Reviewer

1.
On December 31, 2025, ABC Bank recorded an investment of P5,000,000 in a loan granted to a
client. The loan has a 10% effective interest rate payable annually every December 31, 2028.
Unfortunately, the borrower is experiencing significant financial difficulty and will have difficult
time in making full payment. The bank projected that the entire principal will be paid at maturity
and 4% interest will be paid annually on December 31, of the next 3 years. There is no accrued
interest on December 31, 2025. What is the carrying mount of the loan receivable on December
31, 2026?
a. P4,472,800 b. P4,672,800 c. P5,000,000 d. P3,752,800
2. Problem Solving| X Company sold a tract of land to ABC Co. on July 1, 20A for P8,000,000 under
an installment sale contract. ABC Co. signed a 4-year 11% note for P5,600,000 July 1, 20A, in
addition to the down payment of P2,400,000. The equal payments of principal and interest on
the note will ben P1,805,000 payable on July 1, 20B, 20C, 20D and 20E. The land had an
established cash price of P8,000,000, and its cost to the company was P6,000,000. The collection
of the installments on this note is reasonably assured. The interest income for 20A is (Use 4-
decimal PVF and round off your answer to the nearest peso) 615,978
3. Multiple Choices Problem Solving. On December 31, 2025, ABC Bank granted a P5M loan to a
borrower with 10% stated rate payable annually and maturing in 5 years. The loan was
discounted at the market interest rate of 12%. Unfortunately, the financial condition of the
borrower worsened because of lower revenue. On December 31, 2027, the bank determined
that the borrower would pay back only P3,000,000 of the principal at maturity. However, it was
considered likely that interest would continue to be paid on the P5,000,000 loan. What is the
impairment loss on loan receivable to be recognized for 2027?
a. P1,670,000 b. P1,672,960 c. P1,442,960 d. P1,922,960
4. Problem Solving| On December 31, 2025, the “Receivables” account of AA. Company show the
subsidiary details as follows: Accounts receivable, P975,000; Loans receivable, P135,500;
Instalments receivable, normally due 18 months to two years, P346,700; Customers’ accounts
reporting credit balances arising from sales returns and bad orders (was netted against the
Accounts receivable balance), P31,500; Advance payments for purchase of merchandise,
P170,000; Customers’ accounts reporting credit balances arising from advance payments (was
netted against the Accounts receivable balance), P25,000; Cash advances to subsidiary,
P400,000; Claim from insurance company for merchandise lost in transit, P27,000; Subscription
receivable due in 18 months, P305,000; Accrued interest receivable, P12,000, Deposit on
contract bids, P3,000,000 and Advances to shareholders (collectible in 2027), P1,000,000. How
much is the amount to be presented as “loans and receivables” under current assets section of
the balance sheet? 1,493,000
5. Problem Solving| ABC Company provided some information on their financial records on
December 31, 2025:
• Accounts receivable, January 2025 – 2,500,000
• Collections of account receivable net of 10% discount – 5,400,000
• Allowance for bad debts expense, January 2025 – 37,500
• Inventory , January 1 - 2,880,000
• Inventory , December 31 - 2,640,000
• Accounts payable, January 1 - 1,000,000
• Accounts payable, December 31 - 1,500,000
• Cash sales - 1,700,000
• Purchases - 4,800,000
• Gross Profit on sales - 2, 160,000
The management used the percentage of accounts receivable method in estimating bad debts. If the
same technique is used for the current rent, how much is the bad debts expense for the year assuming
the company wrote off P15,000 accounts receivable during the year and recovered P3,450. The bad
debts expense for the year ended 2025 is 11,550
6. Multiple Choices. Which of the following must be deducted from the bank statement balance in
preparing a bank reconciliation which ends with adjusted cash balance?
a. Outstanding checks b. Deposit in transit c. Certified checks d. Reduction of loan charged to
account of depositor
7. Problem Solving| During your review of the records of X Factor Corporation for the year 20A,
you noted that X Factor sold a machine with carrying amount of P640,000 (cost is P1.6M) on
June 30, 20A. X Factor received an P800,000 non-interest bearing note due in 3 years. There is
no established market value for the machine. The yield rate for this type of note is 12%. X Factor
recorded the transaction by debiting Note receivable for P800,000 and crediting Machinery for
P640,000 and Gain on sale for the difference. The transaction has resulted to a gain/loss on sale
of (indicate Gain or Loss in your answer after the amount) 160,000 Gain
8. Multiple Choices. Evaluate the following statements.

