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B ACTG111 Final Exam Solution Set B

The document contains a practice exam for accounting with 22 multiple choice questions covering topics like trial balances, adjusting entries, financial statements, and cost of goods sold. It provides the questions, possible answers, and asks students to select the correct response and show work. The exam is to be completed without additional materials and within the testing period.

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0% found this document useful (0 votes)
129 views20 pages

B ACTG111 Final Exam Solution Set B

The document contains a practice exam for accounting with 22 multiple choice questions covering topics like trial balances, adjusting entries, financial statements, and cost of goods sold. It provides the questions, possible answers, and asks students to select the correct response and show work. The exam is to be completed without additional materials and within the testing period.

Uploaded by

paguipo family
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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DE LA SALLE UNIVERSITY – DASMARINAS

COLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY


FINAL EXAMINATION IN B-ACTG111
1ST SEM, SY2022-2023
SET B

NAME: ______________________________________ YR & SECTION: _________ DATE: ________

INSTRUCTIONS:
· Write your name on both the questionnaire and the answer sheet.
· Read each item carefully before choosing your answer.
· On the answer sheet provided, shade the circle corresponding to the letter of your answer using a
permanent black ink pen.
· Use of pencil and friction pen is not allowed.
· Avoid erasures. Erasures in any form will invalidate your answer.
· You may write on the questionnaire and use the back page for your solution although supporting
computations are not required.
· Use of extra sheets as scratch paper is also prohibited. Use your own calculator. You are not allowed to
borrow calculator from your classmates nor use your cellphone as calculator.

1. S1: The trial balance is also known as the balance sheet.


S2: Data from a trial balance is used to prepare the income statement, statement of owner's
equity, and the balance sheet.
A. S1: False; S2: True
B. S1: True; S2: True
C. S1: False: S2: False
D. S1: True; S2: False

2. Which of the following would result in an error when preparing the Trial Balance?
A. Placing the balance of Prepaid Rent in the Credit column
B. Placing the Withdrawal account balance in the Debit column
C. Placing a Revenue account balance in the Credit column
D. Placing the Accounts Payable balance in the Credit column

3. For the year 2020, Malaya Company’s merchandise inventory has decreased by P64,000.
During the year, the purchase of inventory was P964,000 and the freight – in was P88,300. The
company received returns of P79,300.
How much is the Cost of Goods Sold of Malaya Company?
A. P973,000
B. P964,000
C. P1,037,000
D. P909,000

4. The Buyer and Seller agreed on the term FOB – Shipping Point, Freight Collect for the freight
cost of P34,000 on sales transactions of P980,000 on November 11, 2022. Which journal entry
will be recorded by the Seller?
A. Debit to Freight – in of P34,000
B. Debit to Freight – out of P34,000
C. Debit to Accounts Receivable of P34,000
D. No entry.

5. An example of cash inflow from investing activities is:


A. Cash investment received from owner. - Financing
B. Cash borrowed from the bank.- Financing
C. Advance payment made by customers. - Operating
D. Cash received from the disposal of old equipment - Investing

6. The Trial Balance of MacMac Computer Trading was not balanced. One of the errors discovered
by the Accountant is the posting of sales amounting to P28,000 debit. The Accountant should
correct the error by:
A. Prepare journal entry debiting sales by P28,000
B. Remove P28,000 from the debit side of the Sales account.
C. Remove P28,000 from the debit side and post P28,000 on the credit side of the Sales
account.
D. Post P28,000 on the credit side of the Sales account.

7. Mystery Co. received an interest-bearing note amounting to P400,000 as settlement of an


Accounts Receivable. The note has an interest rate of 12% per year payable in 150 days.
Mystery Co. discounted the notes to the bank for 18% after 30 days.
How much is the carrying amount of the note on the date of discounting?
A. P420,000
B. P400,000
C. P404,000
D. P408,000

8. Mystery Co. received an interest-bearing note receivable amounting to P400,000 as settlement of


an Accounts Receivable. The note has an interest rate of 12% per year payable in 150 days.
Mystery Co. discounted the notes to the bank for 18% after 30 days.
How much is the gain or loss on the discounting of notes?
A. Gain of P9,200
B. Loss of P9,200
C. Gain of P16,000
D. Loss of P16,000

9. The Company purchased merchandise inventory from Supplier X amounting to P340,000 at 40%
down payment and the balance of the account at 2/10, n/30. The transactions will be recorded in:
A. Purchase Journal only
B. Purchase Journal and Disbursement Journal
C. Disbursement Journal only
D. Disbursement Journal and General Journal

10. The term of shipment for the purchase of equipment from Strong Machines is FOB – Shipping
Point, Freight Prepaid amounting to P18,000. The transaction will be recorded in:
A. Purchase Journal only
B. General Journal and Disbursement Journal
C. Disbursement Journal only
D. General Journal only

