ACTG101: FUNDAMENTALS OF ACCOUNTING THEORY AND PRACTICE 1A

QUIZ 1
Jollibee is a merchandising type of business. ANS. False
Branch of accounting focusing on the needs of external users. ANS. Financial Accounting
It is a type of business whose source of revenues is mainly rendering services to
customers. ANS. Service concern or service type
Branch of accounting for government and not-for-profit organizations. ANS. Fund
Accounting
Financial accounting focuses on the needs of internal users like creditors and government
for financial information. ANS. False
Selling of plant assets is what category of business activity? ANS. Investing activities
A kind of partnership owned by l partners who are liable to the partnership liabilities to the
extent of his persona properties. ANS. General partnership
Ten accountants formed a business for the practice of accountancy. Their business is
proprietorship. ANS. False
The concept referring to the assumption that financial statements and reports are prepared
on the basis of continuity of the business operations in the future is ANS. Going concern
principle
This is the category of activities pertaining to acquisition of long term loans and issuance of
equities to fund or sustain a business. ANS. Financing activities
It is a type of business involved in converting raw materials to a finished product. ANS.
Manufacturing
Professional organization of certified public accountants in the Philippines ANS. PICPA
Creditors, potential investors, consumers ANS. External users
The principle referring to the application of the rules of debit and credit. ANS. Duality
Principle
A business organization owned by only one person who usually manages the same. ANS.
Sole proprietorship
A lawyer set up a law office for the practice of his profession. This is an example of a ANS.
Sole Proprietorship
It is the branch of accounting whose main users are the external users. ANS. Financial
Accounting
It is the kind of corporation whose owners are called members. ANS. Non-stock corporation
Materials, labor and overhead are outputs in a manufacturing type of business. ANS. False
It is a type of businesses which is also termed trading or buy and sell. ANS. Merchandising
A principle that requires accountants to be honest and straightforward in performing
professional services. ANS. Integrity
Measuring and reporting the cost and value of people in an organization. ANS. Human
Resource Accounting
Concept that asserts that the business transactions of an entity are separated from the
owner's personal transactions. ANS. Economic Entity Principle
Their services include budgeting, general accounting and internal auditing in a firm. ANS.
Private Accountants
Primary users of financial information includes owners, employees, and managers. ANS.
True
Which of the following is a new area of accounting application" ANS. Human Resource
Accounting
Acquisition of non-current assets is a ANS. Investing Activity
The ultimate goal of any business organization is profit. ANS. True
It is added to raw materials and overhead to produce a finished product. ANS. Salaries of
factory workers
It is every business organization's category of activities that involves generation of income
and incurrence of costs and expenses in the firm's main line of business. ANS. Operating
activities
Following are examples of a corporation except ANS. Alice Trading
Measurability Concept. ANS. Monetary Unit Principle
Purchase of stocks of other company is an investment activity, so with the receipts of
dividends thereon. ANS. False
The business most liquid asset is cash. ANS. True
Which of the following should be registered with the Securities and Exchange Commission?
ANS. Both Partnership and Corporation
Which of the following statements is not true? ANS. A school who also sells books to their
students is a merchandising type of business.
Private accountants can perform these services to the firm where they work except ANS.
Consultancy
Recognizing income and expenses in the period that they are earned or incurred whether
cash is received or not. ANS. Accrual Principle
In case of bankruptcy, proprietors, partners, and shareholders are liable held liable to the
creditors to the extent of their personal properties. ANS. False
If the finished product is the output, the term inputs refers to ANS. All of these
The inventor of double-entry system. ANS. Amanito Manucci
He has a direct and lone responsibility to the assets, liabilities, capital, even the profits and
losses of the business: ANS. Sole Proprietor
Issuance of Stocks and bonds is a ANS. Financing Activity
Financial Accounting, Management Accounting, Cost Accounting ANS. Major Branches of
Accounting
It is the branch of accounting that stem from the manufacturing type of business. ANS. Cost
Accounting
Borrowing funds is a financing activity and payment of corresponding interest is an
operating activity. ANS. True
Following are operating activities except ANS. Payment of dividends
Which of the following statement is not true? ANS. None of these
The Philippine Institute of Certified Public Accountants devised the compilation of
accounting guidelines called Generally Accepted Accounting Principles. ANS. False
Public accountants are those who rendered services to the general public in exchange of
professional fees. They should pass the licensure examination given by ANS. Board of
Accountancy
Which of the following business organization is created under the Batas Pambansa Bilang
68? ANS. Corporation
Accountants performing consultancy, auditing, and tax services. ANS. Public Accountants
He is liable to the partnership debts to the extent of his contribution only. ANS. Limited
partner
National accounting is an area of accounting that deals with accounting, auditing, and
investigative techniques in cases of litigation or disputes. ANS. False
A professional accountant should be fair and should not allow biases, conflict of interest, or
influence other people in the performance of their functions. ANS. Objectivity
The branch of accounting that deals with the implementation of a complete and consistent
accounting principles and techniques in measuring the country's economic activities. ANS.
National Accounting
A business' most liquid asset is ANS. Cash
Primary users of financial accounting information include the following except ANS.
Prospective investors
Father of modern accounting. ANS. Luca Pacioli
The accounting concept that requires that the revenues and expenses should be
recognized in the accounting period when they are actually earned and incurred is called
conservatism principle. ANS. False
Granting loans to other entities is a(n) ANS. Investing Activity
Purchase of bonds or stocks is a ANS. Investing Activity
Following are examples of a service concern business except ANS. Retail Store
Also called the measurability accounting principle, materiality principle states that only
transactions that can be expressed in money should be recorded. ANS. False
The financial statement that presents the operating, investing, and financing activities is
ANS. Statement of Cash Flows
Recording business transactions, Classifying, Summarizing, and interpreting the results.
ANS. Phases of Accounting
Accountants rendering services in exchange of professional fees. ANS. Public Accountants
Management accounting is the branch of accounting that concentrates on the information
needed by external users. ANS. False
The organization responsible for the development and implementation of the accountants'
professional ethics and values is ANS. Philippine Institute of Certified Public Accountants
Which of the following can be a partner's contribution to the partnership? ANS. All of these
In merchandising type of business, the merchandiser performs two roles-a buyer and a
seller. ANS. True
To meet the objectives of the accountancy profession to work to the highest standards and
attain the highest level of performance, the following are required except ANS. Subjectivity
It is the financial statement where the three categories of business activities are presented
in details. ANS. Statement of Cash Flows
Accounting is the information system that measures business transactions, process
information into reports, and communicate the results to decision makers. ANS. True
All kinds of business organization should register a business name with ANS. Department
of Trade and Industry
The secondary users of financial information include investors, creditors, and consumers.
ANS. True
Payment of dividends is a financing activity. ANS. True
Andrea Bargarigo is called the father of modern accounting. ANS. False
Business owners, managers, employees. ANS. Internal Users
Raw materials, labor and overhead costs pertains to a ANS. Manufacturing business

