LA SALLE UNIVERSITY

College of Business and Accountancy

First Semester 2022-2023

FINANCIAL ACCOUNTING AND REPORTING

Review of Accounting Process: Steps 1-4

TRUE OR FALSE.
1. Accounts are records of increases and decreases in 14. Transactions are initially entered into a record called
individual financial statement items. a journal.
TRUE TRUE

2. A chart of accounts is a listing of accounts that make 15. The process of recording a transaction in the journal
up the journal. is called journalizing.
FALSE TRUE

3. The chart of accounts should be the same for each 16. Journalizing is the process of entering amounts in the
business. ledger.
FALSE FALSE

4. Accounts payable are accounts that you expect will be 17. Transactions are listed in the journal chronologically.
paid to you. TRUE
FALSE
18. Journalizing transactions using the double-entry
5. Consuming goods and services in the process of bookkeeping system will eliminate fraud.
generating revenues results in expenses. FALSE
TRUE
19. Liability accounts are increased by debits.
6. Prepaid expenses are an example of an expense. FALSE
FALSE
20. Expense accounts are increased by credits.
7. Unearned Revenues account is an example of a FALSE
liability.
TRUE 21. Revenue accounts are increased by credits.
TRUE
8. The Drawings account is an example of an expense.
FALSE 22. The normal balance of a capital account is a debit.
FALSE
9. Accounts in the ledger are usually maintained in
alphabetical order. 23. The normal balance of the drawing account is a
FALSE debit.
TRUE
10. Depending on the account title, the right side of the
account is referred to as the credit side. 24. The normal balance of an expense account is a
FALSE credit.
FALSE
11. To determine the balance in an account, always
subtract credits from debits. 25. The normal balance of revenue accounts is a credit.
FALSE TRUE

12. The double-entry accounting system records each 26. Withdrawals decrease owner's equity and are listed
transaction twice. on the income statement as a deduction from revenue.
FALSE FALSE

13. The increase side of all accounts is the normal 27. For a month's transactions for a typical medium-sized
balance. business, the salary expense account is likely to have
TRUE only credit entries.
FALSE
28. For a month's transactions for a typical medium-sized 42. The accounts payable account is listed in the chart of
business, the accounts payable account is likely to have accounts as an asset.
only credit entries. FALSE
FALSE
43. A drawing account represents the amount of
29. When a business receives a bill from the utility withdrawals made by the owner.
company, no entry should be made until the invoice is TRUE
paid.
FALSE 44. Revenues are equal to the difference between cash
receipts and cash payments.
30. An account has three parts to it; a title, an increase FALSE
side, and a decrease side.
TRUE 45. Expenses use up assets or consume services in the
process of generating revenues.
31. The T account got its name because it resembles the TRUE
letter “T.”
TRUE 46. Owner’s capital will be reduced by the amount in the
drawing account.
32. The right hand side of a T account is known as a TRUE
debit and the left hand side is known as a credit.
FALSE 47. The journal includes both debit and credit accounts
for each transaction.
33. A debit is abbreviated as Db and a credit is TRUE
abbreviated as Cr.
FALSE 48. A transaction that is recorded in the journal is called
a journal entry.
34. Debiting the cash account will increase the account. TRUE
TRUE
49. Assets are increased with debits and decreased with
35. A credit to the cash account will increase the credits.
account. TRUE
FALSE
50. Liabilities are increased with debits and decreased
36. The cash account will always be debited. with credits.
FALSE FALSE

37. The recording of cash receipts to the cash account 51. Debits will increase Unearned Revenues and
will be done by debiting the account. Revenues.
TRUE FALSE

38. The recording of cash payments from the cash 52. All owner’s equity accounts record increases to the
account is done by entering the amount as a credit. accounts with credits.
TRUE FALSE

