Quizbowl With Answer Key

EASY
1. What kind of business is engaged in buying and selling of goods and commodities for
profit? Trading
2. What function do accounting journals serve in the accounting process?
a. Classifying c. Reporting
b. Summarizing d. Recording
3. Accounting is a service activity. Its function is to provide
a. Quantitative and qualitative information
b. Qualitative information
c. Quantitative information
d. None of the above
4. Purchase of a service vehicle on account
a. Will increase asset and decrease liability
b. Will increase asset and increase liability
c. Will decrease equity
d. Will decrease asset and decrease liability
5. If an accountant fails to make an adjusting entry at the end of a fiscal period to record
expired insurance, the omission will cause
a. Total assets to be understated
b. Total revenues to be understated
c. Total expenses to be understated
d. Liabilities to be overstated
e. Liabilities to be understated
6. If an equipment costs P200,000 and accumulated depreciation amounts to P60,000,

how much is the book value of the equipments?
140,000
7. At the beginning of 2017, an entity purchased a fire insurance policy covering a

property for a period of two years. The P5,600 cost of the policy was paid in cash. At
the end of 2017, by how much will the entity reduce its Prepaid Insurance?
2,800
8. Suppose your business has cash of P50,000, receivables of P60,000, and furniture
totalling P200,000. The store owes P80,000 on account and has a P100,000 note
payable. How much is your equity?
130,000
9. Which of the following transactions does not affect the balance sheet totals?
a. Purchasing P50,000 supplies on account
b. Collecting P40,000 from customers on account
c. Paying a P300,000 note payable
d. Withdrawal of P80,000 by the firm’s owner
10. Over a period of time, if total assets increase by P270,000 and total liabilities increase
by P70,000, then owner’s equity will increase (decrease) by
P200,000 increase
Medium
1. The accounting clear of V Services recorded the collection of accounts receivable

related to recorded service income as 23,000 instead of 32,000. What effect will such
error cause to total income, total assets and total equity?
Answer: No Effect
2. G company has total assets amounting to P465,000.00. If total liabilities amounted to
57% of total assets, what is the amount of owner’s equity?
Answer: 199,950
3. True or False
 In double entry bookkeeping, total of debits does not need to equal the total of
credits.
 During posting, the bookkeeper (1) failed to post and entire entry, (2) posted an
entry for a transaction twice (3) posted an entry in reverse – meaning, what was
supposes to be debited was credited and vice versa. Total balance will not balance
after these errors.
Answer: False, False
1. At the beginning of the year, a business has cash of 50,000, receivables of 60,000, and
equipment totaling 150,000. The liabilities of the business amounted to 75,000. On the
same year, the owner purchased a service vehicle of 25,000 in cash and earned and
collected 100,000 for rendering service. What is the amount of owner’s equity?
Answer 285 000
2. State the elements of Financial Statements
Answer: Assets, Liabilities, Owner’s Equity, Revenue Expenses.
DIFFICULT
1. The following economic activities during the period:

 Cash investment of the owner in the servicing business 75,000
 Cash purchases of the office machine 20,000
 Cash collection for services rendered 50,000
 Cash payment for supplies used in rendering services 25,000
 Cash receipt from borrowings 35,000
Compute for the amount of cash and total assets.
Answer: Cash 115,000.
Total Assets 160,000
2. The following economic activities during the period:

 Cash investment of the owner in the servicing business 300,000
 Cash purchases of the service vehicle 200,000
 Billed on account for services rendered 75,000
 Purchased supplies on account for 25,000
 Issued a note payable for a loan on a bank for 65,000
Compute for the amount of Owner’s Equity.
Answer: 375,000
3. Who is the father of Accounting?

Answer Luca Pacioli

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EASY

2. What function do accounting journals serve in the accounting process?

3. Accounting is a service activity. Its function is to provide

a. Quantitative and qualitative information

d. None of the above

4. Purchase of a service vehicle on account

a. Will increase asset and decrease liability

b. Will increase asset and increase liability

c. Will decrease equity

d. Will decrease asset and decrease liability

a. Total assets to be understated

b. Total revenues to be understated

c. Total expenses to be understated

6. If an equipment costs P200,000 and accumulated depreciation amounts to P60,000,

7. At the beginning of 2017, an entity purchased a fire insurance policy covering a

b. Collecting P40,000 from customers on account

c. Paying a P300,000 note payable

d. Withdrawal of P80,000 by the firm’s owner

1. The accounting clear of V Services recorded the collection of accounts receivable

Answer: False, False

1. The following economic activities during the period:

Compute for the amount of cash and total assets.

Answer: Cash 115,000.

Total Assets 160,000

2. The following economic activities during the period:

3. Who is the father of Accounting?

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