QUIZ 2
Give the following for RST Trading: Gross profit, P400,000 which is 40% of net sales , sales
discount is 5%, sales returns and allowances is 7.5% Sales Returns and Allowances is(round-
off your answers to the nearest peso) ->ANS. P85,714

Software refers to the computer brand that will be used by the business. ANS. False
Give the following for RST Trading: Gross profit, P400,000 which is 40% of net sales , sales
discount is 5%, sales returns and allowances is 7.5% The following are expense except
ANS. Prepaid Insurance Expense
Accounting information system is generally a _______________ approach for monitoring
accounting activities ANS. Computer-based
A ___ is a list of selections of computer functions. ANS. Menu
It is the financial statement that links the income statement to the balance sheet. ANS.
Statement of Equity or Statement of Changes in Equity
_____ refers to the accounting reports which are considered the final stage of data
processing. ANS. Outputs
______ processes include journalizing business transactions, posting to the ledger and
preparing the financial statements. ANS. Manual
The following are shown in the balance sheet except ANS. All of these
Real accounts are found in the Statement of Financial Position. ANS. True
AIS warrants the accurate recording and processing of financial data in accordance with the
_______ principles. ANS. Accounting
The Statement of Cash Flows gives the managers, investors and analyst a better
understanding of the liquidity and solvency of a firm. ANS. True
It is generally a computer-based way of monitoring accounting activities. ANS. Accounting
Information system
___________ Process Outputs ANS. Inputs
A manual AIS employs computers and software in the process of recording data. ANS.
False
It is component of AIS that includes billing statements, sales reports, check registers and
purchase invoices. ANS. Data
An important principle of AIS is that all persons should have access to the system and the
data. ANS. False
The principle of AIS that states that restricted information should be protected from
unauthorized exposure. ANS. Confidentiality
It is the AIS that employs computers and software in the process of recording data. ANS.
Computerized
The Statement of Financial position is important in evaluating the liquidity of the firm. ANS.
True
The following are non- current assets except ANS. Inventory
It is also called the Statement of financial Position. ANS. Balance Sheet
Accounting Information System is generally a computer-based way of monitoring
accounting activities. ANS. True
The AIS users are referred to as what component? ANS. People
_____________ of AIS pertains to the security measures that will protect sensitive data.
ANS. Internal controls
Restricted information should be protected fro unauthorized persons refers to _____
principle of AIS. ANS. Confidentiality
Only authorized person should have access to the system and the data is a the _____
feature of AIS identified by AICPA. ANS. Security
Which of the following statements is correct? ANS. The standard presentation of the
Financial statements for businesses should conform with the generally accepted accounting
principles.
It is the kind of liabilities which are expected to be paid within a year from its reporting date.
ANS. Current liabilities or short-term liabilities
The total assets of the firm on December 31, 2016 is P345,000. Total liabilities is P40,000,
non current assets is three times the amount of liabilities, net income is P120,000, Drawing
is P10,000. How much is the current assets on December 31? ANS. P225,000
It refers to data from different source documents. ANS. Inputs
In a computerized accounting system, the ______ are primarily used to translate accounts
and their balances to financial reports. ANS. Account numbers
They are interested in the financial statements for they know that these will help them in
measuring and evaluating the risk and return of their invested capital. ANS. Business
owners or owners
A well designed AIS can make changes without disturbing the whole system. ANS. 'True
An internal operations _____ involves methods and techniques that will allow transactions
and protect assets of the firm. ANS. Control
The information technology infrastructure pertains to the _____ components of AIS. ANS.
Hardware
The difference between revenues and expenses is always a profit. ANS. False
If the total assets of ABC is P750,000 and liabilities is 30%, total equity is ANS. P525,000
In computerized AIS, a list of selections in choosing computer functions is called tools. ANS.
False
Drawing and net loss are both deducted from the beginning capital in the Statement of
Equity. ANS. True
Following are intangible assets except ANS. Accounts Receivable
Data include billing statements, sales reports, check registers and purchase invoices. ANS.
True