Statement I. Compensating balance requirements as a result of a long-term financing arrangements is
reported under the cash and cash equivalents section of the balance sheet.
Statement II. An overdraft which resulted from an over withdrawal beyond the overdraft allowance may
be reported as either current or noncurrent liability.
Statement III. Certificates of deposit and money market savings certificates are examples of time
deposits which may either be shown in “cash and cash equivalents” line item or “investment” item.
a. One statement is correct b. Two statements are correct
c. All statements are correct d. All statements are incorrect
9. Problem Solving| The following selected transactions occurred during the year ended December
31, 2025 of XYZ COMPANY:
• Gross sales (cash and credit) - P 1,520,000
• Collections from credit customers, net of 5% cash discount – 1,010,800
• Cash sales - 126,000
• Uncollectible accounts written off - 19,200
• Credit memos issued to credit customers for sales returns and allowances - 10,080
• Cash refunds given to cash customers for sales returns and allowances - 15,168
• Recoveries on accounts receivable written off in prior years (not included in cash received stated
above) 6,505
At year-end, the company provides for estimated bad debts losses by crediting the Allowance for Bad
Debts account for 2% of its net credit sales for the year. The allowance for bad debts at the beginning of
the year is P19,327. The net realizable value of Accounts Receivable of XYZ COMPANY at December 31,
2025 is (Round off your answer to the nearest peso): 340,798
10. Multiple Choices Problem Solving. On September 1, 2024, ABC Co. borrowed on a P1,350,000
note payable from XYZ Bank. The note bears interest at 12% and is payable in three equal
annual principal payments of P450,000 starting September 1, 2026. The first annual payment for
interest and principal was made on September 1, 2026. At December 31, 2026, what amount
should ABC report as interest expense?
a. P108,000 b. P72,000 c. P144,000 d. P90,000
11. Multiple Choices. Which will not require an adjusting entry on the depositor’s books?
a. Check in payment of accounts payable amounting to P100,000 is recorded by depositor as P10,000
b. Deposit of another entity is credited to account of depositor
c. Bank service charge
d. NSF check from depositor
December 31, 2025:
• Accounts receivable, December 2025 - 1,680,000
• Collections of account receivable - 6,240,000
• Cash sales - 1,200,000
• Purchases - 4,800,000
For the current year, the management decided to change its method in estimating bad debts from % of
accounts receivable to aging method. Of the ending balance of accounts receivables, 60% of it belongs
to 0-30 days category with 1% uncollectibility rate, 30% belongs to 31-60 days age with 5%
uncollectibility rate, and the rest belongs to 61 and over days category with 10% uncollectibility rate.
Bad debts expense for the year is 62,000
13. Problem Solving| The following selected transactions occurred during the year ended December
31, 2025 of AAA COMPANY:

