Instruction: Choose the correct

answer.

1. Peping Service Center was

established as a single
proprietorship business. The
following financial events
transpired in 2023.

June 30 – Invested 5,000,000

 A. Cash 5,000,000
Revenue 5,000,000
B. Cash 5,000,000
Capital 5,000,000
C. Cash 5,000,000
Withdrawal 5,000,000
D. Capital 5,000,000
Cash 5,000,000

2. July 12 – Acquired machinery 300,000 with

estimated useful life of 5 years
A. Cash 300,000
Machinery 300,000
B. Machinery 300,000
Accounts Payable 300,000
C. Machinery 300,000
Cash 300,000
D. Machinery 300,000
Capital 300,000
3. August 17 Acquired office supplies on
account 50,000

A. Office Supplies Expense 50,000

Office Supplies 50,000
B. Office Supplies 50,000
Capital 50,000
C. Capital 50,000
Accounts Payable 50,000
D. Office Supplies 50,000
Accounts Payable 50,000
4. September 23 Rendered services. 100,000
A. Accounts Receivable 100,000
Revenue 100,000
B. Cash 100,000
Revenue 100,000
C. Cash 100,000
Capital 100,000
D. Accounts Receivable 100,000
Capital 100,000
5. October 29 Rendered services on account
150,000
A. Accounts Receivable 150,000
Revenue 150,000
B. Cash 150,000
Revenue 150,000
C. Cash 150,000
Capital 150,000
D. Accounts Receivable 150,000
Capital 150,000
6. November 30 Paid the following salaries
25,000, rent 12,000
A. Cash 37,000
Salaries Expense 25,000
Rent Expense 12,000
B. Capital 37,000
Salaries Expense 25,000
Rent Expense 12,000
C. Salaries Expense 25,000
Rent Expense 12,000
Cash 37,000
D. Salaries Expense 25,000
Rent Expense 12,000
Cash 25,000
Capital 12,000
7. Dec 1 Received 200,000 for services to be
rendered starting January 1, 2024.
A. Accounts Receivable 200,000
Revenue 200,000
B. Revenue 200,000
Unearned Revenue 200,000
C. Cash 200,000
Revenue 200,000
D. Cash 200,000
Unearned Revenue 200,000
8. Dec 29 Paid utilities 30,000.
A. Utilities Expense 30,000
Cash 30,000
B. Utilities Expense 30,000
Utilities Payable 30,000
C. Cash 30,000
Utilities Expense 30,000
D. Utilities Expense 30,000
Capital 30,000
9. Paid 1 month advance 1 month deposit rent
100,000
A. Rent Expense 50,000
Prepaid Rent 50,000
Cash 100,000
B. Prepaid Rent 100,000
Cash 100,000
C. Cash 100,000
Rent Expense 100,000
D. Prepaid Rent 50,000
Cash 50,000
10. Owner took money from the business for
personal vacation 10,000

A. Cash 10,000
Capital 10,000
B. Capital 10,000
Cash 10,000
C. Salaries Expense 10,000
Cash 10,000
D. Cash 10,000
Accounts Payable 10,000
Classify and / or determine the
effect or necessary adjustment
11. Coins and Currency
A. Inventory
B. Cash
C. Notes Receivable
D. Land
12. Goods for sale
A. Inventory
B. Manufacturing cost
C. Cost of Sales
D. Good in process
13. Collectibles evidenced by a note
A. Inventory
B. Notes Payable
C. Notes Receivable
D. Notes Receivable – non-interest bearing

14. An asset that is not depreciable

A. Inventory
B. Machinery
C. Notes Receivable
D. Land
15. Loan with collateral
A. Bonds Payable
B. Notes Payable
C. Accrued Expense
D. Mortgage Payable

16. Payables by issuing a note

A. Unearned Revenue
B. Notes Payable
C. Accrued Expenses
D. Mortgage Payable

17. Expenses not paid as of year end and

shall be
A. Unearned Revenue and adjusted as
earned
B. Notes Payable and interest must
computed and recorded
C. Accrued Expenses and must deducted
from income
D. Mortgage Payable and must be
reclassified

18. Money received for services

to be rendered in the future
A. Unearned Revenue
B. Notes Payable
C. Accrued Expenses
D. Mortgage Payable

19. Basic Accounting Equation is

A. Assets = Liabilities + Capital
B. Assets – Liabilities = Capital
C. Assets – Capita l= Liabilities
D. Assets + Liabilities + Capital

