Finals

Question 1

44. Issued by the company and was recorded
    as a credit entry in the entity’s cash-in-
    bank account but not yet presented to
    and cleared from the bank account.
    a. Deposit in transit
    b. outstanding checks
    c. Credit memos
    d. Debit memos

Answer 1

B

Question 2

45. It measures how well does an entity
    utilizes their assets and resources to
    generate income.
    a. Liquidity Ratios
    b. Solvency Ratios
    c. Profitability Ratios
    d. Efficiency Ratios

Answer 2

D

Question 3

46. What is the asset turnover ratio formula?
    a. Net Sales divided by average
    total assets
    b. Net Sales divided to
    average total assets
    c. Average total
    assets divided by net sales
    d. All of
    the above

Answer 3

A

Question 4

47. What is the inventory turnover ratio
    formula?
    a. Cost of goods sold divided by
    average inventory
    b. Cost of goods
    sold divided to average inventoryc.
    Average inventory divided by cost of
    goods sold
    d. All of the above

Answer 4

A

Question 5

48. What is the accounts receivable turnover
    ratio formula?
    a. Net credit sales divided by
    average accounts receivable
    b. Net
    credit sales divided to average
    accounts receivable
    c. Average
    accounts receivable divided by net
    credit sales
    d. All of the above

Answer 5

A

Question 6

49. What is the return on assets formula?
    a. Net income divided by total sales
    b. Net income divided to total sales
    c. total sales divided by net income
    d. All of the above

Answer 6

A

Question 7

50. What is the return on equity formula?
    a. Net income divided by
    shareholders’ equity
    b. Net income
    divided to shareholders’ equity
    c.
    Shareholders’ equity divided by net
    incomed.
    D.All of the above

Answer 7

A

Question 8

35. In 2023, accounts receivable is 60,000
    and total assets are 1,200,000 . How
    much is the common size analysis
    percentage of accounts receivable?
    For items 11 – 13 2023 data given:Current
    assets
    Total cash
    Quick asset
    Current
    liabilities
    Php 2,000,000Php 900,000Php 1,300,000
    Php 800,000
36. What is the current ratio? B
37. What is acid test ratio? A
38. What is cash ratio? C
    a. 1.625
    b. 2.5
    c. 1.125
    d. 1.444

Answer 8

B
A
C

Question 9

39. Which of the following statements is
    incorrect?
    a. When debt to equity ratio is less
    than 1, equity has more weight than
    debt.
    b. When debt to equity ratio is
    greater than 1, equity has less weight
    than debt.
    c. Rising debt ratio means the
    company resorts to more debt and
    more interest expense.
    d. Rising
    debt ratio means the company is
    shifting more to equity financing.

Answer 9

D

Question 10

40. Which of the following statements is
    incorrect?
    a. In bank statement, increase in
    entity’s cash is recorded as debit.
    b.
    In bank statement, decrease in entity’
    s cash is recorded as debit.
    c. In
    ledger, increase in entity’s cash is
    recorded as debit.
    d. In ledger, decrease in entity’s
    cash is recorded as credit.

Answer 10

A

Question 11

41. Bank balance
    reconciling items are the following, except?
    a. Deposit in transit
    b. outstanding checks
    c. Bank errors
    d. Book errors

Answer 11

D

Question 12

42. Which one of the following is one of the
    ledger balance reconciling items?
    a. Deposit in transit
    b. outstanding checks
    c. Bank errors
    d. Book errors

Answer 12

D

Question 13

43. Cash that has been received by an entity
    as was recorded in the cash-in-bank
    account balance as a deposit but has not
    been posted by the bank thus not
    reflecting in the bank statement.
    a. Deposit in transit
    b. outstanding checks
    c. Credit memos
    d. Debit memos

Answer 13

A

Question 14

27. The three main ways of financial
    statement analysis quantitatively are?
    .

Answer 14

d. Horizontal Analysis, Vertical Analysis and
Analysis through ratio interpretation

Question 15

28. It is the method of comparing and
    analyzing financial results of different
    accounting periods in each financial
    statement account and element.

Answer 15

a. Horizontal Analysis

Question 16

The amount of cash in 2022 is Php 500,
000 and on your analysis it is increased
by 25% in 2023. How much is theamount
of cash in 2023?

Answer 16

b. 625,000

Question 17

30. Based on question number #4, how much
    is the additional increase of cash in
    2023?

Answer 17

A. 125,000

Question 18

31. It is the method of analyzing financial
    results expressing each financial
    statement account and element as a
    component of a base.

Answer 18

B.vertical analysis

Question 19

32. These determine whether an entity has
    more ownership rather than debt and
    these ratios involve comparison of debt,
    asset, equity and interest.

Answer 19

B.solvency ratio

Question 20

33. These determine whether an entity can
    be able to pay for current liabilities as
    they become due with the use of current
    assets.

Answer 20

A. Liquidity RATIOS

Question 21

34. Which one of the following is a liquidity
    ratio?

Answer 21

B. Times interest earned ratio

Question 22

26. It is important for the owners and
    managers of the entity to be able to
    evaluate the results of all their business
    activities. This analysis can help them to
    all of the following, except?