above) 6,505
the year is P19,327. The Bad Debts Expense for the year ended December 31, 2025 is: (Round off your
answer to the nearest peso)
December 31, 2025:
• Accounts receivable, January 2025 – 2,500,000
• Collections of account receivable net of 10% discount – 5,400,000
• Cash sales - 1,700,000
• Purchases - 4,800,000
The management used the percentage of accounts receivable method in estimating bad debts. If the
same technique is used for the current rent, how much is the bad debts expense for the year assuming
the company wrote off P15,000 accounts receivable during the year and recovered P3,450. The
Allowance for bad debts expense as of the year ended 2025 is 22,500
15. Multiple Choices. Which of the following statements is TRUE?
a. when a customer’s postdated check (dated December 28) was received by the company on
November, no adjusting entry shall be necessary when reporting for the month then ended November
30
b. a customer’s postdated check (dated December 28) was received by the company on November shall
be recorded as cash item as of the month ended November 30
c. a customer’s postdated check (dated December 28) was received by the company on November can
be included as cash item as of the year ended December 31
d. a customer’s postdated check (dated December 28) was received by the company on November shall
not recorded included as cash item for the year ended December 31
16. Multiple Choices| If the company failed to recognize the discount on non-interest bearing notes
receivable (Unearned Interest Income credit), meaning the note was recorded at face how would it
affect the financial statements?
a. at the end of the year of issuance, the income statement will be understated while the balance sheet
will be overstated
b. the income statement won’t be erroneous while the balance will be overstated.
c. the income statement will be understated while the balance sheet will not be erroneous
d. the statement of changes in equity will not affected by this error
17. Problem Solving| During your review of the records of X Factor Corporation for the year 20A, you
noted that X Factor sold a machine with carrying amount of P640,000 (cost is P1.6M) on June 30, 20A. X
Factor received an P800,000 non-interest bearing note due in 3 years. There is no established market
value for the machine. The yield rate for this type of note is 12%. X Factor recorded the transaction by
debiting Note receivable for P800,000 and crediting Machinery for P640,000 and Gain on sale for the
difference. Interest income for the year ended December 31, 20B is 76,533
18. Multiple Choices. Evaluate the following statements
Statement I: Under fluctuating system of petty cash accounting, there will be no necessary adjustments
at the end of the reporting period, at all times.
Statement II: Under imprest system of accounting for petty cash fund, entries for expenses and others
are made upon fund replenishment, therefore, entries are not necessary at any point within the
reporting period.
Statement III: In the conduct of petty cash count, when you find a check with the petty cash custodian’s
name on it, it shall be included as cash item together with the bills and other loose coins.
a. FALSE, FALSE, TRUE
b. TRUE, FALSE, FALSE
c. TRUE, TRUE, FALSE
d. FALSE, TRUE, FALSE
e. TRUE, FALSE, TRUE
19. Problem Solving| X Company sold a tract of land to ABC Co. on July 1, 20A for P8,000,000 under an
installment sale contract. ABC Co. signed a 4-year 11% note for P5,600,000 July 1, 20A, in addition to the
down payment of P2,400,000. The equal payments of principal and interest on the note will be
P1,805,000 inclusive of interest and payable on July 1, 20B, 20C, 20D and 20E. The land had an
established cash price of P8,000,000, and its cost to the company was P6,000,000. The collection of the
installments on this note is reasonably assured. The noncurrent portion of the installment note
receivable on December 31, 20B is (Use 4-decimal PVF) 3,483,040
Problem Solving| Reconciliation of PQRS Company’s bank account at October 31, 20A is
Balance per bank statement of 3,150,000 + Deposits outstanding 450,000 - Checks outstanding 45,000 =
Correct cash balance of 3,555,000.
Balance per book of 3,558,000 - Bank service charge 3,000 = Correct cash balance of 3,555,000
On November 30, 20A data are as follows:
Checks recorded per bank 3,450,000
Checks recorded per book 3,540,000