11. The Company sent a credit memo to Customer Y for the return of damaged goods amounting to
P18,000. This transaction will be recorded in:
A. Purchase Journal and General Journal
B. General Journal and Disbursement Journal
C. General Journal only
D. Disbursement Journal only

12. S1: The post-closing trial balance shows the net income for the period just ended.
S2: Only permanent accounts appear on the post-closing trial balance.
A. S1: False; S2: True
B. S1: True; S2: True
C. S1: False: S2: False
D. S1: True; S2: False

13. The net income of Super Treasure Company for the year is P288,000. The owner’s total
withdrawal during the year was P260,000. No new capital contributions were made during the
year. Which of the following statements is with regards to the net effect on owner’s capital?
A. The owner’s capital increases by P288,000
B. The owner’s capital decreases by P260,000
C. The owner’s capital increases by P28,000
D. The owner’s capital will remain the same

14. In preparing the 10 – column worksheet, the net loss is indicated in the:
A. in the balance sheet credit column and the income statement debit column
B. in the balance sheet debit column and the income statement credit column
C. in the unadjusted trial balance credit column, the adjusted trial balance credit column, and the
balance sheet credit column
D. in the unadjusted trial balance debit column, the adjusted trial balance debit column, and the
balance sheet debit column

15. Which of the following statements is TRUE if the income statement debit column exceeds the
income statement credit column of a worksheet?
A. Owner, Capital increased during the period.
B. The company made a net profit.
C. An error was made.
D. The company incurred a net loss.

16. Which of the following is TRUE of a completed worksheet?


A. The total debits in the unadjusted trial balance column equal the total debits in the adjusted
trial balance column.
B. The total of all the debit columns is equal to the total of all the credit columns.
C. The total debits in the income statement column equal the total credits in the balance sheet
column.
D. The total debits in the income statement column equal the total debits in the balance sheet
column.

17. The Statement of Financial Position that lists the assets above the liabilities and owner's equity
sections is presented in what format?
A. Account form
B. Audited form
C. Report form
D. Unclassified form

18. Faiz and Darlene Co. establishes a petty cash fund amounting P2,000. The Custodian made
replenishment attaching petty cash vouchers of P380 for gasoline, P480 for supplies, P540 for
transportation expense. In the replenishment of the petty cash, one of the journal entries is:
A. Dr. Petty Cash Fund of P2,000
B. Dr. Petty Cash Fund of P1,400
C. Cr. Cash in Bank of P2,000
D. Cr. Cash in Bank of P1,400

19. On October 01, the Company established a petty cash fund with initial balance of P10,000. On
November 15, the Custodian prepared a memorandum requesting for an increase of P1,000 for
the petty cash fund. The Accountant conducted a cash count on the petty cash fund before
issuing the check. The results of the cash count are as follows:
Cash - P2,830
Petty cash vouchers - 5,800
Petty cash advances - 1,200

What was the result of the cash count?


A. The petty cash fund is short by P170
B. There is no shortage or overage on the petty cash fund
C. The petty cash fund is short by P1,150
D. The petty cash fund balance is P9,850

20. Below are the bank reconciliation accounts of Danny Corporation for the year ended December
31, 2021:
Reconciled balance per bank - P888,500
Outstanding checks - 294,300
Balance per bank - 943,700
How much is the deposit in transit?
A. P349,500
B. P239,100
C. P345,900
D. P231,900

21. The following information were taken from the books of Singubud Company:
Gross Profit 324,000
Cost of Goods Manufactured 834,000
Increase in Work - in – Process 28,000
Decrease in Finished Goods 44,000
Goods Placed in Process 976,000

What is the amount of Sales of Singubud Company?


A. P1,114,000
B. P1,130,000
C. P1,202,000
D. P1,186,000

22. The following information was taken from the books of Danny Corporation:
31-Dec-20 31-Dec-21
Direct materials 124,600 182,400
Work in process 345,500 298,600
Finished goods 794,500 678,300
Direct materials purchases 944,000
Direct labor payroll 620,000
Direct labor rate per hour 50.00 /hour
Factory overhead per direct labor hour 22.00 /hour
Selling and Administrative Expenses 284,000

What is the total manufacturing cost of Danny Corporation for the year ended December 31,
2021:
A. P1,894,600
B. P1,779,000
C. P1,790,200
D. P1,518,600
23. Which of the following will you expect to find in an income statement?
A. Accounts Payable
B. Sales Revenue
C. ABC, Capital
D. Accounts Receivable

24. John has two businesses: a travel agency and an internet shop. He must maintain two separate
sets of books to record the activities of his businesses. What accounting principle is being
highlighted?
A. Objectivity principle
B. Entity principle
C. Monetary principle
D. Cost principle

