Fabm2 Reviewer Q1

What is the correct order of the four (4) It is the book of final entry
components of financial statements?

a.) Worksheet
a.) SCI - SCF - SFP - SCE b.) Balance Sheet
b.) SCI - SFP - SCE - SCF c.) General Ledger
c.) SCI - SCE - SFP - SCF d.) Income Statement
d.) SFP - SCI - SCE - SCF
ans. C
ans: C
What is the basic accounting equation? An element of SCI that has a credit normal balance
because it increases Equity.
a.) Assets + Liabilities = Equity
b.) Assets = Liabilities - Equity a.) Expenses
c.) Assets - Liabilities= Equity b.) Income
d.) Assets = Liabilities + Equity c.) Liabilities
d.) Sales
ans: D
ans. B
What is the right way of presenting the

following structures or components of Revenues and gains are two kinds of ___________.
statement of cash flows?
a.) Operational Activities, Investment a. Assets

Activities, Financial Activities b. Liabilities
b.) Operating Activities, Investing Activities, c. Income
Financial Activities d. Expenses
c.) Operating Activities, Financing Activities,
Investing Activities ans. C
d.) Operating Activities, Investing Activities,
Financing Activities Income account used by service operations is called
e.) Operational Activities, Investing ____________.
Activities, Financing Activities
ans: D a. Sales Revenue

b. Service Income
c. Cost of Sales
Statement of Financial Position (SFP) is also d. Other Income
known as ________________. It provides
financial information about the ans. B
__________________________ on a
specific date.
Income account used by trading or merchandising
a.) Trial Balance, results of the operations operations is called ________.
b.) Worksheet, results of the operations
c.) Balance Sheet, results of the operations
d.) Worksheet, condition of the company a. Sales Revenue
e.) Balance Sheet, condition of the b. Service Income
company c. Cost of Sales
d. Other Income
ans: E
ans. A
It is the first financial report being
prepared. It contains the result of The following are what increases and decreases in
operations of the business at a specific owner's equity account of statement of change's in
period. equity. Solve for Drawings.
Capital, Beginning - P265,000

a.) SCI Additional Investments - P120,000
b.) SCF Drawings - ?
c.) SFP Profit/(Loss) - P250,000
d.) SCE Capital, Ending - P555,000
ans: A
a.) P80,000
b.) P90,000
P252,000 Salaries Expense for office c.) P70,000
employees is 40% of the total salaries paid. d.) P105,000
How much is the selling expense?
a.) 151,200 ans. A

b.) 100,800
c.) 100,000
d.) 151,000 The following are what increases and decreases in
owner's equity account of statement of change's in
equity. Solve for Capital Beginning.
Ans: A
Capital Beginning - ?
P50,000 of depreciation attributed to Additional Investments - P150,000
selling is 80%. How much is the general and Drawings - P138,000
administrative expense? Profit - P120,000
Capital Ending - 217,000
a.) 40,000
b.) 45,000 a.) P75,000
c.) 10,000 b.) P83,000
d.) 5,000 c.) P85,000
d.) P73,000
Ans: C Ans. C
The normal balance of Revenue is credit.
It separates Assets from Liabilities and

Equities. The Assets are reported on the a.) True
left and Liabilities and Equity are presented b.) False
on the right.
a.) Indirect form ans. A

b.) Direct form
c.) Report form The normal balance of Expenses is debit.
d.) Account form
a.) True
ans: D b.) False
Cool Lang Store’s Accounts Receivable ans. A

amounted to ₱450,000. Prepaid Expense
and Unearned Income totaled ₱40,000 and
₱8,600, respectively. Cash balance The income amount in the statement of changes in
amounted to ₱112,000 while Accounts owner’s
Payable and Inventory totaled to ₱23,660 equity is the same amount as the income from the SCI
and ₱9,040, respectively. How much is the for
company’s current assets?
the same period.
a.) P626, 650
b.) P625,660 a.) True
c.) P585, 650 b.) False
d.) P585, 660
ans. B Ans. A
This form of the SFP shows asset accounts

first and then liabilities and owner’s equity
accounts after. Which of the following examples does not belong to
Operating Activities?
a.) Indirect form a. sale of goods or rendered service

b.) Direct form
c.) Report form b. purchase of either goods or services
d.) Account form
c. salaries of employees
ans: C
d. sale of investments in debt or
Company’s Total Liabilities and Equity
amounted to ₱285,000. Total noncurrent equity securities of other entities
assets ended at ₱85,000. Cash totaled
₱50,000. Inventory amounted to ₱100,000.
Assuming the company had no other
assets, how much is Accounts Receivable? ans. D
The following examples are transactions classified

a.) P50,000 under Investing Activities except:
b.) P100,000
c.) P135,000 a. sale of Property Plant and
d.) P200,000
Equipment (PPE), intangibles
ans: A and other long-term assets
b. purchase of PPE, intangibles,

