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FUNDAMENTALS OF ACCCOUNTANCY, BUSINESS AND MANAGEMENT 2

MODULE 1 – POST TEST 1

NAME: JANG YEBIN

I. Identification:

_Allowance for Doubtful Accounts_1. It is a contra asset to account receivable that

represents the amount of depreciation against the fixed company.

_Non-current Liabilities_2. It refers to the liabilities that do not fall on due.

_Report Form_3. It is a form of SFP that shows first the asset and then the liability and
lastly the equity accounts.

_Service Company__4. It supplies inventory under the current asset of the company.

_Accounts Form__5. It shows the asset on the left side and liabilities, equity to the
right side just like the debit and the credit.

_Nominal Accounts__6. These are accounts found under the SCI.

_Statement of Comprehensive Income_7. It contains the results of the company’s

operations for a specific period.

_Sales Return_8. It is an account were debited in order to record returns of the

customer allowances for such returns.

_Purchase Discounts_9. Account used to record early payments by the company to the
suppliers of merchandise.

_Freight In_10. This account used to record transportation costs of merchandise

purchased by the company.

_Initial Investment_11. The first investment of the owner of the company.

_Financial Activities_12. Cash transaction related to changes equity and borrowings.

_Beginning Cash Balance_13. The balance of the cash account at the beginning of
the accounting period.

_Prepaid Expense_14. Decreases cash but does not change the net income.

_Ending Cash Balance_15. The balance of the cash account at the end of the
accounting period computed using balance plus net change in cash.
II. Fill in the Blanks:

BALANCE SHEETS BEGINNING CONTRA ASSETS

DECREASES DEDUCTED MERCHANDISING
ONE YEAR PERMANENT ACCOUNTS STATEMENT OF FINCANCIAL POSITION

1. The assets cannot be realized _one year__ after year-end date.

2. __Contra assets__ are those accounts that are represented under the assets
portion of the SFP.
3. SFP means _Statement of Financial Position__.
4. _Permanent Accounts_ accounts are retained permanently under their balance
become zero.
5. SFP is also called _balance sheets_.
6. In increasing current liabilities, accounts payable increase expenses which _
_decreases_ net income but is not a cash transaction.
7. Non-cash expense are added back while the non-cash revenues
are__deducted__.
8. _Decreases_ owner’s equity by withdrawing assets by the owner.
9. Beginning Inventory is an amount of inventory which starts at the __ beginning
__________ of the accounting period.
10.Selling Expenses are those that are directly related to the main purpose of
_merchandising_______________ business.

III. Problem Solving:

1. If during the year total assets increase by 75,000 and total liabilities decrease by
16,000, by how much did owner’s equity increase/decrease?

Owner’s equity= Assets – Liabilities

Owner’s Equity = 75,000 – 16,000
Owner’s Equity = 59,000
2. If the assets are 20,000 and the owner’s equity is 15,000, the liabilities are?
Liabilities = Assets – Owner’s Equity
= 20,000 – 15,000
Liabilities = 5, 000

3. At the end of the first month of operations for Juana’s Delivery Service, the
business had the following accounts: Accounts Receivable – 1200, Prepaid
Insurance – 500, Equipment – 36,200 and Cash – 40,650. On the same date,
Juana owned the following creditors: Nena’s Supply Company – 12,000 (due in
6-months); Maria’s Equipment – 9500 (due after 2 years). The current liabilities
will be __12,000__.

4. At the end of the first month of operations for Juan’s Service Company, the
business had the following accounts: Cash – 19,000, Prepaid Rent – 500,
Equipment – 5000 and Accounts Payable – 2,000. By the end of the month,
Jackson’s had earned 20,000 of Revenues, 1000 of Utilities Expenses and 1,500
of Salaries Expenses. Calculate the net income to be reported by the company
for the first month.

Juan's Service Company

Statement of Financial Position
For the end of the First Month

Service Revenue 20,000

Expenses
Utilities Expenses 1,000
Salaries Expenses 1,500
Total Expenses 2,500

17,500
Net Income
5. Owner Juana invested 100,000 to start her laundry business. During the first
year of operations 2016, the company had the net income of 15,000. Juana
invested additional 100,000 to grow the business. In 2017, the business earned
50,000. As of December 31, 2017. Juana’s Capital balance is 200,000. How much
is Juana’s withdrawal?