Deposits recorded per bank 2,430,000
Deposits recorded per book 2,700,000
Collection by bank (P600,000 plus interest) 630,000
NSF check returned with November 30 statement 15,000
Balance per bank 2,745,000
Balance per book 2,715,000
How much is the outstanding checks on November 30? 900,000
20. Problem Solving| On December 31, 20A, the bank statement on ABC Company had an ending
balance of P747,000. The following data were assembled in the course of reconciling the bank balance:
• The bank erroneously credited ABC Company for P4,200 on December 23.
• During the month, the bank charged back NSF checks amounting to P4,600 of which P1,600 had been
redeposited by December 27.
• Collection for December 31 totaling P20,600 was deposited on January 2, 20B.
• Checks outstanding on December 31 amounted to P60,400.
Note collected by the bank for ABC Company was P16,000 and the corresponding bank charge was
P1,000. What is the unadjusted cash in bank per ledger on December 31, 20A? 691,500
21. Problem Solving| ABC Company provided the following data for the purpose of reconciling the cash
balance per book with the balance per bank statement on December 31, 20A. Balance per bank
statement 1,000,000; Outstanding checks (including certified checks of P50,000) 250,000; Deposit in
transit 100,000; December NSF checks (of which P25,000 had been redeposited and cleared on
December 27) 75,000; Erroneous credit to ABC’s account, representing proceeds of loan granted to
another company 150,000; Proceeds of note collected by bank for ABC including service charge of
P10,000 385,000; What is the cash in bank to be reported in the December 31, 20A statement of
financial position? 900,000
22. Multiple Choices | Which of the following needs an adjustment to the accounts receivable account
of ABC Company?
a. Goods in transit as of the reporting date, shipped to a customer FOB destination, not recorded
as sales and correctly included as inventory
b. Goods in transit as of the reporting date, shipped to a customer FOB destination, recorded as
sales however correctly included as inventory.
c. Goods in transit as of the reporting date, shipped to a customer FOB shipping point, correctly
recorded as sales and was excluded from inventory
d. Goods in transit as of the reporting date, shipped to a customer FOB shipping point, correctly
recorded as sales but was included as inventory
23. Problem Solving| The following selected transactions occurred during the year ended December 31,
2025 of AAA COMPANY:
above) 6,505
the year is P19,327. The balance of the Allowance for Bad Debts as of the year ended December 31,
2025 is: (Round off your answer to the nearest peso)
24. Problem Solving| The following items are found in the cash account of AAA Company at December
31, 2021. The company’s controller asks your opinion whether the items listed below should be
considered as part of cash account and come up with an adjusting entry to adjust the cash account.
• A check worth P288,000 from customer who paid the account net of the 4% discount. The company
records the transaction as credit to Accounts Receivable for the proceeds.
• Postage stamps, P1,000;
• Cash in closed bank (F Bank), P195,000;
• Redemption fund, P300,000;
• Sinking fund, P300,000. This will be used on May 1, 2022 to redeem the bonds payable;
• Change fund, P25,000;
• X Bank Checking Account No. 0004568, P410,000.
• Y Checking Account No. 0002347, P275,000.;
• Overdraft in Z Checking Account No. 00011256, P150,000 resulting from a withdrawal of a company’s
check dated January 3, 2022 in payment of account, P450,000. This was recorded in the company’s
disbursement ledger at December 31, 2021;
• Overdraft in X Checking Account No. 0056791, P155,000;
• 90-day Treasury Bills (purchase on November 1, 2021), P250,000;
• Treasury Bills that will mature on February 13, 2022, P150,000, acquired middle of November 2021.
• Customers’ check dated December 25, 2021, P55,000;
• Company’s check (P50,000) dated December 26, 2021 which was drawn in payment for merchandise
purchased on that date but not delivered until January 3, 2022. This check was deducted in the cash
balance;
AAA COMPANY’S adjusted cash and cash equivalents balance at December 31, 2021 is: 2,048,000
25. Problem Solving| Reconciliation of PQRS Company’s bank account at October 31, 20A is

What is the adjusted cash in bank on November 30?
26. Multiple Choices. Evaluate the following statements
Statement I: Under the adjusted method of bank reconciliation, the bank shall be forced to adjust its
balance to comply with the adjusted balances.
Statement II: In a bank reconciliation statement, the amount of a not-sufficient-fund check must be
deducted from the depositor's cash balance to arrive at the correct cash balance.
a. FALSE, FALSE
b. FALSE, TRUE
c. TRUE, FALSE
d. TRUE, TRUE
27. Problem Solving| On January 1, 2021, ABC Bank loaned P3,000,000 to a borrower. The contract
specified that the loan had an 10-year term and a 11% interest rate. Interest is payable annually every
December 31 and the principal amount will be collected on December 31, 2030. Interest is collected for
2021. On December 31, 2021, the bank determined that the loan has a 12-month probability of default
of 15% and expected to collect only 90% of the loan. On December 31, 2022, the bank determined that
there is a significant increase in the credit risk of the loan but no objective evidence of impairment.
Based on the relevant information, the bank concluded that there is a 40% probability of default over
the remaining term of the loan and it is expected that only 60% of the loan will be collected. Interest is
collected for 2022. On December 31, 2023, the borrower was under financial difficulty and the loan was
considered impaired. The bank agreed that only 50% of the principal will be collected on due date.
Interest is collected for 2023. Round off present value factor to 4-decimal places. Compute the
impairment loss for 2023. 2,277,450
28. Problem Solving| Reconciliation of PQRS Company’s bank account at October 31, 20A is
How much is the deposits in transit on November 30? 900,000
29. Problem Solving| ABC Company provided some information on their financial records on December
31, 2025:
• Accounts receivable, December 2025 - 1,680,000
• Collections of account receivable - 6,240,000

