FABM 210 Fundamentals of Accounting Part 2: Lyceum-Northwestern University
FABM 210 Fundamentals of Accounting Part 2: Lyceum-Northwestern University
LYCEUM-NORTHWESTERN UNIVERSITY
Tapuac District, Dagupan City
Name:_____________________________________ Score:____________________
1. A complete set of financial statements does not include which of the following?
a. Statement of comprehensive income
b. Statement of cost of goods sold and gross profit
c. Balance sheet
d. Statement of cash flows
2. A financial statement that shows the inflows and outflows of cash during a particular period of time
is known as:
a. income statement
b. statement of retained earnings
c. balance sheet
d. statement of cash flows
3. Which of the following terms is not used to refer to the income statement?
a. statement of profit or loss
b. statement of financial performance
c. statement of operations
d. statement of financial position
4. Entity A has total current assets of ₱100,000 and total current liabilities of ₱60,000. What is Entity
A’s current ratio?
a. 1.67
b. 0.67
c. 0.60
d. ₱40,000
1|Page
7. Which of the following statements is incorrect?
a. The original source materials evidencing business transactions are called source documents.
b. Under the double-entry system of recording, for every peso of a debit, there must be a peso of a
credit.
c. The general ledger includes all accounts appearing in the trial balance while the subsidiary
ledgers provide additional detail in support of certain general ledger balances.
d. Assets, expenses, and drawings are decreased by debits and increased by credits.
e. The accounting process consists of the phases of recording, classifying and summarizing.
ABC Co.
Statement of Financial Position
As of December 31, 20x1
2|Page
ASSETS 20x1 20x0
Cash and cash equivalents ₱220,000 ₱100,000
Trade and other receivables 65,000 60,000
Inventory 60,000 240,000
Prepaid assets 20,000 80,000
365,00
Total current assets 0 480,000
₱700,00
TOTAL ASSETS ₱745,000 0
LIABILITIES
Trade and other payables ₱310,000 ₱280,000
EQUITY
Owner’s capital 435,000 420,000
₱700,00
TOTAL LIABILITIES & EQUITY ₱745,000 0
ABC Company
Statement of Comprehensive Income
For the year ended December 31, 20x1
Sales ₱500,000
Cost of sales (300,000)
GROSS PROFIT 200,000
Rent income 75,000
Depreciation expense (120,000)
Insurance expense (60,000)
Bad debts expense (15,000)
Loss on sale of equipment (20,000)
PROFIT FOR THE YEAR 60,000
Other comprehensive income -
COMPREHENSIVE INCOME FOR THE
₱60,000
YR.
Additional information:
Equipment with carrying amount of ₱120,000 was sold for ₱100,000 resulting to a loss on sale of
₱20,000.
Acquisition of equipment for cash amounted to ₱400,000.
Owner drawings totalled ₱45,000.
3|Page
15. How much is the net cash flows from (used in) operating activities?
a. 465,000
b. 426,000
c. 388,000
d. (42,000)
16. How much is the net cash flows from (used in) investing activities?
a. 300,000
b. 320,000
c. (300,000)
d. (220,000)
17. How much is the net cash flows from (used in) financing activities?
a. (42,000)
b. (45,000)
c. 120,000
d. 100,000
4|Page
20. What is the return on net assets?
a. 3.37
b. 3.48
c. 3.50
d. 3.52
21. Client Jay pays ABC Co. ₱1,000 in December for ABC to perform services for Jay in 45 days. ABC uses
the accrual basis of accounting. In December ABC will debit Cash for ₱1,000. What will be the other
account involved in the December accounting entry prepared by ABC (and what type of account is
it)?
a. Accounts Receivable (asset)
b. Prepaid Services (asset)
c. Service Revenues (revenue)
d. Unearned Revenues (liability)
22. ABC Co. performed services for Client Kay in December and billed Kay ₱4,000 with terms of net 30
days. ABC follows the accrual basis of accounting. In January ABC received the ₱4,000 from Kay. In
January, ABC will debit Cash since cash was received. What account should ABC credit in the January
entry?
a. Accounts Receivable
b. Service Revenue
c. Owner's Equity
d. Owner’s Drawings
23. ABC Co. follows the accrual basis of accounting and performs a service on account (on credit) in
December. The service was billed at the agreed upon amount of ₱3,500. ABC Co. debited Accounts
Receivable for ₱3,500 and credited Service Revenue for ₱3,500. The effect of this entry on the
balance sheet of ABC is to increase assets by ₱3,500 and to
a. Decrease Assets By ₱3,500
b. Increase Owner's Equity By ₱3,500
c. Decrease Owner’s Equity By ₱3,500
d. Increase Liabilities By ₱3,500
26. When an owner draws ₱5,000 from the business, the asset Cash decreases by ₱5,000. What is the
other effect on the balance sheet?