The AIS users are referred to as the people component. ANS. True
The computer programs that will be used to store, retrieve, process, and analyze financial
data of the business is called ______. ANS. Software
Following are the other titles for Income Statement except ANS. Statement of Cash flows
________ is the component of accounting information system referring to the system users.
ANS. People
Expenses decrease the assets of the business. ANS. True
The statement of cash flow is also directly related to the balance sheet as it details the
change in cash during the period as it affects the other components of the balance sheet
like other assets, liabilities and equity. ANS. True
Positive cost-benefit analysis feature of Accounting information system means the benefits
it will generate should outscore its _____. ANS. Cost
They are the users who are interested in the financial statements of a business to assess its
financial condition in terms of liquidity to avoid bad debts. ANS. Financing Institutions
It is the AIS component refers to the different approaches , manual or automated, used in
gathering, keeping and retrieving and processing data. ANS. Procedures and Instructions
The Cash balance on Jan 1, 2017 is P250,000, net cash outflows is P95,000, Cash balance
on Dec 31, 2017 is P265,000. How much is the net increase in cash for 2017? ANS.
P15,000
Net loss is a factor affecting capital. ANS. True
The Cash balance on Jan 1, 2017 is P250,000, net cash outflows is P95,000, Cash balance
on Dec 31, 2017 is P265,000. How much is the net cash inflows during the year? ANS.
P110,000
It is an AIS principle that states that only authorized persons should have access to the
system and the data. ANS. Security
____ refers to data from different source documents. ANS. Input
The total assets of the firm on December 31, 2016 is P345,000. Total liabilities is P40,000,
non current assets is three times the amount of liabilities, net income is P120,000, Drawing
is P10,000. How much is the capital balance on January 1, 2016? ANS. P195,000
Give the following for RST Trading: Gross profit, P400,000 which is 40% of net sales , sales
discount is 5%, sales returns and allowances is 7.5% Gross Sales is (round-off your
answers to the nearest peso) ANS. P1,142,857
IT Infrastructure refers to the hardware components of AIS. ANS. True
Give the following for RST Trading: Gross profit, P400,000 which is 40% of net sales , sales
discount is 5%, sales returns and allowances is 7.5%How much is the net sales?(round-off
your answers to the nearest peso) ANS. P1,000,000
It is something that the company owns and uses for its economic benefits. ANS. Assets
A ____________ accounting system where the financial statements are automatically
created by clicking on a specific submenu. ANS. Computerized
The statement added by the International Accounting Standards Board to the three basic
statements set by the Accounting Standards Council. ANS. Statement of Equity or
Statement of Changes in Equity
Procedures refer to the different approaches used in both AISs to gather, keep, retrieve,
and process_____. ANS. Data
If part of the total equity in number 6 above is retained earnings of P125,000, how much is
the share capital? ANS. P400,000
The statement of financial position includes the following except ANS. Total Revenues
Results of operations are shown in the statement of financial position. ANS. False
The following are subject to depreciation except ANS. Land
It refers to the recognition of all income for the whole accounting period regardless of
whether cash payments are received or not. ANS. Accrual of income
The Statement of Equity serves as the basis for measuring and evaluating the company's
performance for a given period of time. ANS. False
The Cash balance on Jan 1, 2017 is P250,000, net cash outflows is P95,000, Cash balance
on Dec 31, 2017 is P265,000. What amount should be reported in the statement of financial
position on December 31, 2017? ANS. P265,000
The hardware should be compatible with the _____for better speed and storage
capabilities. ANS. Software
A computerized AIS is much cheaper than manual AIS. ANS. False
It refers to the hardware components of AIS. ANS. Information Technology Infrastructure
Cost of Goods Sold is also an expense ANS. True
In computerized AIS, a list of selections in choosing computer functions is called what?
ANS. Menu
The statement that summarizes the revenues, expenses, profit or loss of a business for a
given period of time ANS. Income Statement
_______requires source-transactions documents, general journal, general ledger, and
special journals. ANS. Manual AIS
The Statement of Financial Position lists the three accounting elements. ANS. True
It is the financial statement that is prepared first because its bottom line figure will be used
in the other financial statements. ANS. Income Statement