39. The balance of the account can be determined by 53. Journal entries can have more than two accounts as
adding all of the debits, adding all of the credits, and long as the debits equal the credits.
adding the amounts together. TRUE
FALSE
54. Normal balances are the side that increase the
40. When an owner contributes equipment to the account balance.
business, he or she retains ownership of the property. TRUE
FALSE
55. When an owner invests assets in the business, the
41. Liabilities are debts owed by the business entity. capital account increases due to revenue being earned.
TRUE FALSE
56. When an accounts payable account is paid in cash, 70. A proof of the equality of debits and credits in the
the owner's equity in the business decreases. ledger at the end of an accounting period is called a
FALSE balance sheet.
FALSE
57. When an account receivable is collected in cash, the
total assets of the business increase. 71. If the trial balance is in balance, it can be assumed
FALSE that all journal entries were posted correctly and no
errors were made.
58. The process of transferring the data from the journal FALSE
to the ledger accounts is posting.
TRUE 72. Posting a part of a transaction to the wrong account
will cause the trial balance totals to be unequal.
59. The post reference notation used in the ledger is the FALSE
account number.
FALSE 73. The erroneous arrangement of digits, such as writing
PHP45 as PHP54, is called a slide.
60. The post reference notation used in the journal is the FALSE
page number.
FALSE 74. Journalizing a transaction with both the debit and the
credit for PHP69 instead of PHP96 will cause the trial
61. A notation in the post reference column of the balance to be out of balance.
general journal indicates that the amount has been FALSE
posted to the ledger.
TRUE 75. Posting a transaction twice will cause the trial
balance totals to be equal.
62. The order of the flow of accounting data is (1) record TRUE
in the ledger, (2) record in the journal, (3) prepare the
financial statements. 76. The erroneous moving of an entire number one or
FALSE more spaces to the right or left, such as writing PHP85
as PHP850, is called a transposition.
63. The process of transferring the debits and credits FALSE
from the journal entries to the accounts is known as
“updating the accounts”. 77. Accounts
FALSE A. do not reflect money amounts
B. are not used by entities that manufacture products
64. Journalizing eliminates fraud. C. are records of increases and decreases in individual
FALSE financial statement items
D. are only used by large entities with many transactions
65. Once journal entries are posted to accounts, each
account will show a new balance after each entry. 78. Accounts are classified in the ledger
TRUE A. chronologically
B. alphabetically
66. A group of related accounts that make up a complete C. in accordance with their appearance in the financial
unit is called a trial balance. statements
FALSE D. so that accounts used most often are listed first

67. A trial balance determines the accuracy of the 79. Revenue should be recognized when
numbers. A. cash is received
FALSE B. the service is performed
C. the customer places an order
68. Even when a trial balance is in balance, there may be D. the supplier charges an order
errors in the individual accounts.
TRUE 80. Which of the following accounts is an owner's equity
account?
69. The totals at the bottom of the trial balance and the A. Cash
totals at the bottom of the balance sheet both show B. Accounts Payable
equality and balancing, and therefore should be equal. C. Prepaid Insurance
FALSE D. Ross Morris, Capital
81. The gross increases in owner's equity attributable to 89. Which one of the statements below is not a purpose
business activities are called for the journal?
A. assets A. to show increases and decreases in accounts
B. liabilities B. to show a chronological order by date
C. revenues C. to show a complete transaction in one place
D. expenses D. to help locate errors

82. A chart of accounts is 90. A credit may signify a

A. the same as a balance sheet A. decrease in assets
B. usually a listing of accounts in alphabetical order B. decrease in liabilities
C. usually a listing of accounts in financial statement C. decrease in capital
order D. decrease in revenue
D. used in place of a ledger
91. A debit signifies a decrease in
83. The debit side of an account A. assets
A. depends on whether the account is an asset, liability B. expenses
or owner's equity C. drawing
B. can be either side of the account depending on how D. revenues
the accountant set up the system
C. is the right side of the account 92. Which of the following applications of the rules of
D. is the left side of the account debit and credit is true?
A. decrease Prepaid Insurance with a credit and the
84. An account is said to have a debit balance if normal balance is a credit
A. the amount of the debits exceeds the amount of the B. increase Accounts Payable with a credit and the
credits normal balance is a debit
B. there are more entries on the debit side than on the C. increase Supplies Expense with a debit and the
credit side normal balance is a debit
C. there are more entries on the credit side than on the D. decrease Cash with a debit and the normal balance is
debit side a credit
D. the first entry of the accounting period was posted on
the debit side 93. Which of the following describes the classification
and normal balance of the fees earned account?
85. Which statement(s) concerning cash is (are) true? A. asset, credit
A. cash will always have more debits than credits B. liability, credit
B. cash will never have a credit balance C. owner's equity, debit
C. cash is increased by debiting D. revenue, credit
D. all of the above
94. The classification and normal balance of the
86. A debit may signify a(n) accounts payable account is
A. decrease in asset accounts A. an asset with a credit balance
B. decrease in liability accounts B. a liability with a credit balance
C. increase in the capital account C. owner's equity with a credit balance
D. decrease in the drawing account D. revenue with a credit balance

