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Elimination Questions

Accountancy (Polytechnic University of the Philippines)

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1. Which of the following transactions increases affect the balance sheet totals?
both assets and owner’s equity? a. Collecting 40,000 from customers on
a. Owner withdrawal of cash account
b. Payment received from a credit customer b. Paying a P300,000 note payable
c. Received a bank loan c. Purchasing P50,000 supplies on account
d. Rendered services; payment not yet d. Withdrawal of 80,000 by the firm’s owner
received
2. When an entity pays for goods and services 9. A Company that pays employees every two
before actual receipt, the payment should be weeks has paid workers P375,000 in wages and
recorded as a decrease in Cash and an increase salaries for work completed during 2018. In
in addition, the employees earned one week’s
a. A liability. c. an expense. salary of P7,200 at the end of December that
b. An asset. d. an owner’s equity will be paid as part of the P14,400 payroll at the
account. end of the first week of January in 2019. How
3. A ledger is defined as a collection of much should the company report for salaries
a. Account titles – asset, liability, equity, and wages expense for 2013?
income and expense accounts. a. P367,800 c. P389,400
b. All income statement accounts. b. P375,000 d. P382,200
c. All statement of financial position accounts. 10. A business received cash of P30,000 in advance
d. Transactions. for revenue that will be earned later. The cash
4. When owner’s equity decreases, one of the ff receipt entry debited cash and credited
must occur: unearned revenues for P30,000. At the end of
a. A liability increases c. an income the period, P11,000 is still unearned. The
increases. adjusting entry for this situation will
b. An asset increases d. withdrawals a. Debit revenues and credit unearned
decreases. revenues for P19,000
5. Which of the following transactions correctly b. Debit revenues and credit unearned
maintains the equality in the accounting revenues for P11,000
equation? c. Debit unearned revenues and credit
a. To record collections on account, cash and revenues for P19,000
accounts receivable are increased by d. Debit unearned revenues and credit
P160,000. revenues for P11,000
b. To record payment of notes, notes payable 11. Office Supplies were P9,000 at the end of
is decreased and cash is increased by January and P11,400 at the end of February.
P70,000. During February, Office Supplies Expense
c. To record payment of rent, rent expense equaled P3,000. How much cash was paid for
and cash are increased by P8,000. office supplies during February?
d. To record the purchase of computer a. P2,400 c. P17,400
equipment, computer equipment is b. P14,400 d. P5,400
increased and cash is decreased by 12. Salaries Payable were P3,500 at the end of
P46,000. September and P2,800 at the end of October.
6. Which of the following combinations of trial Salaries Expense for October was P18,000. How
balance totals suggest the presence of either a much cash was paid for salaries during
transposition error or a number slide? October?
a. P65,470 debit and P68,170 credit a. P18,700 c. P17,300
b. P33,220 debit and P35,420 credit b. P24,100 d. 11,700
c. P25,670 debit and P26,670 credit 13. Which of the following errors will not cause the
d. P14,517 debit and P15,477 credit debit and credit columns of the trial balance to
7. The Supplies account had a P2,800 debit be unequal?
balance at the end of the accounting period a. A debit entry was recorded in the
before adjustment for supplies used, and an wrong account.
inventory of P600worth of unused supplies was b. A debit was entered in an account as a
on hand. Which of the following is the required credit.
adjusting entry? c. The account balance was carried to the
a. Debit Supplies Expense P600 and Credit wrong column of the trial balance.
Supplies P600 d. The balance of an account was incorrectly
b. Debit Supplies P600 and Credit Supplies computed.
Expense P600 14. On Nov 1, Yuki repair shop received 10,000
c. Debit Supplies P2,200 and Credit Supplies cash for services to be rendered on the month
Expense P2,200 of December. At year-end, only 60% was
d. Debit Supplies Expense P2,200 and rendered. The company follows the revenue
Credit Supplies P2,200 method. What is the adjusting entry at
8. Which of the following transactions does not