QUIZ 3
It represents the claim of the creditors in the total assets of the business. ANS. Liabilities
The left side of the T-account is used to summarize the following except ANS. Increase in
Liability
The Venetian approach of reporting records debits on the left side of the page across the
credits. ANS. True
Investing Cash inflows include the following except ANS. Proceeds from the issuance of
stocks
In a manual accounting system, computers and software are not used. ANS. True
It is the column in the ledger where the page number of the journal is written or copied
during the process of posting. ANS. Posting Reference
The credit side or column of a trial balance shows the normal balances of capital, liability,
revenues, and what other type of account? ANS. Contra account
Following are the services performed by public accountants except ANS. Cost Accounting
General journal entries and adjusting entries are both done during the accounting period.
ANS. False
The trial balance prepared before recording and posting the adjusting entries. ANS.
Unadjusted Trial Balance
It is an event or activity that involves exchange of values between two entities ANS.
Business Transaction
A business entity that deals with producing finished products or goods. ANS. Manufacturing
In merchandising type of business, the owner has dual personality, buyer and seller at the
same time. ANS. True
Increase in assets in placed in what side of an account? ANS. Debit side
In accounting, an account is a basic tool in summarizing or grouping business transactions.
ANS. True
Balance Sheet is also called Statement of Changes in Owner's Equity. ANS. False
It is the asset pertaining to the collectibles from customers arising from sale of goods or
services in exchange for an oral or implied promise to pay at a future date. ANS. Accounts
Receivable
It is anything of economic value that the business owns. ANS. Assets
The trial balance prepared after the closing entries are recorded and posted in the ledger.
ANS. Post-closing Trial Balance
It is the financial statement composed of permanent accounts. ANS. Statement of Financial
Position
The principle referring to charging expenses incurred by an entity to the income statement
for a given period in which the revenues are earned is called matching principle. ANS. True
It is the basic tool in accounting that is used in summarizing or grouping business
transactions. ANS. T-account
The right side of a T-account is used to record the increases in liability, Owner's Equity and
what other account? ANS. Revenue
The term equity refers to ANS. Sources of assets
Business obligations which are expected to be settled within the accounting period or within
a year from the reporting date. ANS. Short term liability
It is the financial statement that shows the results of operations of the business ANS.
Income Statement
Income Statement consists of temporary accounts while Balance Sheet presents permanent
accounts. ANS. True
In a computerized accounting system, the process includes journalizing business
transactions and posting the same to the ledger. ANS. False
It is the book of accounts where the business transactions are first recorded chronologically.
ANS. General Journal
It is the term used to categorize or describe assets, liabilities, and owner's equity. ANS.
Real accounts
Luca Pacioli is called the father of modern accounting. ANS. True
It pertains to the owner's claim over the total assets of the business. ANS. Owner's Equity
An accounting principle that is similar to matching principle. ANS. Accrual Principle
The following are examples of intangible assets except ANS. Cash in Bank
Business obligations ANS. Liability
Following are types of income earned in the ordinary course of business except ANS.
Interest income received on a bank deposit
Which one is not a correct accounting equation? ANS. Capital = Assets +Liabilities
Copying or transferring the information from the journal to the ledger is called ANS. Posting
The owners of a non-stock corporation are called partners. ANS. False
A business entity created by operation of law. ANS. Corporation
It refers to the process of transferring the information of the journal to the ledger. ANS.
Posting to the ledger
Information Technology Infrastructure refers to the computer programs used to store,
retrieve, process, and analyze financial data. ANS. False
Private accountants perform consultancy services, auditing and tax accounting of firms
where the accountant is not a direct hired employee. ANS. False
Sole proprietorship is suitable for high risk businesses. ANS. False
Which of the following is not a current asset? ANS. Cash kept for future use.
It is called the book of original entry. ANS. General Journal
The accounting cycle starts with journalizing and ends up with the preparation of the Post-
closing Trial balance. ANS. True
A business transaction can have a two- fold effect on one accounting element only. ANS.
True
The following accounts are shown in the statement of financial position except ANS. Earned
Revenues
Accounting is a means and an end in every business organization. ANS. False
It is the proof of the equality of debits and credits. ANS. Trial Balance
The recording phase includes the following steps except ANS. Journalizing the adjusting
entries,
Investment of Cash in a business would require an entry debiting Capital and crediting
Cash. ANS. False
It is the accounting element that represents a part of the interest or the right of the creditors
on the assets of the business. ANS. Liability
The right side of a T-account represents decreases in all the accounting elements. ANS.
False
Expenses decrease the net assets of an entity. ANS. True
A business transaction should have this feature to be recognized in the accounting system.
ANS. All of these.

