Name:

Class Standing March 25, 2024

Instructions: Write your answers on a white piece of paper. Erasures are not allowed and
considered wrong.

Students are required to maintain academic integrity. Cheating, lying, and other unethical or
immoral conduct will not be tolerated. Any student found guilty of cheating on quizzes or exams
will get (at a minimum) a 60% on the said test.

Submission: April 1, 2024 4:00pm

Problem 1: The following are upon the open accounts in the ledger of A Enterprises:

Accounts payable
Furniture
Cash
Equipment
Loans payable
Unused office supplies
Accrued interest payable
A, Capital
SSS premium payable
Accounts receivable
Accum. Dep’n-furniture
Accum. Dep’n-equipment
Withholding tax payable
Input tax

Required: Determined the following

1. Number of asset accounts.

Cash, Accounts receivable, Equipment , Furniture , Unused office supplies

2. Number of liability accounts.

Loans payable, Accounts payable, Withholding tax payable, Accrued interest payable
A, Capital,SSS premium payable, Accum. Dep’n-furniture,Accum. Dep’n-equipment, Input tax

3. What account should be listed immediately next to cash?

Accounts receivable,

4. What account should be listed immediately next to equipment?

Furniture

5. What is the normal balance of Input Tax Account?

Accounts receivable,
Problem 2:

Case 1: Discuss how information technology is revolutionizing the accounting function.

Contrast accounting tasks before and after the “information technology revolution”

ANS: The quality of accounting information systems is significantly impacted by information

technology. Inadequate IT infrastructure can result in additional expenses, unreliable data, and
poor decision-making. The quality of accounting information in the construction industry has
been found to be considerably improved by computerized accounting information systems
(CAIS). Speed and flexibility are found to be the most important technical effects on accounting
applications when it comes to the impact of information technology on the quality of accounting
information. Companies may now offer high-quality financial data, make data gathering and
analysis easier, and enhance planning and decision-making procedures thanks to technological
improvements.

Case 2: Your nature of business requires updated records of inventory to be able to determine
the competitive pricing.Which process of encoding is more applicable for such need
Batch or Direct Processing? Justify your answer.

ANS: Periodic inventory accounting methods work best for small organizations with low sales
volumes or easily manageable inventories.

Case 3: You are convinced to computerize your billing and collection system. Which course of
action would you undertake first?
a. To select from available software in the market which is the best for your need?
Or
b. To scout for the latest computer unit available in the
market.
ANS: To select from available software in the market which is the best for your need and
choose the solution that provides the functionality most important to
the business and to make sure to choose objectively, picking software
that solves the business needs even if it doesn't have the most
functionality.

Case 4: You have 5 employees in your present payroll. Under the manual system, it will take
your payroll clerk one day to compute for the amount of pay to each of the 5
employees.
Under the computerized system, it will take only 30 minutes to process completely
and accurately the payroll computation for each period. The cost to computerize the
system is P100,000.
Would you favor the computation of your payroll system? Why or why not?

ANS:I would favor the computerize computation of my payroll system because computerized
payroll accounting has numerous advantages, including improved compliance, scalability,
accuracy, cost and time efficiency, and data security. It is a crucial part of contemporary business
operations.

Problem 3:
Instruction: Write TRUE if the statement is correct or FALSE if it is incorrect.

1. Increases in asset mean increase in the liabilities and/or increases in capital.

FALSE
2. The working capital of the business is its total assets.
TRUE

3. A working capital is the actual owner’s contribution to the business.

FALSE

4. The issuance of promissory note for cash received will increase the working capital of the
business.
FALSE

5. A deposit slip covering the actual amount deposited when recorded will have a net increase
in the assets of the business.
TRUE
6. Creditors have priority of claims against the business assets.
TRUE

7. The assets are on the left hand side of the accounting equation, and the liabilities and capital
are on the right hand side of the equation.
TRUE
8. The total value of credits in most cases is higher than the total value of debits.
TRUE
9. To raise the capital is described as an investment activity of the business.
TRUE
10. The primary concern of financing activities of the business is to acquire and dispose long-
lived assets.
TRUE

11. In the expanded accounting equation, revenue increases the owner’s equity account
TRUE
.
12. The measuring aspect of accounting determines the activities and events with financial
bearing to the basic accounting elements of the business.
TRUE

Problem 4:

Instruction: Indicate the normal balance of the account (DR for debit CR for credit), and in
what financial statement (whether SFP for Statement of Financial Position or SCI for Statement
of Comprehensive Income) the account name should appear.

Account Name DR or CR SFP or SCI

Example: Cash in Bank DR SFP

1. Accrued salary payable CR SFP

2. Freight-in CR SFP
3. Miscellaneous expense CR SCI
4. Withholding tax payable CR SCI
5. Net income summary DR SCI
6. Land DR SFP
7. Input tax CR SCI
8. Taxes and licenses expense CR SCI
9. Depreciation expense CR SFP
10. Bank loan payable CR SFP
11. Interest income DR SCI
12. Accrued interest income DR SFP
13. Income tax CR SCI
14. Freight-out DR SFP
15. Net VAT payable CR SFP
16. Trading securities DR SFP
17. Notes payable CR SFP
18. Notes receivable DR SFP
19. Sales return and allowances DR SCI
20. Gain on sale of capital asset DR SFP

Problem 5:

Instruction: Indicate whether the normal balance of the account is debit or credit, and whether
the increase or decrease of the said account should be debit or credit.

Particulars: Normal Change

Balance Debit/credit
Sales discounted decreased by P2,000 Debit Credit

1. Cash in bank increased by P1,000 P1,000 DEBIT

2. Allowance for bad debts decreased by P500 P500 CREDIT
3. Purchase discounts decreased by P3,000 P3,000 CREDIT
4. Sales discounts increased by P250 P250 DEBIT
5. Merchandise decreased by P40,000 P40,000 CREDIT
6. Cost of sale increased by P20,000 P20,000 CREDIT
7. Transportation out increased by P1,000 P1,000 CREDIT
8. Bad debt expense decreased by P2,000 P2,000 CREDIT
9. Accounts payable increased by P10,000 P10,000 CREDIT
10. Accrued salaries increased by P6,000 P6,000 CREDIT
11. BONUS
12. Accounts receivable decreased by P5,000 P5,000 CREDIT
13. Cash increased by P8,000 P8,000 DEBIT
14. Depreciation increased by P12,000 P12,000 CREDIT
15. Equipment sold for P50,000 P50,000 DEBIT
16. Gain on sale of equipment, P3,000 P3,000 DEBIT
17. Furniture was acquired for P20,000 P20,000 CREDIT
18. Paid accrued interest on notes payable CREDIT
19. Loans payable in the bank was paid in full DEBIT
20. Notes receivable was collected in full DEBIT
21. Loss due to fine loss, P20,000 P20,000 CREDIT
22. Rent expense decreased by P1,500 P1,500 DEBIT