Accounting Plus Final Exam

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City, Metro Manila 1700

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Accounting Plus
FINAL EXAMINATION
NAME: _Ericsson H. Geronda___________________________________________ COURSE: _BSED-

MATHEMATICS______________________
STUDENT NO.: _202100300____________________________ BLOCK SECTION:
________________
Part 1: Choose the correct answer

1. The difference between net sales and cost of merchandise sold for a merchandising business is:
a) Sales
b) Net Sales
c) Gross Profit
d) Gross Sales
2. When purchases of merchandise are made on account, the transaction would be recorded with the following
entry:
a) Debit Accounts Payable, credit Merchandise Inventory
b) Debit Merchandise Inventory, credit Accounts Payable
c) Debit Merchandise Inventory, credit Cash
d) Debit Cash, credit Merchandise Inventory
3. When a corporation sells merchandise and the terms are FOB shipping point and pays the shipping costs, the
seller would record the transportation costs with the following entry:
a) Debit Cash, credit Accounts Receivable
b) Debit Accounts Receivable, credit Sales
c) Debit Accounts Receivable, credit Cash
d) Debit Merchandise Inventory, credit Accounts Payable
4. Multiple-step income statements:

a) Show gross profit but not income from operations
b) Show both gross profit and income from operations
c) Show neither gross profit nor income from operations
d) Show income from operations but not gross profit
5. Which of the following would be reported on the retained earnings statement for the current year?
a) Dividends for the current year
b) Sales
c) Cost of merchandise sold
d) Merchandise inventory
6. A sales invoice included the following information: merchandise price, P12,000; transportation, P500; terms
2/10, n/eom, FOB shipping point. Assuming that a credit for merchandise returned of P600 is granted prior to
payment, that the transportation is prepaid by the seller, and that the invoice is paid within the discount period,
CHOOSE EXCELLENCE… CHOOSE RMC…

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what is the amount of cash received by the seller?

a) P11,662
b) P11,672
c) P12,250
d) P11,172
7. An acid-test ratio of 1.5 means

a) Quick assets are 1.15 times as large as sales.
b) That every P1.50 of quick assets generates P1.00 in sales.
c) That every P1.50 of sales generates P1.00 of liabilities.
d) Quick assets are 1.5 times as large as total liabilities.
8. Merchandise with an invoice price of P7,000 is purchased with terms of 2/10, n/30, FOB shipping point.
Transportation costs paid by the seller were P125. What is the cost of the merchandise purchased if payment is
made during the discount period?
a) P6,860.00
b) P6,982.50
c) P7,000.00
d) P6,985.00
9. Cost of Merchandise Sold would be classified as:

a) Asset
b) Expense
c) Liability
d) Revenue
10. The discount period for credit terms of 1/10, n/30 is:
a) 1 day
b) 10 days
c) 20 days
d) 30 days
11. Freight costs incurred by the seller are recorded in the

a) Sales account
b) Cost of merchandise sold account
c) Transportation In account
d) Transportation Out account
12. Which of the following would be classified in an income statement as Other Income or Other Expense?
a) Advertising Expense
b) Interest Expense
c) Transportation Out
d) Cost of merchandise sold
13. The sales discount is based on

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a) Invoice price plus transportation costs

b) Invoice price less discount
c) Invoice price plus transportation costs less returns and allowances
d) Invoice price less returns and allowances
14. Myers and Company sold P1,800 of merchandise on account to Oscar, Inc. on March 1 with credit terms of
2/10, n/30. Oscar returned P500 of the merchandise due to poor quality on March 3. If Oscar pays for the
purchase on March 11, what entry does Myers make to record receipt of the payment?
a) Debit Cash, P1,764; credit A/R, P1,764
b) Debit Cash, P1,800; credit Sales Returns and allowances, P500; credit A/R, P1,300
c) Debit Cash, P1,274; debit Sales Discounts P26; credit A/R, P1,300
d) Debit Cash, P1,800; credit Sales Discounts P36; credit A/R, P1,764
15. In a perpetual inventory system, what accounts are credited when a customer returns merchandise to the
seller?
a) Sales Returns and Allowances and Accounts Receivable
b) Accounts Receivable and Cost of Merchandise Sold
c) Merchandise Inventory and Cost of Merchandise Sold
d) Sales Returns and Allowances and Merchandise Inventory
16. Assume that sales are P450,000, sales discounts are P10,000, net income is P35,000, and cost of
merchandise sold is P320,000. Gross profit and operating expenses are, respectively.
a) P130,000 and P95,000
b) P120,000 and P95,000
c) P130,000 and P85,000
d) P120,000 and P85,000
17. Which of the following accounts is credited by the seller when merchandise purchases are paid for within
the discount period?
a) Merchandise Inventory
b) Accounts Payable
c) Accounts Receivable
d) Sales Discounts
18. A classified balance sheet reports merchandise inventory as:

a) Plant asset
b) Long-term asset
c) Current asset
d) Current liability
19. Gross Margin is calculated as:

a) Sales less cost of merchandise sold
b) Sales less merchandise inventory
c) Sales less expenses
d) Sales less operating expenses

