The assets that can be converted into cash within a

short period (1 year or less) are known asSelect one:

a. Current assets
b. Intangible Assets
c. Fixed assets
d. Investments

Probable future sacrifices of economic benefits arising from past transactions

are known as:
Select one:
a. Income
b. Assets
c. Expenses
d. Liabilities

Temporary accounts would include:

Select one:
a. Capital, income and expenses
b. Capital, drawing and income
c. Drawing, income and expenses
d. Capital, drawing and expenses

The accounting elements in the Balance sheet include:

Select one:
a. Assets, liabilities, and losses.
b. Income and expenses
c. Liabilities, revenues, and gains
d. Assets, liabilities and equity

All of the following are cash and cash equivalents, EXCEPT

Select one:
a. Cash to be paid by a debtor
b. Money market replacement
c. Savings deposit
d. Currency that is legal tender

The period covered by the prepared financial statements:

Select one:
a. Cannot be shorter than 12 months.
b. Should be of the same length all the time.
c. Cannot end at the middle of a month.
d. Cannot be longer than 12 months.

It is usually used in connection with activities and events that result to the
inflow of assets and/or outflow of liabilities.
Select one:
a. Assets
b. Income
c. Equity
d. Liabilities

Which of the following statement is incorrect?

Select one:
a. Liabilities can result from accepted trade practices or business
commitments.
b. An estimated amount may be assigned to a liability when it is presented in
the balance sheet.
c. Liabilities represent present economic obligations that would require future
settlement.
d. The settlement of a liability requires cash payment.

The elements of Accounting equation are

Select one:
a. I, II and IV
b. I, II, III
c. I, II and IV
d. II, III and IV
e. I. Assets
II. Liabilities
III. Trial balance
IV. Capital

______represent those economic resources owned and/or controlled by the

enterprise, and which are expected to have future usefulness to the business.
Select one:
a. Assets
b. All of the answers correct
c. Equity
d. Liabilities
A
D
C
D
A
D
B
D
A or C (I, II and IV)
A

The cost of chairs and tables of the Manager's office

will be:Select one:
a. A revenue expenditure
b. AVdeferred revenue expenditure
c. No correct answer
d. A capital expenditure

Which of the following is not a characteristics of an economic resource so that

it could be classified as an asset of the business?
Select one:
a. The resource was acquired as a result of a past transaction.
b. The resource has future resource has future service potential.
c. The economic resource has physical existence.
d. The business entity has control over the usefulness of the economic
resource.

Which of these items would be accounted for as an expense?

Select one:
a. The purchase of land.
b. Payment of the current period's rent.
c. Dividends to stockholders
d. Repayment of a bank loan

The net income of a reporting period is equal to:

Select one:
a. Income - expenditures
b. Revenues - losses
c. Income - expenses
d. Expenses - income

Which of the following items may appear in a balance sheet?

Select one:
a. Capital, Drawing, and income
b. Capital, drawing, and expenses
c. Drawing, income and expenses
d. Capital, drawing, and net income

Which of the following accounts is a non-current liability

Select one:
a. Retained earnings
b. Trade payables
c. Bank loan
d. Share capital

Permanent accounts would include:

Select one:
a. Assets, liabilities and equity
b. Income, expenses and equity
c. Assets, equity, and expenses
d. Assets. liabilities and income

The liabilities that are payable in more than a year and are not be liquidated
from current assets.
Select one:
a. All of the answers correct
b. Fixed liabilities
c. Contingent liabilities
d. Current liabilities

Which of the following statements is false?

Select one:
a. Total liabilities can be bigger than the total assets.
b. Owner's equity can be bigger than the total assets.
c. Owner's equity cannot be bigger than the total assets.
d. Owner's equity can be bigger than the total liabilities

Which of the following transactions would increase Cash and cash equivalents
and increase Non-current liabilities?
Select one:
a. Purchase goods on credit
b. Bank loan
c. No correct answer
d. Payment to supplier
e. Payment from customer
A
C
B
C
D
C
A
B
B
B
Arise from those ordinary activities that are directly
related to the normal operations of the business.Select
one:
a. Revenues
b. Loss?
c. Gains
d. All of the answers correct

Amount generated from sales in a business is called:

Select one:
a. Gross Profit
b. Net income
c. Income
d. Operating profit

A loan can be described as a short-term loan of the period is:

Select one:
a. Less than 1 year
b. More than 2 years
c. Over 1 year
d. 3 years

Retained earnings will change over time because of several factors. Which of
the following factors would explain an increase in retained earnings?
Select one:
a. Net loss
b. Net income
c. Dividends
d. Investments by stockholders
Which of the following statements is incorrect?
Select one:
a. An asset has future usefulness or service potential.
b. An asset does not always have physical attributes
c. A reliable monetary value must be assignable to the reported asset items.
d. The business enterprise must have ownership over the items reported as
business assets.

Which of the following is NOT considered revenue?