87. Which of the following types of accounts have a 95. The classification and normal balance of the drawing
normal credit balance? account is
A. assets and liabilities A. an expense with a credit balance
B. liabilities and expenses B. an expense with a debit balance
C. revenues and liabilities C. a liability with a credit balance
D. capital and drawing D. owner's equity with a debit balance

88. Which of the following groups of accounts have a 96. Which of the following accounts are debited to
normal debit balance? record increase in balances?
A. revenues, liabilities, and capital A. assets and liabilities
B. capital and assets B. drawing and liabilities
C. liabilities and expenses C. expenses and liabilities
D. assets and expenses D. assets and expenses
97. In which of the following types of accounts are 104. Which of the following entries records the
increases recorded by credits? investment of cash by Ron York, owner of a
A. revenues and liabilities proprietorship?
B. drawing and assets A. debit Ron York, Capital; credit Accounts Receivable
C. liabilities and drawing B. debit Cash; credit Ron York, Capital
D. expenses and liabilities C. debit Ron York, Drawing; credit Cash
D. debit Cash; credit Ron York, Drawing
98. In which of the following types of accounts are
decreases recorded by debits? 105. Which of the following entries records the receipt of
A. assets a utility bill from the water company?
B. revenues A. debit Utilities Expense; credit Accounts Payable
C. expenses B. debit Utilities Payable; credit Accounts Receivable
D. drawing C. debit Accounts Payable; credit Cash
D. debit Accounts Payable; credit Utilities Payable
99. In which of the following types of accounts are
decreases recorded by credits? 106. Which of the following entries records the
A. liabilities withdrawal of cash by Sue Martin, owner of a
B. owner's capital proprietorship, for personal use?
C. drawing A. debit Sue Martin, Capital; credit Cash
D. revenues B. debit Sue Martin, Drawing; credit Cash
C. debit Salaries Expense; credit Cash
100. A credit balance in which of the following accounts D. debit Salaries Expense; credit Salaries Payable
would indicate a likely error?
A. Fees Earned 107. Office supplies were sold by Ari’s Alarm Service at
B. Salary Expense cost to another repair shop, with cash received. Which
C. Janet James, Capital of the following entries for Ari’s Alarm Service records
D. Accounts Payable this transaction?
A. Office Supplies, debit; Cash, credit
101. A debit balance in which of the following accounts B. Office Supplies, debit; Accounts Payable, credit
would indicate a likely error? C. Cash, debit; Office Supplies, credit
A. Salaries Expense D. Accounts Payable, debit; Office Supplies, credit
B. Notes Payable
C. Edgar Martin, Drawing 108. Office supplies purchased by Ari’s Alarm Service
D. Supplies on account were returned. Which of the following
entries for Ari’s Alarm Service records this transaction?
102. Randomly listed below are the steps for preparing a A. Cash, debit; Office Supplies, credit
trial balance: B. Office Supplies, debit; Accounts Receivable, credit
C. Accounts Payable, debit; Office Supplies, credit
(1) Verify that the total of the Debit column equals the total ofD.the
Office
Credit
Supplies,
column.debit; Accounts Payable, credit
(2) List the accounts from the ledger and enter their debit or credit balance in the Debit or Credit column of
the trial balance. 109. Cash was paid by Ari’s Alarm Service to creditors
(3) List the name of the company, the title of the trial balance,onand
account.
the dateWhich
the trial
of balance
the following
is prepared.
entries for Ari’s
(4) Total the Debit and Credit columns of the trial balance. Alarm Service records this transaction?
A. Cash, debit; Ari Fleish, Capital, credit
B. Accounts Payable, debit; Cash, credit
What is the proper order of these steps? C. Accounts Receivable, debit; Cash, credit
A. (3), (2), (4), (1) D. Accounts Payable, debit; Account Receivable, credit
B. (2), (3), (4), (1)
