Name: ____________________________________
Which of the following is not a correct
Grade & Section: ___________________________
Date: _____________________________________
ENCIRCLE THE LETTER OF THE
CORRECT ANSWER.
1. Which of the following is not a correct
variation of the basic accounting
equation?
a. Assets = Liability + Equity
b. Assets – Liabilities = Equity
c. Assets – Equity = Liability
d. Assets = Liability – Equity
2. Which of the following is not an
essential element of an asset?
a. A resource controlled
b. Arising from past event
c. Expected to provide future economic
benefits
d. Must be owned by the business
3. Which of the following is not an
essential element of a liability?
a. A present obligation
b. Arising from past event
c. Expected to cause an outflow of
economic benefits
d. Arising from a future event
4. A business has a past practice of
making refunds to customers who are
not satisfied with their purchases. This
practice has created valid expectations
from customers that if they return the
goods they have purchased, the
business will refund their payment. The
business has been honoring this
practice for a very long period of time.
The type of obligation created by this
practice is called
a. Constructive obligation
b. Legal obligation
c. Construction obligation
d. Valid obligation
5. Equity is
a. Assets plus liabilities
b. Assets less liabilities
c. Liabilities less assets
d. Assets times liabilities
6.
expanded accounting equation?
a. Assets = Liabilities + Equity + Income
- Expenses
b. Assets + Expenses = Liabilities +
Equity + Income
c. Assets – Liabilities = Equity + Income
- Expenses
d. Assets = Liabilities + Equity + Income
+ Expenses
7. These are increases in economic
benefits during the period in the form of
inflows or enhancements of assets or
decreases of liabilities that result in
increases in equity, other than those
relating to investments by the business
owners.
a. Expense
b. Income
c. Equity
d. Assets
8. Which of the following statements is
correct?
a. Income increases equity
b. Expense increases equity
c. Income decreases equity
d. Income and expense do not affect
equity
9. Which of the following statements is
incorrect?
a. If expense is greater than income, the
difference is profit.
b. If income is greater than expenses,
the difference is profit.
c. If income is less than expenses, the
difference is loss.
d. Profit increases equity.
10.The start-up capital of a business
consisted of ₱1,000,000 cash provided
by the business owner and an additional
₱250,000 from a bank loan. The total
start-up assets of the business therefore
is
a. ₱1,250,000
b. ₱1,000,000
c. ₱750,000
d. ₱250,00
Goodluck and God bless!