De La Salle University

Accountancy Department

ACCTBA1 - QUIZ #2

Name:__________________________________ Section:_____ Date:______________ Score:______

General Instruction: Answer the theory questions on the questionnaire provided and show on a 10 column
worksheet all computations in problem solving in good accounting format. NO CHEATING!!!

Part I. Encircle letter T if the statement is correct or F if the statement is incorrect. (1 pt. each)
T F 1. Revenue is generally recognized under accrual accounting, at the point when services
are rendered to the clients.
T F 2. Equity is the residual interest in the assets of the entity that remains after deducting all
its liabilities.
T F 3. The statement of changes in equity shows the events and transactions that took place
during the reporting period that affects equity.
T F 4. Income Statement presents the summary of the entity’s revenue and expenses for a
specific period. This shows the performance of the entity as to its profitability.
T F 5. If total revenues exceed total expenses, the result of operation is reported as net
income. If total expenses exceed total revenues, it is reported as net loss.
T F 6. All items of income and expenses recognized in the period shall be included in profit
or loss.
T F 7. Bookkeeping is the recording of routine transactions from day to day.
T F 8. External users are individuals or enterprises that have financial interest in the business
but they are not involved in the day to day activities of the organization.
T F 9. Owner’s equity is also a residual interest because the owner gets only what is left after
the creditors have been satisfied in full.
T F 10. Items in the Statement of Financial Position should be presented in such a way that
the current and noncurrent assets are clearly distinguished.
T F 11. Expenses are the costs of services used up in the process of earning revenue.
T F 12. Manufacturing businesses are those who buy raw materials and convert them into
finished products.
T F 13. The information contained in the Financial Statements must be relevant to the needs
of the users. Information has the quality of relevance when it influences the
economic decision of users.
T F 14. Users must be able to compare the Financial Statements of an entity in order to
evaluate the economic trends in the industry and performance of different
enterprise in the same industry.
T F 15. A complete set of Financial Statement comprises of Statement of Financial Position,
Income Statement, and Statement of Changes in Equity, Statement of Cash Flows
and
Notes to Financial Statements.

Part II. For each of the following transaction listed below, indicate in the second column what are the
accounts affected and write in the third column I for increase and D for decrease if the accounts affected
is increased or decreased. (2 pts each number)

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 Transactions Accounts affected I/D

Part 1. Borrowed money from a financing III.

For institution, amount received is net of each
of service charges. the
2. Purchased computer equipment on account
and issued a 2-year promissory note.
3. The owner, Mr. Lee Khod, withdrew
supplies in the business for personal use.
4. Paid advertising expenses covering one
year period starting next month.
5. Owner, Mr. Lee Khod invested additional
cash in the business.

6. Purchased various supplies on account.

7. Paid half of the accounts due to supplier.

8. Collected partial payment from a client
from services rendered last month.
9. Received cash from a customer for
services to be rendered next month.
10. Rendered professional Services,
receiving cash for 50% of fee and the
balance, 30 days note.
independent transaction given, determine whether the account named in parentheses is to be debited or
credited. Write on the space provided the word DEBIT or CREDIT for your answer. (1 pt each)
____________ 1. Borrowed money from a bank (Notes Payable), P120,000.
____________ 2. Received cash from customers in payment of account, P10,000 (Accounts Receivable).
____________ 3. Paid Meralco for the electric bill consumed for the month, P5,000 (Utilities Expense).
____________ 4. A customer was billed P8,500, and issued 30-day promissory note. (Notes Receivable).
____________ 5. Collected in full the note issued by a customer, P15,000 (Notes Receivable).
____________ 6. The owner withdrew P49,562 in payment of his son’s tuition fee (Cash).
____________ 7. A customer deposited P30,000 on Company’s bank account representing payment for
future services to be render (Unearned Service Revenue).
____________ 8. Issued a 30-day note in full settlement of an account with a supplier. (Accounts
Payable).
____________ 9. Paid P15,000 as a rental for the office space (Rent Expense).
____________ 10. Cash proceed from a short term loan, P20,000 (Loans payable).

