Ramon Magsaysay Memorial Colleges

Bachelor of Science in Accountancy Program

Pioneer Ave., General Santos City
Tel. No. 552-3348

Name: ______________________________ Date: ___________ Score: _____________

Subject : ACCTG 11- Financial Accounting and Reporting Final Examination
Instructor: Mrs. Marivic B. Peñaflor, CPA, MBA AY: 2020-2021 1st Semester

Test 1 : Multiple Choice. Write the letter of your choice in your answer sheet in capital letter.
1. The first in the accounting cycle is to
a. Record transactions in a journal
b. Analyze transactions from source documents
c. Post journal entries to general ledger accounts
d. Adjust the general ledger accounts
2. The last step in the accounting cycle is to
a. prepare a post closing trial balance
b. journalize and post closing entries
c. prepare financial statements
d. journalize and post adjusting entries
3. Which statement is correct?
I. The forms of business organization are sole proprietorship, partnership, corporation and
cooperative
II. The forms of business organization are service concern, merchandising concern,
manufacturing concern and hybrid
a. I only b. II only c. both I and II d. Neither I
nor II
4. Which statement is incorrect?
I. The elements of financial statements are assets, liabilities, owner’s equity, revenue and
expenses
II. The elements of financial statements are balance sheet, income statement, statement of
cash flows, statement of changes in equity and notes to financial statements.
a. I only b. II only c. both I and II d.
Neither I nor II
5. An accounting record into which the essential facts and figures in connection with all transactions
are initially recorded is called
a. Ledger c. Trial balance
b. Account d. Journal
6. Which of the ff. types of accounts measure economic flows over a period of time?
a. Real accounts c. Mixed accounts
b. Nominal accounts d. Contra Accounts

7. In which of the following did a loss occur?

a.

ASSETS = LIABILITIES + EQUITY + INCOME - EXPENSES 8. Which of the

a. ₱920,000 ₱710,000 ₱290,000 ₱440,000 ₱520,000 following would
result to total
b. ₱870,000 ₱310,000 ₱240,000 ₱470,000 ₱150,000 expenses of
c. ₱890,000 ₱240,000 ₱240,000 ₱600,000 ₱190,000 ₱480,000?
d. ₱740,000 ₱530,000 ₱170,000 ₱1,900,000 ₱1,860,000 a. Total income of
₱360,000 and
profit ₱120,000
b. Total income of ₱580,000 and loss of ₱100,000
c. Total income of ₱630,000 and profit of ₱150,000
d. Total income of ₱630,000 and loss of ₱150,000
9. Entity A had total assets, liabilities, and equity of ₱130M, ₱80M and ₱50M, respectively, at the
beginning of the period. During the period, Entity A’s total liabilities decreased by ₱20M, while its
profit was ₱25M. There were no other transactions or events that affected equity during the period.
How much is Entity A’s ending total assets?
a. ₱95M
b. ₱135M
c. ₱85M
d. ₱125M
10. Entity A had total assets, liabilities, and equity of ₱150M, ₱90M and ₱60M, respectively, at the
beginning of the period. During the period, Entity A’s total liabilities decreased to ₱40M, while its
profit was ₱25M. There were no other transactions or events that affected equity during the period.
How much is Entity A’s ending total assets?
a. ₱75M
b. ₱115M
c. ₱95M
 d. ₱125M
11. On September 1, 2013, MM company collected the amount of P 120,000 representing advanced
rental from a tenant who occupies a space of the building. The advanced rental will cover the period
from September 1 2013 to September 1, 2014. The accounting period end on December 31, 2013?
Assuming that income method is used in recording precollection of income what is the adjusting
entry on December 31, 2013 ?