20. The main output in recording

activity is
A. Journal entry
B. Adjusting entry
C. Closing entry
D. Reversing entry

21. Posting is performed in

A. The journals
B. Ledger
C. Worksheet
D. Trial Balance

22. Real Accounts include

A. Salaries expense, withdrawal,

income summary
B. Service income, cash,
inventory
C. Prepaid expenses, cash,
accounts payable
D. Notes Payable, cash, service
income

23. The process of adding all

financial information vertically
on the same column
A. Kiting
B. Footing
C. Summarizing
D. Crossfooting

24. Journal entries must

A. Have 1 debit entry and 1
credit entry
B. Have 2 debit entries and 1
credit entry
C. Have 1 debit entry and 2
credit entries
D. Have more debit entries and
more credit entries

25. Trial Balance is

A. A financial statement
B. A tool
 C. A required step in accounting
D. An audit report

26. When debit and credit

balances are equal. The following
statements are correct except
A. It means your work is
absolutely correct
B. Journalizing may be correct
C. Posting may be correct
D. Worksheet may be correct

27. In doing accounting, erasure

or correction is

A. Not allowed as a rule

B. Allowed as long as it is proper
C. Shall use correction tape
always
D. None of the above

28. A journal entry that is

composed of 1 debit and 1 credit

A. Simple entry
B. Single entry
C. Compound entry
D. Multiple entry

29. Failure to adjust revenue at

year end will have
A. Understatement of unearned
revenue and revenue
B. Overstatement of unearned
revenue and revenue
C. Overstatement of unearned
revenue and understatement of
revue
D. Understatement of revenue
and capital

30. Daily salary is 2,000. As of December

31, 2023 , 4 days of work have not been
paid, the adjusting entry is
A. Salaries Expense 2,000
Accrued Salaries Payable 2,000
B. Capital 2,000
Salaries Expense 2,000
C. Salaries Expense 8,000
Salaries Payable 8,000
D. Accrued Salaries 8,000
Salaries Expense 8,000

31. Office supplies at the start of the year

was 27,000. Supplies left as of December 31
is 5,000. The required adjustment is

A. Office Supplies 5,000

Office Supplies Expense 5,000
B. Office Supplies Expense 22,000
 Office Supplies 22,000
C. Prepaid Expenses 22,000
Office Supplies 22,000
D. Office Supplies 5,000
Capital 5,000

32. On February 1, 2023 Land, Building,

Machinery with 10 years life and Equipment
with 5 years life were purchased on a lump
sum amounting to 5,000,000. Fair market
values are 4,000,000, 3,000,0000, 2,000,000
and 1,000,000 respectively. Salvage values
are machinery 100,000 and equipment
 200,000. How much depreciation for
building?

A. 150,000
B. 75,000
C. 300,000
D. None of the above

33. Depreciation for Land will be

A. 200,000
B. 100,000
C. 50,000
D. None of the above

34. Depreciation for Machinery

will be

A. 100,000
B. 200,000
C. 90,000
D. None of the above

35. Depreciable cost for

Equipment will be

A. 800,000
B. 160,000
C. 60,000
 D. 320,000

36. On Sept 23, 2023, Aliayh Service Center

received 240,000 for services to be rendered
immediately for 12 months . It is policy to
consider earned to earn 1 month for services
rendered beyond 15 days. At year ending
balance of unearned revenue will be

A. 60,000
 B. 120,000
C. 180,000
D. None of the above

37. Pepito Repair Center identified that 2022

unearned revenue was not adjusted as earned
amounting to 25,000. Entry for 2023 will be
A. Unearned revenue 25,000
Revenue 25,000
B. Capital 25,000
Revenue 25,000
C. Unearned Revenue 25,000
Capital 25,000
 D. Receivable 25,000
Capital 25,000

38. Which of the following is incorrect

about adjusting entries?

A. to come up with the correct ending

balances
B. shall be done at the end of the year
C. it is grounded on the movement of cash
receipts and disbursements
D. it is made up of at least 1 debit and 1
credit
39. Closing entries will

A. Close all nominal accounts

B. Close all real accounts
C. Close all balance sheet accounts
D. Close all permanent accounts
40. LMR Service Place is earning from a
note receivable with an interest rate of 12%.
The note was received on May 1, 2023. How
much is the note received if the interest
earned is 17,500 for the year?

A. 1,000,000
B. 527,000
C. 218,750
D. 200,000