QUIZ 4
Income earned but not yet collected. ANS. Accrued Revenue
Contra account of depreciable plant assets. ANS. Accumulated Depreciation
The balance of Unearned Service Income on December 31, 2017 is P 25,000. Of this
amount, 1/2 is still unearned. Service Income to be recognized is __________. ANS. P
12,500
The adjusted trial balance of a service concern will list all the contra accounts on the credit
side. ANS. True
From the adjusted trial balance, Assets, contra-asset accounts, drawing, liabilities , and
capital will be transferred to the balance sheet. ANS. True
Select the phrase that doesn't belong to the group ANS. Prepaid Advertising Expense
Select the phrase that doesn't belong to the group ANS. Post-closing Trial Balance
Select the phrase that doesn't belong to the group ANS. Supplies Expense Cash
Select the phrase that doesn't belong to the group (cash,supplies,AII,land) ANS. Land
Select the phrase that doesn't belong to the group ANS. Direct write off method
Select the phrase that doesn't belong to the group ANS. Cash
Select the phrase that doesn't belong to the group ANS. Materiality principle
Select the phrase that doesn't belong to the group ANS. Continuity principle
Select the phrase that doesn't belong to the group ANS. Accrued interest expense
Juan rendered services on credit. Under the accrual basis of accounting, revenue will be
recognized in the income statement. ANS. True
Sales account has a balance of P 250,000 at the end of Quarter 1. Sales Discount is 10%.
Accounts Receivable's balance is P 50,000. Estimated uncollectible is 2% of Net Sales. The
doubtful accounts expense on March 31, 2017 is ______. ANS. P 4,500
Adjusting entries can have a debit or a credit to cash account. ANS. False
The Office Supplies account has a balance of P1, 000 on April 1, 2017. During the month, P
2,500 worth of supplies was purchased. At the end of the month, the office supplies on hand
amounted to P 1,200. The Office Supplies Expense on April 30, 2017 is ______________.
ANS. P 2,300
Accrued Expense is what type of account? ANS. Liability
Shows the changes in the capital account of the owner at the end of the period. ANS.
Statement of changes in Owner's Equity
Cash basis accounting is an accounting method that recognizes income and expenses
when cash is received or paid. ANS. True
Accounting principle that states that expenses be recorded when incurred and related
revenue when earned. ANS. Matching Principle
Expenses paid but not yet incurred. ANS. Prepaid Expenses
The business purchased and occupied a building on March 31, 2017. The cost of the
building is P 500,000, with an estimated useful life of 20 years and salvage value of P100,
000. The Depreciation expense on December 31, 2017 is __________. ANS. P 15,000
A 12%, 90-day note for P 100,000 was issued on November 15, 2017. The accrued interest
on December 31, 2017 is ______________. ANS. P 1,500
Allocation of cost of a plant asset over its useful life. ANS. Depreciation Accounting
The matching principle suggests that expenses should be reported only when paid and all
associated revenues to these expenses are received. ANS. False
Adjusting the value of plant assets requires a debit to accumulated depreciation. ANS.
False
Accounting method that records the transactions only when cash is received. ANS. Cash
Basis Accounting
The difference between the debit and the credit accounts in the income statement will be
the added or deducted from the capital account in the balance sheet. ANS. True
The revenue principle states that income earned must be recognized even if the payment of
the customers has not been received yet. ANS. True
Income received but not yet earned. ANS. Deferred Revenue
Plant asset less accumulated depreciation. ANS. Book value
One of the objectives of adjusting entries is to present fairly the amount of real accounts in
the balance sheet. ANS. True
Trial Balance after the adjusting entries are recorded and posted in the ledger. ANS.
Adjusted Trial Balance
Revenues are greater than expenses. ANS. Profit
Contra account of Accounts Receivable. ANS. Allowance for doubtful Accounts
The normal balance of Allowance for doubtful accounts. ANS. Credit
Accounting equation. ANS. A = L+C

MIDTERM
Issuance of stocks is an investing activity. ANS. False
A limited partnership is composed of limited partners only. ANS. False
Merchandising is also called trading. ANS. True
Manufacturing type of business involves conversion of inputs into outputs. ANS. True
The following are true about journalizing except ANS. A general journal entry with two or
more debits or credits is called a simple journal entry.
Accounting is a(n) ANS. All of these.
Assets = Equity is a complete and correct accounting equation. ANS. False
It pertains to all relevant financial information of the business events and practices. ANS.
Data
It is the contra account representing the estimated amount of uncollectible accounts from
defaulting customers. ANS. Allowance for doubtful accounts
Accrued interest expense is an example of ANS. None of these
Prepaid Expense is an asset with a normal debit balance. ANS. True
Users of financial information whose interest in the financial position and results of
operations of the business will be their basis of asking wage increases and benefits. ANS.
Employees
Financial Accounting is the branch of accounting that caters to the needs for accounting
information by internal users. ANS. False
The ledger is called the book of original entry while the journal is the book of final entry.
ANS. False
It is a nominal account representing the estimated reduction in the value of any depreciable
asset. ANS. Depreciation Expense
Partnership is more advantageous than corporation in terms of capital and management.
ANS. False
Human Resource Accounting is a process of communicating the effects of an organization's
business activities on society and environment to interested parties. ANS. False
Following are financial statements except ANS. Worksheet

