Elimination Round

Easy

1. Accounts payable refer to the current

a. Liability of a business or an organization c. Expense of a business or organization
b. Asset of a business or an organization d. Income of a business or organization

2. The correct journal entry to reconcile an NSF check returned by the bank is:
a. Debit Accounts Receivable, Credit NSF c. Debit NSF Expense, Credit Cash
b. Debit Cash, Credit Accounts Receivable d. Debit Accounts Receivable, Credit Cash

3. Which of the following is a liability?

a. Creditors for Goods c. Cash at Bank
b. Machinery d. Motor Vehicles

4. Of the following account types, which would be increased by a debit?

a. Liabilities and expenses. c. Assets and expenses.
b. Assets and equity. d. Equity and revenues.

5. Which of the following equations properly represents a derivation of the fundamental

accounting equation?
a. Assets + liabilities = owner’s equity.
b. Assets = owner’s equity.
c. Cash = assets.
d. Assets – liabilities = owner’s equity.

6. What are the adjustments most common to bank reconciliation?

a. Interest earned and bank fees c. Unidentified transactions
b. Bank errors d. Checks cleared but not in the accounting system

7. What does Accounts Payable show?

a. Credit Balance c. No Balance
b. Debit Balance d. None of the above

8. In which section of the balance sheet should inventory accounts be classified?

a. Current assets
b. Investments
c. Property, plant, and equipment
d. Intangible assets

9. Which of the following is not asset?

a. Factory
 b. Building
c. Cash at bank
d. Loan from Jim

10. Which of the following statement is correct?

a. When assets increase, are credited

b. When assets increase, are debited and credited
c. When assets increase, are not entered into the books
d. when assets increase, are debited

AVERAGE ROUND

1 . Russell Merchandising Ltd. uses the perpetual inventory system. Which of the following statements
would be correct?
a. When they record a sale, it should also debit inventory.
b. When they record a sale, it should also credit inventory.
c. When they record a sale, it should also credit cost of goods sold.
d. When they record a sale, it should also debit cost of goods available for sale.

2. Which of these items would be accounted for as an expense?

a. Repayment of a bank loan. c. Purchase of land.
b. Dividends to stockholders. d. Payment of the current period’s rent.

3. Failure to record the receipt of a utility bill for services already received will result in _____.
a. an overstatement of assets. c. an overstatement of equity.
b. an overstatement of liabilities. d. an understatement of assets.

4. The purpose of Accrued Expenses is:

a. to accurately reflect expenses in the periods during which they are incurred
b. to keep account of the vendors who never send invoices
c. to make the financial statements more complicated
d. to reflect the amounts owed to the company

5. If the supplies account (assets), before adjustment on May 31, indicated a balance of $2,250,
and the supplies on hand on May 31 totaled $950, the adjusting entry would be:
a. Debit supplies, $1,300; credit supplies expense, $1,300
b. Debit supplies, $950; credit supplies expense, $950
c. Debit supplies expense, $950; credit supplies, $950
d. Debit supplies expense, $1,300; credit supplies, $1,300

DIFFICULT ROUND

1. The basic sequence in the accounting process can best be described as:
a. Transaction, journal entry, source document, ledger account, trial balance.
 b. Source document, transaction, ledger account, journal entry, trial balance.
c. Transaction, source document, journal entry, trial balance, ledger account.
d. Transaction, source document, journal entry, ledger account, trial balance.

2. Home Depot. Inc. had net purchases of $50,000, closing inventory of $25,000, net sales of
$100,000, and gross profit of $32,000. How much was their opening inventory?
a. $7,000 c. $93,000
b. $43,000 d. $143,000

3. Using the following information, determine the adjusted bank balance: bank statement
balance $5,000, bank service charges $15, NSF check $500, checks outstanding $1,000,
deposits in transit $2,000.
a. $6,000 c. $5,485
b. $5,000 d. None of the above

4. Wonder Corporation Ltd. failed to record the purchase of merchandise in their account
books. The merchandise and related accounts payable should have been recorded but were
not. What would be the effect of these errors on assets, liabilities, retained earnings, and
net income respectively?
a. Understated, understated, no effect, no effect
b. Understated, understated, understated, understated
c. Understated, overstated, overstated, understated
d. Overstated, overstated, understated, overstated

