COLLEGE OF MARY IMMACULATE d.

Completeness
11. Older the information, the less useful.
Poblacion, Pandi, Bulacan a. Timeliness
b. Comparability
PRE-QUALIFYING EXAM c. Verifiability
2nd Semester, AY 2022 – 2023 d. Completeness
12. Equipment with an estimated market value of P60
000 is offered for sale at P90 000. The equipment is
acquired for P30 000 in cash and a note payable of
SURNAME FIRST NAME MI P50 000 due in 30 days. The amount used in buyer’s
accounting records to record acquisition is
COURSE: BSA YR. & SEC. ___ a. P 80 000
DATE: _01/24/2023_ b. P 90 000
c. P 60 000
d. P30 000
ACCOUNTING CONCEPTS AND PRINCIPLES 13. Using accrual accounting, revenue is recorded and
reported only.
1. The overall objective of accounting is a. If cash is received after the services are
a. To provide the information that the rendered
managers of an entity need to control the b. When cash is received at the time services
operations are rendered
b. To provide information that the creditors c. When the services are rendered without
can use in deciding whether to make regard to when cash is received
additional loans d. When cash is received without regard to
c. To measure the periodic income of the when the services are rendered
entity 14. On January 1, 2016, Potter Company bought a
d. To provide quantitative financial information building for P2,750,000 to serve as the Company’s
about an entity that is useful in making office. It was estimated that the said building will be
economic decision useful for 20 years. After the end of its useful life, the
2. Information that has no bearing on an economic building can still be sold for P250,000. What is the
decision to be made is useless. amount of depreciation expense that should be
a. Relevance recognized by Potter Company on December 31,
b. Comparability 2016?
c. Verifiability a. P 100,000
d. Completeness b. P 125,000
3. It is the ability to bring together for the purpose of c. P 150, 000
noting points of likeness and difference. d. P 175, 000
a. Relevance 15. Which of the following entries records the receipt of
b. Comparability a utility bill from the water company?
c. Verifiability a. Debit Accounts Payable, credit Cash
d. Completeness b. Debit Accounts Payable, credit Utilities
4. It requires that users have some reasonable of the Payable
complex economic activities of entities, the c. Debit Utilities Expense, credit Accounts
accounting process and the technical terminology in Payable
the statements. d. Debit Utilities Payable, credit Accounts
a. Relevance Receivable
b. Comparability 16. An item retailing for P 100,000, subject to a trade
c. Verifiability discount of 25% is paid for within the discount period
d. Understandability on terms 2/10, n/30. What is the amount of payment
5. Small expenditures for tools are expensed made?
immediately. a. P 73,500
a. Relevance b. P 75,000
b. Materiality c. P 74,000
c. Verifiability d. P 100,000
d. Completeness 17. The process of posting is mostly associated with.
6. When on doubt, recognize all losses and don’t a. Financial Statements
recognize gains. b. Source documents
a. Conservatism c. General Ledger
b. Comparability d. Worksheet
c. Verifiability 18. As of December 31, Ravenclaw Merchandising
d. Completeness Company’s records show the following amounts:
7. It is the capacity of the information to influence a Purchases P 1,250,000, Purchase discount 25, 000,
decision. Purchase returns 140,000. If Ravenclaw Company’s
a. Relevance beginning inventory amounted to P 375,000, the
b. Comparability Company’s total Cost of Goods Available for sale is.
c. Verifiability a. P 710,000
d. Completeness b. P 1,085,000
8. Description and numbers or figures must watch what c. P 1,460,000
really existed or happened. d. P 1,250,000
a. Relevance 19. The unearned rent account has a balance of P
b. Comparability 36,000. If P 4,000 of the P 36,000 is unearned at the
c. Verifiability end of the accounting period, the amount of the
d. Faithful Representation adjusting entry is
9. Financial statements shall be accompanied by notes a. P 4,000
to financial statements. b. P 40,000
a. Relevance c. P 32,000
b. Comparability d. P 36,000
c. Verifiability 20. Which of the following describes the classification
d. Completeness and normal balance of the Unearned Rent Revenue
10. Are no errors or omissions in the description of the account?
phenomenon? a. Asset, debit
a. Relevance b. Liability, credit
b. Free from error c. Revenues, credit
c. Verifiability d. Expense, debit
21. Debits? b. Debits Accounts Receivable and credits
a. Increase both assets and liabilities. Service Revenue.
b. Decrease both assets and liabilities. c. Debits Service Revenue and credits
c. Increase assets and decrease liabilities. Accounts Payable.
d. Decrease assets and increase liabilities. d. Makes no entry until cash is received.
