BASIC ACCOUNTING - LONG QUIZ FINALS.

Write the letter of your answer in UPPERCASE before the

number.

B 1. Which of the following is not considered an account?

a. Equipment b. Revenue c. Accounts payable d. Cash

C 2. The purchase of an asset on account will

a. increase total liabilities and decrease total assets
b. have no effect on total assets and total liabilities-equity
c. increase total assets and increase total liabilities
d. increase total assets and increase owner's equity

A 3. The company collected in full an accounts receivable. Considering this transaction alone
a. total assets will remain the same
b. total assets will increase
c. total assets will decrease
d. equity will increase

D 4. Over a period of time, if total assets increase by P280,000 and total liabilities increase by P80,000, then
owner's equity will be increased by
a. P70,000 b. P340,000 c. P270,000 d. P200,000

B 5. When an entity receives cash for services performed

a. an asset is decreased
b. the owner's equity is increased
c. the owner's equity is decreased
d. total asset remain unchanged

C 6. The accounting equation

a. is used to determine the amount of liabilities owed
b. is used to determine the amount of income earned during the period
c. shows the claim on the entity's assets by both the creditors and owners
d. shows the claim on the owner's equity by the creditors.

B 7. A credit entry decreases the balance of

a. owner's equity b. assets c. income d. liabilities

D 8. A P1,000 debit item was posted as credit. The trial balance column totals will differ by
a. P0 b. P500 c. P1,000 d. P2,000
B 9. Which of the following errors will cause the trial balance to be out of balance?
a. a journal was posted twice.
b. A credit was posted to an account as a debit
c. a transaction was not journalized
d. a journal entry was not posted to the ledger

B 10. Which of the following transactions decreases both assets and owner's equity?
a. payment of liability
b. owner withdrawal of cash
c. receipt of a phone bill to be paid at a later time
d. advance payment made for insurance

C 11. An entry with more than one debit or credit is called

a. multiple entry b. double entry c. compound entry d. dual entry

C 12. The process of transferring journal entry information from the journal to the ledger is
a. footing b. journalizing c. posting d. analyzing

A 13. When a company has performed a service but has not yet received payment, it represents
a. accrued income b. unearned income c. Accrued expense d. prepaid expense

D 14. The accrual basis of accounting recognizes

a. revenue when cash is received
b. expenses when cash is paid
c. revenue when product are produced as past of operating activities
d. expenses when resources are consumed as part of operating activities

C 15. Which of the following is a business event that is not considered a recordable transaction?
a. a company receives a product previously ordered
b. a company pays an employee for work performed
c. a customer inquires about the availability of services
d. a customer purchases a service.

C 16. Unearned revenue is recorded by company that

a. pays money in advance of the performance of a service
b. pays money at the time the performance of a service is complete.
c. receive money in advance of the performance of a service
d. receive money at the time the performance of a service is complete.
B 17. Depreciation is
a. a decrease in the fair value of an asset
b. an expense that is incurred during an accounting period
c. a method of saving cash to replace plant asset
d. added to the cost of equipment in the balance sheet

B 18. Accrued salaries are

a. salaries that have been paid
b. salaries where employees already rendered service but not yet paid.
c. salaries where employees already rendered service and already paid
d. salaries where no service yet was rendered but already paid.

D 19. Which of the following transactions results in the recognition of an expense?

a. payment of accounts payable
b. withdrawal of cash by the owner.
c. payment of the principal of a loan
d. expiration of the usefulness of equipment during the accounting period.

D 20. Supplies expense of P5,000 was erroneously recorded as repairs expense. If not corrected, this will
a. Understate the expenses b. Overstate the capital c. Understate the asset d. No effect in the income

C 21. Sales on account of P3,600 were erroneously recorded as P6,300. This error will
a. Understate the asset b. Understate the capital c. Overstate the income d. Overstate the liability

B 22. Office machine of P20,000 was erroneously recorded as expense. This error will
a. Understate the liability b. Understate the income c. Overstate the asset d. Overstate the revenue

C 23. When a payment is made to a supplier for goods previously purchased on account, the debit is to
a. an expense account b. an asset account c.liability account d. a capital account

D 24. A person who wants to determine the balance of a particular account should refer to the
a. book of original entry b. source documents c. chart of accounts d. ledger

B 25. It is also called as the book of original entries

a. ledger b. journals c. invoice d. trial balance

A 26. The acquisition cost of an equipment is P60,000. It has an estimated life of 5 years and estimated
salvage value of P10,000 at the end of its economic life. Its net book value at the end of its 2nd year is
a. P40,000 b.P36,000 c. P24,000 d. P20,000
D 27. The pre-collection is P600. This is applicable for a six-month rental period ending January 31, 2010.
The balance sheet to prepared is dated December 31, 2010. if the pre-collection was recorded under the
income method, the liability to be recorded would be
a. P500 b. P50 c. P550 d. P100

C 28. The total sales was P1,000,000 of which sales on cash basis amounted to P400,000. The policy of the
business is to provide 1% of credit sales as uncollectible. The doubtful accounts expense is
a. P10,000 b. P4,000 c. P6,000 d. None

C 29. The net book value of the plant asset at the start of the year is P480,000. The depreciation rate is 2%
per year. The net book value at the end of the year is P470,000. If there are no additions and disposals of
assets,
the depreciation expense would be
a.P9,600 b. P9,400 c. P10,000 d.P1,000

