MULTIPLE CHOICE

business reported total assets of

1. At the start of the year, Karina Blade, owner Shadow Blade Barbershop
P2,500,000. . h Karina took P110,000 for
During the year, the company recognized service revenue of P820,~00 of wh~c At the end of the year, the
personal use. Loss amounting to P200,000 was r~ported f~r the period e~de · 0
total assets were valued at P2,200,000, and the residual claim of the owner 1s P1 ,500,00 ·
How much is the total liabilities as of the end of the year?
a) P?00,000
b) P690,000
c) P500,000
d) P1 ,500,000

2. Which of the following does not constitute practice of accountancy in the Philippines?
a) Practice of Public Accountancy
b) Practice in Education/Academe
c) Practice in Commerce and Industry
d) Practice of Law

3. Moskov established Paquito Printing Services. For the period, it rendered services to various customers in
which cash amounting to P610,000 was collected and still has receivables amounting to P125,000 for the total
services rendered. ·
How much is the business revenue for the period? '
a) P610,000
b) P125,000
c) P485,000
d) P735,000

4. At the start of the year, Karina Blade, owner Shadow Blade Barbershop business reported total assets of
P2,500,000.
During the year, the company recognized service revenue of P820,000 of which Karina took P110,000 for
personal use. Loss amounting to P200,000 was reported for the period ended. At the end of the year, the
total assets were valued at P2,200,000, and the residual claim of the owner is P1 ,500,000.
How much is Blade, Capital as of the beginning of the year?
a) P1,810,000
b) P1 ,500,000 ,,
c) P1 ,700,000
d) P1 ,590,000

5. Natan Walker, owner of Spacetime Walker Computer Services, started the business with a P1 ,500,000
capital. At the end of the year, the total value of the claims of the creditors is PB00,000 and the owner's
equity is P1,200,000. During the year, Natan withdrew cash amounting to P100,000.
How much is the total assets at the end of the year?
a) P2,000,000
b) P2,700,000
c) P2,300,000
d) P1 ,900,000

6· ~is accounting organization is tasks to promulgate and improve accounting standards that will constitute
enerally ~~ce_pted Accounting Principles (GAAP) in the Philippines.
a) Phihppme Institute of Certified Public Accountants
b) Board of Accountancy
c) P~ofes~ional Regulation Commission
d) Financial Reporting Standards Council

7. This is the branch of ace t' .

statements oun mg that 1s concerned primarily with the preparation of general-purpose financial
::i\ Fin::inr.i::il Ar.r.n11ntinn
 b) Managerial Accounting
c) Government Accounting
d) Forensic Accounting

8 The trial balance Is out of balance and the accountant suspects that a transposition or slide error has
occurred. What will the accountant do to find the error?
a. Determine the amount of the error and look for that amount on the trial balance.
b. Determine the amount of the error and divide by two, then look for that amount on the trial
balance.
C. Determine the amount of the error and refer to the journal entries for that amount
d. Determinefthe a~ou ~kt of the error and divide by nine. If the result is evenly divided, then
this type o error 1s 1I e1y.

9. Which of the following is not part of the general Journal?

a) Transaction date
b) Debit amount
c) Credit amount
d) Account balance

10. In year 2021, Kagura, the owner of Marksman Salon, made an initial investment to the business amounting to
P1 ,000,000. During the year, the business was able to post a service revenue of P1 ,500,000 and P800,000
worth of expenses. Before the year ends, Kagura withdrew cash to be used as his bet in the ML tournament.
At the end of the year, Kagura Capital has a balance of P1 ,500,000.
Assuming that the total liabilities as of the end of the period is P610,000, how is the total assets as of the
end of the period?
a) P2,110,000
b) P890,000
c) P700,000
d) P-0-

11 . It refers to the company's book of accounts that is also known as the book of origin.al entry.
a) General journal
b) General ledger
c) General book
d) Subsidiary ledger
lY

12. In year 2020, after the declaration of the entire country into a total lockdown due to pandemic, Gatotkaca, a
certified online gamer, put up an online game consultancy business using his savings as a former employee of
ABS-CBN, amounting to P1,000,000, as initial capital. During the year, P600,000 cash was used to purchase
sets of gaming equipment to be used in the business. The purchase of the gaming equipment resulted in a
liability of P200,000. Profit for the year is P280,000.
How much is the total assets of the business as at the end of 2020?
a) P1 ,600,000
b) P1,800,000
c) P1 ,480,000
d) P1 ,200,000

13. The assets of Hayabusa Barbershop comprise of P1 ,000,000 cash and P9,000,000 land and building. The
land and building have unpaid mortgage. The owner~ s equity is P6,500,000. How much is the liability of the
business?
a) P3,500,000
b) PS,000,000
c) P?,500,000
d) P-0-