QUIZ 5
These are the entries done at the beginning of the next accounting period to undo some
adjusting entries made. ANS. Reversing entries
Net loss is closed to capital by debiting Income Summary and crediting capital account.
ANS. False
Reversing accrued expense adjustment requires a debit to Accrued Expense and credit
Expense. ANS. True
Post-closing trial balances confirms the account balances of the ledger which will be the
starting point of the next accounting period. ANS. True
Temporary accounts refer to contra-accounts. ANS. False
The accounting cycle starts with journalizing the business transactions and ends on the
closing entries preparation and posting to the ledger. ANS. False
Aside from the adjusting entries, these entries are also done at the end of the accounting
period to zero out nominal accounts. ANS. Closing entries
It involves routine performances of the different phases of accounting for a given period of
time. ANS. Accounting cycle
A work sheet is an accounting tool that facilitates the easy preparation of financial
statements. ANS. True
The balance of Revenue and Expense Summary can also be closed to the owner's Drawing
account. ANS. True
It is the list of accounts with their balances after the closing entries are recorded and posted
in the ledger. ANS. Post- closing Trial Balance
This is the category of accounts listed in the income statement. ANS. Nominal accounts or
temporary accounts
Closing revenues requires a debit to Income Summary for the total income amounts. ANS.
False
Assets, Liabilities, and Owner's Equity are permanent accounts ANS. True
The worksheet is a financial report that should accompany the financial statements. ANS.
False
Profit and Loss Summary is a nominal account. ANS. True
All the nominal and real accounts are closed at the end of the accounting period. ANS.
False
After the closing entries are posted in the ledger, all the permanent accounts have zero
balances. ANS. False
It is the method of adjusting prepaid expense, the entry of which is reversed. ANS. Expense
method
Post-closing trial balance contains nominal accounts. ANS. False
It is the second step in the accounting cycle that was done during the accounting period.
ANS. Posting the journal entries to the ledger
All accounts in the financial statements prepared at the end of the accounting period are
zeroed out. ANS. False
All adjusting entries should be reversed at the start of the new accounting period. ANS.
False
The account Revenue and Expense Summary is a controlling account where revenues and
expenses are closed. ANS. True
Adjusting entry for Prepaid Expenses-Asset Method is also reversed at the start of the new
accounting period. ANS. False
It is the controlling account that holds the revenues and expenses in the closing the account
process. ANS. Revenue and Expense summary or Income Summary or Profit and Loss
Summary
Post-closing Trial Balance is a tool to determine if the ledger accounts are in balance before
the start of the new accounting period. ANS. True
It is a tool that aids in the accounting process, specifically, in the preparation of the financial
statements. ANS. Worksheet
A credit balance in the Revenue and Expense Summary account represents net loss. ANS.
False
The post-closing trial balance is a trial balance form of what financial statement? ANS.
Balance Sheet or Statement of Financial Position