C. (3), (2), (1), (4) 110. The process of initially recording a business
D. (4), (3), (2), (1) transaction is called
A. closing
103. Which of the following entries records the payment B. posting
of an account payable? C. journalizing
A. debit Cash; credit Accounts Payable D. balancing
B. debit Accounts Receivable; credit Cash
C. debit Cash; credit Supplies Expense
D. debit Accounts Payable; credit Cash
111. Which of the following entries records the 119. Which of the following abbreviations is correct?
acquisition of office supplies on account? A. Debit “Dr”, Credit “Cd”
A. Office Supplies, debit; Cash, credit B. Debit “Db”, Credit “Cr”
B. Cash, debit; Office Supplies, credit C. Debit “Db”, Credit “Cd”
C. Office Supplies, debit; Accounts Payable, credit D. Debit “Dr”, Credit “Cr”
D. Accounts Receivable, debit; Office Supplies, credit
120. Which side of the account increases a cash
112. Which of the following entries records the payment account?
of rent for the current month? A. credit
A. Cash, debit; Rent Expense, credit B. neither a debit or a credit
B. Rent Expense, debit; Cash, credit C. debit
C. Rent Expense, debit; Accounts Receivable, credit D. either a debit or a credit
D. Accounts Payable, debit; Rent Expense, credit
121. A cash payment is recorded on the cash account as
113. Which of the following entries records the receipt of a
cash from patients on account? A. neither a debit or a credit
A. Accounts Payable, debit; Fees Earned, credit B. credit
B. Accounts Receivable, debit; Fees Earned, credit C. debit
C. Accounts Receivable, debit; Cash, credit D. either a debit or a credit
D. Cash, debit; Accounts Receivable, credit
122. The balance of the account is determined by
114. Which of the following entries records the collection A. adding all of the debits to all of the credits.
of cash from cash customers? B. always subtracting the debits from the credits.
A. Fees Earned, debit; Cash, credit C. always subtracting the credits from the debits.
B. Fees Earned, debit; Accounts Receivable, credit D. adding all of the debits, adding all of the credits, and
C. Cash, debit; Fees Earned, credit then subtracting the smaller sum from the larger sum.
D. Accounts Receivable, debit; Fees Earned, credit
123. A list of the accounts is called
115. Which of the following entries records the receipt of A. ledger
cash for two months' rent? The cash was received in B. chart of accounts
advance of providing the service. C. T-Account
A. Prepaid Rent, debit; Rent Revenue, credit. D. Debit
B. Cash, debit; Unearned Rent, credit.
C. Cash, debit; Prepaid Rent, credit. 124. On the chart of accounts, the balance sheet
D. Cash, debit; Rent Expense credit. accounts are normally listed in the following order
A. liabilities, assets, owner’s equity
116. A patient has a physical examination and asks the B. assets, liabilities, owner’s equity
bookkeeper to mail the bill. The bookkeeper should C. owner’s equity, assets, liabilities
A. make no entry until the cash is received D. assets, owner’s equity, liabilities
B. Cash, debit; Accounts Receivable, credit
C. Cash, debit; Fees Earned, credit 125. In which order are the accounts listed in the chart of
D. Accounts Receivable, debit; Fees Earned, credit accounts?
A. assets, expenses, liabilities, owner’s equity, revenues
117. Proof that the dollar amount of the debits equals the B. owners’ equity, assets, liabilities, revenues, expenses
dollar amount of the credits in the ledger means C. assets, liabilities, owner’s equity, revenues, expenses
A. all of the information from the journal was correctly D. assets, liabilities, revenues, expenses, owners’ equity
transferred to the ledger
B. all accounts have their correct balances in the ledger 126. Which are the parts of the T account?
C. only the journal is accurate; the ledger may be A. title, date, total
incorrect B. date, debit side, credit side
D. only that the debit dollar amounts equal the credit C. title, debit side, credit side
dollar amounts D. title, debit side, total

