ACCCOB1

AY 2023-24 Term 2
Quiz #1
Tuesday
SET A

TEST I. TRUE OR FALSE

1. A system of accounting for recording transactions, based on recording increases and decreases in accounts
so that debits equal credits, and applies the accrual basis of accounting.
FALSE
A system of accounting for recording transactions, based on recording increases and decreases in accounts
so that debits equal credits, and applies the DOUBLE ENTRY SYSTEM of accounting.

2. Recording a journal entry for the same transaction more than once will cause an inequality in the trial balance
totals.
FALSE
Recording the same transaction more than once will NOT cause an inequality in the trial balance totals.

3. Adjusting entry for the ending merchandise inventory will be necessary if the business uses a periodic
inventory system.
TRUE

4. Companies make adjusting entries for accruals to record revenues earned and expenses incurred in the
current accounting period that have not been recognized through daily entries.
TRUE

5. The content of the owner’s equity section varies with the form of business organization.
TRUE

6. The Statement of Cash Flows reports only the cash effects of operations and financing transactions during
a period.
FALSE
The cash effects of investing transactions are also included.

7. The basis for classifying assets as current or noncurrent is conversion to cash within the accounting cycle
or one year, whichever is longer.
FALSE
The basis for classifying assets as current or noncurrent is conversion to cash within the OPERATING cycle
or one year, whichever is longer.

8. The Statement of Profit or Loss reveals the net income or loss of a firm at a point in time.
FALSE
For a period of time or for the period ended.

9. The difference between the cost of any depreciable asset and its related accumulated depreciation is referred
to as the depreciable cost.
FALSE
The difference between the cost of any depreciable asset and its related accumulated depreciation is referred
to as the carrying amount.

10. Owner’s drawing is not an expense, and it is not a factor in determining net income. Therefore, it will not be
closed against the Income Summary.
TRUE
TEST II. MULTIPLE CHOICE THEORY

1. The process of rewriting the information from the journal into the ledger is called
A. Recording.
B. Transposing.
C. Posting.
D. Journalizing.

2. In preparing a worksheet and the entity is profitable in the current period, the total of the Statement of
Financial Position credit column will be
A. Larger than the total of the Statement of Financial Position debit column.
B. Smaller than the total of the Statement of Financial Position debit column.
C. Larger than the total of the Statement of Profit or Loss debit column.
D. Larger than the total of the Statement of Profit or Loss credit column.

3. An adjusting entry will NOT take the format of which one of the following entries?
A. A debit to an expense account and a credit to a liability account.
B. A debit to an expense account and a credit to a revenue account.
C. A debit to an expense account and a credit to an asset account.
D. A debit to an asset account and a credit to a revenue account.

4. Recording year-end adjustment to reflect the provision for doubtful accounts will affect which of the following
account
A. Total Liabilities
B. Net Realizable Value of the Accounts Receivable
C. Gross Revenue for the Period
D. Carrying amount of Non-Current Assets

5. In a Statement of Cash Flows, payments to acquire debt instruments of other entities (other
than cash equivalents) should be classified as cash outflows for
A. operating activities.
B. investing activities.
C. financing activities.
D. lending activities.

6. The balance in unearned revenue account represents an amount that is

Earned Collected
A. No Yes
B. No No
C. Yes Yes
D. Yes No

7. The current assets section of the Statement of Financial Position should include
A. Merchandise Inventory.
B. Office Equipment.
C. Furniture & Fixtures.
D. Intangible Assets.

8. Which of the following is not included in the operating expenses section of a functional Statement of Profit or
Loss?
A. Cost of goods sold
B. Prepaid expense
C. Administrative expenses
D. Sales

9. On which of the following would the year-end owner’s equity balance be stated correctly?
A. Unadjusted Trial Balance
B. Adjusted Trial Balance
C. Post-Closing Trial Balance
D. The Worksheet

10. At the end of 2023, Avila Company made four adjusting entries for the following items: (1) depreciation
expense, ₱35,000; (2) expired insurance, ₱2,200 (originally recorded as prepaid insurance); (3) doubtful
accounts expense, ₱900; and (4) rent receivable, ₱10,000.

