MQZ #1

September 29, 2023

Test I.
Instruction: Provide the journal entries to record the transactions described below.

1. Owner contributes P1,000,000 to the business.

2. Purchase of inventory worth P300,000 on cash basis.
3. Purchase of invenory worth P400,000 on account.
4. Sale of goods for P800,000, on account. The cost of the goods sold is P500,000.
5. Payment of P400,000 as settlement of accounts payable.
6. Collection of P700,000 on accounts receivable.
7. Purchase of equipment worth P58,000.
8. Drawings of owner amounting to P10,000.
9. Payment for salaries expense of P70,000.
10. Payment for interest expense of P5,000.

Test II.
You are an owner of a service business. The following were the business transactions during the period:

1. Provided P35,000 cash as capital of the business.

2. Paid supplies expense amounting to P15,000.
3. Paid an overdue rent of P5,000.
4. Received billings for utilities used amounting to P2,000.
5. Issued a promissory note to a lending company in exchange for P10,000 cash.
6. Billed customers on account for services rendered amounting to P75,000.
7. Paid interest expense of P500 to the lending company.
8. Collected cash of P50,000 from credit customers.
9. Withdrew cash of P20,000 from the business.
10. Paid employee salaries of P10,000.

Requirement: Provide the journal entries.

Test III.
Instruction: Indicate whether each of the accounts listed below is an ASSET, LIABILITY, EQUITY, INCOME
or EXPENSE account.

1. Notes receivable
2. Salaries expense
3. Salaries payable
4. Owner’s drawings
5. Building
6. Cost of sales
7. Service fees
8. Advance from customers
9. Prepaid insurance
10. Depreciation
Test IV.
Instruction: Indicate whether each of the accounts listed below is a BALANCE SHEET account or an
INCOME STATEMENT account.

1. Notes receivable
2. Cash
3. Salaries expense
4. Owner’s drawings
5. Building
6. Cost of sales
7. Service fees
8. Unearned revenue
9. Prepaid insurance
10. Depreciation