• Cash sales - 1,200,000
• Purchases - 4,800,000
For the current year, the management decided to change its method in estimating bad debts from % of
accounts receivable to aging method. Of the ending balance of accounts receivables, 60% of it belongs
to 0-30 days category with 1% uncollectibility rate, 30% belongs to 31-60 days age with 5%
uncollectibility rate, and the rest belongs to 61 and over days category with 10% uncollectibility rate.
The net realizable value of accounts receivable as of December 31, 2025 is 138,000
difference. The initial amount of the note receivable is
Interest is collected for 2023. Round off present value factor to 4-decimal places. Compute the interest
income for 2024 79.481
32. Problem Solving| On November 30, 20A, ABC Company received its bank statement. However, the
closing balance of the account was unreadable. Attempts to contact the bank after hours did not secure
the desired information. The following data are available in preparing a bank reconciliation: October 31
book balance 146,000; Note collected by bank 10,000; Interest earned on note 1,000; NSF check of
customer 13,000; Bank service charge on NSF check 200; Other bank service charges 300; Outstanding
checks 20,200; Deposit of October 31 placed in night depository 8,500; Check issued by JKL Company
charged to ABC Co. 2,000; What is the cash balance per bank statement? 153,200
33. Multiple Choices. Under the imprest system, which amount the following situations when
accounting entry/ies is/are made?
a. it is a reporting period and the fund aren’t replenished yet

b. Christmas party contributions made the custodian’s circle of friends where the custodian is in-
charge of its safekeeping
c. petty cashier accommodated and encashed the check of her friend from the purchasing
department
d. request and disbursement of fund by the company’s messenger for the week
e. pending request of the petty cash custodian to increase the petty cash fund
34. Problem Solving| The “CASH and CASH EQUIVALENTS ” account of AAA Corporation’s ledger on
December 31, 2021 showed the following: Petty cash fund (including P2,500 unreplenished vouchers, a
check in the name of the custodian amounting to P10,000, bills of P1,500 and loose coins P900) 15,000;
Preference Share Redemption Fund Account – PNB - 500,000; Traveler’s check - 150,000; Postal money
order - 12,000; Treasury bill, purchased December 1, 2021 (due on March. 1, 2022) - 50,000; Time
deposit due on May 31, 2022 - 85,000; 90-day Treasury bill, due January 30, 2022 - 120,000; Note
receivable in the possession of a collecting agency - 20,000; PNB – Checking Account #211-009-091 -
225,900; Cash on hand, netted by the amount of its own postdated check of P15,000 - 23,000; Savings
deposit, earmarked for acquisition of equipment - 210,000; A check payable to San Ignacio Incorporated,
dated December 30, 2021, that was included/unrecorded in the December 31 PNB Checking Account
#211-009-091 because it is at AAA’s possession - 50,000; Bond Sinking Fund (used to finance the
maturing long-term obligation on December 31, 2022) - 125,000; Overdraft in PNB Checking Account
#211-099-085 - ( 30,000); Check #801 in payment to Accounts Payable, dated Dec. 31, 2021 not mailed
until January 5, 2022 - 20,000; Advances to Officers/Employees for Seminars (no liquidation is required) -
80,000; Money market placement (due June 30, 2022) - 60,000; Listed stock held as temporary
investment - 100,000; Check #789 in payment to Suppliers, dated January 4, 2022 and recorded
December 30, 2021 - 85,500; Pension Fund - 150,000. Compute the adjusted balance of Cash and Cash
Equivalents account. 1,193,900
35. Multiple Choices. Which of the following items is TRUE.
a. it is correct to include the sales but not the cash collections that occur a day after the reporting
period.
b. it is a good practice for a company to assign both the recording and cash custodianship functions
to one employee who is a relative
c. it is not necessary for summarize all the collections, cash and checks, for the day because of the
assumption that customers/clients will present a burden of proof in case of discrepancy
d. it is correct to include the collections but not the sales that occur a day after the reporting
period.
e. all transactions that occur beyond the reporting period shall not be recorded as of the last day
of the reporting period.
36. Problem Solving| X Company sold a tract of land to ABC Co. on July 1, 20A for P8,000,000 under an
installment sale contract. ABC Co. signed a 4-year 11% note for P5,600,000 July 1, 20A, in addition to the
down payment of P2,400,000. The equal payments of principal and interest on the note will ben
P1,805,000 payable on July 1, 20B, 20C, 20D and 20E. The land had an established cash price of
P8,000,000, and its cost to the company was P6,000,000. The collection of the installments on this note
is reasonably assured. The initial amount of notes receivable is (Use 4-decimal PVF) 5,599,798
37. Multiple Choices. If the cash balance shown on entity’s accounting records is less than the correct
cash balance and neither the entity nor the bank has made any errors, there must be
a. Outstanding checks
b. Bank charges not yet recorded by entity

