2nd Quarter - Long Test

Fundamentals of Accountancy 1
Name: ___________________________________ Date:___________________________
Section & Strand: __________________________ Score:___________________________

Test I. Multiple Response Test: Read and understand very well each item and select the best
answer. Encircle the letter only of your choice.(2 points each) (strictly no erasure allowed)

1. ________are commonly followed and accepted set of rules, procedure and guidelines adopted by Securities and
Exchange Commission for reporting Financial Statements.
a.) SAF c.) FAS
b.) Generally Accepted Accounting Principles d.) None of the above
(GAAP)
2. A journal is a chronological record of the entity’s transactions, while __________shows all the effects of business
transactions in terms of debits and credits.
a.) Double entry c) Bookkeeping
b) Journal Entry d) Accounting entry
3. To include the personal assets and transactions of business’s owners in the records and reports of the business
would be in conflict with the:
a.) Objectivity c) Business Entity Principles
b) Realization principles d) Revenue recognition principle
4. A Merchandising firm YT Co. has made a sales income amounting to P 150,000 on Oct. 10, 2018, however
the customer paid only P 100,000 cash, how much should be Debited to Account Receivable and the amount to
be Credited to Income respectively on the date of transaction?
a) Account Receivable P 50,000, Income 150,000. c) Accounts Payable 150,000, Income 200,000
b) Accounts Receivable 150,000, Income 100,000 d) none of the above
5. _______is classified as current assets and the most liquid asset a company can own. It includes currency, coins,
checks, money orders and bank account balances.
a) Inventories c) Accounts Receivable
b) Cash or cash in bank d) Building
6. Mr. Y purchased 1 unit of Machinery and recorded the carrying cost of P 150,000 based on the original
invoice , however the owner insist that it should be recorded based on the estimated cost amounting to
P 160,000. According to Cost Principles how much should be the correct cost to be recorded in Y books?
a) 310,000.00 c) 160,000.00
b) 150,000.00 d) amount cannot be determined
7. __________is the increase in economic benefits during the accounting period in the form of inflows of cash or other
assets or decrease in liabilities that result in increase in equity:
a.) Expenses c) Income
b.) Owners’ withdrawal d) Assets
8. The principle that requires financial statements to reflect the assumption that business will continue operating
instead of being closed or sold, unless evidence shows that it will not continue, is the:
a.) Cost principles c.) Going concern principles
b.) Man of principles d.) Matching principle

9. JKY Trading has made a sale on Aug 10, 2018 of PHP 75,500, out of which the customer made cash payment
amounted to PHP 25,500, and the balance due next month. How much should be recorded in the Accounts
Receivable on August 10, 2018?
a] 60,000 only c] 75,000 only
b]50,000 only d] Cannot be determined
10. Mr. Xmen is a dealer in electronic goods (refrigerator, washing machine, air conditioners, televisions, etc.) He
purchased two air conditioners and installed in his showroom. In the books of Xmen, the cost of two air conditioners
will be debited to:
a] Drawing account c] Office Equipment
b] Capital Account d] Purchases account
11. Expenses that have been paid in Advance is known as _______ .
c) Prepaid expenses
a) Accrued Expense d) Other expenses
b) Salary expense
12. A Bank loan amounting to P 10,000 cash received is debited to ______ and credited to ________ respectively.
a) Inventory & Bank Loan Payable c) Accounts Receivable & Cash
b) Cash & Bank Loan payable d) Purchases & Bank Loan
13. Known as goods owned by company that is for sale in ordinary course of business_________.
a) Inventory c) Purchases
b) Cost d) Cash
14. ________ Is defined as the owners’ interest or claim in the company assets and referred to as net assets or assets
minus liabilities.
a) Capital c) Accounting equation
b) Owners equity d) None of the above
15. Which accounting concept specifies the financial transactions recorded and reported in Philippines Peso, USD,Euro
etc. ?
a) Cost concept c) Historical Cost
b) Monetary Unit d) Matching
16. Which of the following would not fall under the definition of assets______________.
a] Cash c] land
b] Accounts Receivable b] Accounts payable
17. All Nature Trip, a travel agency, purchased equipment for P120,000, made a down payment of P50,000 and signed
a note for the balance. This transactions will_______.
a) Increase total assets by P120,000 c) Increase total liabilities by P 50,000
b) not affect owners equity d) all of the above choices are correct
18. ________Receipt of cash as initial investment of the owners amounting P 100,000 will result to a ____________.