25. An increase in asset may be a result of:


A. A decrease in another asset
B. An increase in liability
C. An increase in owner’s equity
D. All of these

26. The company’s assets are P12,000,000 of which one third represents owner’s equity. How much
its total liabilities?
A. P8,000,000
B. P3,000,000
C. P6,000,000
D. P4,000,000

Solution: P12,000,000 x 1/3 = 4,000,000 (Owner’s Equity)


Accounting Equation: Assets = Liabilities + Owner’s Equity
P12,000,000 = liabilities + 4,000,000
Liabilities = 8,000,000

27. On January 13, 2022, ABC Company sold on account goods with selling price of ₱300,000 with
terms 2/10, n/30. Freight costs amounted to ₱5,000. The goods were received by the buyer on
January 15, 2022. ABC Company collected the receivable on January 23, 2022. How much net
cash did ABC received from the buyer if the terms are FOB destination, freight prepaid?
A. ₱305,000
B. ₱294,000
C. ₱299,000
D. ₱289,000
Solution: (P300,000 x 98%) = P294,000

28. On January 13, 2022, ABC Company sold on account goods with selling price of ₱300,000 with
terms 2/10, n/30. Freight costs amounted to ₱5,000. The goods were received by the buyer on
January 15, 2022. ABC Company collected the receivable on January 23, 2022. How much net
cash did ABC received from the buyer if the terms are FOB destination, freight collect?
A. ₱305,000
B. ₱294,000
C. ₱299,000
D. ₱289,000

Solution: (P300,000 x 98%) = P294,000 – P5,000 (freight collect) = P289,000


29. ABC Company accepted from a customer a ₱4,000,000, 90-day, 11% note dated August 31,
2022. On September 30, 2022, the entity discounted without recourse the note at 14%. However,
the proceeds were not received until October 01, 2022. What amount proceeds was received
from the note receivable discounting? Assume a 360-day calendar year.
A. ₱4,014,100
B. ₱4,110,000
C. ₱4,062,050
D. ₱3,966,150

Solution: P4,000,000 x 11 % x 90/ 360 = 110,000


Maturity value: 4,000,000 + 110,000 = 4,110,000
Discount: 4,110,000 x 14% x 60/360 = 95,900
Proceeds: 4,110,000 – 95,900 = 4,014,100

30. A note receivable or promissory note:


A. has the party to whom the money is due as the maker
B. cannot be factored to another party.
C. may be used to settle an accounts receivable.
D. is not a formal credit instrument.

31. What special journal is used to record a cash purchase transaction?


A. Sales journal
B. Purchase journal
C. Cash receipts journal
D. Cash disbursements journal

32. Under the periodic inventory system, the Purchases account is used to record:
A. only cash purchases of merchandise inventory
B. purchases of any asset on account or note payable
C. only purchases of merchandise inventory on account
D. purchases of merchandise inventory for cash or on account

33. The December 31, 2022 trial balance for ABC Company included the following: purchases,
P100,000; purchase returns and allowances, P10,000; transportation out, P2,000; ending
inventory was P9,000. What was the cost of goods sold for 2022?
A. P87,000
B. P83,000
C. P90,000
D. P81,000

Solution: Purchases P100,000 – Purchase Returns and Allowances, P10,000 – Ending Inventory
P9,000 = P81,000
Note: Transportation out is a selling expense. Only transportation in is included in the
computation of cost of goods sold.

34. A business received cash of P50,000 in advance for revenue that will be earned later. The cash
receipt entry debited cash and credited unearned revenues for P50,000. At the end of the period,
P30,000 is still unearned. The adjusting entry for this situation will:
A. Debit unearned revenues and credit revenues for P30,000.
B. Debit revenues and credit unearned revenues for P20,000.
C. Debit revenues and credit unearned revenues for P30,000.
D. Debit unearned revenues and credit revenues for P20,000.
35. An accounting firm began December with office supplies of P25,000. During the month, the firm
purchased supplies of P10,000. On December 31, supplies on hand totaled P8,000. Supplies
expense for the period is:
A. P27,000
B. P10,000
C. P35,000
D. P8,000

Solution: P25,000 + 10,000 – 8,000 = P27,000

36. The basic differences between the financial statements of a merchandising entity and a service
entity include the cost of goods sold section of the income statement and the:
A. Equity section of the balance sheet
B. Other income section of the income statement.
C. Inclusion of merchandise inventory on the balance sheet as a current asset.
D. Profit figure.