a. Total Assets Increases
b. Owner's Equity Decreases
c. Owner's Equity Increases
d. No effect on equity
27. Notes Payable could not appear as a line on the balance sheet in which classification?
a. Current Assets
b. Current Liabilities
c. Noncurrent Liabilities
d. All of these
5|Page
28. ABC Co. has current assets of ₱50,000 and total assets of ₱150,000. ABC has current liabilities of
₱30,000 and total liabilities of ₱80,000. What is the amount of ABC's owner's equity?
a. 20,000
b. 30,000
c. 70,000
d. 120,000
29. The heading of the statement of profit or loss and other comprehensive income will specify which of
the following?
a. apoint in time
b. aperiod of time
c. from this moment in time
d. time is gold
30. Income earned by a company from its main operating activities are normally referred to as
a. Revenues
b. Gains
c. Expenses
d. Losses
31. A company disposes of equipment that it no longer uses in its business. The amount received by the
company is more than the amount the asset is carried at in the accounting records. The company
will report a(n)
a. Expense
b. Gain
c. Loss
d. Revenue
33. The accounts of Entity A on December 31, 20x1 show the following balances:
34. Imagine you are a business manager. Your company has an opportunity to venture out into a new
market with a new product. However, your current resources are limited. In order to take the
opportunity, you need to discontinue the production of one of your existing products. Your
6|Page
company’s accountant provided you with the following information to help you decide which
product to discontinue.
35. Imagine you are a business manager of a manufacturing company. Your company’s manufacturing
process involves four (4) stages. The first stage takes most of the manufacturing time and costs and
is the bottleneck (i.e., obstacle, hindrance or handicap) in the manufacturing process. The demand
for your product is high and your company can sell all that it can produce. Your predicament now is
your productive capacity.
You want to streamline the first stage and came up with two proposals. Each of those proposals
decreases the manufacturing time but entails additional costs, such as additional investment in new
machines and employment of additional personnel. Your accountant prepared the following cost
analysis to help you decide which of those proposals to implement:
So what is your decision? (Hint: Prepare pro-forma statements of profit for each of the proposals,
including the existing set-up.)
a. Implement Proposal #1
b. Implement Proposal #2
c. Retain the existing set-up
d. This is too difficult for me. I’m quitting my job.
36. It is the principle of a sound tax system which requires that taxes should be imposed in manner that
is proportionate to the taxpayer’s ability to pay.
a. Fiscal adequacy
b. Theoretical justice
c. Administrative feasibility
d. Eminent domain
TAX TABLE
If taxable income is: Tax due is:
Not over ₱250,000 0%
Over ₱250,000 but not over ₱400,000 20% of the excess over ₱250,000
Over ₱400,000 but not over ₱800,000 ₱30,000 + 25% of the excess over ₱400,000
Over ₱800,000 but not over ₱2,000,000 ₱130,000 + 30% of the excess over ₱800,000
Over ₱2,000,000 but not over ₱490,000 + 32% of the excess over
₱8,000,000 ₱2,000,000
Over ₱8,000,000 ₱2,410,000 + 35% of the excess over
₱8,000,000
7|Page
37. Ms. Z, single with no qualified dependent, earns taxable compensation income of ₱3,230,000 during
a taxable year. How much is the tax due of Ms. Z?
a. 338,600
b. 683,800
c. 838,600
d. 883,600
Regular:
Basic monthly salary 22,000
Cost of living allowance (COLA) per
month 1,000
Laundry allowance per month 300
SSS contribution 581.30
PhilHealth contribution 275
Pag-IBIG contribution 100
Union dues 100
39. The accounting records of a taxpayer’s business show the following information for the taxable year:
Additional information:
The ending inventory per physical count is ₱70,000.
How much is the tax due assuming the taxpayer elects to deduct itemized deductions?
a. 30,000
8|Page
b. 80,000
c. 50,000
d. d. 0
40. Mr. B’s gross salary for the month of March 20x1is ₱64,000 before deductions for the following: SSS
contribution of ₱581.30, PhilHealth contribution of ₱437.50,Pag-IBIG contribution of ₱100 and
withholding tax. Mr. B’s employer withholds income taxes on a monthly basis. How much is the net
pay of Mr. B?
a. 49,895.20
b. 51,094.20
c. 52,994.20
d. 55,694.20
41. Mr. C, a resident citizen, earns the following passive incomes, gross of final taxes:
How much is the total final tax on Mr. C’s passive incomes?
a. 7,800
b. 8,600
c. 9,800
d. 12,600
44. The VAT included in the purchase price paid by a buyer is called
a. input VAT.
9|Page
b. selling VAT.
c. output VAT.
d. VAT mobile.
45. You own a VAT-registered business. During the period, your business collected ₱2,576,000 from
sales and paid ₱1,008,000 for purchases. Your business neither extends credit to customers nor
makes purchases on credit.The amount of VAT that you are required to pay to the BIR is
a. 309,120.
b. 188,160.
c. 168,000.
d. 276,000.
ajmiranda
------END-----
Goodluck and Godbless
10 | P a g e