22. A debit is NOT the normal balance for which account 34. If assets total P700,000 and liabilities total P400,000,
listed below? how much are the net asset.
a. Revenue a. P300,000
b. Cash b. P400,000
c. Accounts Receivable c. P700,000
d. Owner’s Withdrawal d. P1,100,000
35. First statement: Each adjusting entry affects one
23. If services are rendered on account, then statement of financial position account and one
a. Assets will decrease. income statement account. Second statement: The
b. Liabilities will increase. accrual basis recognizes revenue when earned and
c. Stockholders’ equity will increase. expenses in the period when cash Is paid.
d. Liabilities will decrease. a. True, True
24. The right side of a t-account is b. False, True
a. The balance of an account. c. True, False
b. The debit side. d. False, False
c. The credit side. 36. First statement: Our purpose of a trial balance is to
d. Blank. prove that debits and credits of an equal amount are
25. The purchase of an asset for cash in the general ledger. Second statement: A general
a. Increases assets and stockholders’ equity. journal chronologically lists transactions and other
b. Increases assets and liabilities. events, expressed in terms of debits and credits to
c. Decreases assets and increases liabilities. accounts.
d. Leaves total assets unchanged. a. True, True
26. Which accounts normally have credit balances? b. False, True
a. Revenues, liabilities, and drawings c. True, False
b. Revenues, liabilities, and assets d. False, False
c. Revenues, liabilities, and Owner’s Capital 37. First statement: The first step in the accounting cycle
d. Revenues, liabilities, and expenses is the journalizing of transactions and selected other
27. The primary purpose of the trial balance is to events. Second statement: Basic steps in the
a. Disclose the complete effect of a recording process include transferring the journal
transaction in one place. information to the appropriate account in the
b. Make sure a journal entry is not posted statement of financial position.
twice. a. True, True
c. Transfer journal entries to the ledger b. False, True
accounts. c. True, False
d. Prove the equality of the debit and credit d. False, False
amounts after posting. 38. As assets upon payment of cash generally are not
28. Which of the following steps in the accounting reverse Which of the statement is false?
process is done after analyzing business a. Depreciation expense, bad debts expense,
transactions? and warranty expense are estimated
a. Preparing the financial statements expense because they all depend upon
b. Preparing a trial balance future events.
c. Entering transactions in a journal b. The balance sheet is also called the
d. Posting journal entries statement of financial position.
29. At November 1, 2020, Johnson Inc. Had an c. Depreciation expense and accrued
Accounts Receivable balance of P200,000. During revenues are example of deferred items.
the month, the company made sales on account of d. When a company records reversing entries,
P300,000. In addition, Johnson Inc. Collected adjusting entries for deferred expenses
P400,000 from customers that owed them money. At recorded initially as assets upon payment of
November 30, 2020, the Accounts Receivable cash generally are not reverse
balance is 39. Why are certain cost of doing business capitalized
a. P100,000 debit when incurred and then depreciated or amortized
b. P100,000 credit over subsequent accounting cycle
c. P500,000 debit a. To reduce the income tax liability
d. P300,000 credit b. To aid management in cash flow analysis
30. On July 7, 2020, Sherman Enterprises received cash c. To match the cost of production with
P1,400 for services rendered. The entry to record revenue as earned.
this transaction will include d. To adhere to the accounting constraint of
a. A debit to Service Revenue of P1, 400. conservatism.
b. A credit to Accounts Receivable of P1, 400. 40. X Company prepares reversing entries. Which of the
c. A debit to Cash of P1, 400. following adjustments will be reversed by X?
d. A credit to Accounts Payable of P1, 400. a. The entry to record the depreciation
31. In the first month of operations, the total of the debit expense.
entries to the Cash account amounted to P3, 000 b. The entry to provide uncollectible accounts
and the total of the credit entries to the Cash account expense.