37. A P4,000 debit item is accidentally posted as a credit. The trial balance column totals therefore
will differ by:
A. P2,000
B. P0.
C. P4,000
D. P8,000

38. ABC Company purchased an equipment on October 1, 2022 for P110,000. At the time of
purchase, the equipment was estimated to have a useful life of 5 years and a residual value of
P10,000. Using the straight-line method, the amount of depreciation in 2022 is:
A. P5,500
B. P5,000
C. P22,000
D. P20,000

Solution: Cost- Residual Value = Depreciable Cost / Useful Life x Date


P110,000 – P10,000 = P100,000 / 5 years = P20,000 annual depreciation x 3/ 12 = P5,000

39. A company’s weekly payroll for a five-day workweek of P15,000 is paid on Fridays. Assume that
the last day of the month falls on Wednesday. Which of the following is the required adjusting
entry?
A. Debit Salaries Expense P9,000 and credit Salaries Payable P9,000.
B. Debit Salaries Expense P6,000 and credit Salaries Payable P6,000.
C. Debit Unpaid Salaries P9,000 and credit Salaries Payable P9,000.
D. Debit Salaries Payable P9,000 and credit Salaries Expense P9,000.

Solution: P15,000 / 5 days = P3,000 (salary per day) x 3 days (Monday- Wednesday) = P9,000

40. The petty cash fund is established in the amount of ₱18,750 and contains ₱11,250 in cash and
₱7,312.50 in receipts for disbursements when it is replenished. The journal entry to record
replenishment should include credit/s to the following account/s:
A. Petty cash, ₱7,312.50
B. Petty cash, ₱7,500
C. Cash in bank, ₱7,312.50; Cash Overage, ₱187.50
D. Cash in bank, ₱7,500

Solution: Journal entry


(DR) Expenses 7,312.50
Cash shortage 187.50
(CR) Cash in bank P7,500

41. A bank reconciliation is prepared monthly for the enterprise to:


A. Arrive at the correct cash balance
B. Correct book errors
C. Correct bank errors
D. Charge the accountant with fraud

42. The balance per company records is P450,000. Assuming the balance per bank is P500,000 and
the outstanding checks is P20,000, and the deposit in transit is P80,000. How much is the
adjusted cash balance?
A. P510,000
B. P560,000
C. P440,000
D. P460,000

Solution: Balance per bank P500,000 + Deposit in transit P80,000 – Outstanding Checks
P20,000 = P560,000

43. If the direct material for the period is P200,000 and the direct labor amounts to P350,000, and the
manufacturing overhead is P520,000. How much is the prime cost?
A. P550,000
B. P870,000
C. P1,070,000
D. P720,000

Solution: Prime costs = Direct material + Direct labor


P200,000 + P350,000 = P550,000

44. Assuming that the total manufacturing cost is P350,000 and the working process beginning is
P250,000, and the cost of goods manufactured is P200,000, how much is the work in process,
ending?
A. P100,000
B. P150,000
C. P300,000
D. P400,000

Solution: Total Manufacturing Cost + Working Process, beginning – Cost of goods manufactured
= Work in process, ending
P350,000 + P 250,000 – P200,000 = P400,000

45. What is the gross profit given the following data:


Net Income= 10,000; Cost of Goods Sold= 60% of Sales; Selling Expenses= 6% of Sales;
Administrative Expenses= 4% of Sales

A. 13,333
B. 33,333
C. 11,111
D. 0
Solution:
Sales 33,333.33 100%
Less: Cost of Sales 60%
Gross Profit 13,333.33 40%
Selling 6%
Admin Expense 4%
Net Income 10,000.00 30%

46. At the beginning of the year, the statement of financial position of South Company shows a total
asset of P2,360,000 and total liabilities of P625,500. During the year the total liabilities increased
by 30%, while the total Asset increased by 50%. How much is the additional capital made by the
owner?
A. 2,726,850
B. 3,540,000
C. 992,350
D. 0
Solution:
Beg End
Assets 2,360,000.00 3,540,000.00
Liab 625,500.00 813,150.00
Cap 1,734,500.00 2,726,850.00 992,350.00

47. B Company paid insurance premium for P60,000 for 12 months premium starting August 1, 2022.
Assuming the accounting period will end on December 31,2022, how much is the amount of
insurance expense that will appear in the statement of financial position?

48. A. 12,000 An
B. 35,000
C. 60,000
D. 0
adjusting entry to record depreciation expense for P30,000 was made at the end of the year.
Assuming the depreciation is from equipment depreciated at 10% with salvage value of P50,000.
How much is the cost of the equipment?
A. 250,000
B. 350,000
C. 30,000
D. 300,000
Solution:
Cost 350,000.00
Salvage Value 50,000.00
Depreciable Cost 300,000.00
x Depreciation Rate 10%
Depreciation Expense 30,000.00

49. D Company paid insurance premium for P120,000 for 12 months premium starting August 1,
2022 and was debited to insurance expense account. Assuming the accounting period ends
December 31. What would be the reversing entry on January 1, 2023?
A. Debit insurance expense for P50,000 and credit prepaid insurance for P50,000
B. Debit insurance expense for P70,000 and credit prepaid insurance for P70,000
C. Debit prepaid insurance for P50,000 and credit insurance expense for P50,000
D. Debit prepaid insurance for P70,000 and credit insurance expense for P70,000
Solution:
Insurance paid 120,000.00
X 7/12
Unused Portion 70,000.00

ITEMS 50 TO 52 ARE BASED ON THE FOLLOWING:


The ending owner’s capital of Ocean Company amounts to P100,000. The beginning assets and
liabilities are P100,000 and P60,000, respectively, and the owner contributed additional investment of
P10,000.

