**Note: Questions and options might be randomized.

PART I
1. The primary ledger containing all the balance sheet and income statement accounts
is the
A. General Ledger
B. Creditors Ledger
C. Customers Ledger
D. Subsidiary ledger

2. Which one of the following is NOT a business document

A. bank statement
B. check voucher
C. confirmation letter
D. sales invoice

3. In the preparation of financial statements and income tax returns, who is the most
responsible?
A. Accountant
B. Auditor
C. Investor
D. Management

4. Which of the following will probably be NOT an adjusting entry

A. Debit an asset and credit revenue
B. debit an asset and credit liability
C. debit an expense and credit liability
D. debit revenue and credit liability

5. A purchase of supplies for cash is recorded in the

A. Revenue Journal
B. Purchase Journal
C. Cash Receipts Journal
D. Cash Payments Journal

6. A purchase of supplies on account is recorded in the

A. Revenue Journal
B. Purchase Journal
C. Cash Receipts Journal
D. Cash Payments Journal

7. The statement of financial position shows the following accounts

A. assets, liabilities and equity
B. assets, liabilities and revenues
C. assets, liabilities and expenses
D. equity, revenues and expenses
8. Which of the following account groups are all considered nominal accounts?
A. Cash, Owner’s Equity, Salaries Payable
B. Prepaid Insurance, Equipment, Service Income
C. Capital Account, Dividend Account, Income Summary
D. Rent Income, Fees Earned, Miscellaneous Expense

9. Which of the accounts below would be closed by posting a debit to the account?
A. Unearned Revenue
B. Service Income
C. John, drawing
D. Miscellaneous Expense

10. Which of the following accounts will not be closed to Income Summary?
A. Salaries Expense
B. Service Income
C. Unearned Rent Income
D. Depreciation Expense

11. Which of the following errors will cause the trial balance totals to be unequal?
A. posting the debit portion of a journal entry incorrectly when the credit
portion of the entry is correctly posted
B. failure to record a transaction or to post a transaction
C. recording the same transaction more than once
D. recording the same erroneous amount for both the debit and the credit parts
of a transaction

12. A trial balance is prepared to

A. prove that there were no errors made in recording transactions into the
journal
B. prove that no errors were made in posting to the ledger
C. prove that each account balance is correct
D. summarize the account balances to help prepare financial statements

13. It consist of transaction date, accounts and amounts to be debited and credited and a
brief explanation
A. general journal
B. journal
C. journal entry
D. special journal

14. The general term used to indicate delaying the recognition of an expense already
paid or of a revenue already received is
A. depreciation
B. deferral
C. accrual
D. inventory
15. General ledger are
A. group of all income statement accounts
B. group of all financial position accounts
C. group of transactions
D. entire group of accounts

16. The process of transferring the journal entries to the accounts is known as
A. posting
B. updating
C. journalizing
D. summarizing

17. Posting is the process of transferring entries from:

A. general ledger to the journal
B. journal to the general ledger
C. journal to the source document
D. source document to the journal

18. The usual columns in the worksheet will NOT include

A. balance sheet
B. income statement
C. cash flow statement
D. trial balance

19. Which of the following transactions is recorded in the purchases journal?

A. purchase of store supplies on account
B. return of damaged office equipment
C. purchase of store supplies for cash
D. purchase of office equipment for cash

20. Which of the following transactions is recorded in the revenue journal?

A. sale of excess office equipment for cash
B. rendering services for cash
C. rendering services on account
D. sale of excess office equipment on account

21. Which of the following is always recorded in the general journal?

A. rendering services for cash
B. purchases of supplies on account
C. rendering services on account
D. closing entries

22. Which of the following is recorded in the cash receipts journal?

A. cash withdrawn by the owner
B. cash purchase of equipment
C. cash received on customer’s account
D. adjusting entry for depreciation
23. Services performed for cash should be recorded in the
A. Revenue journal
B. Purchases journal
C. Cash Receipts journal
D. Cash Payments journal

24. Which of the following is recorded in the cash payments journal?

A. adjusting entry for accrued salaries
B. receipt of cash on supplies returned
C. receipt of cash from services rendered
D. payment of employees’ salaries

25. A cash purchase of supplies should be recorded in the

A. Cash Receipts journal
B. Purchase journal
C. General journal
D. Cash Payments journal

26. Which of the following is true about the revenue journal?

A. cash revenues and revenues on account are recorded in the revenue journal
B. only cash revenues are recorded in the revenue journal
C. only revenues on account are recorded in the revenue journal
D. unearned revenues are also recorded in the revenue journal

27. The cash receipts journal will be used for

A. only cash received from customers on account.
B. all cash received.
C. cash received from customers on account and cash sales.
D. only cash received from cash sales

28. A cash investment made by the owner should be recorded on the

A. cash receipts journal
B. purchases journal
C. cash payments journal
D. revenue journal

29. A withdrawal of cash made by the owner will be found in the

A. cash receipts journal
B. cash payments journal
C. purchase journal
D. revenue journal

30. In which journal would adjusting entries be found?

A. cash receipts journal
B. cash payments journal
C. general journal
D. purchases journal
PART II

1. The accounting device used in summarizing the effects of transactions is the

A. account
B. account title
C. financial statements
D. ledger

2. Double entry accounting system is defined as:

A. only account increases are recorded but not decreases
B. the dual effect of each transaction is recorded with a debit and credit
C. each transaction is is recorded with two journal entries
D. each item is recorded in a journal entry and the general ledger

3. Complete the statement relative to a worksheet. A worksheet:

A. is submitted to top management
B. is for publication
C. is a book of account
D. facilitates the preparation of financial statements