amounted to P1,800. The Cash account has a? c. The entry to record the earned portion of
a. P1,800 credit balance. rent received in advance.
b. P3,000 debit balance. d. The entry to record the unused supplies at
c. P1,200 debit balance. the end of the accounting period.
d. P1,800 credit balance. 41. Choose the correct statement
32. Which of the following accounts is increased with a a. No adjusting entries should be necessary
debit? for the inventory account if the periodic
a. Land inventory system is used.
b. Service Revenue b. Examples of accrued expenses include
c. Interest Payable wages payable and depreciation expense.
d. Capital c. Accrued items are those for which
33. When a company performs a service but has not yet recognition of the related revenue or
received payment, it expense occurs in an accounting period
a. Debits Service Revenue and credits after the entity pays or receives cash,
Accounts Receivable. respectively.
 d. A worksheet is not a part of the basic b. A – L + OE = 0
financial statement of the entity. c. -A + L – OE = 0
42. Incurring an expense for advertising on account d. A-L-OE=0
would be recorded by: 54. Which of the following accounts has a debit
a. Debiting liabilities balance?
b. Crediting assets a. Accounts payable
c. Debiting an expense b. Accrued taxes
d. Debiting assets c. Accumulated depreciation
43. A trial balance d. Bad debts expense
a. Proves that debits and credits are equal in 55. An example of a contra account is.
the ledger a. Depreciation expense
b. Supplies a listing of open accounts and b. Accounts receivable
their balances that are used in preparing c. Sales revenue
financial statements. d. Accumulated depreciation
c. Is normally prepared three times in the 56. A sale on account would be recorded by.
accounting cycle. a. Debiting revenue
d. All of these b. Crediting assets
44. Making insurance payments in advance is an c. Crediting liabilities
example of: d. Debiting assets
a. An accrued receivable transaction. 57. Entries in the purchase journal are posted to the.
b. An accrued liability transaction a. Accounts receivable ledger and the
c. An unearned revenue transaction accounts payable ledger
d. A prepaid expense transaction b. General ledger only
45. Recording revenue earned from a customer, but not c. General ledger and the accounts payable
yet collected, is an example of: ledger
a. A prepaid expense transaction. d. General ledger and the accounts receivable
b. An unearned revenue transaction. ledger
c. An accrued liability transaction. 58. At the date of purchase of a service which is not
d. An accrued receivable transaction. immediately used up, the cost of such unused
46. Prepayments occur when: service is a.
a. Cash flow precedes expense recognition. a. Revenue
b. Sales are delayed pending credit approval. b. Asset
c. Customers are unable to pay the full c. Liability
amount due when goods are delivered. d. Expense
d. Manufactured goods await quality control 59. Which of the statement is false?
inspections. a. Depreciation expense, bad debts expense,
47. Failure to record the unexpired portion of insurance and warranty expense are estimated
premium paid would expense because they all depend upon
a. Understate expense future events.
b. Understate profit b. The balance sheet is also called the
c. Overstates owner’s equity statement of financial position.
d. Overstates liabilities c. Depreciation expense and accrued
48. Failure to record the unearned portion of rent revenues are example of deferred items.
received in advance would d. When a company record reversing entries,
a. Understate income adjusting entries for deferred expenses
b. Understate profit recorded initially as assets upon payment of
c. Overstates owner’s equity cash generally are not reverse
d. Overstates total liabilities 60. Which accounts normally have credit balances?
49. Which of the following would most likely be found in a. Revenues, liabilities, and dividends
an adjusting entry? b. Revenues, liabilities, and assets
a. Prepaid expense c. Revenues, liabilities, and retained earnings
b. Accounts receivable d. Revenues, liabilities, and expenses
c. Cash dividend paid 61. On March 1, Vicente purchased merchandise from
d. Sales on account Troy with an invoice price of P270,000 and 2/10,
50. Why are certain costs of doing business capitalized n/30 terms. On March 3, Vicente paid P10,000
when incurred and then depreciated or amortized transportation cost on the purchased goods. On
over subsequent accounting cycle March 10, Vicente paid for the merchandise. What
a. To reduce the income tax liability was Vicente's total cost of the purchased
b. To aid management in cash flow analysis merchandise?