50. if the business incurred P15,000 operating expenses, the net income would be
A. 30,000
B. 40,000
C. 50,000
D. 60,000
Solution:
Beg End
Assets 100,000.00
Liab 60,000.00
Capital 40,000.00 100,000

Beg Cap 40,000.00


Investment 10,000.00
Net Income 50,000.00
Drawing
End Cap 100,000.00

51. How much is the ending total assets of the business?


A. 150,000
B. 160,000
C. 170,000
D. 180,000
Solution:
Beg End
Assets 100,000.00 160,000.00
Liab 60,000.00 60,000.00
Capital 40,000.00 100,000

52. If the business incurred P15,000 operating expenses, how much is the total revenue of the
business?
A. 35,000
B. 45,000
C. 55,000
D. 65,000
Solution:
Revenues 65,000.00
Expenses 15,000.00
Net Income 50,000.00

53. The beginning balance of accounts receivable of Forest Company was P499,950 net of
allowance for doubtful account. The accounts receivable as of year-end is P550,000 before
allowance for doubtful accounts. The allowance for doubtful accounts is estimated at 1% of the
accounts receivable. The doubtful accounts expense is
A. 550
B. 5,050
C. 5,500
D. 450
Solution:
Beg AR, net 499,950.00
AR, end 550,000.00
x estimate 1%
Req Bal - AFBD 5,500.00
Beg Bal - AFBD 5,050.00
Bad Debts Expense 450.00

54. Cloud Company issued a 90-day promissory note of P20,000, carrying an interest of 12% per
year. The promissory note is dated May 1, 2022 and the Statement of Financial Position date of
the business is June 30, 2022. The accrued expense is
A. 200
B. 400
C. 800
D. 1,600
Solution:
Face Value 20,000.00 May (31-1) 30
Interest rate 12% June 30
Time 60/360 Total 60
Accrued Expense 400.00

55. In preparing its bank reconciliation at December 31, 2022, Case Company has available the
following data:
Balance per bank statement, 12/31/2022 P38,075
Deposit in transit 5,200
Outstanding checks 6,750
Amount erroneously credited by bank to Case’s account 400
Bank service charges for December 75
The adjusted cash in bank balance at December 31, 2022 is
A. 36,525
B. 36,450
C. 36,125
D. 36,050
Solution:
Balance per bank 38,075.00
DIT 5,200.00
OC (6,750.00)
Bank Error (400.00)
Adjusted balance 36,125.00

56. Statement 1: Manufacturing business does not change the form of the products they purchased.
Statement 2: Total manufacturing cost is equal to the total of Direct Materials, Direct Labor, and
Factory Overhead.

A. Both statements are true


B. Both statements are false
C. First statement is true, second statement is false
D. First statement is false, second statement is true

57. Statement 1: Period costs are incurred based on the passage of time rather than based on the
manufacturing activity of the firm.
Statement 2: Product costs include Direct Materials, Direct Labor, Factory Overhead, and General and
Administrative Expenses.

A. Both statements are true


B. Both statements are false
C. First statement is true, second statement is false
D. First statement is false, second statement is true

58. Cost of goods manufactured will usually include


A. some period costs as well as some product costs
B. some costs incurred during the prior period (WIP, Beg) as well as costs incurred
during the current period (DM, DL, FOH)
C. only costs incurred during the current period
D. only direct labor and direct materials costs
ITEMS 59 TO 60 ARE BASED ON THE FOLLOWING:

59. The Cost of Goods Manufactured is


A. 796
B. 771
C. 736
D. 651
Solution:
Total manufacturing costs 711.00
WIP Beg 85.00
WIP End (25.00)
Manufactured 771.00

60. The Cost of Goods Sold is


A. 816
B. 796
C. 746
D. 711
Solution:
Manufactured 771.00
FG Beg 80.00
FG End (105.00)
Cost of Goods Sold 746.00

61. The following selected information pertains to White Co: direct materials, P80,000; indirect
materials, P30,000; factory payroll, P90,000 of direct labor and P25,000 of indirect labor; and
other factory overhead incurred, P32,000.
The Conversion Cost is _____
A. 177,000
B. 87,000
C. 257,000
D. 167,000
Solution:
Indirect materials 30,000.00
Indirect labor 25,000.00
Other FOH 32,000.00
Direct Labor 90,000.00
177,000.00

62. Which of the following statements concerning discount on notes payable is incorrect?

63. A. Discount on notes payable may be debited when an entity discount its own note with
the bank.
B. The discount on notes payable is a contra liability account which is shown as a
deduction from the notes payable
C. The discount on notes payable represents interest charge applicable to future
periods.
D. Amortizing the discount on notes payable causes the carrying amount of the liability
to gradually decrease over the life of the note.
What is the treatment of customers’ NSF checks?

