FDNACCT

AY 2022-24 Term 1
Quiz #2
SET A
TEST I. TRUE OR FALSE

1. The purchase order is used by a sales department to notify the purchasing department of the
items needed.
FALSE
The purchase order is prepared by the purchasing department to order the necessary goods at an
appropriate price from the selected supplier. The PURCHASE REQUISITION is used by a sales
department to notify the purchasing department of the items wanted.

2. In the double-entry system, all business transactions affect at least two accounts and leave the
accounting equation in balance.
TRUE

3. A customer's promise to pay on credit is classified as an Accounts Payable by the seller.

FALSE
A customer’s promise to pay on credit is considered an Accounts Receivable in the books of the
seller.

4. Business transactions are first recorded in the General Ledger.

FALSE
General Journal

5. Liability accounts having a normal balance of credit will use the credit side for increases and
the debit side for decreases.
TRUE

6. A promissory note is a written promise to pay a specified amount on a certain date.

TRUE

7. A wholesale business is a firm which typically sells goods to another firm – a retailer, which will
then sell it to the final customer.
TRUE

8. Under a periodic inventory system, the ending inventory is accounted for at the end of the
accounting period.
TRUE

9. Trade discounts are discounts for early payment of account.

FALSE
Trade discounts are discounts for bulk purchases. Cash discounts are discounts for early payment
of account.

10. Freight costs incurred by the seller on outgoing merchandise are considered to be a Cost of
Sales item to the seller.
FALSE
Freight costs by the seller, also known as Freight Out, is considered as an expense.

TEST II. MULTIPLE CHOICE THEORY

1. Posting
A. Normally occurs before journalizing.
B. Is an optional step in the recording process.
C. Transfers journal entries to ledger accounts.
D. Transfers ledger transaction data to the journal.

2. Which of the following errors will result in an equal Trial Balance?

A. The purchase of delivery truck for ₱450,000 was posted as debit to cash, and a debit to the
motor vehicle account.
B. A payment of account of ₱9,500 is debited to Accounts Payable as ₱9,050.
C. The balance of Accounts Receivable is carried forward as a credit balance.
D. The purchase of supplies on account was journalized twice.
 3. Accounts that normal debit balances are
A. Assets, expenses, and revenues
B. Assets, expenses, and owner’s capital
C. Assets, liabilities, and owner’s drawings
D. Assets, owner’s drawings, and expenses

4. Payment of a liability out of the owner’s personal cash

A. Does not affect the business.
B. Decreases both assets and liabilities.
C. Decreases both assets and equity.
D. Decreases liability and increases equity.

5. An entity collected cash on the note issued by the customer for professional service rendered,
the bookkeeper will
A. Credit notes payable
B. Debit notes receivable
C. Credit service fee revenue
D. Credit notes receivable

6. A company paid ₱5,000 to settle an account payable to a supplier where they bought office
supplies last month. Which of the following general journal entries will the company make to
record this transaction?
A. Debit Office Supplies, ₱5,000; credit Cash, ₱5,000.
B. Debit Office Supplies, ₱5,000; credit Accounts Payable, ₱5,000.
C. Debit Office Supplies Expense, ₱5,000; credit Cash, ₱5,000.
D. Debit Accounts Payable, ₱5,000; credit Cash, ₱5,000

7. A 105-day 5% note was issued with a face value of P10,000 on January 3. The maturity date is
on
A. April 17
B. April 18
C. April 19
D. April 20

8. What do the following credit terms mean: 1/10, n/20?

A. 10% trade discount and 20% cash discount.
B. 20 days credit terms and with 1% cash discount if paid within 10 days.
C. 20 days credit terms and with 1% trade discount if paid within 10 days.
D. 1% interest within 10 days and no interest if paid within 20 days.