Answer 22

Assurance to earn more income

Question 23

1. It is a present economic resource controlled by the entity as a result of past events. An economic
   resource is a right that has the potential to produce economic benefits.
   a. Income
   b. Liabilities
   c. Assets
   d. Either A or C
2. Activities of an entity related to acquisition of funding for the use of C
   the entity.
   a. Investing Activities
   b. Funding Activities
   c. Financing Activities
   d. Operating Activities
3. It is a present obligation of the entity to transfer an economic resource as a result of past events.
   a. Equity
   b. Liabilities
   c. Expenses
   d. Either B or C
4. It is the residual interest in the assets of the entity after deducting all its liabilities.
   a. Equity
   b. Liabilities
   c. Assets
   d. Either A or C
5. All of the following are the basis of an entity to classify a liability as current, except?
   a. It expects to settle the liability in its normal operating cycle
   b. It holds the liability primarily for the purpose of trading
   c. The liability is due to be settled within twelve months after the reporting period
   d. It has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period

Answer 23

C
C
B
A
D

Question 24

6. Statement of financial position can be presented as?
   a. Report form
   b. Account form
   c. Either A or B
   d. Neither A or B
7. Jaja Company has current assets
   of P5,550,000 and total liabilities of P2,350,000. If capital is
   10,000,000, how much is the entity’s noncurrent assets?
   a. P2,100,000
   b. P4,450,000
   c. P7,650,000
   d. P6,800,000
8. An entity has the following account balances at December 31:
   Cash P1,080,000
   Trade Receivables P540,000
   Trade Payables P300,000
   Land Improvements P800,000
   Short term Notes Payable P200,000
   Investment in Associate
   P1,520,000
   Office and Store Supplies P230,000
   Bonds payable P6,000,000
   If the entity maintains P500,000 worth of inventories at the end of every year, how much is the entity’s
   current assets?
   a. P2,120,000
   b. P1,620,000
   c. P2,920,000
   d. P2,350,000

Answer 24

C
D
D

Question 25

9. Recognition Company, a sole proprietorship trading business owned by Jimin Santos, has been
   operating successfully for years now. The capital of the owner at the start of the accounting period,
   January 1, 20X8, amounted to P2,789,674. During the year, the owner decided to raise the capital
   balance by P400,000 worth of additional investment of cash. The entity enjoyed tremendous sales and
   reported net income in the income statement amounting to P789,674. The owner, however, withdrew
   P50,000 cash for a personal emergency purpose. No other equity activities have been noted during the
   year.
   How much is the Capital balance for the year ended December 31, 20x8?
   a. P3,239,674
   b. P4,029,348
   c. P3,929,348
   d. P3,292,348
10. XYZ Company started the accounting period with a capital balance of P456,000 and ended the period
    with a capital balance of P494,000. During the period, the owner made an additional investment of
    P10,000 and personal withdrawals of P20,000. How much is the net income or net loss by the company
    during the period?.
    a. P48,000 net income
    b. P48,000 net loss
    c. P28,000 net income
    d. P28,000 net los

Answer 25

C
A

Question 26

1. The objective of financial statements is to provide information about the financial position, financial
   performance and cash flows of an entity that is useful to a wide range of users in making economic
   decisions.
2. Gains arises in the course of ordinary regular activities. – revenue
3. The elements of statement of comprehensive income are assets, liabilities and equity.
4. Contributions by and distributions to owners in their capacity as owners are presented at statement of
   changes in equity.
5. Expense encompasses both expenses and losses.
6. Direct method statement of cash flows is user friendly information.
7. Cash inflows and outflows are presented at statement of cash flows.
8. Income increases assets, or decreases in liabilities, that result in increases in equity.
9. All other assets (that are not current) shall be classified as noncurrent assets.
10. Investing activities usually can be seen in balance sheet noncurrent assets.

Answer 26

2. FALSE
3. FALSE

Question 27

1. Charity Contributions
2. Cash investments by the owner.
3. Payment of cash dividends to shareholders.
4. Refunds from suppliers
5. Cash proceeds from selling productive assets like property, plant and equipment
6. Payments for the purchase of productive assets like property, plant and equipment.
7. Cash refund to customers
8. Cash proceeds from selling investments in equity securities of other companies
9. Cash proceeds from long-term borrowing.
10. Payments of long-term borrowing.

Answer 27

OA O
FA I
FA O
OA I
IA I
IA O
OA O
IA I
FA I
FA O

Question 28

CA – Current Assets
NCA – Noncurrent Assets
CL - Current Liabilities
NCL – Noncurrent Liabilities
1. Accounts Receivable –
2. Trade accounts payable -
3. Land improvements –
4. Salaries Payable -
5. Prepaid Expenses –
6. Investment in associates -
7. Bonds Payable -
8. Marketable equity securities –
9. Intangible assets –
10. Equipment -

Answer 28

CA
CL
NCA
CL
CA
NCA
NCL
CA
NCA
NCA

Question 29

1. How much is the net sales?
   P8,136,295
2. How much is the net purchases? P3,536,858
3. How much is the cost of goods sold?
   P3,612,782
4. How much is the gross profit?
   P4,523,513
5. How much is the net income?
   P3,884,376

Answer 29

PART V LONG QUIZ