64. A. Accounts receivable In


B. Prepaid expenses
C. Cash
D. Accounts payable
reimbursing the imprest cash fund, which of the following statements is true?
A. Cash is debited.
B. Petty cash fund is debited.
C. Petty cash fund is credited.
D. Expense accounts are debited.
65. Statement 1: A voucher register takes the place of the cash disbursements journal, and provides
a record of all authorized check payments.
Statement 2: In a voucher system, all expenditures to be paid are recorded first in the voucher
register.

A. Both statements are true


B. Both statements are false
C. First statement is true, second statement is false
D. First statement is false, second statement is true

66. Statement 1: The petty cash fund eliminates the need for writing numerous checks for
insignificant amounts of money.
Statement 2: The fluctuating fund system is more preferable over imprest fund system since it clearly
identifies the amount for which the custodian is responsible.

A. Both statements are true


B. Both statements are false
C. First statement is true, second statement is false
D. First statement is false, second statement is true

67. The petty cash fund of Fluffy Company consists of the following:
Currency and coins ---- P13,500
IOUS from officers and employees ----- P3,000
Unreplenished petty cash disbursements ----- P1,500 paid PCVs
Currency in envelope with the notation: “We are Ursula Cruz’ coworkers. Words may not be
adequate to express how sorry we feel. Please accept our heartfelt sympathies on the loss of
your loved one.” ----- P1,500
How much is the correct amount of petty cash fund to be reported on the statement of financial
position?

68. A. 15,000 The


B. 13,500
C. 18,000
D. 19,500
cash ledger of Sky Trading showed a balance of P160,000 on December 31, 2022. Additional
information regarding this account are as follows: AP, CIB
· A check of P13,000 was dated and recorded on December 31, 2022 but was delivered to the
payee on January 5, 2023. Unreleased check -à not yet a payment; part of the cash
· A check for P5,000 dated December 15, 2022, payable to a supplier was recorded and released
to the payee on December 16, 2022 was recorded in the books as P15,000. AP, CIB 15,000 -à
5,000

What is the correct cash in bank balance to be reported in Sky’s December 31, 2022 statement of
financial position?

69. A. 137,000 The


B. 163,000
C. 157,000
D. 183,000
account of Sun Inc. provided the following data in reconciling the April 30 cash in bank balance:
Balance per bank statement ---- P130,350
Balance per books ---- P85,000
Bank service charge ---- P2,000
Deposit in transit ---- P49,000
Outstanding checks ---- P17,650
Note collected by the bank including P11,200 interest (Sun Inc. not yet informed) ---- P136,000
Check drawn by Son Inc. erroneously charged by bank to Sun’s account ---- P54,600
A transposition error was made in recoding a sale and deposit in the sales journal and cash
receipts journal in April:
Correct amount ---- P13,658
Recorded as ---- P16,358
What is the adjusted cash balance on April 30?

70. A. 221,700 The


B. 216,300
C. 107,100
D. 161,700
business is using special journals aside from the general journal. The general journal is used to
record:
A. Cash refund for goods returned – CDJ
B. Credit memo for goods returned by customers
C. Purchases of supplies for cash – CDJ
D. Cash withdrawal of the owner – CDJ
ITEMS 71 TO 78 ARE BASED ON THE FOLLOWING:
The following are the transactions entered into by Star Company during the month of November.
Star Company uses special journals in recording transactions.
Nov 3 ---- Received P50,000 additional investment from the owner.
Nov 4 ---- Purchased P60,000 equipment, 40% down payment and the balance on account.
Nov 6 ---- Sold P100,000 merchandise for cash.
Nov 10 ---- Purchased merchandise on account, P30,000.
Nov 12 ---- Collected P40,000 accounts receivable and granted P400 cash discount.
Nov 15 ---- Paid P80,000 to suppliers for merchandise purchased on account and received P800
cash discount.
Nov 20 ---- Paid P75,000 salaries (the amount is before deducting P3,000 withholding tax and
P2,000 SSS premium).
Nov 25 ---- Sold P60,000 merchandise and received promissory note from the customer for the
same amount.
Nov 28 ---- Paid P5,000 as personal drawing of the owner.

