FIRST QUARTER EXAMINATION IN ABM 1

Fundamentals of Accountancy, Business and Management 1

NAME : SCORE:___________________
GRADE/SECTION : DATE:_____________________

I. TRUE OR FALSE : Encircle T if the statement is true, F if it is false.

T F 1. External Auditing deals with determining the operational efficiency whether the financial statements are
presented fairly and in compliance with accounting standard.
T F 2. Statements are presented fairly and in compliance with accounting standards.
T F 3. The financial statements of a company should always be prepared in accordance with the generally accepted
accounting principles.
T F 4. The financial reports that direct management’s attention are the examples of control Information.
T F 5. Accounting information are needed by the management only.
T F 6. Accounting Education “addresses all aspects of the accounting information” using a scientific method.
T F 7. Government Accounting deals with Taxes paid by government, the recording and of Inflow and outflow of
funds of the government.
T F 8. Internal Accounting is a service provided by public accounting.
T F 9. External users are individuals and organizations outside the company who want work Information about the
company.
T F 10. Managers, employees and owners are examples of external users.

II. MULTIPLE CHOICE – Read and understand the sentences and questions. Choose the correct
answer by writing the corresponding letter of the correct answer on your answer sheets:

11. Evaluate whether a branch of the business complies with the collection and deposit policy of the Company.
A. Internal Accounting C. External Accounting
B. Managerial Accounting D. Tax Accounting

12. Sometimes considered as the subset of Management Accounting.

A. Accounting Education C. Cost Accounting
B. Financial Accounting D. All of the above

13. Financial reports needed of Financial Accounting.

A. Statement of Financial Condition C. Statement of cash flows
B. Income statement D. All of the above

14. Analyze the feasibility of investing in a company to incur they can earn a reasonable return on their Investment.
A. Creditors B. Customers C. Investors D. Regulatory Authorities

15. What information will that Management need that can be answered by accounting?
A. Income B. Sales C. Available cash D. All of the above

16. What is the number of the possible owners of Corporations?

A. 1 B. 2 or more C. 5 D. 5 or more

17. Government agency assigned primarily to regulate Partnership.

A. CDA B. In limited capacity, DTI C. BIR D SEC
 18. What is the cause of termination of the Business of Partnership?
A. Death of any partnership C. Death of the owner
B. Withdrawal of a partner D. Both A & B

19. Enjoys certain tax exemption privilege.

A. Sole Proprietorship B. Corporations C. Cooperatives
D. Partnership

20. Simon wanted to start His dream sari-sari store business, The Capital needed is 50,000
PhP. He only have 25,000Php cash savings. Juan offer to invest t his 25,000PhP and
become part owner of the sari-sari store. Assuming he agrees, The form of business
organizations created is called?
A. Sole Proprietorship C. Corporations
B. Partnership D. Incorporations

III. Choose the correct answer below. Identify the type of business operations
provided:

A. Service B. Merchandising
C. Manufacturing D. Hybrid

21. Bakery
22. Combine raw materials in making loaves of bread, sells hot pandesal and caters
customers’ orders in a small coffee table servings of ensaymada and hot coffee.
23. Tutorial Services
24. Sells goods to customers
25. Sari-sari store
26. Supplies are used, no goods to be sold
27. Raw materials are available
28. ACE hardware
29. Water Refill Station.
30. Jollibee

IV. MATCHING TYPE – Match each term with its definition by writing the appropriate
letter in the blank:

A. Going concern principle E. Time period principle H. Monetary unit principle

B. Objectivity principle F. Cost Principle I. Accrual accounting principle
C. Matching principle G. Disclosure principle J. Conservatism principle
D. Materiality principle

31. All relevant information should be included in the financial reports.

32. In case of doubt, assets and income should not be overstated
33. Assume that the company will continue indefinitely.
34. All transactions should be supported by unbiased evidence.
35. Expenses should be recorded in the period when the revenue is generated.
36. Minimal costs incurred should be recorded as an expenses.
37. A Philippine company should report financial statement in pesos.
38. A barber who performs services for a client should record revenue.
39. Statement of Financial position should be recorded as of December 31, 2018.
40. A company that purchases furniture should record it at its acquisition price.
V. SHORT ESSAYS: Discuss briefly (one to two paragraphs) at the back of this sheet.
Read the prompt directions carefully. ( 5 points each )
41-45 Make an essay explaining why ACCOUNTING often referred to as a language of business?

46-50 Is accounting important to you? Does it affect your daily activities? How?

VI. SOLVE THE PROBLEM: BASIC ACCOUTING EQUATION

Following are the accounting transactions relating to Mr. P's business. Use the accounting equation to show
their effect on his assets, liabilities and capital.

1. Commenced business with a Capital of 50,000

ASSET LIABILITY OWNER’S EQUITY

2. Bought Machinery for cash 10,000

ASSET LIABILITY OWNER’S EQUITY

3. Purchased goods for cash 15,000

ASSET LIABILITY OWNER’S EQUITY

4. Purchased goods from A on credit 5,000

ASSET LIABILITY OWNER’S EQUITY

5. Sold goods for cash 10,000

ASSET LIABILITY OWNER’S EQUITY

6. Paid to A 2,000
ASSET LIABILITY OWNER’S EQUITY

7. Sold goods to B on credit 3,000 LIABILITY

ASSET LIABILITY OWNER’S EQUITY

8. Paid into Bank 6,000

ASSET LIABILITY OWNER’S EQUITY

9. Paid to A by cheque 1,000

ASSET LIABILITY OWNER’S EQUITY

10. Received from B a cheque for 2,000

ASSET LIABILITY OWNER’S EQUITY