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December 31? a. Advertising Expense and Land

a. Debit Service Revenue 4000, credit b. Interest Payable and Owner’s Capital
Unearned revenue 4000 c. Owner’s Withdrawals and Medical
b. Debit Service Revenue 6000 credit Revenues
unearned revenue 6000 d. Prepaid Insurance and Owner’s Withdrawals
c. Debit Service Revenue 6000 credit 22. If Accounts Payable has debit postings of
unearned revenue 6000 P170,000, credit postings of P140,000, and a
d. Debit Unearned Revenue 4000 credit normal ending balance of P60,000, which of the
Service Revenue 4K following was its beginning balance?
a. P30,000 Cr. c. P90,000 Cr.
15. If a P4,700 cash purchase of supplies is b. P30,000 Dr. d. P90,000 Dr.
recorded as a P5,700 debit to Supplies Expense 23. When a T-account has several items on both
and a P5,700 credit to Cash, the result will be sides, the balance of the account is written
that, a. On the side with the greatest number of
a. Supplies Expense will be overstated items.
and cash will be understated. b. On the side with the larger total.
b. The cash account will be overstated. c. On the side with the least number of items.
c. The Supplies Expense account will be d. On the side with the smaller total.
understated. 24. A P1,000 debit item is accidentally posted as a
d. The trial balance will be out of balance. credit. The trial balance column totals therefore
16. If Accounts Receivable has debit postings of will differ by
P580,000, credit postings of P440,000, and a a. P0. c. P1,000.
normal ending balance of P480,000,which of b. P500. d. P2,000.
the following was its beginning balance?
a. P620,000 Cr. c. P620,000
Dr. 25. The Recording a single transaction in the
b. P340,000 Cr. d. P340,000 double-entry accounting records may
A. Decrease the balance on a liability
Dr.
account by a given amount and decrease
17. When collections are made on Accounts the balance on an asset account by the
Receivable, same amount.
a. Owner’s equity increases. B. Decrease the balance on an asset account by
b. Total assets decrease. a given amount and increase the balance on a
c. Total assets increase. liability account by the same amount.
d. Total assets remain the same. C. Increase the balance on an asset account by
a given amount and decrease the balance on a
18. When a company has performed a service but
liability account by the same amount.
has not yet received payment, it D. Increase the balance on one asset account
a. Debits Accounts Receivable and by a given amount and increase the balance on
credits Service Revenues. another asset account by the same amount
b. Debits Service Revenues and credits
Accounts Payable. 26. Detoya Company must determine the Dec.
c. Debits Service Revenues and credits 31, 2016 year-end accruals for advertising
and rent expenses. A P5,000 advertising bill
Accounts Receivable.
was received Jan. 7, 2017. It related to cost
d. Makes no entry until the cash is received. of P3,750 for advertisements in Dec. 2016
19. If Accounts Receivable has debit posting of issues and P1,250 for advertisements in Jan.
P580,000, credit postings of 440,000, and a 2015 issues of newspaper.
normal ending balance of P480,000, which of A store lease, effective Dec. 16 2015 calls
the following was its beginning balance? for fixed rent of P12,000 per month, payable
a. P620,000 Cr. one month from the effective date and
monthly thereafter. In addition, rent equal to
b. P340,000 Cr.
5% of net sales over P3,000,000 per
c. P620,000 Dr. calendar year is payable on Jan.31 of the
d. P340,000 Dr. following year. Net sales for 2016 were
20. Proponents of historical costs maintain that in P5,500,000. In its Dec 31,2016 balance
comparison with all other valuation alternatives sheet, Detoya should report accrued
for general purpose financial reporting, liabilities of
statements prepared using historical costs are a. P125,000
b. P128,750
more
c. P131,000
a. Conservative d. P134,750
b. Indicative of the entity’s purchasing power 27. The account format that displays debits,
c. Objective credits, balances, and headings
d. Relevant a. General journal
21. Which pair of accounts follows the rules of debit b. General ledger
and credit? c. T-account
d. Ledger account
28. Entries made to transfer temporary account

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balances to permanent accounts.

a. Journal entries
b. Adjusting entries
c. Reversing entries
d. Closing entries

29. Accounts with balances that are carried over to

future years.
a. Temporary accounts
b. Permanent accounts
c. Expense accounts
d. Withdrawal accounts

30. Client Jay pays ABC Co. $1,000 in December for

ABC to perform services for Jay in 45 days. ABC
uses the accrual basis of accounting. In
December ABC will debit Cash for $1,000. What
will be the other account involved in the
December accounting entry prepared by ABC
(and what type of account is it)?
a. Accounts Receivable (asset)
b. Prepaid Services (asset)
c. Service Revenues (revenue)
d. Unearned Revenues (liability)

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