71. The total of the Accounts Receivable Dr column for November in the Sales Journal is

72. A. 100,000 The


B. 160,000
C. 40,000
D. 0
total of the Accounts Payable Cr column for November in the Purchases Journal is

73. A. 80,000 The


B. 30,000
C. 110,000
D. 0
total of the Cash Dr column for November in the Cash Receipts Journal is

74. A. 190,000 The


B. 249,600
C. 189,600
D. 0
total of the Cash Cr column for November in the Cash Disbursements Journal is

75. A. 178,200 The


B. 184,000
C. 179,000
D. 214,200
total of the Sundry Dr column for November in the Cash Disbursements Journal is
76. A. 5,000 The
B. 109,000 net
C. 104,000
D. 184,000
cash flows from investing activities for November is

77. A. 60,000 Used The


B. 60,000 Provided net
C. 24,000 Used
D. 24,000 Provided
cash flows from operating activities for November is

78. A. 9,600 Provided The


B. 9,600 Used net
C. 139,600 Provided
D. 139,600 Used
increase (decrease) in Cash for November is

79. A. (9,600) In
B. 9,600
C. 11,400
D. (11,400)
recording transactions

80. A. Assets, expenses, and capital accounts are debited for increases
B. Liabilities, revenue, and drawing accounts are debited for increases
C. Assets, expenses, and drawing accounts are debited for increases
D. The word “debit” means increase and the word “credit” means decrease
Which of the following documents does not initiate an entry to be made in the accounts?

81. A. Sales invoice


B. Purchase invoice
C. Purchase order no exchange of values yet
D. Credit memorandum
When special journals are used, adjusting, closing and reversing entries are generally recorded in the

82. A. Cash disbursements journal A


B. Cash receipts journal
C. General journal
D. Purchases journal
prepaid expense can best be described as an amount

83. A. Paid and currently matched with earnings If


B. Paid and not currently matched with earnings
C. Not paid and currently matched with earnings
D. Not paid and not currently matched with earnings
revenues are greater than expenses, the income summary account will be closed by

84. A. Crediting income summary and debiting capital


B. Debiting income summary and crediting capital
C. Debiting cash and crediting income summary
D. Debiting income summary and crediting cash
Which of the following will increase the gross profit of the merchandising business?
A. Increase in purchase discount
B. Increase in freight in
C. Decrease in freight out
D. Decrease in purchase returns
85. C purchased merchandise for P5,000 and paid P200 for freight, FOB destination, collect. The
merchandise was sold at 120% of cost. The gross profit is
A. 1,000
B. 1,040
C. 6,000
D. 6,240
Sales ( 120% x 5,000) – Cost of Goods Sold (5,000) = Gross Profit of

86. Division of profit is based on the agreement of every member of the entity and must conform to
the agreement between/among them. This agreement is followed by

87. A. Partnership A
B. Corporation
C. Sole proprietorship
D. Cooperatives
stakeholder who is interested in the retail selling price, the contents, and the weight of the
product. He is also interested in the name of the manufacturer and the sources of ingredients.
Who is he?
A. Customer
B. Government
C. Management
D. Supplier

88. Facts and Opinions owned by A. Villanueva is engaged in the surveying business. His clients are
composed of radio and TV stations, and marketing divisions of different companies in the
Philippines. His engagement is on a per commission basis to conduct a comprehensive survey
on popularity of TV and radio programs as well as the customers’ acceptance of a certain
product. During pre-election time, some of his clients are political parties who commission the
survey of their candidates. His ledger reveal the following balances.
Cash in bank P80,000
A. Villanueva, Capital - Beginning 5,000,000
Net Loss for the period 2,200,000
A. Villanueva, Drawing 1,800,000

The ending capital balance is


A. 1,000,000
B. 2,800,000
C. 5,400,000
D. 9,000,000
Solution: 5M – 2.2 M – 1.8 M

89. Fines Company presented the following ledger balances ending December 31, 2022: Service
Income, 226,407; Cash, P94,098; Prepaid Insurance, P5,000; Supplies, P2,400; Furniture &
Equipment, P260,000; Accrued Expense, P12,340; Accumulated Depreciation, P12,000; Interest
Receivable, P34,000. How much is the total non-current asset for the period?
A. 135,498
B. 395,838
C. 147,838
D. 248,000
Solution: Furniture and Equipment 260,000 Less Accumulated Depreciation P12,000
90. Angel Company presented the statement of financial position on October 5, 2022 for the month of
September. In that statement, accounts are presented with ledger balances such as: Cash in
bank and other current assets of P4,500,000, Accounts Payable of P980,000, long-term notes
payable of P550,000, Mortgage Payable of P680,000 to be paid within the year, and non-current
asset of P758,000. How much is the amount of total capital?
A. 2,210,000
B. 5,258,000
C. 3,048,000
D. 0
Solution:
Cash and Other CA 4,500,000.00
NCA 758,000.00
AP (980,000.00)
LT NP (550,000.00)
MP (680,000.00)
Capital 3,048,000.00