9. This term indicates that the seller pays for freight and retains ownership and assumes loss or
damage until the goods are delivered to the buyer.
A. FOB Shipping Point, Collect
B. FOB Shipping Point, Prepaid
C. FOB Destination Point, Prepaid
D. FOB Destination Point, Collect

10. What type of transaction is recorded in the sales journal?

A. Sale of merchandise for cash
B. Sale of merchandise on account
C. Purchase of merchandise on account
D. Purchase of merchandise for cash

TEST III. PROBLEM SOLVING

1. Faith D Nakpil withdrew ₱100,000 from her personal savings account and deposited it in the
name of FDN Accounting Services (FDN). FDN receives ₱36,000 in cash for services provided
to clients. The company performs services on account for ₱11,000. There was a collection of
₱6,000 from customers on account. The company pays ₱8,000 in salaries expense for the
month. The company also pays ₱7,000 for utilities expense and records a withdrawal by the
owner of ₱5,000. Compute the balance of Cash.
2. FDN Accounting Services has the following information related to its Accounts Payable:
• On September 1, 2023, the Accounts Payable balance was ₱60,200.
• During September, a purchase of equipment amounting to ₱300,000 was made on terms
20% down, balance on account.
• Total payments made to various suppliers during the month amounted to ₱170,400.
Compute the balance of Accounts Payable on September 30, 2023.
3. FDN Accounting Services has the following ledger balances as of September 30, 2023:
Cash ₱ 265,000
Accounts Receivable 57,000
Equipment 179,400
Prepaid Expenses 28,000
Accounts Payable 177,500
F. D. Nakpil, Capital (before Net Income/Loss) 259,800
Service Revenue 180,000
Operating Expenses 87,900

Compute the total amount indicated in the Debit Column of the Trial Balance of FDN as of
September 30, 2023.

4. The company issued a 2-month, 16% interest bearing note with a face value of ₱75,000.
Compute the interest of the note.

5. FDN Trading needed cash to pay some bills and borrowed ₱30,000 issuing a 90-day, 10% note
Compute the maturity value of the note.

6. FDN Trading made sales with a list price of ₱40,000 and trade discount of 8%. Compute the
Invoice Price to be recorded as Sales.

7. FDN Trading shows the following balances:

Sales ₱700,000
Sales Returns and Allowances 28,000
Sales Discount 15,000
Cost of Sales 537,000

Compute the Net Sales.

8. FDN Trading shows the following balances:

Beginning Inventory ₱48,000

Purchases 95,000
Purchase Returns and Allowances 7,000
Purchase Discount 4,000
Freight-in 9,000

Compute the Net Cost of Purchases.

9. The following invoices were found in the shipping and freight folder by the company accountant
of FDN Trading:

Invoice 122 – ₱1,000 FOB Shipping Point, Collect

Invoice 125 – ₱1,300 FOB Shipping Point, Collect
Invoice 133 – ₱8,000 FOB Destination Point, Prepaid
Invoice 149 – ₱3,200 FOB Destination Point, Prepaid

All these invoices were related to FDN Trading’s sales to ABC Company. Compute the total
amount of Freight Out to be recorded by FDN Trading.

10. FDN Trading sold merchandise to a customer on credit in the amount of ₱45,000. FDN issued
a credit memo for ₱4,000 due to damages during shipping. The invoice is dated September 15
with terms 1/15, net 45. If the customer chooses not to take the cash discount, compute the
balance of the accounts receivable account pertaining to this customer by September 30.
11. FDN Trading recorded the following events involving a recent purchase of merchandise:

• Purchased goods for ₱400,000, less 20% and less 10%, on terms 2/10, n/30.
• Paid ₱500 freight on terms, FOB Destination Point Shipping Point, Collect
• Made a partial payment of ₱100,000.
• Paid the invoice within the cash discount period.

Compute the cash payment to the seller on the final date of settlement.

12. The following transactions transpired during the period:

(a) Started with ₱75,000 merchandise inventory beginning.

(b) Purchased merchandise on account for ₱415,000, 6/10, n/30.
(c) Paid freight charges for merchandise purchased in (b) amounting to ₱42,000 on terms
FOB Shipping Point, Collect.
(d) Sold merchandise on account for ₱600,000, 3/10, n/30.
(e) Made purchase returns related to (b) amounting to ₱40,000.
(f) Paid the purchases from (b) within the discount period.

Compute the total goods available for sale.

13. On September 1, 2023, FDN Trading sold merchandise for ₱500,000 less 10% and 10% on
terms 20% down, balance 2/20, n/90. The related freight amounted to ₱10,000 on terms FOB
Destination, Prepaid. The customer returned goods amounting to ₱40,000 and made a partial
payment of ₱200,000. The account was collected on September 21. Compute the final amount
of cash collected on September 21.