Quiz 4 Fa Reviewer

QUIZ 4
The liabilities of 123 Enterprises are one-third of the total assets, and the
capital is P380,000. What is the amount of the liabilities?
The correct answer is: 190,000
When asset increases

The correct answer is: Capital increases
Which of the following accounts has a normal debit balance?

The correct answer is: Prepaid Advertising
The process of updating accounts which affects both the balance sheet and income
statement:
The correct answer is: Adjusting
Entries recorded on the right side of any account are called

The correct answer is: Credits
On June 30, 2021, Reighjon sets up a firm and brings in office equipment with
fair value of P370,000 and desktop with fair value of P20,000 to the business.
The entity assumes the mortgage liability related to the office equipment
amounting to P140,000. He also put 190,000 in to the firm’s bank account. What is
the amount of the entity’s capital on June 30, 2021?
Katrina provided you the following information: Current Asset – 300,000; Current
Liabilities – 120,000; Noncurrent Liabilities – 280,000; Katrina, Capital –
250,000. What is the amount of noncurrent assets?
The correct answer is: P350,000
A shoe business has total assets worth P425,750 and liabilities of P225,650. He
withdrew P15,115 during the year while he earned P115,500 profit for the year.
How much did the owner invest in his business?
Which of the following is not an example of noncurrent assets?

The correct answer is: Accounts receivable amounting to P180,000
Which of the following accounting equations is correct?

The correct answer is: Capital = Current Assets + Noncurrent Assets – Current
Liabilities – Noncurrent Liabilities
If total assets are P800,000 and total liabilities are P350,000, how much is the
net asset?
Which of the following accounts is increased by a credit?

The correct answer is: Notes Payable
If total assets increase by P20,000 and total liabilities increase by P12,000

during a period, the capital will:
The correct answer is: Increase by P8,000
At the beginning of the year, DEF Services had liabilities of P100,000 and
capital of 180,000. If assets increased by P80,000 and liabilities decreased by
P30,000, what is the amount of capital at the end of the year?
The normal balance of Unearned Revenue is on the
The correct answer is: Credit Side
Lennard provided you the following information: Noncurrent Assets – 350,000;
Total Liabilities – 60% of total Assets; Lennard, Capital – P200,000. What is the
amount Current Assets?
Gwyneth provided you the following information: Noncurrent Assets – 350,000;

Total Liabilities – 60% of total Assets; Gwyneth, Capital – P200,000. What is the
amount of Total Liabilities?
Accounting equation is to be maintained in every accountable transaction.

The correct answer is 'True'.
Which of the following accounts has a normal debit balance?

The correct answer is: Advertising Expense
If assets increase by P100,000 and liabilities decrease by P50,000, capital must

The correct answer is: Increase by P150,000
When liability increases

The correct answer is: Asset increases
A sole proprietor pays his personal debt of P 50,000 by transferring the entity’s
money into his personal bank account. The effect of the transaction on the
accounting equation would be:
The correct answer is: Both assets and capital decreased by P50,000
The liabilities of a business totals P300,000 while the capital of the proprietor
is P700,000. What is the total assets of the business?
The correct answer is: None of these
a. P400,000
b. None of these
c. P300,000
d. P700,000
Only nominal accounts are to be closed and transferred to capital account at the
end of accounting period
The user of financial statements should refer to the income statement if he needs
to determine the financial condition of an enterprise.
The correct answer is 'False'.
Balance sheet accounts/items are called

The correct answer is: Permanent accounts
If Asset is 120% of an Equity. Given that Liability is 100,000. How much is the
Asset?
The normal balance of an account is on the

The correct answer is: Side represented by increases in the account balance
When capital decreases,
The correct answer is: Asset decreases
The entity purchased Furniture and Fixtures amounting to P80,000 by issuing a
promissory note. Which of the following will be affected?
The correct answer is: Assets and Liabilities
Charlotte provided you the following information: Current Asset – 150,000;

Noncurrent Assets – 240,000; Current Liabilities – 90,000; Charlotte, Capital –
180,000. What is the amount of noncurrent liabilities?
Which of the following does not directly or indirectly affect the owner’s capital
account?
The correct answer is: Accounts Payable
What is the effect on the net income of the accrued income not taken up at the
end of the year?
The correct answer is: Understated
Which of the following is true?

The correct answer is: A debit will increase insurance expense
Which of the following statements is correct?

The correct answer is: Assets = Liabilities + Capital + Revenue - Expenses
The asset created by a business when it makes a sale on account is termed ____
The correct answer is: Accounts receivable
Which of the following is not an example of additional capital?

The correct answer is: A sole proprietor purchases an equipment through the bank
account of the entity
Cash 45,000, Furniture, 20,000 Accounts Payable, 30,000. How much is the Equity?
At the beginning of the year, the assets of ABC Services were P360,000 and its
capital was P200,000. During the year, assets increased by P120,000 and
liabilities increased by P40,000. What was the capital at the end of the year?
Which of the following is true?

The correct answer is: The debit is on the left side of an asset account
Double entry bookkeeping system does not assure accuracy of recording

transactions.
In order to attain accuracy in the recording of transactions, total amount

debited must be equal to total amount credited.
The correct answer is 'False'.
Which of the following items has no effect on owner’s equity?

The correct answer is: Purchase of land
Which of the following transactions affect the total liabilities of a firm?

The correct answer is: Office equipment bought on account
Which of the following statements is true?

The correct answer is: Assets, expense, and withdrawals are debited for increases

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QUIZ 4

When asset increases

Which of the following accounts has a normal debit balance?

Entries recorded on the right side of any account are called

Which of the following is not an example of noncurrent assets?

Which of the following accounting equations is correct?

Which of the following accounts is increased by a credit?

If total assets increase by P20,000 and total liabilities increase by P12,000

Gwyneth provided you the following information: Noncurrent Assets – 350,000;

Accounting equation is to be maintained in every accountable transaction.

Which of the following accounts has a normal debit balance?

If assets increase by P100,000 and liabilities decrease by P50,000, capital must

When liability increases

Balance sheet accounts/items are called

The normal balance of an account is on the

Charlotte provided you the following information: Current Asset – 150,000;

Which of the following is true?

Which of the following statements is correct?

Which of the following is not an example of additional capital?

Which of the following is true?

Double entry bookkeeping system does not assure accuracy of recording

In order to attain accuracy in the recording of transactions, total amount

Which of the following items has no effect on owner’s equity?

Which of the following transactions affect the total liabilities of a firm?

Which of the following statements is true?

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