FINAL EXAMS ACTG6100 ACTG FOR NON-ACCOUNTANTS

Question 1
Collected P 15,000 from customer on account.
This Business Transaction effects the following account, which will be debited or credited.
ACCOUNTS RECEIVABLE - CREDIT
CASH - DEBIT
The correct answer is:
Collected P 15,000 from customer on account.
This Business Transaction effects the following account, which will be debited or credited.
ACCOUNTS RECEIVABLE - [CREDIT]
CASH - [DEBIT]

Question 2
Components of Worksheet: (Note: Must be in order)

1. TRIAL BALANCE COLUMN

2. ADJUSTMENT COLUMN

3. ADJUSTED TRIAL BALANCE

4. INCOME STATEMENT COLUMN

5. BALANCE SHEET COLUMN

Components of Worksheet: (Note: Must be in order)

1. [TRIAL BALANCE COLUMN]

2. [ADJUSTMENT COLUMN]

3. [ADJUSTED TRIAL BALANCE]

4. [INCOME STATEMENT COLUMN]

5. [BALANCE SHEET COLUMN]

Question 3

The formula for Depreciation Expense:

Depreciation Expense = Cost of Asset – Scrap value/residual value/salvage value
Estimated economic life
Identify the following:
Cost of asset is the amount of company paid to purchase the asset. It includes the invoice
price plus transportation charges and installation fees.

Salvage value is the amount expected to be recovered at the end of an asset’s useful life.

Depreciation cost or value is the difference between the cost of an asset and its scrap
value.
The formula for Depreciation Expense:

Depreciation Expense = Cost of Asset – Scrap value/residual value/salvage value

Estimated economic life

Identify the following:

[Cost of asset] is the amount of company paid to purchase the asset. It includes the invoice
price plus transportation charges and installation fees.

[Salvage value ] is the amount expected to be recovered at the end of an asset’s useful life.

[Depreciation cost or value ] is the difference between the cost of an asset and its scrap
value.

Question 4
The first four steps in the accounting cycle are: (Note: Must be in order)

1. Identify and Analyze Transactions

2. Record Transactions to Journal

3. Post Journal Information to Ledger

4. Prepare Unadjusted Trial Balance

The correct answer is:
The first four steps in the accounting cycle are: (Note: Must be in order)

1. [Identify and Analyze Transactions]

2. [Record Transactions to Journal]

3. [Post Journal Information to Ledger]

4. [Prepare Unadjusted Trial Balance]

Question 5
Purchased additional office supplies for cash, P 25,000.
This Business Transaction effects the following account, which will be debited or credited.

CASH - CREDIT
OFFICE SUPPLIES - DEBIT
The correct answer is:
Purchased additional office supplies for cash, P 25,000.

This Business Transaction effects the following account, which will be debited or credited.

CASH - [CREDIT]
OFFICE SUPPLIES - [DEBIT]

Question 6
The year and month are not written for every written entry unless the year or month changes
or a new page is needed.
Select one:
a.
Date
b.
Posting Reference
c.
Credit
d.
Debit
The correct answer is: Date
Question 7
An account is debited when an amount is entered on the RIGHT side of the account and
credited when an amount is entered on the LEFT side.
The correct answer is:
An account is debited when an amount is entered on the [LEFT] side of the account and
credited when an amount is entered on the [RIGHT] side.
Question 8
Question text
Purchased Furniture for P55,000, 30 days
This Business Transaction effects the following account, which will be debited or credited.

ACCOUNTS PAYABLE - DEBIT

FURNITURE - CREDIT

Purchased Furniture for P55,000, 30 days

This Business Transaction effects the following account, which will be debited or credited.
ACCOUNTS PAYABLE - [CREDIT]

FURNITURE - [DEBIT]
Question 9
If the sum of its credits is greater, that account has a credit balance.
Select one:
True
False
The correct answer is 'True'.
Question 10
The left-hand side of a T-account is called the DEBIT SIDE , and the right-hand side is called
the CREDIT SIDE
The correct answer is:
The left-hand side of a T-account is called the [DEBIT SIDE], and the right-hand side is called
the [CREDIT SIDE]
Question 11
Rendered accounting services for cash, P20,000.
This Business Transaction effects the following account, which will be debited or credited.

CASH - DEBIT
SERVICE REVENUE - CREDIT
The correct answer is:
Rendered accounting services for cash, P20,000.

This Business Transaction effects the following account, which will be debited or credited.