a. Debit rent income of 40,000 and credit unearned rent income of P 40,000
b. Debit unearned rent income of P 40,000 and credit rent income of P 40,000
c. Debit rent income of P 80,000 and credit unearned rent income of P 80,000
d. Debit unearned rent income of P 80,000 and credit rent income of P 80,000
12. Using the same information in number 11, assuming liability method is used in recording
precollection of income, what is the adjusting entry on December 31, 2013?
a. Debit rent income of 40,000 and credit unearned rent income of P 40,000
b. Debit unearned rent income of P 40,000 and credit rent income of P 40,000
c. Debit rent income of P 80,000 and credit unearned rent income of P 80,000
d. Debit unearned rent income of P 80,000 and credit rent income of P 80,000
13. Using the same information in number 11, assuming you failed to prepare adjusting entry on
December 31, 2013, income will be
a. Overstated by 40,000 c. Understated by 40,000
b. Overstated by 80,000 d. Understated by 40,000
14. Refer to number 12, assuming you failed to prepare adjusting entry on December 31, 2013, income
will be
a. Overstated by 40,000 c. Understated by 40,000
b. Overstated by 80,000 d. Understated by 40,000
15. Marlon Security Services, owned and managed by Marlon Medina, bought office supplies costing P
10,000. The purchase was recorded by a debit to an account “ Supplies expense”. At the end of the
accounting period, it was ascertained that 40% cost of supplies were on hand. What adjusting entry
to be made at year end?
a. Debit Supplies expense, P 4,000 and credit Supplies inventory, P 4,000
b. Debit Supplies inventory, P 4,000 and credit Supplies expense, P 4,000
c. Debit Supplies expense, P 6,000 and credit Supplies inventory, P 6,000
d. Debit Supplies inventory, P6,000 and credit Supplies expense, P 6,000
16. Refer to number 15, failure to prepare adjusting entry at year end would result to a/an
a. Understatement of asset c. overstatement of income
b. Overstatement of asset d. answer is not given
17. Which statement is incorrect?
I. Inventory refers to the goods that a merchandising business has purchased with the main
intention of reselling them.
II. The periodic inventory system is commonly used for inventories that are normally
interchangeable, have relatively low value, and have a fast turnover rate.
a. I only b. II only c. both I and II d.
Neither I nor II
18. Which statement is correct?

I. Under the perpetual inventory system, increases and decreases in inventory are
recorded through the purchases, freight-in, purchase returns, and purchase discounts
accounts.
II. Under the perpetual inventory system, cost of goods sold is debited when inventory is
sold and credited when there is a sales return.
a. I only b. II only c. both I and II d.
Neither I nor II
19. Which statement is correct?

I. Purchase returns and discounts are deducted from gross purchases when computing for net
purchases.
II. Ending inventory is added to Total Goods Available for Sale when computing for Cost of
Goods Sold
a. I only b. II only c. both I and II d.
Neither I nor II

20. Entity A has a beginning inventory of ₱280,000. During the period Entity A purchased inventories
costing ₱890,000. Freight paid on the purchase totaled ₱30,000. If the ending inventory is
₱220,000, how much is the cost of goods sold?
a. 1,360,000
b. 980,000
c. 950,000
d. 920,000
21. Entity A has gross purchases of ₱360,000. Freight paid on the purchases amounted to ₱50,000.
Purchase discounts totaled ₱20,000 while purchase returns totaled ₱15,000. How much is the net
purchases?
a. 375,000
b. 390,000
c. 410,000
d. 445,000
22. Entity A has a beginning inventory of ₱340,000. During the period Entity A purchased inventories
costing ₱990,000. Freight paid on the purchase totaled ₱40,000. The ending inventory was
₱360,000. If the net sales were ₱1,200,000, how much is the gross profit?
a. 1,010,000
 b. 1,200,000
c. 190,000
d. 260,000
23. Entity A has a beginning inventory of ₱140,000. During the period Entity A purchased inventories
costing ₱790,000. Freight paid on the purchase totaled ₱10,000. The ending inventory was ₱60,000.
Gross sales were ₱1,800,000 while sales returns and discounts totaled ₱220,000. How much is the
gross profit?
a. 680,000
b. 700,000
c. 780,000
d. 880,000
24. Owner’s cash investment to the business.
Debit Credit
a. Cash Owner’s capital
b. Cash Owner’s drawings
c. Owner’s capital Cash
d. Cash Sales
25. Payment (settlement) of accounts payable
Debit Credit
a. Inventory Accounts payable
b. Cash Accounts payable
c. Accounts payable Cash
d. Cost of sales Inventory
26. Sale of inventory on cash basis
Debit Credit
a. Inventory Sales
b. Cash Accounts receivable
c. Cash Sales
d. Cost of sales Cash
27. Merchandise inventory account is increased. Which statement is correct?
I. Merchandise inventory account is credited
II. Merchandise inventory account is debited
a. I only b. II only c. both 1 and II d. neither I nor II
28. Sales returns and allowances is increased. Which statement is incorrect?
a. I only b. II only c. both 1 and II d. neither I nor II
For item nos. 29 to 36 . Below are the transactions of Mr. A occurred for the month of January 2020. (Use
perpetual inventory method).
a. Mr. A, the sole owner of Entity A, invested ₱1,000,000 to the business.
b. Equipment costing ₱250,000 was acquired for cash.
c. Inventory costing ₱180,000 was acquired on credit. Entity A uses the perpetual inventory
system.
d. Inventory costing ₱120,000 was sold for ₱400,000 on credit.
e. Accounts payable of ₱160,000 was settled.
f. Accounts receivable of ₱340,000 was collected.
g. Utilities expense of ₱60,000 was paid.
h. Salaries expense of ₱280,000 was paid.
i. Owner’s drawings during the period totaled ₱70,000.
j. Depreciation expense on the equipment for the period was ₱25,000.