118. Which of the following is true about a T-Account?

A. Left hand side of the T-Account is called a debit.
B. Left hand side of the T-Accounts is called a credit
C. Right hand side of the T-Account is called a debit
D. None are true.
127. Which of the following is not a correct rule of debits 133. Which of the following statements is not true about
and credits? liabilities?
A. assets, expenses and withdrawals are increased by A. Liabilities are debts owed to outsiders.
debits B. Account titles of liabilities often include the term
B. assets are decreased by credits and have a normal “payable”.
debit balance C. Cash received before services are performed are
C. liabilities, revenues and owner’s equity are increased considered to be liabilities.
by credits D. Liabilities do not include wages owed to employees of
D. the normal balance for revenues and expenses is a the company.
credit
134. The owner’s equity will be reduced by all of the
128. Prarie Clinic purchased X-ray equipment for following accounts except:
PHP7,500, paid PHP2,250 down, with the remainder to A. Revenues
be paid later. The correct entry would be B. Expenses
A. Equipment 2,250 C. Drawing account
Cash 2,250 D. All are true.
B. Cash 2,250
Accounts Payable 5,250 135. Expenses can result from:
Equipment 7,500 A. increasing owner’s equity.
C. Equipment Expense 7,500 B. consuming services.
Accounts Payable 2,250 C. using up liabilities.
Cash 5,250 D. all are true.
D. Equipment 7,500
Accounts Payable 5,250 136. The chart of accounts classify the accounts to make
Cash 2,250 identification of the accounts easier. This is done by way
of assigning a number to each account. The first number
129. The chart of accounts is designed to identifies the classification of the type of
A. alphabetize the accounts to make reading easier for account. Which of the following indicates the use of this
its financial statement users. classification?
B. analyze the accounts and organize them in order of A. 1-Assets, 2-Liabilities, 3-Owner’s Equity, 4-Expenses,
dollar amount to simplify the accounting information for 5-Revenues
users. B. 1-Assets, 2-Liabilities, 3-Owner’s Equity, 4-Revenues,
C. summarize the transactions and determine their 5-Expenses
ending balances. C. 1-Assets, 2-Owner’s Equity, 3-Revenues, 4-Expenses,
D. meet the information needs of a company and other 5-Drawing
financial statement users. D. 1-Owner’s Equity, 2-Drawing, 3-Revenues, 4-
Expenses
130. Which group of accounts is comprised of only
assets? 137. The ____ is where a transaction can first be found
A. Cash, Accounts Payable, Buildings on the accounting records.
B. Accounts Receivable, Revenue, Cash A. chart of accounts
C. Prepaid Expenses, Buildings, Patents B. income statement
D. Unearned Revenues, Prepaid Expenses, Cash C. balance sheet
D. journal
131. Of the following which istrue about assets?
A. Assets include physical and intangible assets. 138. The process of recording a transaction in the
B. Assets include only physical assets. journal is called
C. Assets are owned solely by the owner of the A. recording
company. B. journalizing
D. Assets are the result of selling products or services to C. posting
customers. D. summarizing

132. Which of the following is not considered to be a

liability?
A. Wages Payable
B. Accounts Receivable
C. Unearned Revenues
D. Accounts Payable
139. Joshua Scott invests PHP40,000 into his new 143. Which of the following accounts would be increased
business. How would the journal entry for this with a credit?
transaction be entered in the journal? A. Land, Accounts Payable, Drawing
A. Cash 40,000 B. Accounts Payable, Unearned revenue, Collins Capital
Joshua Scott, Capital 40,000 C. Collins Capital, Accounts Receivable, Unearned
Invested cash in business Revenue
B. Cash 40,000 D. Cash, Accounts Receivable, Collins Capital
Joshua Scott, Capital 40,000
Invested cash in business 144. In accordance with the debit and credit rules, which
C. Joshua Scott, Capital 40,000 of the following is true?
Cash 40,000 A. Debits increase assets.
Invested cash in business B. Credits increase assets.
D. Joshua Scott, Loan 40,000 C. Debits increase both assets and capital.
Cash 40,000 D. Credits increase both assets and liabilities.
Invested cash in business
145. All of the following accounts are increased with a
140. debit except:
April 23 Cash 26,000 A. Unearned Revenues
Jim Xu, Capital 26,000 B. Land
Invest cash in Xu Co. C. Accounts Receivable
D. Cash