5. Office Mart’s financial statements revealed an uncollectible accounts expense of $8,000,

accounts receivable of $140,000, and allowance for uncollectible accounts of $12,000. The
net realizable value of Office Mart’s accounts receivable is:
a. $128,000 c. $136,000
b. $132,000 d. $152,000

FINAL ROUNDS

EASY ROUND

1. ‘2/10, net 30’ is an example of:

a. Terms c. Systems
b. Methods d. None of the above

2. A check issued by you, but not yet passed through the banking system, is:
a. an outstanding check c. a dishonored check
b. a credit transfer d. a standing order

3. A check issued by you, but not yet passed through the banking system, is:
a. an outstanding check c. a dishonored check
 b. a credit transfer d. a standing order

4. A check issued by you, but not yet passed through the banking system, is:
a. an outstanding check c. a dishonored check
b. a credit transfer d. a standing order

5. A check issued by you, but not yet passed through the banking system, is:
a. an outstanding check c. a dishonored check
b. a credit transfer d. a standing order

6. By which of the following formulas should interest on a loan be computed?

a. (principal x rate)/time c. (principal x time)/rate
b. (principal x rate x time) d. (principal x time)/time

7. The correct journal entry to reconcile the interest earned on a bank balance is:
a. Debit Cash, Credit Interest Revenue
b. Debit Cash, Credit Accounts Payable
c. Debit Cash, Credit Accounts Receivable
d. Debit Accounts Receivable, Credit Cash

8. A payment of cash for the purchases of services should be recorded in the:

a. cash payments journal c. revenue journal
b. purchases journal d. cash receipts journals

9.The sales account and the purchase account should include:

a. only cash sales and purchases of merchandise.
b. only credit sales and credit purchases of merchandise.
c. both cash and credit sales and credit purchases of merchandise.
d. not only merchandise transactions, but also purchases and other assets used in the business.

10. Jim, a sole proprietor paid a creditor Mr. A from his money outside the firm. The entry to record the
transaction would be:
a. Debit Cash Credit Bank
b. Debit Mr. A Credit Capital
c. Debit Creditor Credit Cash
d. None of the above

AVERAGE ROUND

1. Using the following information, determine the adjusted book balance: cash account balance
on the books $27,000, bank service charges $200, NSF check $2,000, checks outstanding
$3,000, deposits in transit $1,000.
a. $24,800 c. $25,000
b. $25,800 d. None of the above.

2. Remington Inc. has provided the following information about its balance sheet:
Cash $ 100
Accounts receivable $ 500
Stockholders’ equity $ 700
Accounts payable $ 200
Bank loans $ 1,000
Based on the information provided, how much do their liabilities amount to?
a. $200. c. $1,200.
b. $900. d. $1,700.

3. If merchandise purchased on account is returned, the buyer may inform the seller of the
details by issuing:
a. a credit memorandum c. a debit memorandum
b. a bill d. an invoice

4. What is the primary goal of an Accounts Payable department?

a. To pay invoices immediately to avoid collection calls
b. To short pay invoices, knowing that some clients will not notice
c. To maintain an accurate AP record and pay invoices according to the company policy
d. To tell people who call that their check is in the mail, when it is not, in order to buy time

5. How does a company ensure that their physical inventory matches what is there in the
account books?
a. It assumes it to be correct if it has been received properly in the system
b. It holds the warehouse manager accountable
c. It counts every item daily
d. It uses some form of physical inventory count – either annual or cyclical

6. Prepaid expenses are an example of an expense.

a. True
b. False
c. Sometimes
d. Undetermined

7. Of the following, which is true about assets?

a. Assets include both physical and intangible items.
b. Assets include only physical items.
c. Assets are the personal property of the owner of the company.
d. Assets are the result of selling products or services to customers.