4. Numerous errors may exist even though the trial balance columns are equal. Which
is NOT one of these errors?
A. a journal entry is posted twice
B. transposition error
C. an incorrect amount is recorded and posted
D. a transaction is not journalized

5. Which of the following is CORRECT relative to a worksheet

A. it is used to journalize and post adjusting entries
B. it is preceded by a financial statements
C. it is not affected by closing entries
D. it must always be a 10-column format

6. Which is not a component of the financial statements?

A. Board of Directors' report
B. Notes to financial statements
C. Statement of Changes in Equity
D. Statement of Financial Position

7. The usual columns of the worksheet includes the following EXCEPT:

A. Statement of Cash Flows
B. Income Statement
C. Balance Sheet
D. Trial Balance
8. In the preparation of financial statements and income tax returns, who has the
highest level of responsibility?
A. Accountant
B. Investor
C. Management
D. Auditor

9. In preparation of payroll, which of the following is NOT automatically deducted from

the employee's pay?
A. Employee IOUs
B. taxes and compensation
C. Pag-ibig contributions
D. SSS contributions

10. Which of the following is NOT a policy compliance?

A. Remit to the SSS deducted contributions from employees together with the
employer's share of the contribution
B. Communicate down to the sales people sales and collection policies
C. Comply with income tax, VAT and withholding tax requirements of the
government
D. Withhold financial reports to management and other stakeholder

11. Complete the statement. The use of computers in processing accounting data:
A. eliminate the need for accountants
B. results in fast, efficient and accurate outputs
C. eliminates the need for financial accounting standards
D. needs sophisticated hardwares and softwares to be beneficial

12. Financial statements information are taken from:

A. journal entries
B. source documents
C. general ledger
D. trial balance after adjustments

13. Which of the following statements is NOT CORRECT relative to closing entries?
A. Only nominal accounts are closed
B. A credit balance in the income summary account represents the net income
C. Drawing is among the accounts to be closed in a sole proprietorship and in a
partnership
D. The Income Summary account balance is closed to capital in a
corporation

14. Internal controls are NOT designed to provide reasonable assurance that?
A. access to asset is permitted only in accordance with management
authorization
B. all frauds are detected
C. company personnel comply with applicable rules and regulations
D. transactions are executed in accordance with management's authorization
15. Which statement is CORRECT relative to cash disbursements?
A. Disbursements are made by check except petty cash fund
disbursements
B. Anybody can handle accountable vouchers and checks
C. Cash disbursements can be taken from daily cash collections
D. Cash disbursements may be supported with checks issued without vouchers

16. Which of the following statements is CORRECT with respect to separation of duties?
A. Employees should not have temporary and permanent custody of assets
B. Employees who authorize transactions should not have custody of
related assets
C. Employees who authorize transactions should have recording responsibility
for these transactions
D. It is permissible to allow an employee to open cash receipts and record those
receipts

17. The statement that is CORRECT relative to a ledger is

A. it is preceded by the gathering and organizing of source documents
B. it consists of the general ledger and the subsidiary ledger
C. financial statements are lifted directly from the ledger
D. there is an applicable accounting standard for the sequencing of accounts

18. The posting process involves the transferring of information from the journal to the
ledger for:
A. general journal entries only
B. the accounts of customers and creditors only
C. all journal entries
D. adjusting and closing entries only

19. The statement that is FALSE concerning the ledger is:

A. control accounts are found in the general ledger
B. is the journal, log book and working paper can also be denoted as
ledger
C. it is considered as a classifying device
D. the T account form of a ledger represents the left side as the debit and right
side as the credit

20. Which of the following statements is LEAST LIKELY a company policy?

A. regularity of meetings of the Board of Directors
B. release of checks to creditors
C. remittance of payroll deductions
D. manner of recruiting and hiring of employees
21. All of the following are correct except:
A. payroll deductions are remitted on time to the proper agencies
B. implementation of the new BIR rules and regulations is postponed until
notices are received
C. deductions for VAT and withholding taxes are consistently complies
D. sales targets and performance are regularly communicated

22. The hart of accounts is entered in the accounting records:

A. upon assumption of business entity
B. every accounting period
C. every five years of operation
D. at the beginning of each year

23. The account title and account numbers in the chart of accounts are arranged in the
following order
A. liabilities, equity, revenue, assets and expenses
B. revenue, expenses, assets, liabilities and equity
C. assets, expenses, liabilities, equity and revenue
D. assets, liabilities, equity, revenue and expenses

24. The accounts and amounts in the trial balance are taken from:
A. transactions
B. general ledger
C. journal
D. source documents

25. The debit and credit analysis of a transaction normally takes place
A. when the entry is posted in the ledger
B. before an entry is recorded in the journal
C. upon receipt or preparation of source documents
D. when the trial balance is prepared

26. The subsidiary ledger is

A. a section of the general ledger
B. shows the details of a control account in the ledger
C. presents relevant information needed by top management
D. is for customers' account only

27. Which one of the following is NOT a business document used in recording a
business transaction?
A. bank statement
B. check voucher
C. confirmation letter
D. sales invoice
28. The term used for the general ledger account that summarizes the various accounts
in the related subsidiary ledger is:
A. journal account
B. control account
C. subsidiary account
D. ledger account

29. Which of the following statements is NOT CORRECT with regards to source
documents
A. the internal source documents prepared are numbered in series
B. the internal source documents are verified as authorized and approved
C. Source documents received from outside parties are less important
D. they may be internally prepared or received from outside parties

30. Which of the following is NOT a possible combination of a journal entry?

A. increase in asset and decrease in equity
B. decrease in liability and decrease in asset
C. increase in asset and increase in liability
D. decrease in equity and increase in liability