91. Sunshine Services presented the following accounts ending December 31, 2022: Sale of service,
P240,480; Cash, P34,698; Prepaid insurance, P78,900; Supplies, P2,000; Furniture and
equipment, P160,000; Salaries expense, P12,840; Depreciation expense, P12,580; Rental
expense, P13,500; and Utilities expense, P12,400. If the owner withdrew P24,000 from the
business, how much is the amount of net income for the period?
A. 240,480
B. 201,560
C. 177,560
D. 189,160
Solution:
Sale of service 240,480.00
Salaries Expense (12,840.00)
Depreciation (12,580.00)
Rent (13,500.00)
Utilities (12,400.00)
Net Income 189,160.00

92. Land was acquired at a cost of P150,000 in 2020. In June 2022, its current market value was
P300,000 when this property was invested by Victor in a real estate business. Attached to the
property was an outstanding mortgage payable of P20,000. If mortgage was assumed by the real
estate business, Victor, Capital will be credited for
A. 280,000
B. 300,000
C. 130,000
D. 150,000
Solution: Market value of P300,000 – Mortgage of P20,000 = P280,000

93. The company issued a note for an overdue supplier’s account. Which of the following procedure
is correct?
A. the amount will be posted to the debit side of the customer’s card
B. the amount will be posted to the credit side of the supplier’s card
C. the note is credited in the general journal by a debit to accounts payable
D. this will be posted to the accounts payable general ledger on the credit side
94. During profitable periods, the Statement of Income pair of columns in the Worksheet would have

95. A. equal totals


B. none of the choices
C. debit total lesser than credit total
D. debit total greater than the credit total
Raphael Forwarders Company received P19,965 in advance for a work to be rendered in three
months. The amount was credited for service income account. If the amount is received on
November 1, 2022, how much is the earned and unearned income respectively as of December
31, 2022?
A. 19,965 and 0
B. 6,665 and 13,310
C. 13,310 and 6,665
D. 0 and 19,965
Solution:
Earned (2/3) 13,310.00
Unearned (1/3) 6,655.00

96. DePaulo Company discounted its own 60-day, 10% promissory note for P240,000 on November
1, 2022 from Royal National Bank. Interest deducted was charged to interest expense. How
much is the interest expense to be applied in 2023?

97. A. 4,000
B. 24,000
C. 0
D. 2,000
Supplies on Hand at the beginning of the year were P3,500 for Joy Company. During the year, the
company made purchases of P5,000. Physical counting showed P2,900 worth of supplies
remained on hand at the end of the year. How much was the supplies expense for the year?
What is the account to be credited?
A. 5,600 / Supplies on Hand
B. 5,600 / Supplies Inventory
C. 600 / Supplies on Hand
D. 2,900 Supplies Inventory
Solution:
Supplies Beg 3,500.00
Purchases 5000.00
Supplies End (2,900.00)
Supplies Expense 5,600.00

98. Als Company purchased goods for P205,000, under the terms less: 5%, 2/10, n/30, FOB
Destination, freight prepaid, P3,000. Three days after the purchase, the buyer returned P2,000
worth of goods which was acknowledged by the seller upon acceptance by issuing a credit
memorandum. The buyer paid the account within the discount period. The final settlement of the
buyer if he paid within the discount period amounts to
A. 198,940
B. 190,855
C. 188,993
D. 188,895
Solution:
Purchases 205,000.00
x (100% - 5%) 95%
Invoice Price 194,750.00
PRA 2,000.00
Amount subject to disc 192,750.00
x (100% - 2%) 98%
final settlement 188,895.00

99. SCH Company purchased goods for P25,000, under the terms: 2/10, n/30, FOB destination,
freight prepaid, P300. Seven days after the buyer returned P2,000 worth of goods which was
acknowledged by the seller upon acceptance by issuing a credit memo. the buyer paid the
account within the discount period. The purchase is VAT inclusive. How much is the amount
debited to purchases account?
A. 25,000
B. 23,000
C. 20,535.71
D. 22,321.43
Solution:
Purchases 25,000.00
Divided by 1.12
Debit to purchases 22,321.43

100. Zita Company bought goods for 400 units at P17.25 per unit. If the beginning inventory is
230 units at P17.25 per unit, how much is the gross profit if the company sold 234 units for P25
per unit?
A. 1,813.50
B. 3,967.50
C. 6,831
D. 3,967.50
Solution:
Sale (234 x 25) 5,850.00
Cost (234 x 17.25) (4,036.50)
Gross Profit 1,813.50

2 Timothy 2:15
Do your best to present yourself to God as one approved, a worker who does not need to be
ashamed and who correctly handles the word of truth.

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