c. To match the cost of production with a. P270,000
revenue as earned. b. P274,400
d. To adhere to the accounting constraint of c. P274,600
conservatism. d. P280,000
51. Which of the following steps in the accounting cycle 62. Winston started business on Jan. 1. During the year,
are listed in logical order? the company purchased merchandise with an
a. Post the closing entries, take a post-closing invoice price of P5,000,000. Winston paid P200,000
trial balance, and journalize the closing freight on the merchandise. During the year, Winston
entries. returned P800,000 of the merchandise to its
b. Post the journal entries to the general suppliers. All purchases were paid for in a timely
ledger account, prepare a worksheet, and manner, and a P100,000 cash discount was taken.
then take a trial balance. P4,180,000 of the merchandise was sold for
c. Take a trial balance, prepare a worksheet, P6,270,000. What was the Dec. 31 balance in the
then prepare financial statements. Inventory account?
d. Prepare the income statement, prepare the a. P820,000
balance sheet and then prepare a trial b. P320,000
balance. c. P120,000
52. The debit and credit analysis of the transaction d. P20,000
normally takes place. 63. Gabriela uses the perpetual inventory system.
a. Before an entry is recorded in a journal. Gabriela purchased merchandise with an invoice
b. When the entry is posted to the ledger. price of P80,000, terms 2/10, n/30. If Gabriela
c. When the trial balance is prepared. returned merchandise with an invoice price of
d. At some other point in the accounting cycle. P20,000 to the supplier, what should the journal
53. The accounting equation can be started as: entry to record the return include?
a. A + L – OE = 0 a. Debit to Inventory P20,000
 b. Debit to Inventory P19,600 ITEM 72-75
c. Credit to Inventory P20,000
d. Credit to Inventory P10,000
64. Carl purchased P50,000 merchandise from the Account Name Debit Credit
Sartre with terms of 3/10, n/30. How much discount Sales 750,000
is Carl entitled to take if it paid within the allowed
discount period of 10 days?
Sales Returns and Allowances 15,000
a. P500 Sales Discount 10,000
b. P1,000 Purchases 170,000
c. P1,500
Purchase returns and allowances 20,000
d. P58,800
65. Cormack purchased merchandise with a list price of Freight in 30,000
P60,000 from the Murray. Murray offers its Selling expenses 75,000
customers credit terms of 2/10, n/30. What amount Genl and Ad expense 275,000
should Cormack pay if the cash discount is taken?
a. P59,400
b. P60,600 Beginning Merchandise inventory P55,000
c. P61,200 Ending Merchandise Inventory P35,000
d. P58,800
66. Luis began the period with P200,000 in inventory.
The entity purchased an additional P200,000 of
inventory and returned P20,000 for a full credit. A
physical count of the inventory at year-end revealed 72. Net sales for the period
an inventory on hand of P160,000. What was Luis' a. P755,000
costs of goods sold for the period? b. P725,000
a. P160,000 c. P735,000
b. P220,000 d. P775,000
c. P480,000 73. Net purchases for the period
d. P500,000 a. P150,000
67. Which of the following is not a reason for sales b. P180,000
discounts to be offered to the debtors? c. P210,000
a. Increase the amount paid by the debtors d. P430,000
b. Improve the liquidity by turning the 74. Cost of goods sold for the period
accounts receivable into cash a. P235,000
c. Encourage earlier settlement of debts by b. P160,000
debtors c. P200,000
d. Reduce the level of bad debts d. P170,000
68. Which of the following statements is correct about 75. Profit for the period
credit period? a. P525,000
a. If a customer purchases goods within the b. P450,000
credit period, a cash discount will be c. P250,000
allowed to the customer. d. P175,000
b. If a customer settles the payment within
the credit period, a cash discount will be
allowed to the customer.
c. It refers to the period in which customers
must settle their debts due.
d. It refers to the period in which customers
need to settle one-third of the debts in order
to avoid further interests charged.
69. ABC Company sold 10 units of goods with a unit list
price of P2,000 on Jan. 1, 2020. Given that the trade
discount is 5% and the cash discount is 10%, and
that the cash discount period is 10 days and the
credit period is 30 days, if the customer settles the
debt on Jan. 28, 2020, what is the actual amount he
needs to pay?
a. P17,100
b. P18,050
c. P19,000
d. P20,000
Based on the following information, answer Questions.