c. Deposits credited by bank but not yet recorded by entity
d. Deposits in transit
38. Problem Solving. On July 31, 20A, ABC Company discounted at the bank, a customer’s P1.2 million, 6-
month, 10% notes receivable dated May 31, 20A. The bank discounted the note at 12%. How much did
ABC Company recognized as Loss on receivable discounting under the conditional sale? Assume 30 days
a month. 10,400
difference. The carrying value of the notes receivable at the end of December 31, 20A
Interest is collected for 2023. Round off present value factor to 4-decimal places. Compute the
impairment loss for 2023. 1,389,858
42. AAA Textiles Limited factors P500, 000 of accounts receivable with BBB Factors Limited on a with
recourse basis. The receivable records are transferred to BBB Factors Limited which will receive the
collections. BBB Factors Limited assesses a finance charge of 3% of the amount of accounts receivable
and retains an amount equal to 5% of the accounts receivable. It is determined that the fair value of the
recourse obligation is P6, 000. Determine the amount that should be presented in the profit/ loss by
AAA as a result of the factoring transaction. 46,000
43. Multiple Choices. Bank reconciliations are normally prepared on a monthly basis to identify
adjustments needed in the depositor’s records and to identify bank errors. Adjustments on the part of
depositor should be recorded for
a. Book errors, bank errors, deposits in transit and outstanding checks
b.Bank errors, outstanding checks and deposits in transit
c. All items except bank errors, outstanding checks and deposits in transit
d. Outstanding checks and deposits in transits
44. Problem Solving| In an audit of ABC Company on December 31, 20A, the following data are
gathered: Balance per book 2,000,000; Bank charges 6,000; Outstanding checks 470,000; Deposit in
transit 600,000; Customer note collected by bank 750,000; Interest on customer note 30,000; Customer
check returned NSF 124,000; Depositor’s note charged to account 500,000; What is the adjusted cash in
bank on December 31, 20A? 2,650,000
month, 10% notes receivable dated May 31, 20A. The bank discounted the note at 12%. Assuming the
maker of the note has not able to pay the bank on due date and ABC paid the entire maturity value plus
protest fee of 56,700. Compute the total amount of cash that ABC received from the maker on
December 31, assuming a 15% annual interest is additionally charged from the date the maker defaulted
to pay the bank by ABC. Use 30 days a month.
46. Problem Solving| The following selected transactions occurred during the year ended December 31,
2025 of AAA COMPANY:
above) 6,505
Debts account estimated at 8% of its accounts receivable balance at year end. The allowance for bad
debts at the beginning of the year is P19,327. Determine the Bad Debts Expense for the year 2025.
47. AAA Co. assigned P1,000,000 of accounts receivable to BBB Finance Co. as security for a loan of
P840,000. BBB charged a 2% commission on the amount of the loan; the interest rate on the note was
10%. During the first month, AAA collected P220,000 on assigned accounts after deducting P760 of
discounts. AAA accepted returns worth P2,700 and wrote off assigned accounts totaling P7,400. The
amount of cash AAA received from BBB at the time of the transfer was 823,200
month, 10% notes receivable dated May 31, 20A. The bank discounted the note at 12%. How much net
proceeds did ABC Company received from the discounted note? 1,209,600
49. Problem Solving| Problem Solving| ABC Company has a balance of P10,350,000 trade accounts
receivables as of the end of 20A. The following information shall be considered for adjustment:
• The balance included the selling price of goods in transit shipped FOB destination to a customer
amounting to 75,000. ABC was notified that the goods were received on January 5, 20B. Freight cost will
be collected from the customer.
• In the afternoon of December 31,20A, the goods costing P100,000 with a selling price of P120,000, was
shipped to X customer, FOB destination, freight collect. This wasn’t recorded because the shipment
documents were misplaced by the billing staff.
• On December 26, ABC shipped merchandise sold at P330,000 to Z, FOB destination. Initially, the
transaction was not recorded because of the shipping term. ABC was notified on December 31 AM that Z
already have the goods however, action was not taken until January 2, 20B.
• Merchandise was shipped to W in the afternoon of December 31, 20A costing P400,000 with a selling
price of P500,000, FOB shipping point, freight prepaid. The freight cost was 2% of the billed price. This
transaction was’nt booked by ABC yet.
How much is the adjusted balance of ABC’s Accounts Receivable account as of the year ended December
31, 20A? 11,208,000
50. Multiple Choices| Which of the following needs an adjustment to the accounts receivable account of
ABC Company?
a. freight cost paid by the buyer for goods shipped FOB shipping point
b. freight cost prepaid by the seller for goods shipped FOB shipping point
c. freight cost prepaid by the seller for goods shipped FOB destination
d. freight cost prepaid by the buyer for goods shipped FOB shipping point

