Reference no: EM132518647

Question 1. The Store Supplies account had a P2,808 debit balance at the end of the accounting period before adjustment for supplies used, and an inventory of P605 worth of unused supplies was on hand. Which of the following is the required adjusting entry?

a. Debit Store Supplies Expense P605 and credit Store Supplies P605.

b. Debit Store Supplies P2.203 and credit Store Supplies Expense P2.203.

c. Debit Store Supplies P605 and credit Store Supplies Expense P605.

d. Debit Store Supplies Expense P2,203 and credit Store Supplies P2,203.

Question 2. Which of the following transactions result in the recognition of an expense?

a. Expiration of usefulness of equipment during the accounting period

b. Payment on accounts payable

c. Withdrawal of cash by the owner

d. Payment of the principal of a loan

Question 3. On a worksheet for a merchandising company that uses the perpetual inventory system,

a. the items composing cost of goods sold are scattered through the Income Statement columns.

b. the cost of goods sold is contained in one account in the Income Statement columns.

c. the cost of goods sold is contained in one account in the Balance Sheet columns.

d. the cost of goods sold is created by an entry in the Adjustments columns.

Question 4. An item retailing for P10,000, subject to a trade discount of 25%, is paid for within the discount period on terms of 2/10, n/30. What is the amount of payment?

Question 5. The word "accrued" implies which of the following:

a. Money has been paid but no services have been provided

b. Money has been paid for a service to be performed during the next period.

c. Money has been paid and the service has been provided.

d. Money has not been paid or received but the service has already been performed or rendered.

Question 6. Which of the following transactions correctly maintains the equality in the accounting equation?

a. To record collections on account, cash, and accounts receivable ate increased by P160,000

b. To record the purchase of computer equipment, computer equipment is increased, and cash is decreased by P46,000

c. To record the payment of notes, notes payable is decreased and cash is increased by P70,000

d. To record payment of rent, rent expense and cash are increased by P8,000

Question 7. At the end of an accounting period, the equation Assets = Liabilities + Owner's Equity does not necessarily balance. Which of the following actions balances the equation?

a. Subtract revenues and add expenses to owner's equity

b. Subtract revenues from owner's equity and add expenses to assets

c. Add the difference between revenues and expenses to owner's equity

d. Add revenues and subtract expenses from assets

Question 8. Recording a single transaction in the double-entry accounting records may

a. Increase the balance on an asset account by a given amount and decrease the balance on a liability account by the same amount

b. Decrease the balance on a liability account by a given amount and decrease the balance on an asset account by the same amount

c. Increase the balance on one asset account by a given amount and increase the balance on another asset account by the same amount

d. Decrease the balance on an asset account by a given amount and increase the balance on a liability account by the same amount

Question 9. Which of the following steps in the accounting cycle are listed in logical order?

a. Prepare the income statement, prepare the statement of financial position and then prepare the worksheet.

b. Post the journal entries to ledger accounts, prepare the worksheet, and then make a trial balance

c. Journalize the closing entries, post the closing entries, and then take a post-closing trial balance.

d. Post the closing entries, take a post-closing trial balance, then journalize the closing entries.

Question 10. A business received cash of P31,254 in advance for revenue that will be earned later. The cash receipt entry debited cash and credited unearned revenues for P31,254. At the end of the period, P12,579 is still unearned. The adjusting entry for this situation will

a. Debit unearned revenues and credit revenues for P18,675.

b. Debit unearned revenues and credit revenues for P16,875.

c. Debit revenues and credit unearned revenues for P18,675.

d. Debit revenues and credit unearned revenues for P16,875.

Question 11. Which of the following accounts may be placed first in a proper journal entry?

a. Cash, when it has been decreased

b. Interest Income, when it has been increased

c. Unearned Revenues, when it has been increased

d. Accounts Payable, when it has been decreased

Question 12. Which of the following errors will not cause the debit and credit columns of trial balance to be unequal?

a. A debit entry was recorded in the wrong account

b. The balance of an account was incorrectly computed

c. The account balance was carried to the wrong column of the trial balance

d. A debit was entered in an account as credit.

Question 13. Unearned revenues are recorded by companies that

a. Pay money in advance of the performance of a service

b. Pay money at the time the performance of a service is complete

c. Receive money in advance of the performance of a service

d. Receive money at the time the performance of a service is complete