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Statement of Financial Position: Quiz 1: Multiple Choice

The document provides a multiple choice quiz on the statement of financial position, also known as the balance sheet. It then provides an activity to prepare the statement of financial position for a sample company using a trial balance. The activity includes partially completed pro-forma financial statements and requirements to fill them out along with notes to certain line items.

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danica dimaculangan
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6K views6 pages

Statement of Financial Position: Quiz 1: Multiple Choice

The document provides a multiple choice quiz on the statement of financial position, also known as the balance sheet. It then provides an activity to prepare the statement of financial position for a sample company using a trial balance. The activity includes partially completed pro-forma financial statements and requirements to fill them out along with notes to certain line items.

Uploaded by

danica dimaculangan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Chapter 1

Statement of Financial Position

QUIZ 1: MULTIPLE CHOICE

1. This financial statement is also called the “Balance Sheet” or the “Statement of Condition.”
a. Statement of financial position
b. Statement of financial performance
c. Statement of comprehensive income
d. Any of these

2. Which of the following information is not shown in the statement of financial position?
a. Assets
b. Liabilities
c. Income
d. Equity

3. A complete set of financial statements does not include


a. Statement of profit or loss and other comprehensive income
b. Statement of cash flows
c. Statement of retained earnings
d. Notes to the financial statements

4. These refer to the resources controlled by a business that have resulted from past events and
have the potential to provide the business economic benefits.
a. Assets
b. Liabilities
c. Income
d. Equity

5. Assets less liabilities is


a. Income
b. Profit, if assets exceed liabilities
c. Loss, if assets exceed liabilities
d. Equity

6. A statement of financial position that shows distinctions between current and noncurrent assets
and liabilities is called
a. Classified statement of financial position
b. Unclassified statement of financial position
c. Current statement of financial position
d. All of these

1
7. If total assets are ₱100,000 while total equity is ₱40,000, the total liabilities in the statement of
financial position must be
a. ₱140,000
b. ₱60,000
c. ₱40,000
d. it depends on the profit or loss

8. Which of the following is a noncurrent asset?


a. Cash
b. Accounts receivable
c. Building
d. Inventory

9. Which of the following is a current asset?


a. Land
b. Prepaid asset
c. Equipment
d. Accumulated depreciation – Equipment

10. Which of the following is a noncurrent liability?


a. Accounts payable
b. Notes payable due in 7 months
c. Notes payable due in 16 months
d. Salaries payable

“For the Lord gives wisdom; from his mouth come knowledge and understanding.”
(Proverbs 2:6)
- END -

2
QUIZ 2: ACTIVITY

The trial balance of Entity A on December 31, 20x1 shows the following information:

  Debits Credits
Cash on hand 60,000
Cash in bank 1,000,000
Accounts receivable 2,000,000
Allowance for doubtful accounts 300,000
Advances to employees 40,000
Advances to suppliers 30,000
Inventories 1,200,000
Prepaid insurance 800,000
Land 2,200,000
Building 3,400,000
Accumulated depreciation - Bldg. 2,000,000
Accounts payable 720,000
Accrued liabilities 80,000
Income tax payable 500,000
Loans payable (due in 20x3) 3,000,000
Discount on loan payable 870,000
Interest payable (due in 20x2) 340,000
Owner's Capital 4,660,000
Totals 11,600,000 11,600,000

Requirements:
a. Prepare the statement of financial position of Entity A as of December 31, 20x1 by completing all
the required information in the pro-forma statement of financial position provided below,
including a proper heading for the statement.

Hint: “Discount on loans payable” is a contra-account to loans payable.

b. Prepare a partial “notes” showing the breakdowns of the selected line items.

3
PRO-FORMA STATEMENT OF FINANCIAL POSITION

ASSETS Notes
Current assets:
Cash and cash equivalents 6
Trade and other receivables 7
Inventories
Prepaid insurance
Total current assets

Noncurrent assets:
Property, plant and equipment 8
Total noncurrent assets

TOTAL ASSETS

LIABILITIES AND EQUITY


Current liabilities:
Trade and other payables 9
Current tax liability
Total current liabilities

Noncurrent liabilities:
Loans payable - net 10
Total noncurrent liabilities

TOTAL LIABILTIES

Equity:
Owner's Capital
TOTAL EQUITY

TOTAL LIABILITIES & EQUITY

“Blessed is the one who perseveres under trial because, having stood the test, that person will receive the
crown of life that the Lord has promised to those who love him.” (James 1:12)

4
SOLUTION TO QUIZ 2:

Requirement (a):

Entity A
Statement of financial position
As of December 31, 20x1
Note
ASSETS
s
Current assets:
Cash and cash equivalents 6 1,060,000
Trade and other receivables 7 1,770,000
Inventories 1,200,000
Prepaid insurance 800,000
Total current assets 4,830,000

Noncurrent assets:
Property, plant and equipment 8 3,600,000
Total noncurrent assets 3,600,000

TOTAL ASSETS 8,430,000

LIABILITIES AND EQUITY


Current liabilities:
Trade and other payables 9 1,140,000
Current tax liability 500,000
Total current liabilities 1,640,000

Noncurrent liabilities:
Loans payable - net 10 2,130,000
Total noncurrent liabilities 2,130,000

TOTAL LIABILTIES 3,770,000

Equity:
Owner's Capital 4,660,000
TOTAL EQUITY 4,660,000

TOTAL LIABILITIES & EQUITY 8,430,000

5
Requirement (b):

Note 6: Cash and cash equivalents


This line item consists of the following:
Cash on hand 60,000
Cash in bank 1,000,000
Cash and cash equivalents 1,060,000

Note 7: Trade and other receivables


This line item consists of the following:
Accounts receivable 2,000,000
Allowance for doubtful accounts (300,000)
Advances to employees 40,000
Advances to suppliers 30,000
Trade and other receivables 1,770,000

Note 8: Property, plant and equipment


This line item consists of the following:
Land 2,200,000
Building 3,400,000
Accumulated depreciation - Bldg. (2,000,000)
Property, plant and equipment 3,600,000

Note 9: Trade and other payables


This line item consists of the following:
Accounts payable 720,000
Accrued liabilities 80,000
Interest payable 340,000
Trade and other payables 1,140,000

Note 10: Loans payable - net


This line item consists of the following:
Loans payable 3,000,000
Discount on loan payable (870,000)
Loans payable - net 2,130,000

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