Abm

Question 1

1. Which of the following statement is correct?
   Statement 1: When a company incurs persistent losses from operation, the going
   concern concept is abandoned.
   Statement 2: Materiality of an item in the financial statement is a matter of
   professional judgement on the part of the accountant.
   A. Statement 1 only
   B. Statement 2 only
   C. Both Statement 1 and 2
   D. None of the statements are correct.
2. Which principle of accounting that assets are usually valued?
   A. cost principle
   B. matching principle
   C. materiality principle
   D. full disclosure principle
3. When to incur electricity expense?
   A. upon the receipt of billing statement
   B. upon payment of the electricity bill
   C. when the period that the electricity used
   D. all of the above
4. Kahusayan Art Works and Pagkakaisa Manpower Agency is a distinct and a
   separate entity. What accounting concept and principle applied?
   A. matching principle
   B. going-concern concept
   C. time-period concept
   D. business entity concept
5. On January 5, 2020, Johannah received a billing statement from Tower Realty
   for the unpaid monthly rental for the month of November 2019. She issued checks
   on January 15, 2020 for her payment. When does the rental expense recognized,
   using the accrual basis concept?
   A. November 30, 2019
   B. December 31, 2019
   C. January 05, 2020
   D. January 15, 2020

Answer 1

1. C
2. A
3. C
4. D
5. A

Question 2

1. How to compute the value of owner’s equity?
   A. Assets + Liabilities
   B. Assets – Liabilities
   C. Liabilities + Assets
   D. Liabilities = Assets
2. What represents the claim of the creditor over the asset of the business?
   A. Accounting equation
   B. assets
   C. liabilities
   D. owner’s equity
3. What refers to the right hand of the account?
   A. debit side
   B. credit side
   C. debit entry
   D. credit entry
   For item numbers 4 and 5: Mr. Sikwa Te deposited ₱1,000,000.00 cash to BPI
   for an investment of his new snack-inn business.
4. How much is the assets of Mr. Sikwa Te?
   A. P500,000
   B. P1,000,000
   C. P1,500,000
   D. -0-
5. How much is the value of owner’s equity?
   A. ₱500,000.00
   B. ₱1,000,000.00
   C. ₱1,500,000.00
   D. -0-
6. Which statement is correctly stated?
   Statement I – If the owner has no obligation at all, the owner has the sole right
   of the assets.
   Statement II – Owner’s equity tells how much the claim of the creditor.
   A. Statement I only
   B. Statement II only
   C. Both Statements I and II
   D. None of the above statements.
7. If the company bought an equipment on account, what will happen to the assets?
   A. increased
   B. decreased
   C. unbalanced
   D. not affected
8. In an expanded accounting equation, the withdrawal of the owner’s capital, will
   decrease the-
   A. assets
   B. liabilities
   C. owner’s equity
   D. net income
9. How to compute the net profit?
   A. Assets + Liabilities
   B. Assets - Liabilities
   C. Revenue + Expenses
   D. Revenue - Expenses
   10.If the expenditure is greater than the revenue, what will be the result of the
   income statement?
   A. Net Profit
   B. Net Loss
   C. Unbalance
   D. Break-Even

Answer 2

1. B
2. C
3. B
4. B
5. B
6. A
7. A
8. C
9. D
10. B

Question 3

1. Which of the following account is differently classified from the others?
   A. accrued income
   B. accounts receivable
   C. prepaid expenses
   D. accumulated depreciation
2. Which of the following is an example of depreciable assets?
   A. cash
   B. copyright
   C. unused supplies
   D. machinery equipment
3. Which of the following is not a nominal account?
   A. assets
   B. liabilities
   C. owner’s equity
   D. income
4. What type of assets that has no physical substance?
   A. current assets
   B. tangible assets
   C. intangible assets
   D. non-current assets
5. Statement A: Income and expenses are the elements that are directly related
   to financial condition.
   Statement B: Assets, liabilities, and owner’s equity are the elements directly
   related to measurement of business performance.
   A. only statement A is true
   B. only statement B is true
   C. both statements are true
   D. both statements are false