In the normal situation, to facilitate subsequent entries, the adjusting entry or entries that may be reversed
is/are
A. Entry 2
B. Entry 4
C. Entries 2 and 4
D. Entries 1, 2, 3, and 4
TEST III. PROBLEM SOLVING

1. The accounts in the ledger of ABC Trading are listed in alphabetical order.

Accounts Payable ₱ 50,000

Accounts Receivable 80,000
Cash 154,000
Fees Earned 194,000
Insurance expense 30,000
Land 200,000
Note Payable 100,000
Owner's Equity 180,000
Wages Expense 40,000
Withdrawals 20,000

All accounts have normal balances. How much is the total amount of the debits in the trial
balance?
₱524,000

2. The purchase invoice shows the amount of ₱250,000, 2/10, 1/20, n/30; FOB destination collect, ₱2,000. If
the account is paid 15 days after the invoice date, how much is the net amount paid to seller?
₱245,500

3. ABC Trading has the following account balances:

Purchases ₱ 336,000
Sales Returns and Allowances 44,800
Purchase Discounts 28,000
Freight-in 21,000
Delivery Expense 28,000
Merchandise Inventory 1/1/23 84,000
Merchandise Inventory 12/31/23 105,000

How much is the total cost of goods available for sale of ABC Trading?
₱413,000

4. ABC Trading is preparing its worksheet. The subtotals of the Statement of Profit or Loss columns of
worksheet are ₱1,200,000 debit and ₱880,000 credit. If the subtotal of the Statement of Financial Position
debit column is ₱350,000, how much is the subtotal of the Statement of Financial Position credit
column?
₱670,000

5. The following balances have been taken from the ABC Trading’s Statements of Financial Position:

12/31/2023 12/31/2022
Prepaid Insurance ₱ 6,000 ₱ 7,500
Salaries Payable ? 63,000

The company paid or collected during 2023 the following items

Insurance premiums paid ₱ 41,500
Salaries paid 481,000

The salary expense on the Statement of Profit or Loss for 2023 was ₱498,500. How much is the
balance of Salaries Payable at the end of December 31, 2023?
₱80,500

6. At the beginning of the fiscal year, office supplies inventory amounted to ₱15,000. During the year, office
supplies amounting to ₱88,000 were purchased. This amount was debited to the Office Supplies account.
An inventory of office supplies at the end of the fiscal year showed ₱20,000 of supplies remaining. The
beginning of the year balance is still reflected in the office supplies inventory account. How much is the
amount of the adjustment to the Office Supplies Expense account? Indicate if debit or credit.
₱83,000 Debit

7. ABC Trading Company acquired a machine on April 1, 2022 for ₱12,500,000. The machine had a 10-year
economic life but will only be used for 6 years by the business. It has a residual value of
₱500,000 and will be depreciated using straight-line method. How much is the total accumulated
depreciation of the machinery on December 31, 2023?
₱3,500,000
8. ABC Trading Company provided the following accounts from the unadjusted Trial balance on December 31,
2023.

Debit Credit
Accounts Receivable 2,500,000
Allowance for Doubtful Accounts 20,000
Sales 10,000,000
The company estimated that 2.50% of the gross accounts receivable will become uncollectible.
Cash sales are 40% of the total sales. How much is the doubtful account expense for the year
2023?
₱42,500

9. The following are the account balances of ABC Trading Company for the Year ended December 31, 2023.

Cash ₱ 61,300
Accounts Receivable 23,000
Equipment 134,000
Accumulated Depreciation 11,000
Accounts Payable 17,000
Notes Payable 50,000
Aya B. Tan, Capital 120,000
Fees Earned 67,000
Aya B. Tan, Withdrawals 8,700
Wages Expense 14,500
Rent Expense 9,000
Utilities Expense 4,750
Depreciation Expense 1,500
Miscellaneous Expense 750
Prepaid Expenses 7,500

How much is the net income (loss) for the period?

₱36,500

10. ABC Trading's total owner’s equity increased by ₱320,000 during 2023. Additional investment during the
year totaled ₱100,000. Total revenues during the year were ₱5,000,000 and total expenses were
₱4,600,000. Cash on hand decreased by ₱75,000 during the year. How much is the owner’s drawing
during 2023?
₱180,000

11. ABC Trading's trial balance reflected the following account balances on December 31, 2023:

Accounts Receivable (net) ₱24,000

Note Receivable – collectible on 3/23/25 6,000
Accumulated Depreciation — Equipment 15,000
Cash 21,000
Inventory 30,000
Equipment 25,000
Patent 24,000
Prepaid Expenses 8,000
Land Held for Future Business Site 18,000

In ABC’s December 31, 2023 Statement of Financial Position, how much is the current
assets?
₱83,000

12. ABC Trading reports the following cash activities:

Cash provided by operating activities ₱ 250,000
Cash used in investing activities 110,000
Cash provided by/used in financing activities ?
Beginning cash balance 120,000
Ending cash balance 400,000

How much is the cash provided by/used in operating activities? Indicate if provided by or
(used in).
Cash provided by operating activities ₱140,000

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