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DEPTALS > INTACC - Multiple Choice > Flashcards

INTACC - Multiple Choice Flashcards

1
Q
  1. Which of the following is considered as an income?

a. Discount on Notes Receivable
b. Unearned Interest Income
c. Deferred Revenue
d. None of these

A

d. None of these

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2
Q
  1. Which of the following adjusting entries may a reversing entry be used?

a. Debit insurance expense, credit prepaid insurance
b. Debit interest receivable, credit interest income
c. Debit unearned rental income, credit rental income
d. Debit depreciation expense, credit accumulated depreciation

A

b. Debit interest receivable, credit interest income

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3
Q
  1. Issuing accounting standards is the responsibility of the

a. PICPA
b. FRSC
c. AASC
d. CPE Council

A

b. FRSC

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4
Q
  1. These are the principal means through which an entity communicates its financial information to those outside it.

a. Managerial reports
b. Segment reports
c. Financial statement
d. Directors’ statements

A

c. Financial statement

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5
Q
  1. Which of the following is not among the economic resources of a business enterprise?

a. Money
b. Products or output of the enterprise
c. Obligations to pay money
d. Ownership interests in other enterprises

A

c. Obligations to pay money

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6
Q
  1. An accounting (financial reporting) period may be

a. One month
b. one quarter
c. one year
d. a, b or c

A

d. a, b or c

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7
Q
  1. A business entity produces financial statements at arbitrary points in time with which basic accounting concept?

a. Objectivity
b. Periodicity
c. Conservatism
d. Matching

A

b. Periodicity

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8
Q
  1. Comparability is sometimes sacrificed for

a. Reliability
b. Conservatism
c. Objectivity
d. Relevance

A

d. Relevance

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9
Q
  1. One of the fundamental qualitative characteristics of financial statements is

a. Relevance
b. Timeliness
c. Neutrality
d. Completeness

A

a. Relevance

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10
Q
  1. The valuation basis used in conventional financial statements is

a. Replacement Cost
b. Fair Value
c. Original Cost
d. A mixture of cost and value

A

d. A mixture of cost and value

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11
Q
  1. They are interested in information that enables them to determine whether their loans, and the interest attaching to them, will be paid when due.

a. Investors
b. lenders
c. suppliers
d. public

A

b. lenders

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12
Q
  1. Who has the primary responsibility for the preparation and presentation of the financial statements of
    an entity?

a. Shareholders
b. board of directors
c. management
d. accountant

A

c. management

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13
Q
  1. This information is useful in assessing an entity’s investing, financing and operating activities during the reporting period

a. Economic resources
b. Financial structure
c. Cash Flow
d. Performance

A

c. Cash Flow

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14
Q
  1. A systematic compilation of a group of accounts; also called a “book of secondary entry”

a. Trial balance
b. ledger
c. worksheet
d. journal

A

b. ledger

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15
Q
  1. The appropriate book of account in which the receipt of a cash dividend is recorded

a. cash receipts journal
b. Sales journal
c. Purchases journal
d. general journal

A

a. cash receipts journal

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16
Q
  1. The normal balance of any account is the

a. Left side
b. Right side
c. side which increases that account
d. side which decreases that account

A

c. side which increases that account

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17
Q
  1. It is the difference between the debit and the credit side of a T account.

a. Normal balance
b. discount
c. account balance
d. a and c

A

c. account balance

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18
Q
  1. The effect of the closing entries is to:

a. Change assets
b. Change liabilities
c. Change retained earnings
d. Change the debit balances of all accounts into credits and vice versa

A

c. Change retained earnings

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19
Q
  1. Which of the following would not be classified as cash?

a. Personal checks
b. Traveler’s checks
c. Cashier’s checks
d. Postdated checks

A

d. Postdated checks

20
Q
  1. When making payments to suppliers, an entity normally credits this account

a. Cash
b. Vouchers payable
c. Cash in Bank
d. Accounts payable

A

c. Cash in Bank

21
Q
  1. In an imprest system, it is the fund set aside for small disbursements

a. Pretty cash fund
b. Dividends Fund
c. Payroll fund
d. Petty cash fund

A

d. Petty cash fund

22
Q
  1. A petty cash system is designed to

a. Cash checks for employees.
b. Handle cash sales
c. Account for all cash receipts and disbursements
d. Pay small miscellaneous expenses

A

d. Pay small miscellaneous expenses

23
Q
  1. Which of the following should be recorded in Accounts Receivable?

a. Receivables from officers
b. Receivables from subsidiaries
c. Dividends receivable
d. None of These

A

d. None of These

24
Q
  1. Receivables arising from sales to customers are best described as

a. Accounts receivables
b. Note receivables
c. Trade receivables
d. Non-trade receivables

A

a. Accounts receivables

25
Q
  1. Materials amounts of anticipated discounts and allowances should be recorded

a. In the period of sale
b. When discounts are availed of
c. when the boss says so
d. they are not recorded

A

a. In the period of sale

26
Q
  1. The allowance for uncollectible accounts is based on all of the following except:

a. Experience
b. Profitability expectancy
c. Customer Fortunes
d. Industry Expectations

