CUYAPO NATIONAL HIGH SCHOOL

Senior High School Curriculum

Fundamentals of Accountancy, Business & Management 1

NAME: Date:
Professor: Section: Score:

Instruction: Choose the letter corresponding to the correct answer for each of the questions provided
below. Encircle the correct answer.
1. Accounting has been given various definitions, which of the following is not one of those definitions
a. Accounting is a service activity. Its function is to provide quantitative information, primarily financial
in nature, about economic entities that is intended to be useful in making economic decisions.
b. Accounting is the art of recording, classifying, and summarizing in a significant manner and in terms of
money, transactions and events which are, in part of at least, of a financial character and interpreting
the results thereof.
c. Accounting is a systematic process of objectively obtaining and evaluating evidence regarding
assertions about economic actions and events to ascertain the degree of correspondence between these
assertions and established criteria and communicating the results to interested users.
d. Accounting is the process of identifying, measuring, and communicating economic information to
permit informed judgment and decisions by users of information.
2. Under the accrual basis of accounting,
a. income is recorded only when cash is received and expenses are recorded only when cash is paid.
b. liabilities, owner's capital, and drawings all have normal credit balances.
c. all real accounts have normal debit balances.
d. income is recorded in the period it is earned and expense is recorded in the period it is incurred,
irrespective of when cash is received or paid.
3. The branch of accounting that deals with providing financial information to external decision makers is
a. Public accounting b. Government accounting c. Financial accounting. d. Managerial
accounting.
4. Financial accounting applies to which of the following:
a. Businesses b. Non-profit organizations c. Governments d. All of the above
5. External users of general-purpose financial statements include all of the following except
a. Creditors
b. Investors
c. Owners who are directly involved in managing the business
d. Lenders
6. The official accounting standard setting body in the Philippines is the
a. Accounting Standards Committee (ASC).
b. Financial Reporting Standards Council (FRSC).
c. Bureau of Internal Revenue (BIR).
d. Financial Accounting Standards Board (FASB).
7. The output of an accounting system is (are)
a. the accountable events.
b. recording, classifying and summarizing.
c. accounting reports.
d. accountant.
8. Under this concept, the life of the business is divided into series of reporting periods. Thus, businesses
normally prepare financial statements at least annually.
a. Time period
b. Conservatism constraint
c. Matching principle
d. Unit-of-measure assumption
9. Under this concept, the cost of processing and communicating information should not exceed the benefits to
be derived from it.
a. Time period b. Conservatism c. Materiality d. Cost-benefit
10. This government regulatory body is tasked with regulating corporations, including partnerships. It requires
corporations and partnerships to file audited financial statements.
a. Securities and Exchange Commission
b. Cooperative Development Authority
c. Department of Trade and Industry
d. Department of Corporations and Partnerships

11. The process of identifying, measuring, analyzing, and communicating financial information needed by
management to plan, evaluate, and control an organization’s operations is called
a. financial accounting.
b. tax accounting.

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 c. management accounting.
d. auditing.
12. Accounting is often called the "language of business" because  
a. it is easy to understand.
b. it is fundamental to the communication of financial information.
c. all business owners have a good understanding of accounting principles.
d. accountants in many companies share financial information.
13. The most common form of business organization is  
a. Corporation b. sole proprietorship c. partnership d. cell phone stand.
14. What is the primary purpose of accounting?
a. To count money.
b. To provide accounts.
c. To provide information that is intended to be useful in making economic decisions.
d. To produce accountants.
15. Accounting is a body of knowledge which has been systematically gathered, classified and organized.
a. Accounting as a practical art
b. Accounting as the language of business
c. Accounting as a social science
d. Accounting as an information system
16. An advantage of a sole proprietorship business is
a. you are the boss and you keep all the profits.
b. greater capital compared to the other forms of business organization.
c. it is generally exempt from taxes.
d. it has an unlimited life.
17. Which of the following is not a service business?
a. Accounting firm b. Hospital c. Bank d. Bakery
18. Which of the following is most likely not considered a merchandising business?
a. Pharmacy b. Rice wholesaler c. Movie theater d. Department store
19. Which of the following is not considered a manufacturing business?
a. Banco de Oro b. Toyota c. Apple d. San Miguel Pure Foods
20. Which of the following is an advantage of a service business?
a. You can take advantage of price fluctuations by increasing your stocks of goods when prices
temporarily go down.
b. Lower cost of quality.
c. You don’t need to worry about inventory costs, warehousing and distribution costs.
d. You have a high growth potential because you can tap into a wider market and can produce in large
quantities.
21. Which of the following is a disadvantage of a manufacturing business?
a. You can have a better pricing policy because you can mass-produce goods.
b. You may not need to have a strategically located retail store to display your products because you can
sell directly to wholesalers rather than to end consumers.
c. You have the opportunity to establish a brand that could last longer than your lifetime.
d. You need a high start-up capital.
22. The accounting standards in the Philippines are called
a. Pinoy Financial Reporting Staards (PFRSs)
b. Generally Acceptable Accounting Pinoy (GAAP)
c. Philippine Financial Reporting Standards (PFRSs)
d. Financial Reporting Standards Council (FRSC)
23. Which of the following does not form part of the accounting standards used in the Philippines?
a. Philippine Financial Reporting Standards (PFRSs)
b. Philippine Accounting Standards (PASs)
c. Interpretations
d. Philippine Auditing Practice Statements
24. The process of providing financial information to external decision makers is referred to as:
a. Public accounting b. Government accounting c. Financial accounting d. Managerial accounting.
25. This account is used to record payments received from customers prior to the delivery of goods or rendering
of services.
a. Accrued income b. Unearned income c. Prepaid asset d. Accounts
receivable
26. A chart of accounts is
a. a listing of all accounts and their balances.
b. a subsidiary ledger.
c. a special journal.
d. a listing of all account titles.
27. How is profit or loss calculated?
a. It is the difference between net assets at the beginning and end of the accounting period irrespective of
transactions with owners.
b. It is the difference between net liabilities at the beginning and end of the accounting period.
c. It is the difference between assets and liabilities.
d. It is the difference between income and expenses.

