Fin 11 Prelim Exam

SAINT COLUMBAN COLLEGE
SENIOR HIGH SCHOOL DEPARTMENT

BUSINESS ENTERPRISE SIMULATION 11
PRELIMINARY EXAMINATION
NAME: __________________________________________ DATE: ____________________

0
GRADE & SECTION: ________________________________ SCORE: ___________________
Read the instructions carefully and make sure to practice honesty in answering. God bless you.
I. MULTIPLE CHOICE
1. It represents the residual interest in the assets of the business after deducting all the liabilities
a. Assets c. Owner’s Equity
b. Liabilities d. Accounting Equation
2. Are financial obligations of the business which are expected to be settled in the normal course of
the operating cycle and due to be settled within one year from the Statement of Financial Position
date –
a. Non-Current Liabilities c. Accounts Payable
b. Current Liabilities d. Notes Payable
3. What represents the claims of the creditors over the assets of the business?
a. Assets c. Owner’s Equity
b. Liabilities d. Accounting Equation
4. Bernadette Ordonez’s residual interest showed a balance of P350,000. If it claims an ownership
in assets worth P1,000,000, how much is the liabilities?
a. P650,000 c. 1,350,000
b. P350,000 d. 1,000,000
5. ABC Co. has current assets of P50,000 and total assets of P150,000. ABC has current liabilities
of P30,000 and total liabilities of P80,000. What is the amount of ABC's owner's equity?
a. P20,000 c. P70,000
b. P30,000 d. P120,000
6. On December 1, ABC Co. hired Juanita Perez to begin working on January 2 at a monthly salary
of P4,000. ABC's balance sheet of December 31 will show a liability of
a. P40,000 c. P4,000
b. P48,000 d. No Liability
7. Purita Quintos has an obligation P450,000. If the total assets are P950,000, how much is the
amount of owner’s equity?
a. P1,400,000 c. P950,000
b. P500,000 d. P1,500,000
The Following data were taken from the Statement of Financial Position of Marilou Sagario Co. as
of 30 June 20A:
Assets Liabilities
Cash on Hand P300,000 Accounts Payable P100,000
Accounts Receivable 60,000 Notes Payable 50,000
Furniture and Fixtures 40,000 Total Liabilities P150,000
Capital
M. Sagario, Capital P250,000
Total Assets P400,000 Total Liabilities & Capital P400,000
8. If Accounts Receivable accounts were all collected, how much is the cash on hand balance?
a. P240,000 c. P300,000
b. P280,000 d. P360,000
9. If Accounts Payable account was paid for cash after recording collection, how much is the total
assets?
a. P300,000 c. P350,000
b. P310,000 d. P370,000
10. Assuming that changes took place on the following accounts, what would now be the new
balances of the accounting equation after effecting the changes?
A =L + O
a. P400,000 = P 150,000 + P 250,000
b. P300,000 = P 50,000 + P 250,000
c. P350,000 = P 100,000 + P 250,000
1 | Page FIN 11 – PRELIM EXAM

d. Any other answers
11. What is the basic accounting equation?
a. A = L + OE c. L+ OE = A
b. OE = A – L d. A = L – OE
12. The left-hand side of an account refers to –
a. Debit side c. debit entry
b. Credit side d. credit entry
13. The words debit and credit come from –
a. Latin Word c. Mongolian word
b. Greek Word d. Japanese Word
14. It is the most delicate asset possessed by the business.
a. Cash c. Building
b. Land d. Accounts Receivable
15. What is the formula of Interest?
a. I = Pxt c. I = Prt
b. I = Prt2 d. I = Pr/t
II. TRUE OR FALSE

Direction: Write "TRUE" if the statement is correct and "FALSE" if the statement is wrong
before the item.
1. Accounting is often characterized as the language of business".
2. Capital represents the owner's investment, or equity, in a business.
3. Every transaction is recorded in terms of increases and/or decreases in two or
more accounts.
4. The terms bookkeeping and accounting are synonymous.
5. For accounting purposes, a business and its owner are considered one and the
same.
6. Both sides of the fundamental accounting equation must always be equal.
7. Income statement accounts are also known as permanent accounts.
8. The term accrued when associated with an expense account connotes liability.
9. Balance sheet accounts are also called nominal accounts.
10. To accrue means to record earned but not yet paid accounts.
III. Transaction Effects on the Basic Accounting Model. For each transaction, indicate
whether the assets (A), liabilties (L) or owner's equity (OE) increased (+), decreased (-), or
did not change (o) by placing the appropriate sign in the appropriate column. (2 points each)
ASSET LIABILITIES OWNER’S EQUITY
During the month of May, Junjun had the following transactions.

1. Pay regular salary P3,000 to an employee for work done
during the past week; no amount had previously been recorded.
2. Borrow P9,000 in cash from bank by signing a loan agreement.
3. Pay P700 for insurance coverage for the past few months;
this amount has previously been recognized in the company's
accounting system as it was incurred.
4. Buy a new automobile for the company for a price of P40,000
by paying P10,000 in cash and signing a note for the remainder.
5. Investment by the owner for cash of P19,000.
IV. PRACTICAL PROBLEMS
Mr. Bartolome Pozon is the owner of Kumbati Madi Bowling Lanes. He requested you to
prepare a Trial Balance for the 6-months period ended June 30, 2024.
Kumbati Madi Bowling Lanes

Trial Balance
June 30, 2024
Cash in Bank 750,000.00

Petty Cash Fund 1,000.00
Accounts Receivable 10,000.00
Prepaid Rent 15,000.00
Prepaid Insurance 8,000.00
Furniture and Fixtures 50,000.00
Bowling Equipment 965,000.00
Accounts Payable 56,734.00
B. Pozon, Capital 1,632,641.00
B. Pozon, Drawing 8,000.00
Bowling Income 192,850.00
Miscellaneous Income 11,325.00
Salaries Expense 12,000.00
Supplies Expense 36,000.00
Taxes and Licenses 7,500.00
Utilities Expense 31,050.00
1. Prepare a Trial Balance

2. Make ADJUSTING ENTRIES of the following transactions:
Note: If the transaction requires solving, please show your solution.
a. Unpaid Salaries at year-end amounted to P50,000.00.
b. A P60,000, 10%, 6-month note was received from a customer dated

September 1, 2017. The interest was not yet collected at the end of the
calendar year.
c. The business was renting a space of the building for P17,000 per month
payable every 10th pay of the following month.
d. Gwapa ko Co. issued a 8%, P256,000, one-year, note payable on July 1,

2024. The principal and interest are due on July 1, 2025.
e. The Electricity Bill in December amounting to P15,000 was not yet paid.

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SAINT COLUMBAN COLLEGE

SENIOR HIGH SCHOOL DEPARTMENT

NAME: ______________________ DATE:

1 | Page FIN 11 – PRELIM EXAM

II. TRUE OR FALSE

During the month of May, Junjun had the following transactions.

IV. PRACTICAL PROBLEMS

Kumbati Madi Bowling Lanes

Cash in Bank 750,000.00

2 | Page FIN 11 – PRELIM EXAM

1. Prepare a Trial Balance

3 | Page FIN 11 – PRELIM EXAM

b. A P60,000, 10%, 6-month note was received from a customer dated

d. Gwapa ko Co. issued a 8%, P256,000, one-year, note payable on July 1,

4 | Page FIN 11 – PRELIM EXAM

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