14. Which of the following errors will cause the trial balance totals to be unequal?
 a. amount incorrectly entered on the trial balance
b. failure to record a transaction or to post a transaction
c. recording the same transaction more than once .
d. recording the same erroneous amount for both the debit and the credit parts of a
transaction
e. posting a part of a transaction correctly as a debit or credit but to the wrong account

15. Which of the following is not an element of financial position?

a) Asset
b) Owner' s Equity
c) Liabilities
d) Revenue

16. In year 2020, after the declaration of the entire country Into a total lockdown due to pandemic, Gatotkaca, a
certified onllne gamer, put up an onllne game consultancy business using his sav[ngs as a former employee of
ABS-CBN, amounting to P1 ,000,000, as Initial capital. During the year, PS00,000 cash was used to purchase
sets of gaming equipment to be used In the business. The purchase of the gaming equipment resulted In a
liability of P200,000. Profit for the year Is P280,000.
In recording the purchase of the gaming equipment, how much will be debited to that account?
a) P600,000
b) P200,000
c) PB00,000
d) 400,000

17. Alucard Company has assets of P124,000 and liabilities of P58,000 at the beginning of the year. During the year,
assets decreased to P106,000 and total liabilities increased by P23,000. Total revenues was P38,000. There
were no additional investment nor withdrawal made during the year.
If total_assets increase~ ~y PB0,000, and total liabilities increased by P24,000 during the same period, how
much rs the owner's eqµrty as of the end of the period?
a) P121,000
b) P122,000
c) P204,000
d) P82,000

18. Which of the following is false?

a) Republic Act 9298 otherwise known as the Philippine Accountancy Act of 2004 is the law that
regulates the practice of Accountancy in the Philippines.
b) One of the objectives of RA 9298 is the standardization and regulation of accounting education.
c) One of the objectives of RA 9298 is the supervision, control and regulation of the practice of
accountancy in the Philippines. ·
d) Practice of Private Accountancy shall constitute in a person, be it his/her individual capacity or as a
partner or as a staff member in an accounting or auditing firm holding himself/herself out as one skilled
in the knowledge, science and practice of accounting, and as a qualified person to render professional
services as a certified public accountant.

19. In year 2021, Kagura, the owner of Marksman Salon, made an initial investment to the business amounting to
P1 ,000,000. During the year, the business was able to post a service revenue of P1 ,500,000 and P800,000
worth of expenses. Before the year ends, Kagura withdrew cash to be used as his bet in the ML tournament.
At the end of the year, Kagura Capital has a balance of P1 ,500,000.
How much is the amount of cash withdrew by Kagura?
a) P-0-
b) P700,000
c) P1 ,500,00
d) P200,000 .
20. In the following, who is primarily responsible for the fina,:icral statement?
a) Company's accountant
b) The company's internal auditor
c) The company's external auditor
,.., Th"" ,.,._P'Jtl".,.,...,...,.,,,,...
 21 1 • d d to pandemic Gatotkaca, a
· n year 2020, after the declaration of the entire country rnto a total lock own ue ' 1Oyee of
certified online gamer, put up an online game consultancy business using his savings as a former emp h
ABS-CBN , ~mounti_ng to Pt,000,000, as initial capital. During the year, P600,00_0 cash "!"as used to pur~ :se
~et~ _of gaming equipment to be used in the business. The purchase of the gaming equipment resulted
hab1hty of P200,000. Profit for the year is P280,000.
How much is the capital of Gatotkaca as at the end of 2020?
a) P1 ,280,000
b) P1 ,000,000
c) P1 ,080,000
d) P480,000

22. Which of the following is not included in preparing a Statement of Changes in Owner's Equity?
a) Owner's withdrawal
b) Additional investment
c) Profit or loss
d) Service revenue

23. Which of the following accounts has a debit normal balance?

a) Owner's drawing
b) Unearned income
c) Salaries payable
d) Interest payable

24. Which of the following accounts is not a liability?

a) Unearned revenue
b) Accounts payable
c) Accrued expense
d) Prepaid expense

25. This is the body authorized by law to promulgate rules and regulations affecting the practice of accountancy in
the Philippines
a) Commission on Audit
b) Securities and Exchange Commission
c) Board of Accountancy
d) Philippine Institute of Certified Public Accountants

26. Which of the following is not a correct accounting equation?

a) Assets - Liabilities = Owner's Equity
b) Assets= Liabilities+ Owner's Equity
c) Liabilities = Assets - Owner's Equity
d) Liabilities - Owner's Equity = Asset

27. When a transposition error is made on the trial balance, the difference between the debit and credit totals
on the trial balance will be
a. zero
b. twice the amount of the transposition
c. one-half the amount of the transposition
d. divisible by 9