29. How much is the total increase of cash at the during January 2020?
30. How much is the total increase of inventory account during January 2020?
31. How much is the total amount of current assets at the end of January 2020?
32. How much is the total amount of non-current assets at the end of January 2020?
33. How much is the total amount of revenue for the year 2020?
34. How much is the total cost of goods sold for the year 2020?
35. How much is the total expenses for the year 2020?
36. How much is the net profit or net loss for the year 2020?

For item nos. 37 to 43

37. The preliminary Trial balance of Magaling Traders owned by Magaling Xa as of December 31, 2013
showed in part of the Accounts Receivable and its related Estimated Uncollectible Accounts:
Debit Credit

Accounts Receivable P 450,000

Estimated Uncollectible Account 8,000

If at the end of the year the estimated uncollectible account is to be provided at 4% of its
outstanding receivable, what would be the adjusting entry at year end?

a. Debit, Estimated Uncollectible Accounts, 18,000 and credit, Uncollectible Account expense , P
18,000
b. Debit, uncollectible account expense, P 18,000 and credit, Estimated uncollectible account, P
18,000
c. Debit, Estimated Uncollectible Accounts, 10,000 and credit, Uncollectible Account expense , P
10,000.
d. Debit, uncollectible account expense, P 10,000 and credit, Estimated uncollectible account, P
10,000
 38. Refer to number 37, what is the estimated Realizable Value of the Accounts Receivable as of
December 31,2013?
a. P 432,000 b. P 440,000 c. P 424,000 d. P answer not given
39. Refer to number 37, Assuming, at year end, the estimated uncollectible account should be
increased by 3% of the outstanding receivable account, what should be the adjusting entry needed?
a. Debit, Estimated Uncollectible Accounts, 5,500 and credit, Uncollectible Account expense , P
5,500.
b. Debit, uncollectible account expense, P 5,500 and credit, Estimated uncollectible account, P
5,500
c. Debit, Estimated Uncollectible Accounts, 13,500 and credit, Uncollectible Account expense , P
13,500.
d. Debit, uncollectible account expense, P 13,500 and credit, Estimated uncollectible account, P
13,500
40. Refer to numbers 37 and 39, what is the estimated Realizable Value of the Accounts Receivable as
of December 31,2013?
a. P 444,500 b. P 428,500 c. P 436,500 d. answer is not given
41. On July 1, 2013, Beauty Salon and Spa owned by Beauty Ever bought a brand new air-conditioning
unit for P 250,000. Freight on shipment is P 1,000 and installation cost is P 3,000. The unit has an
estimated life of 10 years and has a salvage value of P 50,000 at the end of its life. The accounting
period ends on December 31, 2013.
What is the adjusting entry on December 31,2013 to record depreciation expense?