Select one:
a. Rent revenue
b. Deferred Revenue
c. Interest Revenue
d. Ticket Sales Revenue

____these represents the present economic obligations of an entity that would

require some form of future settlement.
Select one:
a. Liabilities
b. Assets
c. Equity
d. Income

Which of the following will not be reported in the statement of changes in

equity?
Select one:
a. Balance of capital at the end of the period.
b. Proceeds from the sale of the building
c. Net income during the period
d. Additional investment of the proprietor

The debts which are to be repaid within a short period (year or less) are
known as
Select one:
a. All of the answers correct
b. Current liabilities
c. Fixed liabilities
d. Contingent liabilities

The long-term assets that have no physical existence but are right that have
value is known as:
Select one:
a. Investments
b. Intangible assets
c. Current assets
d. Fixed assets

a. Investments
b. Intangible assets
c. Current assets
d. Fixed assets
A. Revenue
A. Gross profit
A. Less than 1 year
B. Net income
D.
B. Deferred revenue
A. Liabilities
B. Proceeds from the sale of the building
B. Current liabilites
B. Intangible asset

A business can use a general ledger without using

subsidiary ledgers, or vice versa.Select one:
a. False
b. True

Only transactions involving cash can be journalized.

Select one:
a. True
b. False

A business can use a general journal without using special journals, or vice
versa.
Select one:
a. False
b. True

A transaction that involves an increase in an asset and a decrease in a liability

would not affect the equality of the fundamental accounting equation.
Select one:
a. False
b. True

It is a good practice to post all the debits of all the journal entries of the month
before posting all the credits of the same period.
Select one:
a. True
b. False

1.The income statement shows which of the

following?
a. Income and expenses
b. Assets and liabilities
c. Receipts and payments

2.Which of the following account titles will not appear in the balance sheet of a
single proprietorship?
a. Investment in shares of stock of PLDT
b. Accumulated depreciation- building
c. Share capital
d. Franchise

3.The purchase of a new delivery truck to be used in the business?

a. Investing
b. Operating
c. Supplemental
d. Financing

4.Which of the following is an asset account?

a. Notes payable
b. Prepaid insurance
c. Accounts payable
d. Unearned insurance

5.Which of these is not a Financial Statement?

a. Income statement
b. Cash book
c. Balance sheet

6.An increase in the balance in Accounts payable.

a. Supplemental
b. Financing
c. Investing
d. Operating

7.Equity is shown in which financial statement?

a. Cash flow
b. Income statement
c. Balance sheet

8.Which of the following is a current asset?

a. Land that is acquired for future expansion of the business
b. Unused supplies
c. Cash paid upon signing the franchise contract
d. Cash deposit for the machinery that is to be delivered in the following
period.

9. The term operating, financing and investing as used to categorize what type
of item?
a. Revenue
b. Cash flow
c. Assets

10.Inventory and accounts receivable are classified in the balance sheet as?
a. Current liabilities
b. Long-term assets
c. Current assets
Which of the following is not an acceptable basis of recognizing expenses?

Select one:
a. Critical measurement
b. Immediate recognition
c. Systematic and rational allocation
d. Direct association with revenue
Which of the following expenses is recognized under the direct association with revenue
criterion?

Select one:
 a.Salaries of office staff
b.Salesmen's commission
c.Advertising expense
d.Salary of the sales manager

Which of the following is the reason why adjusting entries are prepared?

Select one:
a. Periodicity concept
b.Prudence or conservatism
c. Matching concept
d. Qualitative characteristics of timeliness
A supporting document prepared by a buyer that is used as an evidence of a
downward adjustment in the amount that is due to the seller is known as:
Select one:
a. Credit memorandum
b. Credit memorandum
c. Receiving report
d. Purchase order (If the seller prepared the evidence, it is called credit
memorandum. If it is the buyer, it is a debit memorandum.)

A company has the following accounts balance: Sales P2,000,000; Sales Return and
Allowances P250,000; Sales Discounts P50,000; and Cost of Goods Sold
P1,275,000. The gross profit rate is:
Select one:
a. 25%
b. 64%
c. 51%
d. 36%
Which of the following would appear on both a single-step and a multiple step statement of
earnings?

Select one:
a. Gross profit
b. Cost of goods sold
 c. Other expenses and losses
d. Earnings from operations
The basic function of financial accounting is to

Select one:
a. Interpret financial data
b. Record all business transactions
c. No correct answer
d. Assist the management in performing functions effectively
Assume that sales are P450,000, sales discounts are P10,000, net earnings are P35,000, and cost
of goods sold is P320,000. Gross Profit and operating expenses are respectively:

Select one:
a. P120,000 and P95,000
b. P120,000 and P85,000
c. P130,000 and P85,000
d. P130,000 and P95,000
The business carried out work for a customer and was paid in cash, is the entry to the revenue
account a debit or a credit?