Reviewer

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Reviewer

Uploaded by

Copyright:

Available Formats

1.

• Accounts receivable, January 2025 – 2,500,000

• Collections of account receivable net of 10% discount – 5,400,000

• Allowance for bad debts expense, January 2025 – 37,500

• Inventory , January 1 - 2,880,000

• Inventory , December 31 - 2,640,000

• Accounts payable, January 1 - 1,000,000

• Accounts payable, December 31 - 1,500,000

• Cash sales - 1,700,000

• Gross Profit on sales - 2, 160,000

8. Multiple Choices. Evaluate the following statements.

a. One statement is correct b. Two statements are correct

c. All statements are correct d. All statements are incorrect

• Gross sales (cash and credit) - P 1,520,000

• Collections from credit customers, net of 5% cash discount – 1,010,800

• Cash sales - 126,000

• Uncollectible accounts written off - 19,200

a. Check in payment of accounts payable amounting to P100,000 is recorded by depositor as P10,000

b. Deposit of another entity is credited to account of depositor

c. Bank service charge

d. NSF check from depositor

• Accounts receivable, December 2025 - 1,680,000

• Collections of account receivable - 6,240,000

• Allowance for bad debts expense, January 2025 – 38,400

• Inventory , January 1 - 2,880,000

• Inventory , December 31 - 2,640,000

• Accounts payable, January 1 - 1,000,000

• Accounts payable, December 31 - 1,500,000

• Cash sales - 1,200,000

• Gross Profit on sales - 2, 160,000

• Gross sales (cash and credit) - P 1,520,000

• Collections from credit customers, net of 5% cash discount – 1,010,800

• Uncollectible accounts written off - 19,200

• Accounts receivable, January 2025 – 2,500,000

• Collections of account receivable net of 10% discount – 5,400,000

• Allowance for bad debts expense, January 2025 – 37,500

• Inventory , January 1 - 2,880,000

• Inventory , December 31 - 2,640,000

• Accounts payable, January 1 - 1,000,000

• Accounts payable, December 31 - 1,500,000

• Cash sales - 1,700,000

• Gross Profit on sales - 2, 160,000

d. the statement of changes in equity will not affected by this error

a. FALSE, FALSE, TRUE

b. TRUE, FALSE, FALSE

c. TRUE, TRUE, FALSE

d. FALSE, TRUE, FALSE

e. TRUE, FALSE, TRUE

On November 30, 20A data are as follows:

Checks recorded per bank 3,450,000

Checks recorded per book 3,540,000

Deposits recorded per book 2,700,000

Collection by bank (P600,000 plus interest) 630,000

NSF check returned with November 30 statement 15,000

Balance per bank 2,745,000

Balance per book 2,715,000

How much is the outstanding checks on November 30? 900,000

• Collection for December 31 totaling P20,600 was deposited on January 2, 20B.

• Checks outstanding on December 31 amounted to P60,400.

• Gross sales (cash and credit) - P 1,520,000

• Collections from credit customers, net of 5% cash discount – 1,010,800

• Cash sales - 126,000

• Uncollectible accounts written off - 19,200