CYBER ACCOUNTING GENIUS VERSION 11.

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QUESTIONNAIRE AND ANSWER KEY
1ST WAVE

1. Which of the following represents a lack of internal control in a computer-based

information system?
a. The design and implementation is performed in accordance with
management’s specific authorization.
b. Any and all changes in application programs have the authorization and
approval of management.
c. Provisions exist to ensure the accuracy and integrity of computer processing
of all files and reports.
d. Both computer operators and programmers have unlimited access to the
programs and data files.

2. Leon Manufacturing Corporation mass produces ten different products. The

company’s controller is interested in strengthening internal control over the
accounting for materials used in production. He would most likely design and
implement
a. A perpetual inventory system.
b. An economic order quantity system.
c. A separation of duties among production personnel.
d. A job-order cost accounting system.

3. Which of the following is not one of the auditor’s primary objectives in an audit of
trading securities?
a. To determine whether securities actually exist.
b. To determine whether securities are authentic.
c. To determine whether securities are the property of the client.
d. To determine whether securities are properly classified in the Statement of
Financial Position.

4. In the absence of partnership loss agreement to the contrary, how shall capitalist
partners share in partnership’s loss?
a. Based on capital contribution ratio
b. Based on profit agreement ratio
c. Just and equitable share
d. Equally

5. The journal entry to record the usage and purchase of direct materials during the
year includes a debit to direct material efficiency variance. Which of the following
statements is correct?

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 a. The actual direct material used in production is higher than the standard
direct material that should have been used.
b. The actual direct material used in production is lower than the standard
direct materials that should have been used.
c. The actual purchase price of direct material is higher than the standard
price of direct material.
d. The actual purchase price of direct material is lower than the standard price
of direct material.

6. On October 1, 20x1, Mud Company a Philippine Company purchased parts from

Terra, a Portuguese Company with payment due on December 1, 20x1. If Mud’s
20x1 operating income included no foreign exchange gain or loss, the transaction
could have:
a. Resulted in an extraordinary gain
b. Been denominated in Philippine pesos
c. Generated a foreign exchange gain to be reported as a deferred
charge on the balance sheet
d. Generated a foreign exchange loss to be reported as a separate
component of stockholders’ equity
Answer: B
(b) – “operating income included NO forex gain or loss” - the transaction is
payable or denominated in Philippines pesos, therefore it is not a Foreign
Currency transaction it is simply an ordinary transaction wherein no foreign
currency involved.

7. On January 1, 2018, A, B and C formed ABC Partnership with original capital

contribution of P300,000, P500,000 and P200,000. A is appointed as managing
partner.

During 2018, A, B and C made additional investments of P500,000, P200,000 and

P300,000, respectively. At the end of 2018, A, B and C made drawings of P200,000,
P100,000 and P400,000, respectively.

At the end of 2018, the capital balance of C is reported at P320,000.

The profit or loss agreement of the partners is provided below:

• 10% interest on original capital contribution of the partners.
• Quarterly salary of P40,000 and P10,000 for A and B, respectively.
• Bonus to A equivalent to 20% of Net Income after interest and salary to all
partners
• Remainder is to be distributed equally among the partners.

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 What is C’s share in the partnership profit for the year ended December 31,
2018?
a. P120,000
b. P320,000
c. P180,000
d. P220,000

December 31, 2018 C’s Capital Balance P 320,000

Add: C’s drawings at the end of 2018 400,000
Less: C’s additional investment during 2018 (300,000)
Less: C’s capital balance on January 1, 2018 (200,000)
C’s share in partnership profit for the year ended 12/31/18 P 220,000

8. Bond Co. is using the target cost approach on a new product. Information
gathered so far reveals:
Expected annual sales 600,000 units
Desired profit per unit P 0.25
Target cost (variable) P 168,000

What is the target selling price per unit?

a. P0.28
b. P0.50
c. P0.25
d. P0.53

9. Well Water Inc. wants to produce and sell a new flavored water. In order to
penetrate the market, the product will have to sell at P2.00 per 12 oz. bottle. The
following data has been collected:
Annual sales 50,000 bottles
Projected selling and administrative costs P8,000
Desired profit P80,000
The target cost per bottle is
a. P0.24.
b. P0.40.
c. P0.16.
d. P0.60.

