Accountancy Department

ACCCOB2 Quiz No. 1

3rd Term, AY 2022-2023
SET A

NAME: _______________________________________________ Section ________________

ID NUMBER: __________________________________________

GENERAL INSTRUCTIONS. (Points will be deducted for any violation.)

1. Write your name, ID number and section on the test questionnaire and worksheet or scannable form.
2. Shade HEAVILY the scannable form using BLACK BALLPEN ONLY.
3. Do not detach any portion of the questionnaire.
4. Anyone caught cheating will have a grade of 0.0 in the course.
5. iPods, cellular phone, laptops and other similar gadgets and communication devices are not allowed during the
quiz.
6. Read the instructions carefully before you start.
7. Any questions regarding the quiz shall be addressed directly to the faculty only.
8. The quiz is good for 1 hour and 30 minutes.
God bless everyone!
I: TRUE OR FALSE (1 point each)
1. Comparability refers to the qualitative characteristics of a financial that allows users to
compare and contrast items presented in a financial information, whether from the same
entity at different periods or different entities in the same period. TRUE

2. Financial accounting focuses more on the reporting to internal users while management
accounting focuses more on external users. FALSE
3. Going concern as the underlying assumption projects that the company will only have at
least ten years to operate and continue its business transactions. FALSE
4. The narrative descriptions or disaggregation, disclosures and supplementary information of
items presented on the statements and information about items that do not qualify for
recognition of those statements are presented at the Statement of Cash Flows. FALSE
5. The two general characteristics of useful financial information are fundamental and
enhancing characteristics. TRUE
6. Physical form is essential to the existence of an asset. FALSE
7. If effective rate is higher than the nominal rate of the note, it is deemed that the note
receivable is at a discount. TRUE
8. A checked that has been paid by a customer but tagged as NSF may be part of cash and
cash equivalents. FALSE
9. An entity acquired a BSP Treasury Bill that would mature on January 31, 2024. The
investment was acquired on July 1, 2023. The treasury bill qualifies to be presented as part
of cash equivalents on the entity’s 2023 financial statements. FALSE
10. Factoring refers to the offering of accounts receivables as collateral for an existing loan.
FALSE
11. If a note was discounted without recourse, the bank can still collect from the entity after two
years if the original debtor dishonors the contract. FALSE
12. To qualify as cash equivalent, a short-term investment in debt securities must have
remaining three months or less before maturity as of the purchase date. TRUE
13. Accounts receivables are initially recognized once contractual right to the cash flow expire. F
14. Deposit in transit in a bank reconciling item that is due to timing differences. TRUE

15. Boomer Company had inadvertently recorded a P50 check issued as P500. The effect of the
error is an understatement of the cash ending balance for P450. TRUE
II: MULTIPLE CHOICE – THEORY (1 point each)

16. An entity using annual financial reports within one month at the end of reporting period is an
example of which enhancing quality of accounting information?
a. Neutrality
b. Timeliness
c. Predictive Value
d. Faithful Representation

17. PFRS stands for

a. Philippine Financial Rubrics Set
b. Public Financial Reporting Stocks
c. Philippine Financial Reporting Standards
d. Public Financial Regulations Standards

18. All of the following qualifies as receivables financing, except

a. Pledging
b. Factoring
c. Submerging
d. Discounting

19. Which of the following is not considered cash for financial reporting purposes?
a. Petty cash funds
b. Money orders, personal checks, manager’s check
c. Coin, currency and available funds
d. Postdated checks and IOUs

20. Which of the following is not considered as external users of financial statements
a. Investor from the Philippine Stock Market
b. Lenders of the entity
c. President of the company
d. General Public

21. Accounts receivables shall be recognized initially at

a. Face Value plus Transaction Cost
b. Maturity Amounts
c. Face Amounts
d. Factored Values

22. Trade Receivables are classified as current assets when they are reasonably expected to be
collected within:
a. One year
b. The normal operating cycle
c. One year or within the normal operating cycle, whichever is shorter
d. One year or within the normal operating cycle, whichever is longer

23. Petty cash is

a. Separately classified as current asset.
b. Money kept on hand for making minor disbursements of coin and currency rather than by
writing checks
c. Set aside for payment of payroll
d. Restricted cash

24. Gain or loss of foreign currency translation is reported at

a. Statement of cash flows
b. Notes to financial statements
c. Statement of Comprehensive Income
d. Not reported due to restrictions set by PFRS
III. PROBLEM SOLVING. Shade the letter of your choice. Solutions MUST BE IN PROPER
ACCOUNTING FORMAT, otherwise, will not be given points credit if not followed. (2 pts each)

25. Promise Trading had the following account balances on December 31, 2022:
Cash in bank - current account 5,000,000
Cash in bank - dividend fund 1,000,000
Cash on Hand 500,000
Cash in bank - whereby 2,000,000 is restricted account for building construction 3,000,000
Time deposit, purchased Dec 15, 2022 and with maturity date of March 15, 2023 2,000,000

The cash on hand includes a P200,000 check payable to Promise Trading, dated January 2, 2023. What
total amount should be reported as "cash and cash equivalents" on December 31, 2022?
a. 8,300,000 b. 7,300,000 c. 6,300,000 d. 9,300,000

26. The Cash account of Marshall Company as of December 31, 2022 shows the following details:

Petty cash fund that consist of bills and coins amounting to 15,000 and
20,000
vouchers worth 5,000
Undeposited collections, including a bank draft issued to Marshall for P70,000 1,220,000
Bank Overdraft, DEF Bank (50,000)
Bond sinking fund 850,000
IOUs signed by officers 33,000
On December 31, 2022, what total amount should be reported as "cash and cash equivalents"?
a. 1,230,000 b. 1,160,000 c. 1,180,000 d. 1,165,000

