Finals Flashcards
1
Q
- 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
A
B
2
Q
- 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
A
D
3
Q
- 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
A
A
4
Q
- 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
A
A
5
Q
- 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
A
A
6
Q
- 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
A
A
7
Q
- 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
A
A
8
Q
- 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 - What is the current ratio? B
- What is acid test ratio? A
- What is cash ratio? C
a. 1.625
b. 2.5
c. 1.125
d. 1.444
A
B
A
C
9
Q
- 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.
A
D
10
Q
- 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.
A
A
11
Q
- Bank balance
reconciling items are the following, except?
a. Deposit in transit
b. outstanding checks
c. Bank errors
d. Book errors
A
D
12
Q
- 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
A
D
13
Q
- 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
A
A
14
Q
- The three main ways of financial
statement analysis quantitatively are?
.
A
d. Horizontal Analysis, Vertical Analysis and
Analysis through ratio interpretation
15
Q
- It is the method of comparing and
analyzing financial results of different
accounting periods in each financial
statement account and element.
A
a. Horizontal Analysis
16
Q
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?
A
b. 625,000
17
Q
- Based on question number #4, how much
is the additional increase of cash in
2023?
A
A. 125,000
18
Q
- It is the method of analyzing financial
results expressing each financial
statement account and element as a
component of a base.
A
B.vertical analysis
19
Q
- These determine whether an entity has
more ownership rather than debt and
these ratios involve comparison of debt,
asset, equity and interest.
A
B.solvency ratio
20
Q
- These determine whether an entity can
be able to pay for current liabilities as
they become due with the use of current
assets.
A
A. Liquidity RATIOS
21
Q
- Which one of the following is a liquidity
ratio?
A
B. Times interest earned ratio
22
Q
- 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?
A
Assurance to earn more income
23
Q
- 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 - 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 - 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 - 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 - 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
A
C
C
B
A
D
24
Q
- Statement of financial position can be presented as?
a. Report form
b. Account form
c. Either A or B
d. Neither A or B - 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 - 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
A
C
D
D
25
Q
- 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 - 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
A
C
A
26
Q
- 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. - Gains arises in the course of ordinary regular activities. – revenue
- The elements of statement of comprehensive income are assets, liabilities and equity.
- Contributions by and distributions to owners in their capacity as owners are presented at statement of
changes in equity. - Expense encompasses both expenses and losses.
- Direct method statement of cash flows is user friendly information.
- Cash inflows and outflows are presented at statement of cash flows.
- Income increases assets, or decreases in liabilities, that result in increases in equity.
- All other assets (that are not current) shall be classified as noncurrent assets.
- Investing activities usually can be seen in balance sheet noncurrent assets.
A
- FALSE
- FALSE
27
Q
- Charity Contributions
- Cash investments by the owner.
- Payment of cash dividends to shareholders.
- Refunds from suppliers
- Cash proceeds from selling productive assets like property, plant and equipment
- Payments for the purchase of productive assets like property, plant and equipment.
- Cash refund to customers
- Cash proceeds from selling investments in equity securities of other companies
- Cash proceeds from long-term borrowing.
- Payments of long-term borrowing.
A
OA O
FA I
FA O
OA I
IA I
IA O
OA O
IA I
FA I
FA O
28
Q
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 -
A
CA
CL
NCA
CL
CA
NCA
NCL
CA
NCA
NCA
29
Q
- How much is the net sales?
P8,136,295 - How much is the net purchases? P3,536,858
- How much is the cost of goods sold?
P3,612,782 - How much is the gross profit?
P4,523,513 - How much is the net income?
P3,884,376
A
PART V LONG QUIZ