Select one:
a. Debit
b. Credit
Information is material if:

Select one:
a. It is recorded on the basis of concrete documents.
b. None of the previous answers.
c. It corresponds to financial variables
d. Its omission or misstatement could influence the economic decisions of users taken on
the basis of the financial statements.
All of the following are characteristics of managerial accounting, except:

Select one:
a. Its purpose is to assist managers in planning and controlling business operations.
b. Information must be developed in conformity with generally accepted accounting
principles or with income tax regulations.
 c. Information may be tailored to assist in specific managerial decisions.
d. Reports are used primarily by insiders rather than by persons outside of the business
entity.
The four principal qualitative characteristics of useful financial statements are:

Select one:
a. Understandability, relevance, reliability, comparability
b. Understandability, relevance, accuracy, comparability
c. Timeliness, relevance, reliability, comparability
d. Understandability, relevance, reliability, simplicity
Which financial statement is used to show what the firm owns?

Select one:
a. Statement of retained earnings
b. Income statement
c. Cash flow statement
d. Balance sheet
Financially, shareholders are rewarded by

Select one:
a. No correct answer
b. Profits
c. Dividends
d. Interest
Which of the following statements is?incorrect?

Select one:
a. The business enterprise must have ownership over the items reported as business assets.
b. An asset has future usefulness or service potential
c. An asset does not always have physical attributes.
d. A reliable monetary value must be assignable to the reported asset items.
Financial statements are prepared:

Select one:
a. For corporations, but not for sole proprietorship or partnership.
b. In either monetary or non-monetary terms, depending upon the need of the decision-
maker.
 c. Only for publicly owned business organizations.
d. Primarily for the benefit of persons outside of the business organizations
What are the accounting standards issued by the IASB called?

Select one:
a. International Accounting Principles
b. International Financial Reporting Standards
c. International Financial Accounting Standards
d. Internationally Accepted Accounting Standards
Accounting deals with quantifiable information.

Select one:
a. False
b. True
Person who manages all of a firm's accounting activities.

Select one:
a. Accounting staff
b. Payroll manager
c. Controller

The sales discount is based on:

Select one:
a. Invoice price less return and allowances
b. Invoice price plus freight out
c. Invoice less discount
d. Invoice price plus freight in
The accounting cycle begins by recording
_____________ in the form of journal entries.
a. Corporate minutes
b. Business Contracts
c. Financial Information
d. Business Transactions

Question 2
Question text
A chart of accounts is limited to 50 accounts.
Select one:
a. True
b. False

Question 3
Question text
Which is NOT a type of adjusting entry?
Select one:
a. Unearned expenses
b. Accrued expenses
c. Prepaid expenses
d. Unearned revenues

Question 4
Question text
Cash paid to a supplier for goods supplied by them on credit terms, is the
entry to accounts payable a debit or credit entry?
Select one:
a. Credit
b. Debit

Question 5
Question text
The business carried out work for a customer and was paid in cash, is the
entry to the revenue account a debit or a credit?
Select one:
a. Credit
b. Debit

Question 6
Question text
The payment of a liability is recorded by a debit to the liability account and a
credit to the owner's capital account.
Select one:
a. True
b. False

Question 7
Question text
Supplies are purchased for cash, is the double entry posting to the supplies
on hand account a debit or credit entry?
Select one:
a. Credit
b. Debit

Question 8
Question text
Which of the following is never debited when making closing entries?
Select one:
a. Owner's Drawings
b. Expenses
c. Revenue
d. Income summary

Question 9
Question text
Debit and credit rules for accounts on one side of the accounting equation are
mirror images of those on the other side.
Select one:
a. False
b. True

Question 10
Not yet answered
Marked out of 1.00
Not flaggedFlag question
Question text
Rent is prepaid for an office for the business, is the accounting entry to the to
the prepaid rent account a debit or a credit?
Select one:
a. Debit
b. Credit

Question 11
Not yet answered
Marked out of 1.00
Not flaggedFlag question
Question text
The top of the T account is used for account titles. Credits are entered on the
left side of the T; debits, on the right.
Select one:
a. True
b. False
Which is the last step of accounting as a process of information?

Select one:
a. Communication of information
b. Analysis and interpretation of information
c. Preparation of financial statement
d. Recording the transaction
A merchandising company:

Select one:
a. Earns profit from fares only.
b. Earns profit from commissions only.
c. Earns net income by buying and selling merchandise.
d. Receives fees in exchange for services
Government agency gives a CPA certificate to an accountant after he passes a series of rigorous
examinations administered by the Board of Accountancy (BOA).

Select one:
a. PRC
b. Civil Service Commission
c. BIR
d. School Registrar
Supplies are purchased for cash, is the double entry posting to the supplies on hand account a
debit or credit entry?

Select one:
a. Credit
b. Debit

Work was completed and invoiced to a customer for payment within 30 days, is the posting to
accounts receivable a debit or a credit?

Select one:
a. Debit
b. Credit
A one year reporting period that begins on January 1 ends on December 31 is:
Select one:
a. Calendar year reporting period
b. Semester reporting period
c. Quarterly reporting period
d. Fiscal year reporting period
Although accounting information is used by a wide variety of external parties, financial reporting
is primarily directed toward the information needs of:

Select one:
a. Investors and creditors
b. Customers
c. Government agencies such as the Internal Revenue Service.
Which of the following accounts is not liability?

Select one:
a. Prepaid insurance
b. Accrued wages
c. Unearned rent
d. Provision for income taxes