QUIZ 6
A journal entry can have two or more debits and two or more credits. ANS. True
Accumulated Depreciation or Allowance for Depreciation is a contra account of Accounts
Receivable. ANS. False
Certificates of deposits and checks are part of the Cash on Hand and in Banks or simply,
Cash account. ANS. True
Accounts Receivable is an asset pertaining to collectibles from customers out of sale of
goods or services in exchange for a written promise to pay at a future date. ANS. False
A business transaction can have dual effect on a single accounting element or value. ANS.
True
A chart of accounts presents a list of account titles, its definition, description of when to
debit or credit and its corresponding account numbers. ANS. True
The credit side of T-account is used to record increases in liability and capital. ANS. True
Using the allowance method, the Accounts Receivable account is credited for the estimated
uncollectible from customers. ANS. False
Adjusting and closing entries are prepared at the end of the accounting period. ANS. True
A trial balance is also a tool in checking whether the journal entries are accurately done and
posted in the ledger. ANS. True
Maria Clara invested the following in a Parlor: Cash P 60,000, parlor equipment originally
costing P 20,000, with a fair market value of P 18,000. Maria Clara's Capital account should
be credited for ANS. P 78,000
The process of transferring the journal entries to the ledger is called posting the accounts.
ANS. True
The left side of a T-account is intended for the increases in all accounting elements. ANS.
False
The normal balance of an account is always on its right side. ANS. False
Businesses have a common annual accounting period. ANS. False
The right or claim of the owner over the assets of the firm is called liabilities. ANS. False
Writing the general journal page number in the F column of the ledger and the account
number to the F column of the general journal during the posting process is called cross-
referencing. ANS. True
Mr. X's Capital account has a balance of P 100,000 on March 31, 2017. Withdrawals for
personal expenses during April amounted to P 15,000. At the end of April, the Capital
account has a balance of P135, 000. Mr. X's net income for April is ANS. P 50,000
The parlor's gross revenue for the month is P 100,000 and expenses incurred are 30%.
Maria also earned a broker's fee of P 20,000 for selling a real property. The amount of net
income that should be reported by the parlor is ANS. P 70,000
A business transaction to be recognized in accounting should involve exchange of values
and quantifiable in terms of money ANS. True
The account number is written in the ledger posting reference column during the process of
posting. ANS. False
At the end of the month, Maria Clara Parlor's total Liabilities and Owner's Equity is P
250,000. One fifth of which is the liability. The parlor's total assets is ANS. P 250, 000
The difference, if any, between the total debits and total credits of the Cash account should
always be shown on the debit side. ANS. True
The account to be credited is indented following the account debited and the corresponding
amount is placed on the extreme right money column of the journal. ANS. True
The expanded accounting equation is Assets = Liabilities + Capital - Revenues - Expenses -
Drawing. ANS. False
A's Laundry Shop T-accounts for A, Capital, Laundry Income, Laundry Expenses have
normal balances of P 200,000, P 180,000, and P80,000, respectively. What is the new
balance for A, Capital at the end of the period? ANS. P 300,000
The transaction: Mr. A invested P20, 000 cash and equipment worth P30, 000 in a laundry
shop business, will result to an increase in assets and increase in capital for the business.
ANS. True
The debit and the credit columns of the journal are totaled. ANS. False
The following information were taken from the balance sheet of Juan Repair shop as of
March 31, 2017: Cash P70,000; Notes Receivable, P10,000; supplies, P5,000; Prepaid
Rent,P20,000; total non-current assets, P80,000; Total Liabilities and Capital, P200,000.
How much is the Accounts Receivable? ANS. P 15,000
The general journal is also called the book of final entry. ANS. False
A non-exchange business transaction does not involve changes in quantifiable monetary
values. ANS. False
The amount corresponding to a debited account can be written on the credit money column
of the journal. ANS. False
The trial balance of Maria Clara Parlor has a total debit balance of P 300,000. Among the
accounts listed are Accounts Payable, P 3,500; Notes Payable, P10,000;Maria Clara,
Capital, P180,000. The parlor's revenue is ANS. P 106,500
Assets are anything of economic value and owned by the business entity. ANS. True
The transaction: Mr. A bought supplies worth P5,000 on credit, will be recorded by an entry
debiting Supplies P5,000 and crediting Accounts Receivable P5,000. ANS. False

FINALS
In recording in the general journal, the year and month of the transaction are written once in
every page of the journal. ANS. True
At all times, if the total of the debit and credit columns of the trial balance are balanced,
there is no possible error that occurred during the journalizing and posting stages. ANS.
False
Assuming, Mr. A. paid rent of P25, 000, this would result to decrease in capital and
decrease in liability. ANS. False
A T-account is a representation of the ledger. ANS. True
The summarizing phase of the accounting cycle ends with the preparation of the financial
statements. ANS. True
The trial balance extracted from the ledger before the adjusting entries are posted in called
the adjusted trial balance. ANS. False
Maria Clara rendered parlor services during the month: P 5,000 cash basis and P 3,500 on
account. The amount to be credited to Service Income is ANS. P 8,500
All assets have normal debit balances. ANS. True
Maria Clara has the following transactions during the month of March: paid salaries of
house helper, P 3,500; paid utility expenses of the parlor, P 2,500; at the end of month,
hired a parlor helper with a monthly salary of P5, 000. The total expenditures that should be
reported for the month of March is ANS. P 6,000
Maria Clara rendered parlor services during the month: P 5,000 cash basis and P 3,500 on
account. The service on credit  was converted by the customer to a non-interest bearing
note. The entry to record this is ANS. Notes Receivable P 3,500 Accounts Receivable P3,
500
The following are the primary users of accounting data except. - Government agencies

Accounting is a process because it performs task such as recording, processing and classifying
financial data using a sequence of steps. – True

The following are the main objectives of Code of Ethics for accountants except. – Objectivity

A technique in determining the costs of the products, projects or any business activity. - Cost
Accounting

Nature of accounting where it performs the tasks of recording, processing business transactions and
communicating financial information using a sequence of different steps. - Accounting is a process
A branch of accounting that focuses on the needs for accounting information of external users like
creditors, potential outside investors, government agencies and the general public, who are not
actively participating in the daily operations of the business. - Financial accounting

Accounting principles that refers to the importance of business transactions, balances and errors the
financial statements have. - Materiality Principle

The branch of accounting that deals with the implementation of a complete and consistent
accounting principles and techniques in measuring the country's economic activities. - National
Accounting

Branch of accounting that undertakes the examination and verification of a firm's accounts and
internal control system. – Auditing

Business activities that pertains to purchasing and selling of long-term assets such as property and
equipment. - Investing activities

Stock dividends receipt from stock investment activities under. - Operating activities

A corporations is. - A business entity that has a separate legal personality from its owners.