28. Which of the following errors, each considered individually, would cause the trial balance totals to be
unequal?
a. a transaction was not posted
b. a payment of P96 for insurance was posted as a debit of P46 to Prepaid Insurance and a
credit of P46 to Cash
c. a payment of P311 to a creditor was posted as a debit of P3, 111 to Accounts Payable and
a debit of P311 to Accounts Receivable
d. cash received from customers on account was posted as a debit of P140 to Cash and a
credit of P140 to Accounts Payable
r 29.
would be
Supplies purchased on account were incorrectly recorded as Office Equipment. The correcting entry

a. Supplies, debit; Office Equipment, credit.

b. Accounts Receivable, debit; Supplies, credit.
c. Office Equipment, debit; Supplies Expense, credit.
d. Supplies, debit; Accounts Payable, credit.
30. Mathilda, owner of Minsltthar Recruitment Agency made an initial Investment In his business in the amount of
P1, 750,000. At the end of the year, the total assets of the business amounted to P2,500,000 which consists of
P1 ,000,000 cash and P1 ,500,000 equipment. The equipment has an unpaid balance of P200,000, the only
liability of the business. Answer the following Independent questions:
Assuming that the owner withdrew P200,000 during the year, how much Is the amount of profit for the period?
a) P200,000
b) P750,000
c) P1 ,500,000
d) P300,000
31 . It refers to the list of account titles used in recording business transactions
a) General ledger
b) General ledger
c) Chart of accounts
d) Book of accounts

32. Alucard Company has assets of P124,000 and liabilities of P58,000 at the beginning of the year. During the year,
assets decreased to P106,000 and total liabilities increased by P23,000. Total revenues was P38,000. There
were no additional investment nor withdrawal made during the year.
If total assets increased by PS0,000, and total liabilities increased by P24,000 during the same period, what is
the amount of increase or decrease in capital?
a) P56,000
b) P79,00
c) P121,000
d) None of the above
33. Which of the following not an ingredient of relevance?
a) Predictive value
b) Confirmatory value
c) Both a and b
d) Understandability

34. During the year, Zhask Qompany bought office equipment for PS00,000 paying 20% down-payment and the
balance to be paid after 30 days.
Which of the following is the correct journal entry to record this transaction?
a) Debit: Office Equipment, PS00,000; Credit Cash P160 ,000 and Accounts payable P640,000
b} Debit: Office Equipment, PS00,000; Credit Cash P160,000 and Notes payable P640,00
c) Debit: Office Equipment, PS00,000; Credit Cash P160,000 and Equipment payable P640,000
d) Debit: Cash P160,000 and Accounts payable P640,000; Credit: Office Equipment, P800,000

35. Thamus, business owner of Thalong Janitorial Services, reported the following expenses for the period:
• Salaries oMhe 20 employees of Thalong Janitorial Services, PS00,000.
• Salaries of house helpers in the owner's residence, P40,000.
• Cleaning supplies consumed in the conduct of business, P100,000.
• Salary of Zilong , driver of Tham us family and a very close friend of Thamus, P1 ,000,000.
How much is the total operating expenses of the business?
a} P600,000
b} P1 ,600,000
c} P1 ,640,000
d) P640,000

36. Bookkeeping is
1 \ I aee!l hr"11't i" etl"l"\f"'\a ~"'"''"'' ,ntin,.
 b) Broader in scope than accounting
c) The same as accounting
d) Not related to accounting
b slness entity rendered services to
37. Which of the following accounts may not be debited when the u
customers?
a) Cash
b) Accounts Receivable
c) Notes Receivable
d) Service Revenue

38. Which of the following Is true? A collection of accounts receivable

a) Has no effect on total assets.
b) Will increase the total assets.
c) Will decrease the total assets.
d) Will increase capital account.

39. In year 2021, Kagura, the owner of Marksman Salon, made an initial investment to the business amounting to
P1 ,000,000. During the year, the business was able to post a service revenue of P1 ,500,000 and PS00,000
worth of expenses. Before the year ends, Kagura withdrew cash to be used as his bet in the ML tournament.
At the end of the year, Kagura Capital has a balance of P1 ,500,000.
How much is the profit or loss for the period?
a) P-0-
b) P700,000
c) P1 ,500,000
d) P200,000

40. Which of the following is not a possible effect of a business transaction?

a) An increase in one asset and an increase in another asset.
b) An increase in asset and an increase in liability.
c) An increase in one asset and a decrease in another asset.
d) A decrease in asset and a decrease in liability.

41 .
June 24 Land 15,000
Cash 15,000
Purchased land for business

What effects does this journal entry have on the accounts?

a. Increase to Cash and increase to Land
b. Increase to Land and decrease to Cash
c. Decrease to Cash and decrease to Land
d. Increase to Cash and decrease to Land

42.
June 26 Supplies 500
Accounts Payable 500
????????????

What is the best explanation for this journal entry?

a. Purchased supplies with cash
b. Investment of supplies by owner
c. Purchased supplies on account
d. Paid accounts payable.