27. The Cash account of Boomer Corporation as of December 31, 2022 shows the following details:
Undeposited collections 23,850
Certified checks 45,500
Commercial paper purchased 10/2/22 and due 2/2/23. 50,000
A two-year BSP treasury bill purchased November 1, 2022 and will
105,000
mature on January 31, 2023
Cash fund set aside for payroll purposes 250,000
Check from customer dated January 5 2023 12,000
Cash in foreign currency ($50,000) received from customer. Upon
2,250,000
receipt from customer: P45:$1. Closing rate on 12/31/22: P50:$1
On December 31, 2022, what total amount should be reported as "cash and cash equivalents"?
a. 2,674,350 b. 2,819,350 c. 2,924,350 d. 2,974,350

28. MILLIONS Corporation has just received the monthly bank statement dated July 31, 2022. The
statement shows an ending balance of P118,950. Listed on the statement are collected note of P10,000
(which was electronically transferred to the bank for MILLIONS Corporation), a service charge of P1,200,
two NSF checks totaling P7,450, and a P3,000 charge for printed checks. In reviewing the corporation's
cash records, the bookkeeper identifies outstanding checks totaling P24,650 and a July 31 deposit-in-transit
of P17,880. During the month of July, ta check was prepared amounting to P5,000 as payment to a
supplier and the bookkeeper recorded a debit to cash amounting to P5,000. The corporation's general
ledger 'Cash in Bank' account shows July 31 ending cash balance of P123,830.
How much is the adjusted cash balance on July 31, 2022?
a. 117,180 b. 122,180 c. 112,180 d. 104,300

29. Carson Company had the following information for its December 31, 2022 bank reconciliation:
Balance per bank statement 1,805,000
Deposit in transit 315,000
Collection for Carson Company credited by Bank to Loki Trading 60,000
Outstanding checks 275,000
Credit Memo for interest earned 2,000

What is the adjusted bank balance on December 31, 2020?

a. 1,847,000 b. 1,785,000 c. 1,907,000 d. 1,905,000
30. At the end of the year, the unadjusted trial balance of Mochi’s Pastries includes the following items:
Accounts receivable 700,000
Allowance for doubtful accounts 20,000
Sales 5,000,000
Sales returns and allowance 30,000
Sales discount 20,000
Past experiences indicate that 75% of all sales are credit sales. It is the policy to maintain an allowance for
doubtful accounts equal to 12% of the outstanding accounts receivable. What is the net realizable value
of Mochi's Pastries' receivables?

a. 630,000 b. 616,000 c. 636,000 d. 650,000

31. Information pertaining to Carson Company are as follows:

Additional data for transactions made by the company are as follows:

•Check for purchase of supplies was drawn for P60,000 but was recorded as P90,000 by Carson.
•The manager wrote a check for traveling expenses of P100,000 while out of town. The check was not
recorded in the books of Carson.
What is the amount of outstanding checks on July 31?
a. 540,000 b. 550,000 c. 600,000 d. 980,000

32. to 33. Mochi Corporation had the following data as of year-end:

12/31/2022 12/31/2021
Cash and cash equivalents 2,550,000 2,225,000
Accounts receivable 850,000 960,000
Sales 5,820,000 5,560,000

32. All sales of Mochi are on credit terms. What is the company's Accounts Receivable Turnover for
the year 2022? Round off answer to two decimal places.
a. 2.82 c. 6.43 c. 6.69 d. 6.85

33. Using the same information above, what is the company's Average Collection Period or Days
Receivable? Use 365 calendar days in a year. Round off answers to whole numbers.

a. 53 days b. 55 days c. 57 days d. 129 days

34. to 35. Hawkeye Trading uses the allowance method of accounting for doubtful accounts. The following
summary schedule was prepared from an aging of accounts receivable outstanding on December 31 of the
current year:
No. of days outstanding Amount % estimated loss
0-30 days 5,000,000 2%
31-60 days 2,000,000 10%
over 60 days 1,000,000 15%
Total 8,000,000

Allowance for doubtful accounts before adjustment amounted to 80,000. If Hawkeye bases its estimate on
the aging of accounts receivable,

34. How much should be the required allowance for doubtful accounts on December 31?
a. 350,000 b. 370,000 c. 450,000 d. 500,000

35. How much is the doubtful accounts expense that should be reported in the Income Statement of
the current year?
a. 450,000 b. 420,000 c. 370,000 d. 270,000

36. Mama’s Cradle received an 11% five-year note having a face value of P4,000,000 from a customer on
January 2, 2023. The interest on the note is payable every December 31. The effective interest on January
2, 2023 was 12%. What is the present value of the note receivable on the date of issuance?
 Present value of 1 at 11% for 5 periods 0.5935
Present value of an ordinary annuity of 1 at 11% for 5 periods 3.6959
Present value of 1 at 12% for 5 periods 0.5674
Present value of an ordinary annuity of 1 at 12% for 5 periods 3.6048

Note: Choose from the above given PVFs when multiplying with the amount of principal and interest.

a. 3,585,712 b. 3,855,712 c. 4,469,600 d. 4,574,000

37. My Aussie Gal received a P1,000,000 120-day, 15% note from a customer on April 1, 2022. It was
discounted to a bank without recourse on May 1 at 12% discount rate. How much was My Aussie Gal's
net proceeds from discounting?

a. 955,500 b. 968,500 c. 1,018,500 d. 1,040,000

“We go through our careers and things happen to us. Those experiences made me what I am.”
- Thomas Keller