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28. Aling Nena’s Sari-sari Store’s total sales during the period were ₱100M. Of that amount, ₱60M was on
credit. If the total business expenses were ₱70M, how much is the profit (loss)?
a. 30M b. (30M) c. 10M d. (10M)
29. The beginning equity is ₱5,000. If total income for the period is ₱8,000 while total expenses are ₱6,000,
how much is the ending balance of equity?
a. 7,000 b. 5,000 c. 3,000 d. 1,000
30. The ending equity is ₱9,000. If total income for the period is ₱5,000 while total expenses are ₱8,000, how
much is the beginning balance of equity?
a. 12,000 b. 9,000 c. 6,000 d. 0
31. If the beginning equity is ₱50,000 while the ending equity is ₱70,000, how much is the profit (loss) for the
period?
a. 20,000 b. (20,000) c. 10,000 d. (10,000)
32. Entity A’s total assets, liabilities and equity were ₱10,000, ₱7,000 and ₱3,000, respectively, at the
beginning of the period. During the period, total liabilities decreased by ₱4,000 while profit was ₱5,000.
How much is the ending total assets of Entity A?
a. 12,000 b. 11,000 c. 9,000 d. 7,000
33. At the start of the period, a business has total assets of ₱500,000 and total liabilities of ₱300,000. During
the period, the business earned total income of ₱1,000,000 and total expenses of ₱640,000. No additional
investments or withdrawals were made by the owner. Total assets at the end of the period were ₱830,000.
How much is the total liabilities at the end of the period?
a. 280,000 b. 270,000 c. 260,000 d. 240,000
34. This branch of accounting focuses on catering to the information needs of internal users.
a. Management accounting
b. Financial accounting
c. Auditing
d. External accounting
35. The communicating process of accounting includes all of the following except
a. Recording b. Summarizing c. Classifying d. Controlling
36. Which of the following best describes the basic purpose of accounting?
a. To provide information about a reporting entity that is useful in making economic decisions.
b. To provide all the information needed by management in managing the operations of a reporting entity.
c. To provide information that the creditors can use in deciding whether to make additional loans.
d. To provide accountants something to do.
37. Which of the following is not a characteristic of an asset?
a. It is expected to provide future economic benefits.
b. It is a resource controlled by the entity.
c. It causes an outflow of economic benefits when it is settled.
d. It has resulted from a past event.
38. It is the left side of an account.
a. Debit b. Credit c. Date d. Account title
39. It is a record of the increases and decreases in a specific item of asset, liability, equity, income or expense.
a. Journal b. Account c. Accountant d. Notes
40. Which of the following is not a balance sheet account?
a. Cash b. Accounts payable c. Owner’s drawings d. Salaries expense
41. This account is used to record sales on credit.
a. Accounts receivable b. Accounts receivable c. Cash d. Cost of sales
42. This account is used to record the cost of purchased goods that are intended for resale.
a. Building b. Inventory c. Accounts receivable d. Owner’s capital
43. The business acquires equipment. The business allocates the equipment’s cost over the equipment’s useful
life, instead of expensing it right away. The portion of the equipment’s cost that is expensed during the
period is recorded as
a. Bad debts expense b. Equipment c. Allowance for bad debts d.Depreciation expense.
44. This account is used when a business purchases inventory on account (on credit).
a. Cash b. Accounts receivable c. Accounts payable d. Prepaid supplies
45. Payments to employees as compensation for the services they have rendered during a period are recorded in
this account.
a. Rent expense b. Cost of sales or Cost of goods sold c. Freight-out d. Salaries expense
46. This account is used to record the investments of the business owner to the business.
a. Owner’s capital b. Owner’s drawings c. Salaries expense d. Loss
47. Revenues earned from rendering services are recorded in this account.
a. Sales b. Service fees c. Interest income d. Gains
48. Which of the following would result to income of ₱320,000?
a. Total expenses of ₱280,000 and loss of ₱40,000
b. Total expenses of ₱360,000 and profit of ₱40,000
c. Total expenses of ₱220,000 and loss of ₱100,000
d. Total expenses of ₱360,000 and loss of ₱40,000
49. Which of the following would result to total expenses of ₱480,000?
a. Total income of ₱360,000 and profit ₱120,000
b. Total income of ₱580,000 and loss of ₱100,000
c. Total income of ₱630,000 and profit of ₱150,000
d. Total income of ₱630,000 and loss of ₱150,000

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50. A business has total assets, liabilities, and equity of ₱10,000, ₱7,000 and ₱3,000, respectively, at the
beginning of the period. During the period, total liabilities decreased to ₱4,000 while profit was ₱5,000.
How much is the ending total assets?
a. 12,000 b. 11,000 c. 9,000 d. 7,000

“Striving for success without hard work is like trying to harvest where you haven’t planted”. David Bly
Good luck!!!

Prepared by: Checked by: Noted by:

RAUL S. CABANTING NENITA C. BUISEL AURORA T. AGUILA