CHATERINE C.

VILLAHERMOSA BSA-2

ASSUMPTION COLLEGE OF NABUNTURAN

Nabunturan, Compostela Valley

ACCTG 101 Final Examination

First Semester 2020 21-Dec-20

MULTIPLE CHOICE. For computational problems, please show solutions, otherwise no score.

1. The basic purpose of accounting is

a. To provide the information that the managers of an economic entity need to control its opera
b. To provide information that the creditors of an economic entity can use in deciding whether t
additional loans to the entity.
c. To measure the periodic income of the economic entity.
d. To provide quantitative financial information about a business enterprise that is useful in m
economic decision.

2. The records of properties acquired and services availed of by a business are maintained in accordance w
a. Business entity concept.
b. Cost principle.
c. Proprietorship principle.
d. Matching principle.

3. Which are of public accounting means the examination of financial statements by a CPA for the purpose
expressing an opinion as to the fairness of the statements?
a. Management advisory services
b. Taxation
c. Internal auditing
d. External auditing

4. Which of the following is not an example of additional capital?

a. A sole proprietor purchases a car through the bank account of the entity.
b. A sole proprietor brings a second-hand computer from his home to the office.
c. A sole proprietor transfers ₱1,000 from his own bank account to the entity account.
d. A sole proprietor uses his own building as an office without receiving any rent.

5. Suppose a debtor repays his debt of ₱50,000 by transferring the money into the bank account of the bus
The effect of the transaction on the accounting equation would be:
a. Both assets and liabilities increase by ₱50,000.
b. Both assets and liabilities decrease by ₱50,000.
c. Only assets decrease by ₱50,000.
d. Assets and liabilities remain unchanged.

6. Which of the following is correct if the sole proprietor of an entity borrows ₱30,000 in the name of the e
deposits it into the entity's bank account?
 a. The assets of the entity increase by ₱30,000
b. The liabilities of the entity decrease by ₱30,000
c. The capital of the entity increase by ₱30,000
d. The drawings of the entity increase by ₱30,000

7. Which of the following statements regarding a trial balance is incorrect?

a. A trial balance helps to localize errors within an identifiable time period.
b. A trial balance is a test of the equality of the debit and credit balances in the ledger.
c. A trial balance is a list of all of the open accounts in the ledger with their balances as of a give
d. A trial balance proves that no errors of any kind have been made in the accounts during the

8. A business compiling its financial statements for the year to July 31 each year pays rent quarterly in adva
Jan. 1, Apr. 1, July 1 and Oct. 1 of each year. The annual rent was increased from ₱600,000 per year to ₱
per year starting Oct. 1, 2018. What figure should appear for rent expense in the entity's income statem
the year ended July 31, 2019?
a. ₱690,000
b. ₱620,000
c. ₱700,000
d. ₱630,000

9. Draft accounts for the year ended Oct. 31, 2018 report a loss of ₱148,600. The entity did not include an
of ₱162,500 and a prepayment of ₱83,400. What is the profit or loss for the year ended Oct. 31, 2018 fo
the inclusion of the accrual and prepayments?
a. A loss of ₱69,500
b. A loss of ₱227,700
c. A loss of ₱394,500
d. A profit of ₱180,700

10 . Which of the following is an example of a deferral?

a. A commission collected in advance.
b. Interest earned on a bank account.
c. Interest expense incurred but not yet paid.
d. Medical fees earned but not yet collected.

11 . Which of the following transactions during the year would most likely not need an adjusting entry at the
of the period?
a. Cash withdrawal by the owner.
b. Performance of a service that previously was paid for.
c. Purchase of a two-year insurance policy.
d. Purchase of office equipment.

