitability
Journalizing is the ___________ step in the accounting cycle.
Last
2nd
1st
3rd

financial data. Changes in the company's financial amounts = ?
(Amount of base year) - (Amount in the New Year)

(Amount in the New Year) + (Amount in the base year)
(Amount of base year) + (Amount in the New Year)
(Amount in the New Year) - (Amount in the base year)
The heading of the trial consists of the following except:

The title or list of the trial balance
Date
Business name
The first step in coming up with the increase or decrease on the

company's books is to determine the company's base year.
Horizontal analysis
none of the choices
vertical analysis
Ratio analysis
The following are the common types of transactions that may conduct in
the bank except:
Deposit
Investing
Withdrawal
Both B and C
It contains a list of accounts with open balances in the general
ledger for a given perio~
General Ledger
Unadjusted Trial Balance
Income Statement
General Journal
It highlights computations that allow the reader to understand how the

company performs and positions itself financially.
Vertical Analysis
Ratio Analysis
None of the choices
Horizontal Analysis
Which of the following accounts has a debit normal balance?
Stockholder's Equity
Professional Income
Loans Payable
Insurance expense
A measure of the extent to which a person or organization has cash to

meet immediate and short-term obligations.
growth
Stability
profitability
Liquidity
If the debit total is more than the credit total, the difference is
placed on the __________________.
Credit Side
Any side
Debit Side
Explanation
Which of the following accounts has a credit normal balance?
Accounts Payable
Cash
Rent Expense
Drawing
Bank statement shares the same content with _________________.
Trial Balance
Financial statement
A Passbook
Statement of Income
The General Ledger is known as the
None of the choices

"Book of final entry"
"Book of third cycle"
"Book of original entry"
_____________________ is the comparison of a company's financial

statements from one period to another.
Analytical techniques
Vertical Analysis
Ratio Analysis
Horizontal Analysis
Identification:
1. These are the amounts placed in the bank to earn interest.

Deposits
2. These are considered cash because of their similarities in terms
of function. Checks
3. A bank statement is also known as Statement of account
4. Savings account is the most common type of account.
5. It is the fund maintained by an individual or an entity in a bank
that allowed money to be deposited, withdrawn, or removed by the
account holder. Deposit account
6. It is a booklet showing you the details of your deposits and
withdrawals in the bank. Passbook
7. Current or Checking accounts is a kind of account that allows
account holders to issue checks against their deposits.
8. These are the amounts removed from the amount that you deposited.
Withdrawals
9. Withdrawal slips are used in usual withdrawing of amounts from
the deposit accounts.
10. It provides the account holder of the details of the
deposits and withdrawals in their account. Bank statement
Another term for foot is :
Gross
Total
Sum
Net
It is considered as the key in the preparation of financial

statements.
General Ledger
General Journal
Trial balance
Balance Sheet
It can be used in exchange for goods, debt, or services.
Check
None of the choices
All of the choices
Cash
It provide the account holder of the details of deposits and

withdrawals in their account.
Withdrawal slip
Bank Statement
Bank Record
Deposit Slip
The entry to record the salary that has accrued?
dr cash cr salary payable

dr salary cr salary
dr salary expense cr cash PS: Bobo ini na choices HAHAHAHA

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FUNDAMENTALS OF ACCOUNTANCY, BUSINESS AND MANAGEMENT II

Accrual basis of accounting is a basic accounting principle that

Account form is more commonly used form of an SFP.

Increase in assets is recorded as a Debit.

The following are examples of non-current assets except

We technically call recording as bookkeeping or journalizing because

Statement of Cash Flow

This concept states that the activities of a business are recorded

Accounting is based on the single-entry bookkeeping.

What type of accounts are Interest Receivable and Fees Receivable?

The income statement summarizes the profitability of the business over

Income statement covers a period of time.

Wages are considered expenses.

CPA means Certified Public Accountant.

Manufacturing business converts raw materials to finished goods.

If Revenue is greater expenses, there is a Gain.

Type of business activities that generates profit from the conversion

A sole proprietor's equity account is written as follows: name of

Examples of this type of business are laundry shops, salons, spas,

Ownership of a cooperative is divided into shares of stock.

ABC Store records the transaction by a debit to Accounts Receivable

Asset Decrease, No Effect

The T-account is the simplest form of account.

In this concept, accounts assume that the business will continue

going concern concept

Going-concern is a concept where accountants assume that the business

Management accounting is also referred to as General Information

Examples of real accounts are revenues, expenses, and drawing

The owner invests trucksto be used in the business.

Equity Decrease, Equity No Effect

The following are known as Balance Sheet accounts except:

The Income Statement is composed of the revenues and expenses.

A debit account in excess of credits would possess a credit balance.

Owner's Equity is to sole proprietorship as Capital is to corporation.

Investing activities cannot be presented in direct or indirect method.

Credits always reduce account balances.

In this principle, it is assumed that the business owners or managers

Mr. Robie paid his obligation to the supplier.

Equity Decrease, Liability Increase

Single proprietorship is concerned with the manufacture of goods into

Owner's equity usually consists of the owner's investment and the

Services businesses offer products.

If the beginning capital of Mrs. Castro is P200,000 and she made an

In the statement of changes in equity of a sole proprietor, this is

Cash basis accounting relies entirely on the payment and receipt of

In cash basis accounting, income shall only be recognized when cash is

An asset is a present obligation arising out of past events.

Withdrawals decrease equity.

Withdrawals are also known as "drawings".

Long-term debts are noncurrent.

Long-term liabilities are noncurrent.

Assets minus Liabilities is equal to Equity is also considered an

This principle has two aspects, the quantifiability and stability of

Stable monetary unit

Both statements are true

This shows relationship between the inflows and outflows of resources

None of the choices