The journal entry will: 146. Which of the following owner’s equity accounts
A. Increase Capital and decrease Cash follows the same debit and credit rules as liabilities?
B. Increase Cash and decrease Capital A. Expense accounts only
C. Increase Cash and increase Capital B. Drawing accounts only
D. Decrease Cash and decrease Capital C. Revenues accounts only
D. Expenses and drawing accounts
141.
May 24 Land 105,000 147. The payment for the monthly rent will require the
following entry
Cash 105,000
A. Debit Cash and Debit Rent Expense
Purchased land for
B. Credit Cash and Credit Rent Expense
business
C. Debit Rent Expense and Credit Cash
D. Credit Rent Expense and Debit Cash

What effects does this journal entry have on the 148. Expenses follow the same debit and credit rules as
accounts? A. Revenues
A. Increase Cash and increase Land B. Drawing Account
B. Increase Land and decrease Cash C. Capital Account
C. Decrease Cash and decrease Land D. Liabilities
D. Increase Cash and decrease Land
149. Net income will result when
142. A. revenues (credits) > expenses (debits)
March 10 Accounts Payable 800 B. revenues (debits) > expenses (credits)
Cash 800 C. expenses (credits) = revenues (debits)
Paid creditors on D. revenues (credits) = expenses (debits)
account
150. Which of the following will increase owner’s equity?
A. Expenses > revenues
What effect does this journal entry have on the B. the owner draws money for personal use
accounts? C. Revenues > expenses
A. Decrease accounts payable, increase cash D. Cash is received from customers on account.
B. Increase cash, decrease accounts payable
C. Increase accounts payable, increase cash
D. Decrease accounts payable, decrease cash
151. Which of the following situations increase owner’s
equity? Which is the best explanation for this journal entry?
A. Supplies are purchased on account. A. Purchased equipment, paid cash of PHP5,000, with
B. Services are provided on account. the remainder to be paid in payments.
C. Cash is received from customers. B. Purchased equipment, paid cash of PHP10,000, with
D. Utility bill will be paid next month. the remainder to be received in the future.
C. Purchased equipment, paid cash for the entire
152. Which of the following group of accounts are amount.
increased with a debit? D. Purchased equipment on credit.
A. assets, liabilities, owner’s equity
B. assets, drawing, expenses 158. The process of rewriting the information from the
C. assets, revenues, expenses journal into the ledger is called
D. assets, liabilities, revenues A. sliding
B. transposing
153. Which of the following group of accounts increase C. journalizing
with a credit? D. posting
A. Capital, revenues, expenses
B. Assets, capital, revenues 159. Total dollar amount of the debits equal the total
C. Liabilities, capital, revenues dollar amount of the credits in the ledger can be verified
D. None of these through:
A. ledger
154. Which of the following is true regarding normal B. trial balance
balances of accounts? C. account
A. All accounts have a normal debit balance. D. balance sheet
B. The normal balance of all accounts will have either a
positive or negative balance. 160. The process of transferring the journal entries to the
C. Accounts that have a normal debit balance will only accounts is known as
have debit entries, never credit entries. A. posting
D. The normal balance is the side of the account that B. updating
increases the account. C. journalizing
D. summarizing
155. All of the following occur with a double-entry
accounting system except: 161. The posting process will include the transfer of the
A. The accounting equation remains in balance. following information from the journal to the account.
B. The sum of all debits is always equal to the sum of all A. date, amount (debit or credit)
credits in each journal entry. B. date, amount (debit or credit), journal page number
C. Each business transaction will have only two entries. C. amount (debit or credit), account number
D. Every transaction affects at least two accounts. D. date, amount (debit or credit) account number