a. Debit, depreciation expense ,20,000 and credit, accumulated depreciation, P 20,000

b. Debit, depreciation expense, 12,500 and credit, accumulated depreciation, P 12,500
c. Debit , depreciation expense, P 10,200 and credit, accumulated depreciation, P 10,200
d. Debit, depreciation expense, P 12,700 and credit, accumulated depreciation 12,700
42. Refer to number 41, what is the net book value of the asset as of December 31,2013?
a. P 193,800 b. P 191,300 c. P 243,800 d. P answer is not given
43. In the examination of “ Prepaid expense” account of Jenny Basillio and Associates, an auditing firm
who conducts the audit discovers the following:
Prepaid insurance P 36,000
Prepaid rental 48,000

1. Insurance policy contract covers the period from May 1 2013 to May 1, 2014.
2. Lease rental contract covers the period from November 1, 2012 to November 1, 2013.
If the cut-off date for financial reporting is December 31, 2013, what should be the balance
of prepaid expense account?

a. P 12,000 b. 24,000 c. P 20,000 d. answer is not given

44. Refer to number 43, failure to prepare adjusting entry at year end, income will be
a. Overstated by 24,000 c. understated by 40,000
b. Overstated by P 64,000 d. answer is not given
45. Which of the adjusting entries presented below is/are to be reversed?
a. Prepaid insurance
Insurance expense
b. Depreciation expense
Accumulated depreciation
c. Supplies expense
Supplies
d. Uncollectible accounts
Estimated uncollectible accounts
46. Which of the adjusting entries presented below is/are to be reversed?
a. Rent income
Unearned rent income
b. Depreciation expense
Accumulated depreciation
c. Unearned interest income
Interest income
d. Uncollectible accounts
Estimated uncollectible accounts
47. Which of the adjusting entries presented below is/are to be reversed?
a. Rent Receivable
Rent income
b. Depreciation expense
Accumulated depreciation
c. Unearned interest income
Interest income
d. Rent expense
Prepaid rent

For item nos. 47 to 53

The following are transactions of AA company occurred during January 2020? Journalize the above
transactions using periodic inventory method. ( Assume VAT is inclusive)

1. Purchased merchandise on account, P 120,000.

2. Returned merchandise purchased in no. 1, P 3,000.
3. Paid the account and avail a 5 % discount.
 4. Sold merchandise on account, P 300,000
5. Received merchandise returned by customer, P 8,000 in no. 4.
6. Collected the accounts of customer with a 3 % discount.
48. The journal entry to record no. 1 transaction is:
a. Debit purchases , 120,000 and credit cash, P 120,000
b. Debit inventory, 120,000 and credit cash, P 120,000
c. Debit, purchases, 120,000 and credit, accounts payable, 120,000
d. Debit, inventory, 120,000 and credit, accounts payable, 120,000
49. Refer to no. 48, what special journal this transaction be recorded?
a. sales journal c, Cash disbursement journal
b. Purchase journal d. cash receipts journal
50. The journal entry to record transaction no. 2 is:
a. Debit purchase returns , 3,000 and credit cash, P 3,000
b. Debit inventory, 3,000 and credit cash, P 3,000
c. Debit, accounts payable, 3,000 and credit, purchase returns, 3,000
d. Debit, accounts payable, 3,000 and credit, inventory, 3,000
51. The journal entry to record no. 4 is :
a. Debit cash , 300,000 and sales, P 300,000
b. Debit accounts receivable, 300,000 and sales, P 300,000
c. Debit, accounts payable, 300,000 and credit, sales, 300,000
d. Debit, sales, 300,000 and credit, accounts receivable, 300,000
52. Refer to no. 51, what special journal this transaction be recorded?
a. sales journal c, Cash disbursement journal
b. Purchase journal d. cash receipts journal
53. The journal entry to record no. 4 is :
a. Debit cash , 300,000 and sales, P 300,000
b. Debit accounts receivable, 300,000 and sales, P 300,000
c. Debit, accounts payable, 300,000 and credit, sales, 300,000
d. Debit, sales, 300,000 and credit, accounts receivable, 300,000