C 30. The enterprise has a sales of P50,000, cost of sales is P20,000, beginning inventory is P10,000 and
purchases is P40,000. How much is the ending inventory?
a. 10,000 b. 20,000 c. 30,000 d. 40,000

C 31. From data in number 30, how much is the gross profit?
a. 10,000 b. 20,000 c. 30,000 d. 40,000

B 32. From the same data in 30, if the business incurred operating expenses of P40,000, What is the result of
operation of the business?
a. profit of P10,000 b. loss of P10,000 c. breakeven (revenue=expenses) d. none of the choices

B 32. How much is the cost of sales of a merchandising business having a beginning inventory of P20,000, a
purchases of P30,000 plus freight-in of P2,000 and ending inventory of P10,000
a. 40,000.00 b. 42,000.00 c. 38,000.00 d. 62,000.00

D 33. The purchaser of a company has the following records of purchases transaction P30,000, freight-in
P5,000, purchase allowances P2,000, purchase returns P1,000 and purchase discount of P2,500. How much is
the net purchases?
a. 35,000 b. 30,000 c. 29,500 d. 24,500

B 34. The seller of goods has recorded the following data, total sales P50,000, sales discount P5,000, sales
returns P1,000, sales allowances P500 and freight out of P2,000. How much is the net sales?
a. 50,000 b. 43,500 c. 45,500 d. 52,000
 C 35. Goods totalling P50,000 were purchased February 2 with terms of 2/10, n/30. Returns of P10,000 were
made on February 10. What discounts, if any can be availed of if the invoice was paid on February 12?
a. None b. P1,000 c. P800 d. P200
A 36. On July 31, 2002, rent of P90,000 was collected in advance from a tenant covering the next 12 months.
The collection was credited to Unearned Rent. What is the amount of Unearned Rent to be reported in the
December 31, 2002 balance sheet?
a.P52,500 b.P37,500 c. P45,000 d. P30,000 d. P60,00
C 37. Company purchased a large printing press for P600,000 paying P100,000 cash and signing a five- year
note for P500,000. As a result, the total amount of the company's assets was
a. increased by P600,000 b. decreased by P100,000 c. increased by P500,000 d. increased by P400,000

B 38. As of December 31, 2012, Majika Company has assets of P350,000 and owner's equity of P200,000.
What are the liabilities for Majika Company as of December 31, 2012?
a. P100,000 b. P150,000 c. P200,000 d.P250,000

D 39. The owner's capital is P150,000. The creditors have 60% claims on total assets. What is the correct
amount of total assets?
a. P250,000 b. P90,000 c. P60,000 d. P375,000

C 40. The owner's equity of BSA Company is P90,000 representing 30% of the total assets. How much is the
amount of total its total liabilities?
a. P300,000 b. P200,000 c. P210,000 d. P120,000

D 41. My Girl Company collected a note of P200,000 plus interest of P20,000. The assets of My Girl
Company is increased by
a. P220,000 b. P200,000 c. P180,000 d. P20,000

C 42. A new business has the following transactions: 1. The owner invested P400,000; 2. P75,000 supplies
were purchased for cash; 3. P325,000 was received for services rendered by the business; 4. Salary of
P150,000 was paid to employees and 5. P250,000 was borrowed from the bank. What is the correct amount of
total assets?
a. P575,000 b. P900,000 c. P825,000 d. P1,050,00

575,000 43. This question is related to no. 42, what is the amount of owner's equity?
a. P650,000 b. P400,000 c. P725,000 d. P900,000
A 44. On July 1, 2010, Mary company bought merchandise for P50,000 terms FOB destination, 2/10, n/30.
Freight of P2000 was paid by Mary company. On July 5, the company return merchandise worth P5000 for
which a debit memo was received. How much is the amount to be paid by Mary company on July 11, 2010.
a. 42,100 b. 42, 140 c. 43,000 d. 44,100

C 45. On April 1, 2012, the company acquired delivery truck for P150,000. The truck has salvage value of
P10,000 and useful life of 10 years. How much is the depreciation expense for 2012?
a.14,000 b. 15,000 c. 10,500 d.9,333

A 46. A note was issued on Dec. 1, 2012 for P20,000 payable on March 1, 2013 at 15%. What is the amount
of the adjustment for interest accrued at December 31, 2012?
a.250 b.750 c.350 d.275

C 47. A company has P1,500 of supplies on hand at the end of 2009. During 2010, P2,750 of supplies were
bought. A count of supplies on hand at the end of 2010 found an inventory of P875. What was the amount of
supplies expense for 2010?
a. 1,875 b. 5,125 c.3,375 d.4,250
A 48. Payment for purchases during the period amounts to P150,000. During the period, accounts payable
increased by P50,000. How much is the amount of purchases?
a. 200,000 b. 100,000 c. 150,000 d. 250,000

B 49. The income statement showed rent income of P55,000 for the year 2010 and the balance sheet shows
unearned rent income of P5,000 as of December 31, 2010. If no accrued rent income was recorded, how much
as the total cash collected for rental?
a. P50,000 b. P60,000 c. P55,000 d. P5,000

C 50. The beginning balance in accounts receivable is P44,000, the ending balance is P42,000. Sales during
the period as P129,000. How much are cash receipts from customers?
a. P141,000 b. P112,000 c. P131,000 d. P127,000

“You will be surprised to know how far you can go

from the point where you thought it was the end”

GOD BLESS future CPAs.!!!

Prepared by: Krystal Jane M. Ortega, CPA