10. Which of the following is considered to be an external event other than transfers?
I. Theft
II. Vandalism
III. Change in market value of assets

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 a. I and II d. I, II and III
b. II and III e. Answer not given
c. I and III

11. S1: Since equity is the residual amount of assets over liabilities, equity cannot be
recognized individually from the other elements of the financial position.
S2: Physical form is a necessity for an item to be classified as asset.
a. True, false c. False, false
b. False, true d. True, true

12. GUIMARAS CORP. reported the following increase (decrease) in the account
balances for the current year:
Cash P 100,000
Accounts receivable 500,000
Inventory (200,000)
Investments (400,000)
Equipment 600,000
Accumulated depreciation (100,000)
Accounts payable (300,000)
Bonds payable 500,000
Revaluation surplus 80,000
Share capital 300,000
Share premium 100,000

During the current year, the entity paid P50,000 cash dividends and
appropriated P100,000 retained earnings for future plant expansion. Using
capital maintenance approach, how much is comprehensive income during
the current year?

a. P150,000 c. P 70,000
b. P 20,000 d. P100,000 KGAUCP 2019

SOLUTION:
Cash P 100,000
Accounts receivable 500,000
Inventory (200,000)
Investments (400,000)
Equipment 600,000
Accumulated depreciation 100,000
Accounts payable 300,000
Bonds payable (500,000)
Net increase in equity 500,000

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 Additional investments (300,000 + 100,000) (400,000)
Comprehensive income P 100,000

13. Which of the following may be used to compute for the adjusted balance of cash?
a. Balance per books + Credit memo - Debit memo – Understatement of cash
collections
b. Balance per books + Credit memo - Debit memo + Overstatement of cash
collections
c. Balance per books + Credit memo - Debit memo + Overstatement of cash
disbursements
d. Balance per books + Credit memo - Debit memo - Overstatement of cash
disbursements

14. KAOLIN CORP. had the following cash balance at December 31, 2014:
Undeposited coins and currency P35,000
Unrestricted demand deposits 1,450,000
Company checks written (and deducted from the demand
deposits amount) but not scheduled to be mailed until January 2 270,000
Time deposits restricted for use (expected use in 2015) 3,000,000

In exchange for a guaranteed line of credit, Volume has agreed to maintain a

minimum balance of P150,000 in its unrestricted demand deposits account, how
much cash is to be presented in the statement of financial position?
a. P1,755,000 c. P3,305,000
b. P3,270,000 d. P4,755,000

SOLUTION:
Undeposited coins and currency P35,000
Unrestricted demand deposits 1,450,000
Company checks written 270,000
Total Cash P1,755,000

15. Which of the following notes receivable are initially measured at present value?
I. Long-term interest bearing notes receivable where the stated interest is
lower than the effective rate of interest.
II. Short-term non-interest bearing notes receivable where discounting is
immaterial.

a. I only c. Both I and II

b. II only d. Neither I nor II

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16. By the end of the current period, ESMERALDA INC.'s accounts receivable balance
increased by P220,000. Total credit sales made during the period amounted to
P360,000, while write-offs and recoveries were P22,000 and P6,000, respectively.
How much is the total collections, including recoveries, during the period?
a. P140,000 c. P124,000
b. P134,000 d. P118,000 FAR MILLAN 2016

SOLUTION:
Accounts receivable
beg. -
Credit sales 360,000 124,000 Collections, including recoveries
22,000 Write-off
Recoveries 6,000
end. 220,000

17. The following information relates to ALDOUS CORP.’s accounts receivable for 2015:
Accounts receivable, January 1, 2015 P975,000
Credit sales for 2015 4,050,000
Sales returns for 2015 112,500
Impairment of receivable 2015 60,000
Collections from customers during 2015 3,225,000
Estimated future sales returns at December 31, 2015 75,000
Estimated sales discounts accounts at December 31, 2015 25,000

What amount should Hero report for accounts receivable at December 31, 2015
statement of financial position?
a. P1,527,500 c. P1,627,500
b. P1,627,500 d. P1,800,000

SOLUTION:
Accounts receivable, January 1 P 975,000
Credit sales 4,050,000 P5,025,000
Less: Credits to Receivables
Impairment 60,000
Collections 3,225,000
Sales returns 112,500 3,397,500
Accounts receivable, Dec. 31, 2015 P1,627,500
Less: Estimated future returns 75,000
Estimated future discounts 25,000 100,000
Amortized cost (expected net cash inflow) P1,527,500

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18. X died, leaving the legal title to his land to his son A, while the usufruct was given
to B. When B dies,
a. His rights will be transmitted to his heirs by operation of law
b. His rights will be inherited by the heirs because obligations are transmissible
in general
c. His rights will be merged with the legal title of A
d. His rights will be inherited by the other heirs of X

19. The obligation to give support arises from:

a. Law
b. Contract
c. Quasi-contract
d. Moral conscience

20. D bought a pack of gum from a convenience store which costs P18. He paid P20
to the cashier, but the cashier gave him P5 as change. What juridical relation is
created between D and the cashier?
a. Contract
b. Quasi-Contract
c. Delict
d. Quasi-Delict

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