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20. Company A’s gross profit ratio has been steadily declining for 5 years while the net profit ratio has
remained constant. The most likely reason for this pattern is:
a) Cost of merchandise sold and operating expenses have both increased each year
b) Selling price and operating expenses have both decreased each year
c) Cost of merchandise sold and operating expenses have both decreased each year
d) Selling price decreased and operating expenses increased each year
Part 2. I. Using the Financial statement and Income statement below compute for the following of 2022:
1. Current ratio
2. Quick ratio
3. Return on Asset
4. Return on Equity
5. Gross Profit Margin
6. Debt ratio
7. Debt to equity ratio
8. Inventory turnover
9. Inventory period
10. Receivable Turnover
11. Ave. collection period
Part 2.

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1. Current ratio
120,000.00/50,000.00
= 2.4
2. Quick ratio
120,000.00-60,000.00)/50,000.00) 60,000/50,000.00
= 1.2
3. Return on Asset
71,900.00/445,000.00
= 0.16
4. Return on Equity
71,900.00/200,000.00
=0.36
5. Gross Profit Margin
(550,000.00-260,000.00)/550,000.00)
290,000/550,000.00
=0.53
6. Debt ratio
120,000.00/50,000.00
=2.4
7. Debt-to-equity
ratio 445,000.00/200,000.00
=2.23
8. Inventory turnover
-260,000.00/55,000.00
=-4.73
9. Inventory
period 365/4.73
=77.17
10. Receivable Turnover
65,000.00/125,000
=0.52
11. Ave. collection period
365/0.52
=701.92

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Part 3. XYZ Company is closing its books and must prepare a bank reconciliation for the following items:
a) Bank statement contains an ending balance of P300,000 on February 28, 2022, whereas the company's ledger
shows an ending balance of P260,900
b) Bank statement contains a P100 service charge for operating the account

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c) Bank statement contains interest income of P20
d) XYZ issued checks of P50,000 that have not yet been cleared by the bank
e) XYZ deposited P20,000 but this did not appear on the bank statement
f) A check for the amount of P470 in payment for supplies purchased previously on account was misreported in
the cash payments journal as P370.
g) A note receivable of P9,800 was collected by the bank.
h) A check of P520 deposited by the company has been charged back as NSF.
Required:
Bank reconciliation using Adjusted balance method.
Prepare book adjusting entries.
Part III.
XYZ Company
Bank Reconciliation Statement
February 28, 2022
Per Bank
Unadjusted Balance - 300,000.00
Less: Outstanding Checks - (50,000.00)
Add: Deposit in Transit - 20,000.00
Adjusted Balance - 270,000.00
Per book
Unadjusted Balance - 260,900.00
Less: Debit Memos
Service Charge - (100.00)
NSF - (520.00)
Error - (100.00)
Add: Credit Memos
Interest Income - 20.00
Notes Collected - 9,800.00
Adjusted Balance - 270,000.00
Entries

Contact No.(02) 8671-0199 / 0939-266-9493
Service Charge:
Miscellaneous Expense - 100.00
Cash in bank - 100.00
NSF:
Accounts Receivable - 520.00
Cash in Bank - 520.00
Error:
Supplies Expense - 100.00
Interest Income:
Interest Income - 20.00
Notes Collected:
Cash in Bank - 9,800.00

Notes Receivable -9,800.00
Prepared by:
MR. ALVIN D. AGUILAR

College Instructor

Accounting Plus Final Exam

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7108 Lire Lane Villanueva Village Parañaque

City, Metro Manila 1700

NAME: _Ericsson H. Geronda___________________________________________ COURSE: _BSED-

Part 1: Choose the correct answer

4. Multiple-step income statements:

CHOOSE EXCELLENCE… CHOOSE RMC…

what is the amount of cash received by the seller?

7. An acid-test ratio of 1.5 means

9. Cost of Merchandise Sold would be classified as:

11. Freight costs incurred by the seller are recorded in the

13. The sales discount is based on

CHOOSE EXCELLENCE… CHOOSE RMC…

a) Invoice price plus transportation costs

18. A classified balance sheet reports merchandise inventory as:

19. Gross Margin is calculated as:

CHOOSE EXCELLENCE… CHOOSE RMC…

CHOOSE EXCELLENCE… CHOOSE RMC…

CHOOSE EXCELLENCE… CHOOSE RMC…

CHOOSE EXCELLENCE… CHOOSE RMC…

c) Bank statement contains interest income of P20

g) A note receivable of P9,800 was collected by the bank.

CHOOSE EXCELLENCE… CHOOSE RMC…

Cash in Bank - 9,800.00

MR. ALVIN D. AGUILAR

CHOOSE EXCELLENCE… CHOOSE RMC…

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