Suppose UCU Store received the settlement of debt from
Lindbergh Soriano by cash. Lindbergh Soriano purchased
goods with a list price of P100,000 on Jan. 1 with a trade
discount of 5%. Suppose the cash discount period is 15 days
with a cash discount of 4% and Lindbergh Soriano settled the
payment on Jan. 10 in full.
70. What is the amount of sales discounts given to
Lindbergh Soriano?
a. P1,380
b. P3,800
c. P4,000
d. P5,000
71. The correct cash amount for the settlement of debts
owed by Lindbergh Soriano should be:
a. P91,200
b. P96,000
c. P95,000
d. P95,400
Comprehensive Problems.

ITEM 76-85

76. How much is the cash balance in the ledger?

a. P281,600 ITEM 86-90
b. P80,080
c. P201,520
d. P361,680
77. How much is the accounts payable balance in the
ledger?
a. P73,500
b. P83,250
c. P9,750
d. P93,000
78. How much is the laundry revenue balance in the
ledger?
a. P6,900
b. P19,250
c. P31,600
d. 31,500
79. How much is the balance in the unadjusted trial 86. If the balance of the Villanueva, Capital account was
balance? P210,000, what would be the balance of the Building
a. P354,900 account?
b. P355,100 a. P250,000
c. P355,080 b. P40,000
d. P350,100 c. P90,000
80. How much is the total expenses before adjusting d. P210,000
entries? 87. If the balance of the Building account was P170,000,
a. P18,030 what would be the total of liabilities and owner's
b. P18,000 equity?
c. P18,080 a. P170,000
d. P18,500 b. P270,000
81. How much is the total adjustments? c. P320,000
a. P35,100 d. P350,000
b. P35,000 88. If the balance of the Building account was P150,000
c. P30,800 and the equipment was sold for P70,000, what would
d. P36,200 be the total of owner's equity?
82. How much is the total adjusted trial balance after a. P150,000
adjustment? b. P160,000
a. P382,000 c. P270,000
b. P380,100 d. P330,000
c. P382,100 89. If the balance of the Building account was P140,000
d. P381,000 and P30,000 of Accounts Payable were paid in cash,
83. How much is the profit or loss? what would be the balance of the Villanueva, Capital
a. P17,230 account?
b. (P17,200) a. P210,000
c. (P17,230) b. P260,000
d. P17,200 c. P320,000
84. How much is the changes in equity? d. P340,000
a. P245,000
b. P262,230
c. P227,770
d. P227,700
85. How much is the total balance in balance sheet?
a. P305,000
b. P305,070
c. P305,200
d. P305,270
 94. How much is the total expenses after adjusting
90. If the balance of the Building account was P80,000 entries?
and P30,000 of Accounts Payable were paid in cash, a. P1,030,000
what would be the total liabilities and owner's equity? b. P1,080,000
a. P240,000 c. P1,700,080
b. P280,000 d. P1,700,500
c. P290,000 95. How much is the total adjusted trial balance?
d. P230,000 a. P3,820,000
b. P5,200,000
c. P5,230,000
ITEM 91-100 d. P5,300,000
96. How much is the profit or loss?
a. P(P870,230)
b. P870,230
c. P(870,000)
d. P870,000
97. How much is the changes in equity?
a. P2,405,000
b. P2,070,230
c. P2,070,000
d. P2,270,700

98. How much is the total balance in balance sheet?

a. P3,050,000
b. P2,050,070
c. P3,250,200
d. P2,500,000
99. How much is the post-closing trial balance?
a. P3,050,000
b. P2,050,070
c. P3,250,200
d. P2,900,000
100. How much is the total assets in balance sheet?
a. P2,500,000
b. P1,580,000
c. P1,700,080
d. P1,700,500

91. How much is the total adjustments?

a. P300,000
b. P330,000
c. P320,000
d. P310,000
92. 2How much is the accounts payable balance in the
adjusted trial balance?
a. P730,500
b. P400,000
c. P900,750
d. P930,000
93. How much is the total expenses before adjusting
entries?
a. P700,000
b. P180,000
c. P700,080
d. P700,500