12 . Failure to adjust for accrued salaries at year-end will result in an

a. Overstatement of liabilities.
b. Overstatement of profit.
c. Understatement of assets.
d. Understatement of owner's equity.
13 . A statement of changes in equity
a. Has no relationship with the balance sheet.
b. Indicates whether the cash position of the entity will permit withdrawals by the owner.
c. Provides a link between the income statement and the balance sheet.
d. Shows the income and expenses of the entity for a given period.

14 . The trial balance debit or credit amount of each account is combined with the amount of any debit or cr
adjustment to that account to determine the new balance of the account. This process is known as
a. Balancing
b. Cross footing
c. Footing
d. Totaling

15 . If the balance of the Building account was ₱140,000 and ₱30,000 of Accounts Payable were paid in cash,
would be the balance of the Villanueva, Capital account?
a. ₱210,000
b. ₱260,000
c. ₱320,000
d. ₱340,000

16 . On the completed work sheet, which set of columns usually should be out of balance after the initial foo
a. Balance Sheet columns only
b. Adjusted trial balance columns only
c. Income Statement columns only
d. Both Income Statement and Balance Sheet Columns

17 . Which of the following accounting cycle steps comes before the others?
a. The financial statements are prepared.
b. Closing entries are recorded and posted.
c. Source documents are analyzed.
d. Adjusting entries are recorded and posted.

18 . Which of the following accounts is not closed during the closing process?
a. Income Summary
b. Owner's Capital
c. Commissions Revenues
d. Owner's Withdrawals

19 . A trade discount is
a. Show in the sales journal.
b. Shown in the purchase journal.
c. Shown in the general journal.
d. Not shown anywhere.

20 . A merchandiser will earn an operating income of exactly zero when

a. Cost of goods sold equals gross margin.
b. Gross margin equals operating expenses.
 c. Net sales equals cost of goods sold
d. Operating expenses equals net sales.

21 . The collection of a ₱5,000 account beyond the 2% discount period would result in a
a. Credit to Accounts Receivable for ₱5,000.
b. Credit to Cash for ₱5,000
c. Debit to Cash for ₱4,900.
d. Debit to Sales Discount for ₱100.

22 . On a worksheet for a merchandising entity that uses the perpetual inventory system
a. The cost of goods sold is contained in one account in the Balance Sheet columns.
b. The cost of goods sold is contained in one account in the Income Statement columns.
c. The cost of goods sold is created by an entry in the Adjustments columns.
d. The items composing cost of goods sold are scattered through the Income Statement column

23 . Which of the following accounts would appear on a worksheet for a merchandising entity that uses the p
inventory system?
a. Cost of Goods Sold
b. Income Summary
c. Purchases Returns and Allowances
d. All of these

24 . The Merchandise Inventory account balance in the Trial Balance columns of a worksheet for a merchand
entity that uses the periodic inventory system
a. Appears in both the debit and the credit columns.
b. Appears in the credit column only.
c. Is correct as stated.
d. Is the same as it was at the beginning of the period.

25 . The controlling account in the general ledger that summarizes the debits and credits to the individual ac
in the customers' ledger is called
a. Accounts payable
b. Accounts receivable
c. Purchases
d. Sales

26 . If a firm uses special journals, in which journal would the sale of merchandise for cash be recorded?
a. Cash disbursements journal
b. Cash receipts journal
c. General journal
d. Sales journal

27 . When merchandise is returned or a price adjustment is granted, an entry is made in the

a. Adjustments journal
b. Cash receipts journal
c. General journal
d. Purchases journal
28 . Each of the following is true with respect to product cost, except
a. Direct labor is an example of a product cost.
b. Product costs are deducted from revenue when the manufacturing process is completed.
c. Product costs are not regarded as expenses of the current period.
d. Product costs represent inventoriable costs.

29 . Which of the following is not likely to be treated as a product cost?

a. Depreciation on the factory.
b. Interest paid on nots payable.
c. Portion of the cost of running the quality control department.
d. Wages paid to factory workers.