a) Credit Cash 100,000 and Debit to Capital c) Debit Liability 90,000 and Credit Capital 90,000
b) Debit to Cash P 100,000 and Credit Capital d) Debit capital P100,000 and Credit Cash
P100,000 P100,00

19. If wages is paid for the XY Company employees amounting to P 100,000, the effect to Cash account will______
and the Salary Expense account _______ .
a) Decrease, increase respectively c) both account decreases
b) Increase, No effect d) no effect at all

20. Refers to claims, debts or obligations to other companies or third party.

1. The Accounting Equation is _______________=________________=_______________________.

2. Resources owned by Company with future economic and monetary value______________.

3. ____________Is the interest or claim of the owners in the business.

4. Money owned or an obligation to the outsiders such as Bank or other financial Institution_______________.

5. An Investment of Owners in the business Increases ______________and ____________________.

Test III: Requirements:

1. Using A column Columnar Pad, analyze the transaction below and Journalize each transactions
by Debiting (DR) or Crediting ( CR) to their Respective accounts with brief explanation. Use the
following charts of accounts below and Journalize accounts affected and the effects of the
transactions by recording the journal entries. ( good for 25 points)

Assets: Liabilities
Cash and Cashin Bank Accounts payable
Accounts Receivable Notes Payable
Coffee Maker Equipment
Prepaid Rent Owners’ /equity/Capital
Prepaid Insurance Greg Sy Capital
Furniture & Fixtures Greg Sy Drawing
Office Supplies
Land
Transportation Equipment
Expenses Revenue/Income
Office Rent Expenses Service Revenue
Salary and benefits Expense
Insurance Expenses
Repair and Maintenance Expense
Water and Electricity Expense

On October 1, 2018 Greg Sy Trading opened a Car Maintenance Services. During the month, the
following transactions were completed in relation to the first month of operation.

Oct 1. Invested Cash for the business amounting P 250,000 and deposited the amount in cash. Also on the same
day the owner invested Land to be used for maintenance site Amounting to P 300,000
Oct 3. Purchased Brand new Automobile to be used for transport services from X Car Dealer Co. for P250,000
by paying P 150, 000 cash and balance due end of the month.
Oct 6. Paid office rent in advance for 2 months (Nov and Dec-2018). amounting to P 20,000.
Oct 7. Purchase Office Supplies for P 15,000 and 10,000 on credit from Panday Bookstore.
Oct 10. Purchased P 10,000 office furniture from Digoy Furniture Trading on account payable in 60 days.
Oct 12. Billed MNP Trading for service rendered for P 85,000, received partial payment in the amount of P
30,000 and the remaining amount is due end of the month.
Oct 13. Completed work service for customer KFC Trading, billed and sent Invoice for P 150,000,
received 50% partial payment in cash and the balance due within 15 days.
Oct 18. Paid cash for furniture purchased on Oct. 10 from Digoy Furniture.
Oct 25. Paid employees salaries and other benefits amounting to P 45,000.
Oct 30 Paid Electricity and water in the Amount to P 12,000 and P 8,000 respectively.
Oct 30. The owner withdraw cash for P 15,000.
Oct 31. Received payment for the remaining amount due from MNP Trading for the services rendered on Oct. 10.
Oct. 31. Paid balance amount payable to X Car Dealer Co. for Automobile purchased on Oct. 3.
Oct. 31. Received cash for the remaining 50 % balance from KFC Trading for the service rendered on Oct. 13.

Prepared by: Checked by: Approved by:

Sofronio A. Torlao Jr. Jossy B. Bernal, MAEd

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