Part IV. Below are the possible effects of business transaction for a period. For each transaction, write the
letter of the correct answer on the space provided using capital letter. (1 pt each)

A. Increase in asset and increase in liability

B. Decrease in asset and decrease in liability
C. Increase in one asset and decrease in another asset
D. Increase in asset and increase in equity
E. Increase in liability and decrease in equity.
F. Decrease in asset and decrease in equity
G. Decrease in asset, decrease in equity and increase in liability
H. Increase in one asset, increase in another asset and increase in equity
I. Increase in one asset, decrease in another asset and increase in liability
J. Increase in asset, decrease in another asset and increase in equity

_____1. Borrowed money from a bank, amount received in net of service charged.
_____2. Purchased office equipment for cash.

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_____3. Rendered services receiving 90-day note.
_____4.Expenses were incurred and paid.
_____5.Owner invested cash.
_____6.Billed the client for services rendered.
_____7. Payment of accounts payable.
_____8. Collected a partial payment from a client.
_____9. Withdrawal of the owner.
_____10. Recorded the bill from MERALCo. No payment is made yet.
_____11. Rendered professional services, receiving cash for 50% of the fee and the balance, 30-day note.
_____12. Collected customer’s note in full with interest.
_____13. Purchased office equipment, paying 20% down payment and the balance to be paid after three
months.
_____14. Received cash representing proceeds of bank loan.
_____15. Paid account to a supplier in full.

Part V. Journalizing of business transactions. On a separate 10-column worksheet, journalize the

following business transaction occurs for Miekoy Accounting Firm for the month of March 2012.Observe
the proper use of worksheet. (1 pt each)

Miekoy Accounting Firm started its operation on January 2012, during the month of March, the following
transactions occurred:

March Transactions
The owner, M. Din invested additional P100,000 and office building with cost of P600,000 and
fair value of P500,000 in the accounting firm. The building was used as collateral with existing
P50,000 liability before investing in the business. Mr. Din will pay P50,000 and the business will
1 not assume the collateral.
1 Purchased office supplies worth P20,000. Paid 20% and issued a 3-month note for the balance.
5 Purchased additional office supplies on account, P10,000 payable after 10 days.
8 Invested an old computer with original cost of P24,500 and current fair value of P19,250.
Purchased 2 units of computer with printer for P25,000 each. Terms: 30% down payment and
9 balance on account due after 50 days.
12 Rendered accounting services for cash, P25,000 and P35,000 on account.
15 Hired additional office staffs with monthly pay of P6,500 that will start on March 20.
Paid salaries of office staffs, P15,000 and issued a 1-month promissory note for the accounts due
15 today.
16 Paid Water bills, P3,500 and received a telephone bills, P2,000.
18 Purchased another unit of computer, P26,000 for cash.
20 Collected P10,000 from customer from services rendered last month.
23 A short term loan from bank was granted in the amount of P50,000 less P5,000 service charges.
M. Din issued 1-year promissory note.
Rendered accounting services for the amount received from the customer two (2) months ago,
25 P35,360.
28 M. Din withdrew cash of P20,000 to pay the tuition fee of his son.
30 Paid salaries of the employees, P14,000.

Bonus Part. Using the information in Part V. On a 10-column worksheet, show your computations and
write your final answer on the space provided for the following: (2 pts. each)

1. How much is the total current assets of the business? P___________________.

2. How much is the total non-current assets of the business? P____________________.
3. How much is the total current liabilities of the business? P___________________.
4. How much is the net income or loss for the period? (indicate net income or loss)
P____________________.
5. How much should be the balance of M. Din, Capital to be reflected in the Statement of Financial
Position as of March 30, 2013? P_____________________.

GOOD LUCK!!!!

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 END OF EXAMINATION
“Some chances don’t come our way unless we create them”


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