30 . The purchases - raw materials account is debited when

a. Direct materials are placed into production.
b. Direct materials are purchased.
c. Indirect materials are placed into production.
d. Indirect materials are purchased.

Use the following information to answer the questions below (Numbers 31 to 35). The following is the t
for Shine and Rain Paints Services:

Shine and Rain Paint Services

Trial Balance
31-Jul-20

Cash P 120,000
Accounts Receivable 80,000
Painting Supplies 130,000
Office Supplies 200,000
Prepaid Rent 280,000
Prepaid Insurance 200,000
Painting Equipment 200,000
Office Equipment 120,000
Accounts Payable P 200,000
Lakers, Capital 600,000
Lakers, Withdrawals ?
Painting Revenues ?
Salaries Expense ?
Utilities Expense 200,000
Telephone Expense 120,000
P A P B

31 . If the balance of the Lakers, Withdrawals account were P480,000 and the balance of the Salaries Expens
were P200,000, what would be the amount of B?
a. ₱ 720,000
 b. ₱2,320,000
c. ₱1,480,000
d. ₱1,520,000 answer: 1,530,000.00

32 . If the trial balance showed a balance of P280,000 in the Lakers, Withdrawals account and a balance of P2
in the Salaries Expense account, what would be the amount of Painting Revenues for the period?
a. ₱1,320,000 answer: 1,330,000.00
b. ₱1,920,000
c. ₱ 720,000
d. ₱1,720,000

33 . In the trial balance, total assets equal

a. ₱1,320,000
b. ₱ 920,000
c. ₱1,720,000
d. ₱1,640,000 answer: 1,650,000.00

34 . If the trial balance showed a balance of P320,000 in the Salaries Expense account and a balance of P1,40
in the Painting Revenues account, what would be the amount of A?"
a. ₱2,000,000 answer: 1,970,000.00
b. ₱2,200,000
c. ₱1,800,000
d. ₱2,400,000

35 . If the trial balance showed a balance of P160,000 in the Salaries Expense account and a balance of P1,20
Painting Revenues account, what would be the amount of the Lakers, Withdrawals account?
a. ₱1,000,000
b. ₱ 760,000
c. ₱ 560,000
d. ₱ 200,000 answer: 190,000.00

Use the following information to answer questions 36 to 40 below. Phoenix Ball Repairs had the followin
sheet accounts and balances:

Accounts Payable 240,000 Equipment 280,000

Accounts Receivable 40,000 Knicks, Capital ?
Building ? Land 280,000
Cash 120,000

36 . If the balance of the Knicks, Capital accounts was P840,000, what would be the balance of the Building a
a. ₱1,000,000
b. ₱ 160,000
c. ₱ 360,000
d. ₱ 840,000

37 . If the balance of the Building account was P680,000, what would be the total of liabilities and owner's eq
a. ₱ 680,000
 b. ₱1,080,000
c. ₱1,280,000
d. ₱1,400,000

38 . If the balance of the Building account was P600,000 and the equipment was sold for P280,000, what wou
total of owner's equity?
a. ₱ 600,000
b. ₱ 640,000
c. ₱1,080,000
d. ₱1,320,000

39 . If the balance of the Building account was P560,000 and P120,000 of Accounts Payable were paid in cash
would be the balance of Knicks, Capital account?
a. ₱ 840,000
b. ₱1,040,000
c. ₱1,280,000
d. ₱1,360,000

40 . If the balance of the Building account was P320,000 and P120,000 of Accounts were paid in cash, what w
the total liabilities and owner's equity?
a. ₱ 560,000
b. ₱ 720,000
c. ₱ 760,000
d. ₱ 920,000

41 . Under the perpetual inventory system, in addition to making the entry to record a sales return, and entit
a. Debit Cost of Goods Sold and credit Merchandise Inventory.
b. Debit Cost of Goods sold and credit Purchases.
c. Debit Merchandise Inventory and credit Cost of Goods sold.
d. Make no additional entry until the end of the period.