Answer 3

1. A
2. D
3. D
4. C
5. D

Question 4

1. __________________ serves as a financial diary. It is used to record all
   financial transactions of a business chronologically as they occur.
2. __________________ are designed as a simple way to record recurring
   transactions. It has four common types that are frequently used, namely:
3. Sales Journal; 2. Purchase Journal; 3. Cash receipts journal; and 4.
   Cash Disbursements Journal.
4. __________________ is a specialized journal and used to record the sale of
   merchandise on account. This journal records only the transactions
   involving a debit to Accounts Receivable and a credit to Sales.
5. __________________ is a specialized journal used to log a purchase of
   Merchandise on credit or on account. A debit to Purchases and a credit to
   Accounts Payable are the only transactions recorded in this journal.
6. __________________ is a journal used to record receipts of cash or cash
   inflows from whatever source. In other words, this journal records all cash
   coming in the organization.
7. __________________ is a journal used by businesses to manage and record
   payments of cash or cash outflows. In other words, this journal is used for
   recording transactions credit to cash.
8. __________________ is the journal used to record all other business
   transactions which are not recorded in the special journals.
9. __________________ is a collective record used by a business for individual
   accounts. It is used to sort all entries made in journals in a chronological
   order and group all transactions that concern the individual accounts. This
   is also referred to as the T-Account because the basic form is like the letter
   ‘T’.
10. __________________ is used to accumulate, classify, and group all accounts
    from the journal, and will be used in the preparation of financial
    statements.
11. __________________ is created and maintained to provide and support
    an accurate detail of information about specific ledger account. The
    combined balances of these similar accounts of subsidiary ledgers should
    equal the balance in the specific general ledger.

Answer 4

1.Journal
2.Special Journals
3.Sales Journal
4.Journal Purchases
5. Cash Receipts Journal
6. Cash Disbursements Journal
7. General Journal
8. Ledgers
9. General Ledger
10. Subsidiary Ledger

Question 5

1. The owner, Miko, invested ₱300,000.00 from his personal account.
   a. Cash Disbursement Journal
   b. Cash Receipts Journal
   c. General Journal
   d. Purchase Journal
   e. Sales Journal
2. Purchase furniture and fixtures for cash from Davao Furniture,
   ₱11,000.00.
   a. Cash Disbursement Journal
   b. Cash Receipts Journal
   c. General Journal
   d. Purchase Journal
   e. Sales Journal
3. Purchase various tuna products from Ellen’s Tuna amounted
   ₱50,000.00 for cash.
   a. Cash Disbursement Journal
   b. Cash Receipts Journal
   c. General Journal
   d. Purchase Journal
   e. Sales Journal
4. Sold Merchandise on account to Chicken and Tuna: for ₱8,500.00.
   a. Cash Disbursement Journal
   b. Cash Receipts Journal
   c. General Journal
   d. Purchase Journal
   e.Sales Journal
5. 5. Sold Merchandise for cash to Petong’s Restaurant: ₱12,500.00.
      a. Cash Disbursement Journal
      b. Cash Receipts Journal
      c. General Journal
      d. Purchase Journal
      e. Sales Journal

Answer 5

1. B
2. A
3. A
4. E
5. B

Question 6

1. Prepaid rent expense _________
2. Rent expense ___________
3. Rent payable ___________
4. Cash ___________
5. Accounts receivable ___________
6. Accounts payable ___________
7. Purchases ___________
8. Purchase returns and allowances ___________
9. Sales returns and allowances ___________
10. Gestopa, Drawing ___________

Answer 6

Debit 1.
Debit 2.
Credit 3.
Debit 4.
Debit 5.
Credit 6.
Debit 7.
Credit 8.
Debit 9.
Debit 10.

Question 7

1. Decrease in prepaid rent expense ___________ ___________
2. Increase in rent expense ___________ ___________
3. Decrease in rent payable ___________ ___________
4. Increase in cash ___________ ___________
5. Decrease in accounts receivable ___________ ___________
6. Decrease in accounts payable ___________ ___________
7. Increase in office equipment ___________ ___________
8. Increase in furniture ___________ ___________
9. Increase in capital ___________ ___________
10. Decrease in capital ___________ ___________

Answer 7

Credited 1.
Debited 2.
Debited 3.
Debited 4.
Credited 5.
Debited 6.
Debited 7.
Debited 8.
Credited 9.
Debited 10.

Question 8

______________ 1. List of account titles used by the business and
serves as guide to the bookkeeper.
______________ 2. It consists of successive steps starting from
recording of business transactions.
______________ 3. The process of recording transactions in the
general journal.
______________ 4. The book of accounts where transactions are
recorded for the first time.
______________ 5. The second step in the accounting cycle where records
from the journal are transferred to the ledger.
______________ 6. A list of accounts which proves the equality of
debits and credits.
______________ 7. Also called the book of original entry
______________ 8. Also called the book of final entry
______________ 9. A journal entry with two or more debits and credits
______________ 10. A journal entry with one debit and credit

Answer 8

1.Chart of accounts
2.Accounting cycle
3.Journalizing
4.General Journal
5.Posting
6. Trial Balance
7. Journal
8. Ledger
9. Compound Entry
10. Simple Journal Entry