A business that buys goods in finished form and sells it to customer in the same form. -
Merchandising companies

Smart Telecommunications is a business entity with business activity of___________. – Services

Corporations have transferable ownership, giving them unlimited life while also limiting their liability.
– True

Any business data that impacts the company's finances should be recorded in accounting
information system. – True

AIS enables calculations to be so accurate, the financial statements prepared by computers are
highly reliable. – Reliability

It is a list of selections in choosing computer functions. – Menu

It is a computer programs used to store, retrieve, process and analyze financial data. – Software

When cash is received, the account Cash will be – Debited

Entries to revenues accounts such as Service Revenues are usually – Credit

What will usually cause an asset account to increase? – Debit

The financial statement that reports the revenues and expenses for a period of time such as a year
or a month is the. - Income statement

Activities consist of cash receipts from income or revenues and cash payments on expenses. -
Operating Activities

Non-current assets are only intangible assets of which without physical substance. – False

The following are liabilities except. - Prepaid expense

Activities results from buying and selling long-term assets that the firm uses for operations. -
Investing activities
The following are in Balance Sheet except. – Sales

These are the collection of summary-level reports about an organization's financial results, financial

position, and cash flows. - Financial statement

The following are the accounting element in basic accounting equation except. – Expense

In recording revenue what is the debit entry for assuming the company performed a service and was
immediately paid the full amount of PHP 1000 for the service. – Cash

These are debts or obligations of the business to creditors. – Liabilities

Which of the following should not be recorded as debit? - Increase in Liability

These are anything that the business owns and with economic value to the firm and can be tangible
or intangible. – Asset

The _______ are recorded in the income statement when the cash is paid out. – Expenses

The two methods in adjusting unearned revenue, the income method and the ______ method. -
Liability method

Consider the scenario under Accrual principle. Customer pays ABC Company for service. What will
be entry? - Debit: Cash, Credit: Accounts Receivable

When a customer paid the massage service but the firm has not yet performed the service, the
transaction will result to a. - Unearned revenue

It is an income earned but not yet collected or not yet due for collection. - Accrued Revenue

The adjusting entry will ALWAYS have one balance sheet account (asset, liability, or equity) and one
income statement account (revenue or expense) in the journal entry. – True

Which of the following can be recorded as Debit. - Decrease in liability

Unearned revenue is recorded as credit as it is a liability. – True

Accounting principles stating that recording of income should be recorded on time they earned. -
Matching Principle

Perla Labandera Laundry Shop

Trial Balance
March 31, 2017
 
P 120,000
Cas h   
 
 
Accounts R eceivable P 5,000
  
 
P 500
Allowance for doubtful Accounts    
  
Laundry Supplies    
P 4,500
 P 4,500

 
 
Prepaid R ent P 20,000
  
 
 
Laundry E quipment P 75,000
  
 
 
Acc. Depr.-Laundry E quip.   P 7,500
 
 
 
Furniture P 10,000
  
 
 
Acc. Depr.-furniture   P 1,800
 
 
 
Accounts Payable   P 2,800
 
 
 
Notes Payable   P 10,000
 
 
 
Perla,Capital   P 150,000
 
 
 
Perla, Drawing P 10,000
  
 
 
Laundry Income   P 145,300
 
 
 
R ent E xpens e
P 30,000
  
 
 
Salaries E xpens e P 15,000
  
 
Utilities E xpens e    
P 12,000
 
  
 
Advertis ing E xpens e P 5,500
  
 
 
Laundry Supplies E xpens e P 5,000
  
 
 
Depr.-Laundry E quipment P 2,500
  
 
 
Ins urance E xpens e P 2,500
  
 
 
Depr.-Furniture P 600
  
 
 
Doubtful Accounts E xpens e P 300
  
 
Total:  P 317, 900  P 317, 900

Perla Labandera Laundry Shop

Income Statement
For the Quarter Ending March 31, 2017
Laundry Income   P 145,300

Less:     
R ent E xpens e P 30,000  
Salaries E xpens e P 15,000  
Utilities E xpens e P 12,000  
Advertis ing E xpens e P 5,500  
Laundry Supplies E xpens e P 5,000  
Depr.-Laundry E quipment P 2,500  
Ins urance E xpens e P 2,500  
Depr.-Furniture P 600  
Doubtful Accounts E xpens e P 300  
Total Expense   P 73,400

     
Net Profit