156. 162. The post reference columns are used to trace

March 6 Cash 2,500 transactions from the journal to the accounts. What will
Unearned Fees 2,500 be posted on the post reference column of (a) the
???????????? journal and (b) on the account?
A. (a) the amount of the debit or credit (b) the journal
page number
What is the best explanation for this journal entry? B. (a) the journal page number (b) the date of the
A. Received cash for services performed transaction
B. Received cash for services to be performed in the C. (a) the journal page number, (b) the account number
future. D. (a) the account number, (b) the journal page number
C. Paid cash in advance for services to be done.
D. Paid cash for services to be performed.

157.
April 14 Equipment 15,000
Cash 5,000
Note Payable 10,000
????????????
163. The chart of account for the Corning Company
includes some of the following accounts:
What is the post reference that will be found on the
Account Name Account Number Prepaid Insurance account?
Cash 11 A. 11
Accounts Receivable 13 B. 15
Prepaid Insurance 15 C. 3
D. None
Accounts Payable 21
Unearned Revenue 24
165. The chart of account for the Corning Company
Corning, Capital 31
includes some of the following accounts:
Corning, Drawing 32
Fees Earned 41 Account Name Account Number
Salaries Expense 54 Cash 11
Rent Expense 56 Accounts Receivable 13
Prepaid Insurance 15
Accounts Payable 21
On the journal page 3, the following transaction was
Unearned Revenue 24
found:
Corning, Capital 31
Corning, Drawing 32
Prepaid Insurance 1,530
Cash 1,530 Fees Earned 41
Salaries Expense 54
Rent Expense 56

What is the post reference that will be found on the

cash account? On the journal page 3, the following transaction was
A. 11 found:
B. 15
C. 3 Prepaid Insurance 1,530
D. None Cash 1,530

164. The chart of account for the Corning Company

includes some of the following accounts:
What is the post reference that will be found on the
Account Name Account Number journal entry?
Cash 11 A. 15, 11
Accounts Receivable 13 B. 15
Prepaid Insurance 15 C. 11
Accounts Payable 21 D. 3
Unearned Revenue 24
166. The chart of account for the Miguel Company
Corning, Capital 31
includes some of the following accounts:
Corning, Drawing 32
Fees Earned 41 Account Name Account Number
Salaries Expense 54 Cash 11
Rent Expense 56 Accounts Receivable 13
Prepaid Insurance 15
Accounts Payable 21
On the journal page 3, the following transaction was
Unearned Revenue 24
found:
Miguel, Capital 31
Miguel, Drawing 32
Prepaid Insurance 1,530
Fees Earned 41
Cash 1,530
Salaries Expense 54
Rent Expense 56
On the journal page 3, the following transaction was The total of all the assets is:
found: A. PHP10,000
B. PHP8,000
Cash 640 C. PHP9,700
Fees Earned 640 D. PHP9,800

