SUMMATIVE TEST FABM 2

FIRST QUARTER

Name: ______________________________________Grade/Section: ________________ Date: __________

TEST I. MULTIPLE CHOICE: Read and analyze each item carefully. Write the letter corresponding the best
answer on the space provided before each number.

1. It is a form of the SFP that shows asset accounts first and then liabilities and owner’s equity accounts after.
A. Report Form C. Vertical Form
B. Account Form D. None
2. It is considered as cost for borrowing money?
A. Interest Payable C. Accounts Payable
B. Notes Payable D. Trade Payable
3. Provide services rather than products to customers.
a. Manufacturing business C. Service business
b. Merchandising business D. None of the above
4. Which of the following accounts is a current asset?
a. Bonds Payable C. Account payables
b. Property, Plant and Equipment D. Account receivables
5. It refers to the purchase and sale of long-term assets and other business investments, within a specific
reporting period.
A. Operating activities C. Investing activities
B. Financing activities D. Income activities
6. It is the summary of the cash inflows and outflows that brought cash to its ending balance.
A. Statement of Changes in Equity C. Income Statement
B. Statement of Financial Position D. Cash Flow Statement
7. Purchase and sale of long-term assets and other business investments, within a specific reporting period.
A. Operating Activities C. Financing Activities
B. Investing Activities D. Income Activities
8. This is the excess of current assets over current liabilities.
A. Current ratio C. Working Capital
B. Acid test ratio D. Quick ratio
9. Which of the following is not considered as a quick asset?
A. Cash C. Inventory
B. Accounts Receivables D. Trading Securities
10. It measures the frequency of accounts receivables converted into cash.
A. A/R turnover ratio C. Both A & B
B. Average collection period D. None of these
11. This is the entity’s ability to meet long term obligations as they become due.
A. Liquidity ratios C. Solvency ratios
B. Profitability ratios D. None of the above
12. If current assets amounted to P600,000 and current liabilities amounted to P200,000, how much is the
working capital of the entity?
A. P800,000 C. P400,000
B. 3 D. 1/3
13. If net sales is P200,000 and the average accounts receivable is P50,000, what is the A/R turnover ratio?
A. 4 C. ¼
B. P150,000 D. P250,000
14. Net sales for the year is P900,000 and the gross profit is P400,000, what is the gross profit ratio?
A. .444 C. 2.25
B. 1.8 D. .555
15. The advantage of this account is that even if the banks are closed, you can withdraw your funds.
A. Check C. ATM
B. Passbook D. Bonds
16. It is a type of savings account that is held for a fixed-term and can be withdrawn only after the lapse of the
agreed period and by giving notice to the bank.
A. Current C. Checking
B. Time Deposit D. ATM
Carina Computer Shoppe
Below are the accounts of Carina Computer Shoppe for the year ended December 31, 2021. Prepare a
statement of financial position and answer the following questions:

Accounts payable P100,000.00

Accounts Receivable P140,000.00
Capital P1,840,000.00
Cash P1,000,000.00
 Inventories P450,000.00
Long term debt P300,000.00
Notes payable (short term) P100,000.00
Notes receivable (short term) P100,000.00
Property and equipment P550,000.00
Supplies and other prepayments P100,000.00

17. How much is the total current asset of the entity?

a. P1,760,000.00 C. P1,780,000.00
b. P1,770,000.00 D. P1,790,000.00
19-20 Gina Vulcanizing Shop
The following are the accounts of Gina Vulcanizing Shop for December 31, 2021. Prepare a single step
Statement of Comprehensive Income and then answer the following questions.
Professional Fees Earned P1,000,000.00
Salaries Expense P100,000.00
Supplies Expense P150,000.00
Depreciation Expense P120,000.00
Utilities Expense P80,000.00
Insurance Expense P40,000.00
Rent Expense P180,000.00

18. How much is the total operating expense as of December 31, 2021?
a. P660,000.00 C. P680,000.00
b. P670,000.00 D. P690,000.00

21-22 Marina Clothing

The following are the accounts of Marina Clothing for December 31, 2021. Prepare a multi-step
Statement of Comprehensive Income and then answer the following questions.

Sales Revenue P500,000.00

Sales Return P5,000.00
Cost of Goods sold P340,000.00
Salaries Expense P25,000.00
Travelling Expense P6,000.00
Supplies Expense P5,000.00
Interest Expense P1,000.00
19. How much is the total operating expenses?
a. P35,000.00 C. P37,000.00
b. P36,000.00 D. P38,000.00

23-24 Holi Law Firm is owned by Atty. Holi. The balance of Atty. Holi Land’s capital as of January 1, 2015 is
P1,800,000.00. During the year, he invested additional cash of P450,000.00 in the business. Also, Holi Law
Firm earned P168,750.00 of net income. Finally, he withdrew P112,500.00. Prepare a statement of changes in
owner’s equity and answer the following questions.
20. What form of business organization does Holland Law Firm?
a. Single proprietorship C. Corporation
b. Partnership D. Cooperative
21. How much is the additional amount after beginning capital of Holland Law Firm?
a. P450,000.00 C. P618,750.00
b. P168,750.00 D. P112,500.00
25-27 Cameron Trading

Below are the cash transactions of Cameron Trading for December 31, 2021. Prepare the statement of
cash flow and then answer the following questions.

Cash payment to suppliers of P62,500.00

goods and services
Cash receipts from rendering of P125,000.00
22. How much is the services cash flow from operating
activities? Payment to owners P12,500.00
a. Proceeds from bank loans P62,500.00 P62,500.00
Proceeds from cash investment P287,500.00
C. P125,000.00
b. of owners (P62,500.00)
Payment for acquisition of D. (P125,000.00)
P250,000.00
equipment
Cash at the beginning of the P2,500,000.00
year
 23. How much is the cash flow from investing activities?
a. P250,000.00 C. (250,000.00)
b. P287,500.00 D. (287,500.00)

28-30. Below is the Statement of Comprehensive Income of AM General Merchandise. Prepare a horizontal
and vertical analysis and answer the questions below.

24. How much is the percentage change of the cost of goods sold account?
a. 6.9% C. 6.7%
b. 6.8% D. 6.6%
25. How much is the peso change of the other expenses account from the year 2019 to 2020?
a. P6,750.00 C. P6,749.00
b. P6,751.00 D. P6,748.00