Happy Me Convenience Store had the
following account balances for the year and other long-term assets
ended December 31, 2021: Cash-₱255,170,
Accounts Payable-₱35,200, Prepaid Rent- c. collection from a long-term note
18,000, .Merchandise Inventory ₱56,220,
Computer Equipment ₱35,400; Unused receivable
Store Supplies ₱1,000. Compute for the
company’s non-current asset? d. getting a long-term loan from
a bank.
a.) P35,400
b.) P35,200
c.) P70,600 ans. D
d.) It has no non-current assets
ans: A
Which is an example of transaction under Financing
Activities?
A single rule is used when there is an
operation. It is the subtotals of current a. payment for selling and administrative expenses
assets, noncurrent assets, current liabilities b. interest received
and noncurrent
liabilities. Meanwhile, a double rule is used c. owners cash withdrawals
to represent the end of a part of the d. dividends received
financial statement.
ans. C
a.) both statement is true
b.) statement 1 is false, statement 2 is true.
c.) statement 1 is true, statement 2 is false. The following are the transactions of the year; receipt
d.) both statement is false from customers - P1,000,000; payments to supplier
and employees - P700,000; Additional Investments
Ans. A from owners - P100,000; Withdrawals by owners -
P80,000. Long-term loan from a bank - P300,000. Solve
Which does not belong to current assets? for transactions under Operating Activities only.
a.) Patent
b.) Cash a.) P200,000
c.) Prepaid Rent b.) P120,000
d.) Prepaid Insurance c.) P300,000
d.) P220,000
Ans. A
The following accounts belongs to current ans. C

liabilities except:
The following are the transactions of the year; receipt
a.) Accounts Payable from customers - P1,000,000; payments to supplier
b.) Accumulated Depreciation and employees - P700,000; Additional Investments
c.) Unearned Revenues from owners - P100,000; Withdrawals by owners -
d.) Notes Payable P80,000. Long-term loan from a bank - P300,000. Solve
for transactions under Financing Activities only.
Ans. B
a.) P480,000
Obligation to pay evidenced by a b.) P320,000
promissory note. c.) P400,000
d.) P380,000
a.) Notes Receivable

b.) Accounts Payable
c.) Notes Payable ans. B
d.) Loans Payable
In vertical analysis, the base amount for depreciation

ans. C expense is generally
the_____.
Advance payments made by customers
while goods and services are not yet
delivered to the customer. a. net income amount
a.) Accrued Expense b. net sales amount

b.) Service Revenue c. gross sales amount
c.) Unearned Revenues d. total assets amount
d.) Income Revenue
ans. B
Ans. C
An investor would like to determine the rate of return

Identify the account if it is an ASSET, of his invested capital.
LIABILITY or EQUITY, and CURRENT or NON-
CURRENT. Which of the following ratios would be most useful?
a. Gross Profit Ratio c. Return on Equity

Land
ans. Asset, Non-Current b. Net Profit Ratio d. Return on Assets
Unearned Revenue
ans. Liabilities, Current ans. B
Copyright Comparing the amount of a balance sheet item in one
ans. Asset, Non-Current year to the amount
for the same item in a prior year is called

____________.
a. Common-size Analysis
b. Vertical Analysis
c. Horizontal Analysis
d. Ratio Analysis
Ans. C
If current assets are ₱270,000.00 and total assets are

₱810,000.00, what
percentage of total assets are current assets?
a. 3.30% b. 33.33% c. 30.00% d. 25.30%
ans. B
It is a check with two diagonal lines (//) on the left

most corner of the check.
a.) Stale Check

b.) Post Dated Check
c.) Crossed Check
d.) Bank Check
ans. C

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What is the correct order of the four (4) It is the book of final entry

components of financial statements?

What is the right way of presenting the

a.) Operational Activities, Investment a. Assets

ans: D a. Sales Revenue

Capital, Beginning - P265,000

a.) 151,200 ans. A

The normal balance of Revenue is credit.

It separates Assets from Liabilities and

a.) Indirect form ans. A

Cool Lang Store’s Accounts Receivable ans. A

This form of the SFP shows asset accounts

a.) Indirect form a. sale of goods or rendered service

The following examples are transactions classified

ans: A and other long-term assets

b. purchase of PPE, intangibles,

The following accounts belongs to current ans. C

a.) Notes Receivable

In vertical analysis, the base amount for depreciation

a.) Accrued Expense b. net sales amount

An investor would like to determine the rate of return

a. Gross Profit Ratio c. Return on Equity

for the same item in a prior year is called

If current assets are ₱270,000.00 and total assets are

percentage of total assets are current assets?

a. 3.30% b. 33.33% c. 30.00% d. 25.30%

It is a check with two diagonal lines (//) on the left

a.) Stale Check

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