8. Which of the following statements is not true about liabilities?

a. Liabilities are debts owed to outsiders.
b. Account titles of liabilities often include the term “payable.”
c. Cash received before a service is performed creates a liability.
d. Liabilities do not include wages owed to employees of the company.
 9. The chart of accounts is designed to
a. alphabetize the accounts to make reading easier for financial statement users
b. organize accounts in order of dollar amount to simplify the accounting information for
users
c. summarize the transactions and determine ending account balances
d. meet the information needs of a company's managers and other users of its financial
statements

10. An account is said to have a debit balance if

a. the amount of the debits exceeds the amount of the credits
b. there are more entries on the debit side than on the credit side
c. there are more entries on the credit side than on the debit side
d. the first entry of the accounting period was posted on the debit side

DIFFICULT ROUND

1. In the chart of accounts, each account number has two digits. The first digit indicates the
major account group to which the account belongs. Which of the following correctly
identifies the major account groups typically represented by the numbers 1 through 5?
a. 1­Assets, 2­Liabilities, 3­Owner’s Equity, 4­Expenses, 5-Revenues
b. 1­Assets, 2­Liabilities, 3­Owner’s Equity, 4­Revenues, 5-Expenses
c. 1­Assets, 2­Owner’s Equity, 3•Revenues, 4•Expenses, 5•Drawing
d. 1­Owner’s Equity, 2­Drawing, 3­Revenues, 4-Expenses

2. The accounts in the ledger of Monroe Entertainment Co. are listed below. All accounts have
normal balances.

Accounts Payable Php1,500 Fees Earned $3,600

Accounts Receivable 1,800 Insurance Expense 1,300
Prepaid Insurance 2,000 Land 3,000
Cash 3,200 Wages Expense 1,400
Drawing 1,200 Capital 8,800

The total of all the assets is

a. Php10,000
b. Php 8,000
c. Php 9,700
d. Php 9,800

3. A credit balance in which of the following accounts would indicate a likely error?
a. Fees Earned
 b. Salary Expense
c. Janet James, Capital
d. Accounts Payable

4. A client has a massage and asks the company bookkeeper to mail her the bill. The
bookkeeper should make which entry to record the invoice?
a. No entry until the cash is received
b. Fees Earned, debit; Accounts Receivable, credit
c. Cash, debit; Fees Earned, credit
d. Accounts Receivable, debit; Fees Earned, credit

5. The posting process will include the transfer of which of the following data from the journal
to the account?
a. date, amount (debit or credit)
b. date, amount (debit or credit), journal page number
c. amount (debit or credit), account number
d. date, amount (debit or credit) account number

6. The accounts in the ledger of Monroe Entertainment Co. are listed below. All accounts have
normal balances.

Accounts Payable Php1,500 Fees Earned $3,600

Accounts Receivable 1,800 Insurance Expense 1,300
Prepaid Insurance 2,000 Land 3,000
Cash 3,200 Wages Expense 1,400
Drawing 1,200 Capital 8,800

Prepare a trial balance.

The total of the debits is
a. Php13,900
b. Php11,200
c. Php 12,700
d. Php 9,700

7. A client has a massage and asks the company bookkeeper to mail her the bill. The
bookkeeper should make which entry to record the invoice?
a. No entry until the cash is received
b. Fees Earned, debit; Accounts Receivable, credit
c. Cash, debit; Fees Earned, credit
d. Accounts Receivable, debit; Fees Earned, credit

8. Gently Laser Clinic purchased laser equipment for $8,500, paid $2,250 down,
with the remainder to be paid later. The correct entry would be
 a. Equipment 2,250
Cash 2,250
b. Cash 2,250
Accounts Payable 6,250
Equipment 8,500
c. Equipment Expense 8,500
Accounts Payable 2,250
Cash 6,250
d. Equipment 7,500
Accounts Payable 5,250
Cash 2,250

9. Given the following data

April 14 Equipment 15,000

Cash 5,000
Note Payable 10,000
????????????.

Which is the best explanation for this journal entry?

a. Purchased equipment; paid cash of $5,000, with the remainder to be paid in the future.
b. Purchased equipment; paid cash of $10,000, with the remainder to be received in the
future.
c. Purchased equipment with cash.
d. Purchased equipment on account.

10. Which of the following owner’s equity accounts follows the same debit and credit rules as
liabilities?
a. expense accounts only
b. drawing accounts only
c. revenue accounts only
d. expense and drawing accounts