A

b. Profitability expectancy

27
Q
  1. Loans and receivables are measured, subsequent to initial recognition at

a. Historical value
b. Fair value
c. net realizable value
d. effective Value

A

c. net realizable value

28
Q
  1. On December 31, before adjusting and closing the accounts had occurred, the Allowance for Doubtful Accounts of Wise Corporation showed a debit balance of P5,300 of the accounts receivable indicated
    the amount is probably uncollectible to be P3,900. Under these circumstances, a year–end adjusting entry for uncollectible account expense would include a:

a. Debit to the Allowance for Doubtful Accounts for P1,400
b. Debit to Uncollectible Accounts Expense, P9, 200
c. Credit to the Allowance for Doubtful Accounts for P1,400
d. Debit o Uncollectible Accounts Expense, P3,900

A

b. Debit to Uncollectible Accounts Expense, P9, 200

29
Q
  1. Consistency is an important factor in comparability within a single entity, although the two are not the
    same. The consistency standard of reporting requires that

a. Some costs should be recognized as expenses on the basis of a presumed direct association with specific revenue.
b. Assets whose prices or utility are increased by external events other than transfers should be retained in the accounting records at their recorded amounts until they are exchanged.
c. Historical cost should be the primary basis used in measuring inventory; intangible assets and property, plant and equipment.
d. Changes in circumstances or in the nature of the underlying transactions should be disclosed.

A

d. Changes in circumstances or in the nature of the underlying transactions should be disclosed.

30
Q
  1. A T-Account is

a. A way of depicting the basic form of an account.
b. A special account used instead of a journal.
c. A special account used instead of a trial balance
d. None of these

A

a. A way of depicting the basic form of an account.

31
Q
  1. The inclusion of footnotes and supporting schedules in the financial statements reflect application of the

a. Time period assumption
b. Industry peculiarities constraint
c. Full-disclosure principle
d. Relevance quality

A

c. Full-disclosure principle

32
Q
  1. During the accounting period, transactions involving revenue, expenses, and withdrawals are recorded
    in

a. permanent accounts
b. financial statements
c. temporary financial accounts
d. temporary capital accounts

A

d. temporary capital accounts

33
Q
  1. The basic accounting concept that refers to the tendency of accountants to resolve uncertainty in favor of understating assets and revenues and overstating liabilities and expenses is known as the

a. conservatism constraint.
b. materiality constraint.
c. substance over form principle.
d. industry practices constraint.

A

a. conservatism constraint.

34
Q
  1. A proof of cash, also known as a four-column bank reconciliation, is

a. A reconciliation of beginning balances, deposits-receipts, checks-disbursements, and ending
balances.
b. Bank reconciliation for four selected periods.
c. Reconciliation of beginning balances, receipts, and disbursements, usually for 1 month.
d. Reconciliation of the beginning account balance and the ending account balance, taking into
account deposits in transit, outstanding checks, and other reconciling items.

A

a. A reconciliation of beginning balances, deposits-receipts, checks-disbursements, and ending
balances.

35
Q
  1. The fundamental qualitative characteristic of faithful representation has the components of

a. Predictive value and confirmatory value.
b. Comparability, consistency, and confirmatory value.
c. Comparability, verifiability, timeliness, and understandability.
d. Completeness, neutrality, and freedom from error.

A

d. Completeness, neutrality, and freedom from error.

36
Q

Use the following data for items 36 and 37:
The general ledger trial balance of Jovy Company includes the following statement of financial position accounts as of December 31, 2016:
Accounts Receivable P 550,000
Accounts Payable P 270,000
Accu. Dep. – equip. P 100,000
Equipment P 280,000
Cash & Cash Equival. P 560,000
Bonds Payable P 670,000
Bank Overdraft P 75,000
Treasury Stock P 230,000
Inventory P 280,000
Prepaid Rent P 97,000
Allow. for Doubt. Acc. P 50,000
Utilities Payable P 80,000

  1. What amount should be reported as current assets in the statement of financial position of Jovy
    Company?

a. 1,362,000
b. 1,462,000
c. 1,437,000
d. 1,587,000

  1. What amount should be reported as current liability in the statement of financial position of Jovy Company?

a. 425,000
b. 350,000
c. 1,095,000
d. 1,020,000

A
  1. c. 1,437,000
  2. a. 425,000
37
Q

Use the following data for items 38 and 39
The general ledger of Angel Company contains the following accounts for December 31, 2016:
Net income (after 30% tax) P 399,000
Operating Expenses P 320,000
Dividends paid-2012 P 123,000
Cost of Goods Sold P 230,000
Retained earnings, end bal. P 750,000

  1. How much is the sales that is reported in the statement of the comprehensive income of Angel Company?

a. 949,000
b. 1,120,000
c. 1,243,000
d. 476,000

  1. How much is the beginning balance of the Retained Earnings of Angel Company?

a. 627,000
b. 1,026,000
c. 873,000
d. 474,000

A
  1. b. 1,120,000
  2. d. 474,000
38
Q

**Use the following data for items 40 and 41*
Jovelyn Company established a petty cash fund amounting to 12,000 on July 1, 2016. The following expenses were incurred by the company:
Postage Stamps P 500
Miscellaneous expense P 1,100
Travel Expense P 2,100