Refer to nos. 54 to 56
54. How much is the amount of input tax?
55. How much is the amount of output tax
56. How mush is the vat payable at the end of January 2020?
For nos. 57 -60

The payroll of DD company for the month of January 2020 is presented below

Employees Gross SSS Philhealt Pag-ibig Taxable Withholding Net pay

pay h Income Tax payable

45,000
1. Ana, FE
2. Rose, Sun 39,000
3. Fee, Ang 22,000
4. Ma, Ganda 28,000
Total

Required:
1. Compute the total deductions.
2. Compute the amount of withholding tax payable.
3. Compute the total amount of SSS, philhealth and
Pag-ibig premium payable as of January 31, 2020.
4. Compute the amount of net pay.
5. The journal entry to record the payroll is:
6. The journal entry to record the share of the employer
is:

Monthly Salary EC
ary range SS Contribution
Credit Contribution

Employe Employee TOTAL ER

r
 Monthly Salary EC
ary range SS Contribution
Credit Contribution

BELOW – 2,250 2,000 160.00 80.00 240.00 10

2,250 – 2,749.99 2,500 200.00 100.00 300.00 10

2,750 – 3,249.99 3,000 240.00 120.00 360.00 10

3,250 – 3,749.99 3,500 280.00 140.00 420.00 10

3,750 – 4,249.99 4,000 320.00 160.00 480.00 10

4250 – 4,749.99 4,500 360.0 180.00 540.00 10

4,750 – 5249.99 5,000 400.00 200.00 600.00 10

5,250 – 5,749.99 5,500 440.00 220.00 660.00 10

5,750 – 6,249.99 6,000 480.00 240.00 20.00 10

6,250 – 6,749.99 6,500 520.00 260.00 780.00 10

6,750 – 7,249.99 7,000 560.00 280.00 840.00 10

7,250 – 7,749.99 7,500 600.00 300.00 900.00 10

7,750 – 8,249.99 8,000 640.00 320.00 960.00 10

8,250 – 8,749.99 8,500 680.00 340.00 1,020.0 10

0

8.750 – 9,249.99 9,000 720.00 360.00 1,080.0 10

0

9,250 – 9,749.99 9,500 760.00 380.00 1,140.0 10

0

9,750 – 10,000 800.00 400.00 1,200.0 10

10,249.99 0

10,250 – 10,500 840.00 420.00 1,260.0 10

10,749.99 0

10,760 – 11,000 880.00 440.00 1,320.0 10

11,249.99 0

11,250 – 11,500 920.00 460.00 1,380.0 10

11,749.99 0

11,750 – 12,000 960.00 480.00 1,440.0 10

12,249.99 0

12,250 – 12,500 1,000.00 500.00 1,500.0 10

12,749.99 0
 Monthly Salary EC
ary range SS Contribution
Credit Contribution

12,760 – 13,000 1,040.00 520.00 1,560.0 10

13,249.99 0

13,250 – 13,500 1,080.00 540.00 1,620.0 10

13,749.99 0

13,750 – 14,000 1,120.00 560.00 1,680.0 10

14,249.99 0

14,250 – 14,500 1,160.00 580.00 1,740.0 10

14,749.99 0

14,750 – 15,000 1,200.00 600.00 1,800.0 30

15,249.99 0

15,250 – 15,500 1,240.00 620.00 1,860.0 30

15,749.99 0

15,750 – 16,000 1,280.00 640.00 1,920.0 30

16,249.99 0

16,250 – 16,500 1,320.00 660.00 1,980.0 30

16,749.99 0

16,750 – 17,000 1,360.00 680.00 2,040.0 30

17,249.99 0

17,250 – 17,500 1,400.00 700.00 2,100.0 30

17,749.99 0

17,750 – 18,000 1,440.00 720.00 2,160.0 30

18,249.99 0

18,250 – 18,500 1,480.00 740.00 2,220.0 30

18,749.99 0

18,750 – 19,000 1,520.00 760.00 2,280.0 30

19,249.99 0

19,250 – 19,500 1,560.00 780.00 2,340.0 30

19,749.99 0

19,750 and 20,000 1,600.00 800.00 2,400.0 30

above 0