42 . Merchandise inventory becomes part of cost of goods sold when an entity

a. Pays for inventory.
b. Purchases the inventory
c. Receives payment from customer
d. Sells the inventory.

Use the following information to answer questions 43 to 47 below:

Accounts Debit Credit

Sales 375,000
Sales returns and allowances 7,500
Sales discounts 5,000
Purchases 85,000
Purchases returns and allowances 10,000
Transportation In 15,000
 Selling expenses 37,500
General and administrative expenses 137,500

In addition, beginning merchandise inventory was ₱27,500 and ending merchandise inventory was ₱17,5

43 . Net sales for the period were

a. ₱377,500
b. ₱362,500
c. ₱367,500
d. ₱387,500

44 . Net purchases for the period were

a. ₱75,000
b. ₱90,000
c. ₱105,000
d. ₱215,000

45 . Cost of goods sold for the period was

a. ₱117,500
b. ₱80,000
c. ₱100,000
d. ₱85,000

46 . Profit for the period was

a. ₱262,500
b. ₱225,000
c. ₱125,000
d. ₱87,500

47 . If beginning and ending merchandise inventories were ignored in computing profit, then profit would be
a. Overstated by ₱10,000.
b. Understated by ₱27,500
c. Understated by ₱17,500
d. Understated by ₱10,000

o0o End of Final Examination o0o

never take things for granted

always be very careful
use your common sense
maintain a forward looking attitud
jun alcomendras
instructor
 need to control its operations.
use in deciding whether to make

rprise that is useful in making rational

ntained in accordance with the

by a CPA for the purpose of

entity account.

bank account of the business.

000 in the name of the entity

s in the ledger.
heir balances as of a given date.
the accounts during the accounting period.

ays rent quarterly in advance on

m ₱600,000 per year to ₱720,000
e entity's income statement for

entity did not include an accrual Solution: 148,600.00

ar ended Oct. 31, 2018 following 162,500.00
(13,900.00)
83,400.00
69,500.00

an adjusting entry at the end

wals by the owner.

mount of any debit or credit

process is known as

ayable were paid in cash, what

lance after the initial footing?

 eet columns.
tement columns.

come Statement columns.

ing entity that uses the periodic

orksheet for a merchandising

edits to the individual accounts

r cash be recorded?
rocess is completed.

5). The following is the trial balance

ce of the Salaries Expense account Solution: 31 1,650,000.00

480,000.00
200,000.00
 2,330,000.00
800,000.00
1,530,000.00

ount and a balance of P200,000 Solution: 32 1,650,000.00

es for the period? 280,000.00
200,000.00
2,130,000.00
800,000.00
1,330,000.00

Solution: 33

nt and a balance of P1,400,000 Solution: 34 1,650,000.00

320,000.00
1,970,000.00

nt and a balance of P1,200,000 in the Solution: 35 1,650,000.00 800,000.00

als account? 160,000.00 1,200,000.00
1,810,000.00 2,000,000.00
1,810,000.00
190,000.00

l Repairs had the following balance

balance of the Building account? Solution: 280,000.00

840,000.00
1,080,000.00
720,000.00
360,000.00

liabilities and owner's equity? Solution: 240,000.00

1,160,000.00
 1,400,000.00

d for P280,000, what would be the Solution: 720,000.00

600,000.00
1,320,000.00
240,000.00
1,080,000.00

Payable were paid in cash, what Solution: 720,000.00

560,000.00
120,000.00
1,400,000.00
120,000.00
1,280,000.00

were paid in cash, what would be 720,000.00

320,000.00
1,040,000.00
120,000.00
920,000.00

d a sales return, and entity would

dise inventory was ₱17,500. Solution 375,000.00
7,500.00
5,000.00
362,500.00

Solution 85,000.00
10,000.00
75,000.00

ofit, then profit would be

e things for granted

very careful
common sense
a forward looking attitude