A petty cash count shows that the balance of the petty cash fund as of July 31, 2016 is P5,200

  1. How much is the cash shortage or overage? (indicate after the amount if it is a cash shortage or overage)

a. 6,800 shortage
b. 6,800 overage
c. 3,100 shortage
d. 0

  1. How much should be credited to “Payable to Petty Cashier account” upon the discovery of the cash shortage or overage?

a. 6,800
b. 3,700
c. 3,100
d. 0

A
  1. c. 3,100 shortage
  2. c. 3,100
39
Q

Clark Co.’s advertising expense account had a balance of P146,000 at December 31, 2016, before any
necessary year-end adjustment relating to the following:
• Included in the P146,000 is the P15,000 cost of printing catalogs for a sales promotional campaign in
January 2017.
• Radio advertisements broadcast during December 2016 were billed to Clark on January 2, 2017. Clark paid the P9,000 invoice on January 11, 2017.

  1. What amount should Clark report as advertising expense in its income statement for the year ended December 31, 2016?

a. 146,000
b. 161,000
c. 131,000
d. 140,000

A

d. 140,000

40
Q

An analysis of Thrift Corp.’s unadjusted prepaid expense account at December 31, 2016, revealed the following:
• An opening balance of P1,500 for Thrift’s comprehensive insurance policy. Thrift had paid an annual premium of P3,000 on July 1, 2015.
• A P3,200 annual insurance premium payment made July 1, 2016.
• A P2,000 advance rental payment for a warehouse Thrift leased for one year beginning January 1, 2017.

  1. In its December 31, 2016 balance sheet, what amount should Thrift report as prepaid expenses?

a. 3,600
b. 5,200
c. 6,700
d. 5,100

A

a. 3,600

41
Q
  1. Malatik Company showed net income of P480,000 in its income statement for the current year. Selling
    expenses were equal to 15% of sales and also 25% of cost of sales. All other expenses were 13% of sales. Ignoring Income Tax, what is the gross profit for the current year?

a. 4,000,000
b. 2,400,000
c. 1,600,000
d. 480,000

A

c. 1,600,000

42
Q
  1. One-Day-Millionaire received cash (P106,208 from Customer A and P53,104 from Customer B) in advance for revenue that will be earned later. The cash receipt entry debited cash and credited unearned revenues. At the end of the period, P51,151 is still unearned relating to the services to customer A and P13,331 is earned relating to the services to customer B. The adjusting entry will include a credit to Revenue account of how much?

a. 64,482
b. 68,388
c. 94,830
d. 159,312

A

c. 94,830

43
Q
  1. On December 31, Ruth Company has the following data:
    Trade receivables P 232,500
    Allow. for uncollect. acc. P (5,000)
    Claim against shipper for
    goods lost in transit,
    FOB shipping point P 7,500
    Selling price of unsold
    consigned goods P 65,000
    Security deposit P 75,000

How much is the total current receivables?

a. 310,000
b. 300,000
c. 240,000
d. 235,000

A

d. 235,000

44
Q
  1. The following changes in Patriot Corporation’s account balances occurred during 2016:
    Increase
    Assets. . . . . . . . . . 267,000
    Liabilities. . . . . . . . . 81,000
    Capital Stock. . . . . 198,000

Patriot paid dividends of P39,000 during the year.
There were no changes in Retained Earnings for 2016 except dividends and net income.

What was Patriot’s net income for 2016?

a. 27,000
b. 186,000
c. 225,000
d. 147,000

A

a. 27,000

45
Q
  1. Thompson Company sublet a portion of its office space for ten years at an annual rental of P36,000, beginning on May 1. The tenant is required to pay one year’s rent in advance, which Thompson recorded as a credit to Rental Income. Thompson reports on a calendar-year basis. The adjusting entry
    on December 31 of the first year would include a debit to?

a. Rental Income P36,000
b. Unearned Rental income P36,000
c. Rental Income P12,000
d. Unearned Rental Income P12,000

A

c. Rental Income P12,000

46
Q
  1. Zita Co. uses a four-column bank reconciliation. The bank reconciliation for March shows outstanding checks for P3,000. During May, the company wrote checks totaling P236,000. The bank statement for
    May shows P230,100 of checks clearing the company’s account. What is the amount of outstanding checks on the May bank reconciliation?

a. 2,000
b. 8,900
c. 5,900
d. None

A

b. 8,900

47
Q
  1. The bank reconciliation for Ronnie Company includes the following: balance per bank P 147,300; balance per accounting records P142,100; Unrecorded services charges P200; Unrecorded NSF cheque
    P100; Outstanding cheques P13,700; The amount of deposits in transit is:

a. 7,800
b. 8,800
c. 8,000
d. 8,200

A

d. 8,200

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