CASH - [DEBIT]
SERVICE REVENUE - [CREDIT]

Question 12
Requires that all revenue earned whether payment is received or not should be recognized in
the period the goods or services are delivered or rendered and that all related costs to deliver
the goods or to render the whether paid or not should be recognized as expense to match the
revenue.
Answer:
The correct answer is: Accrual Accounting
Question 13
Requires that all revenue is recognized only when cash is received while expenses are
recognized only when cash is paid.
Answer:
The correct answer is: Cash-basis Accounting
Question 14
Refers to the availability of cash in the near future after taking account of financial
commitments over this period.
Select one:
a.
Capacity for Adaptation
b.
Financial Structure
c.
Solvency
d.
Liquidity
The correct answer is: Liquidity
Question 15
What is GAAP stands for?
Select one:
a.
Generally Accepted Accounting Principles
b.
General Accepted Accounting Principles
c.
Generally Accepted Accountant Principles
d.
Generally Accept Accounting Principles

The correct answer is: Generally Accepted Accounting Principles

Question 16
Refers to the availability of cash over the longer term to meet financial commitments as they
fall due
Select one:
a.
Capacity for Adaptation
b.
Financial Structure
c.
Liquidity
d.
Solvency
The correct answer is: Solvency
Question 17
Is the source of financing for the assets of the enterprise. It indicates what amount of assets
has been financed by creditors, which is borrowed capital, and what amount of assets has
been financed by owners, which is invested capital.
Select one:
a.
Finance
b.
Financial Structure
c.
Liabilities
d.
Liquidity
The correct answer is: Financial Structure
Question 18
Steps in Preparing a Worksheet: (Note: Must be in order)
STEP 1: Insertion of account balances in the trial balance columns.

STEP 2: Entering adjustments in the adjustment columns.

STEP 3: Entering the account balances in the adjusted trial balance columns.

STEP 4: Summing the final statements.

STEP 5: Proving the arithmetic accuracy
Steps in Preparing a Worksheet: (Note: Must be in order)
STEP 1: [Insertion of account balances in the trial balance columns.]

STEP 2: [Entering adjustments in the adjustment columns.]

STEP 3: [Entering the account balances in the adjusted trial balance columns.]

STEP 4: [Summing the final statements.]

STEP 5: [Proving the arithmetic accuracy]

Question 19
Paid salary of office staffs, P55,000
This Business Transaction effects the following account, which will be debited or credited.
CASH - CREDIT
SALARY EXPENSES - DEBIT
The correct answer is:
Paid salary of office staffs, P55,000
This Business Transaction effects the following account, which will be debited or credited.

CASH - [CREDIT]
SALARY EXPENSES - [DEBIT]

Question 20
Purchased office supplies worth P30,000 on account.
This Business Transaction effects the following account, which will be debited or credited.
ACCOUNTS PAYABLE - CREDIT
OFFICE SUPPLIES - DEBIT
The correct answer is:
Purchased office supplies worth P30,000 on account.
This Business Transaction effects the following account, which will be debited or credited.

ACCOUNTS PAYABLE - [CREDIT]

OFFICE SUPPLIES - [DEBIT]

Question 21
Liabilities are carried at the undiscounted amounts of cash or cash equivalents expected to
be paid to satisfy the liabilities in the normal course of business.
Select one:
a.
Realizable Value
b.
Value
c.
Settlement value
d.
Present Value
The correct answer is: Settlement value
Question 22
If the sum of an account’s debit is greater than the sum of its credits, that account has a debit
balance.
Select one:
True
False
The correct answer is 'True'.
Question 23
If the total of the debit side exceeds the total of credit side then this would be represented by
a CREDIT BALANCE and opposite is true for a DEBIT BALANCE
The correct answer is:
If the total of the debit side exceeds the total of credit side then this would be represented
by a [DEBIT BALANCE] and opposite is true for a [CREDIT BALANCE]

Question 24
Each account balance is determine by footing (adding) all the debits and credits
Select one:
True
False
The correct answer is 'True'.
Question 25
The Businesss Owner, withdrew cash P25,000 for her personal use.
This Business Transaction effects the following account, which will be debited or credited.
CASH - CREDIT
OWNER, WITHDRAWALS - DEBIT
The correct answer is:
The Businesss Owner, withdrew cash P25,000 for her personal use.

This Business Transaction effects the following account, which will be debited or credited.
CASH - [CREDIT]
OWNER, WITHDRAWALS - [DEBIT]

Question 26
The accounting cycle is a step-by-step process to record business activities and events to keep
financial records up to date.
Select one:
True
False
The correct answer is 'True'.
Question 27
Sebastian Smith, decided to create his own Wed Development Company.
He invested P150,000 to start his own Company
This Business Transaction effects the following account, which will be debited or credited.
CASH - DEBIT

SMITH, CAPITAL - CREDIT

The correct answer is:
Sebastian Smith, decided to create his own Wed Development Company.

He invested P150,000 to start his own Company.

This Business Transaction effects the following account, which will be debited or credited.

CASH - [DEBIT]

SMITH, CAPITAL - [CREDIT]

Question 28
Assets are carried at the amount of cash or cash equivalents that would have to be paid if the
same or an equivalent asset was acquired currently.
Select one:
a.
Historical Cost
b.
Cost of Sale
c.
Cost of Good Sold
d.
Current Cost
The correct answer is: Current Cost