169. A trial balance is prepared to

What is the post reference that will be found on the A. prove that there were no errors made in recording
journal entry? transactions into the journal
A. 41 B. prove that no errors were made in posting to the
B. 3 ledger
C. 11, 41 C. prove that each account balance is correct
D. 11 D. summarize the account balances to help prepare
financial statements
167. The chart of account for the Miguel Company
includes some of the following accounts: 170. The accounts in the ledger of Monroe
Entertainment Co. are listed in alphabetical order. All
Account Name Account Number accounts have normal balances.
Cash 11 Accounts Payable 1,500 Fees Earned 3,600
Accounts 1,800 Insurance 1,300
Accounts Receivable 13
Receivable Expense
Prepaid Insurance 15
Prepaid 2,000 Land 3,000
Accounts Payable 21 Insurance
Unearned Revenue 24 Cash 3,200 Wages Expense 1,400
Miguel, Capital 31 Drawing 1,200 Capital 8,800
Miguel, Drawing 32
Fees Earned 41
Salaries Expense 54 Prepare a trial balance. The total of the debits is
Rent Expense 56 A. PHP13,900
B. PHP11,200
C. PHP12,700
On the journal page 5, the following transaction was D. PHP9,700
found:
171. Of the following financial reports, which one is the
Salaries Expense 525 one that will determine if the accounting equation is in
Cash 525 balance?
A. Journal entry
B. Income statement
C. Trial balance
What is the post reference that will be found on the
D. Account reconciliation
Salaries Expense account?
A. 5
172. An overpayment error was discovered in computing
B. 11
and paying the wages of a Jamison Tree Trimming
C. 54
employee. When Jamison receives cash from the
D. None
employee for the amount of the overpayment, which of
the following entries will Jamison make?
168. The accounts in the ledger of Monroe
A. Cash, debit; Wages Expense, credit
Entertainment Co. are listed in alphabetical order. All
B. Wages Payable, debit; Wages Expense, credit
accounts have normal balances.
C. Wages Expense, debit, Cash, credit
Accounts Payable 1,500 Fees Earned 3,600
D. Cash, debit; Wages Payable, credit
Accounts 1,800 Insurance 1,300
Receivable Expense
Prepaid Insurance 2,000 Land 3,000
Cash 3,200 Wages 1,400
Expense
Drawing 1,200 Capital 8,800
173. If the two totals of a trial balance are not equal, it 178. The trial balance is out of balance and the
could be due to accountant suspects that a transposition or slide error
A. failure to record a transaction has occurred. What will the accountant do to find the
B. recording the same erroneous amount for both the error?
debit and the credit parts of a transaction A. Determine the amount of the error and look for that
C. an error in determining the account balances, such as amount on the trial balance.
a balance being incorrectly computed B. Determine the amount of the error and divide by two,
D. recording the same transaction more than once then look for that amount on the trial balance.
C. Determine the amount of the error and refer to the
174. When a transposition error is made on the trial journal entries for that amount.
balance, the difference between the debit and credit D. Determine the amount of the error and divide by nine.
totals on the trial balance will be If the result is evenly divided, then this type of error is
A. zero likely.
B. twice the amount of the transposition
C. one-half the amount of the transposition 179.
D. divisible by 9 Which of the following is not a short-cut in finding errors
on the trial balance?
175. Which of the following errors, each considered A. Determine the difference between debits and credits
individually, would cause the trial balance totals to be and look for the amount.
unequal? B. Determine the amount and change any account to
A. a transaction was not posted make the trial balance correct.
B. a payment of PHP67 for insurance was posted as a C. Determine the difference between debits and credits,
debit of PHP76 to Prepaid Insurance and a credit of divide the amount by 2, look for the amount.
PHP76 to Cash D. Determine the difference between debits and credits,
C. a payment of PHP4,450 to a creditor was posted as a divide the amount by 9, if it divides evenly, look for a
debit of PHP4,500 to Accounts Payable and a credit of transposition or slide error.
PHP450 to Accounts Receivable
D. cash received from customers on account was posted 180. The purchase of supplies on account was recorded
as a debit of PHP720 to Cash and a credit of PHP720 to and posted as a debit to Supplies for PHP500 and a
Accounts Payable credit to Accounts Receivable for PHP500. The
correcting entry would include a:
176. Supplies purchased on account were incorrectly
recorded as Office Equipment. The correcting entry A. credit to Accounts Receivable for PHP500
would be B. credit to Accounts Receivable for PHP1,000
A. Supplies, debit; Office Equipment, credit. C. credit to Accounts Payable for PHP500
B. Accounts Receivable, debit; Supplies, credit. D. credit to Accounts Payable for PHP1,000
C. Office Equipment, debit; Supplies Expense, credit.
D. Supplies, debit; Accounts Payable, credit.

177. Which of the following errors will cause the trial

balance totals to be unequal?
A. posting the debit portion of a journal entry incorrectly
when the credit portion of the entry is correctly posted
B. failure to record a transaction or to post a transaction
C. recording the same transaction more than once
D. recording the same erroneous amount for both the
debit and the credit parts of a transaction