43. Which of the following accounts would be increased with a credit?

a. Land, Accounts Payable, Drawing
b. Accounts Payable, Unearned revenue, BK Capital
c. BK Capital, Accounts Receivable, Unearned Revenue
d Cash . Accounts Receivable. BK Caoital
r 44. In accordance with th
a Deb·t .
· 1
.
e debit and credit rules, which of the following is true?
s increase assets
b. Credits increase assets
c. Debits increase both assets and capital
d. Credits increase both assets and liabilities.

- 45 - All except one of the following accounts will be Increased with a debit:
a. Unearned Revenues
b. land
c. Accounts Receivable
d. Cash

_ 46. Which of the following owner's equity accounts follow the same debit and credit rules as liabilities?
a. Expense accounts only
b. Drawing accounts only
c. Revenues accounts only
d. Expenses and drawing accounts

47. The payment for the monthly rent will require the following entry
a. Debit Cash and Debit Rent Expense
b. Credit Cash and Credit Rent Expense
c. Debit Rent Expense and Credit Cash
d. Credit Rent Expense and Debit Cash

48. Expenses follow the same debit and credit rules as

a. Revenues
b. Drawing Account
c. Capital Account
d. liabilities
49. Net income will result when
a. revenues (credits)> expenses (debits)
b. revenues (debits) > expenses (credits)
c. expenses (credits)< revenues (debits)
d. revenues (credits) = expenses (debits)
50. Which of the following will increase owner's equity?
a. Expenses > revenues
b. the owner draws money for personal use
c. Revenues > expenses
d. Cash is received from customers on account.

51 . Which of the following is true regarding normal balances of accounts?

a. All accounts have a normal debit balance.
b. The normal balance of all accounts will have either a positive or negative balance.
c. Accounts that have a normal debit balance will only have debit entries, never credit
entries.
d. The normal balance is the side of the account that increases the account .
52.
June 26 Cash 450
Unearned Fees 450
????????????

a. Received cash for services performed

b. Received cash for services to be performed in the future.
c. Paid cash in advance for services to be done.
d. Paid cash for services to be performed.
53.
June 26 Equipment 14,000
Cash 4,000
Note Payable 10,000
????????????

Which is the best explanation for this journal entry?

.., Ci lrl"'h..,C"orl °''"'' "'..,;,.. ,._..,it'h ,._f CA nnn +ho l"o,.,.,.., inrlor +n ho n..,irl in
 b. Purchased equipment, paid cash of P4,000, with the remainder to be received in the
future.
c. Purchased equipment, paid cash for the entire amount
d Purchased equipment on credit. 1 II d
54. The process of rewriting the Information from the journal Into the ledger s ca e
a. sliding
b. transposing
c. journalizing
55. ~he that the total peso amount of the debits equals the total peso amount of the credits in the ledger is
called a
a. ledger
b. trial balance
c. account
d. balance sheet
56. The process of transferring the journal entries to the accounts is known as
a. posting
b. updating
c. journalizing
d. summarizing

57. The accounts in the ledger of Mickeys Park Co. are listed in alphabetical order. All accounts have normal balances.
Accounts Payable 500 Fees Earned 2,000
Accounts Receivable 800 Insurance Expense 300
Investment 1,000 Land 2,000
Cash 1,600 Wages Expense 400
Withdrawals 200 Owner's Equity 1,800

The total of all the assets is:

a. 4,400
b. 5,300
C. 5,200
d. 4,700
e. 5,700

58. A trial balance is prepared to

a. prove that there were no errors made in recording transactions into the journal
b. prove that no errors were made in posting to the ledger
c. prove that each account balance is correct
d. summarize the account balances to help prepare financial statements

59. The accounts in the ledger of Mickeys Park Co. are listed in alphabetical order. All accounts have normal balances.
Accounts Payable 500 Fees Earned 2,000
Accounts Receivable 800 .,.,, Insurance Expense 300
Investment 1,000 Land 2,000 ,,-
Cash 1,600 ,,, Wages Expense 400 ,,,,
Withdrawals 200 - Owner's Equity 1,800

Prepare a trial balance. The total of the debits is

a. P5,300
b. P10,600
c. P4,100
d. P10,400
e. P4,700

60. An overpayment error was discovered in computing and paying the wages of a Bartson Repair Shop employee.
When Bartson receives cash from the employee for the amount of the overpayment, which of the following entries will
Bartson make?
a. Cash, debit; Wages Expense, credit
b. Wages Payable, debit; Wages Expense, credit
c. Wages Expense, debit, Cash, credit
d. Cash, debit; Wages Payable, credit
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