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UNIVERSITY OF THE CORDILLERAS
COLLEGE OF ACCOUNTANCY
ACCOUNTING 1/2
DJOASUNCION
INSTRUCTIONS: CHOOSE THE BEST ANSWER FOR EACH OF THE FOLLOWING. SHADE THE LETTER OF YOUR
CHOICE ON THE ANSWER SHEET PROVIDED. STRICTLY NO ERASURES ARE ALLOWED. FOR PROBLEM SOLVING
QUESTIONS, PRESENT YOUR SOLUTIONS IN TEN-COLUMN WORKSHEET PRESENTED CHRONOLOGICALLY. (80
items x 1point=80)
1. The amount of purchases to be recorded under the gross method if the invoice is paid within the discount period on
a purchase of goods having a list price of P20,000 subject to a trade discount of 15 percent with terms 2/10, n/30, is
a. 20,000
c. 16,660
b. 17,000
d. 19,600
2. Assume the same data above, on the date of payment (payment within the discount period), the journal entry would
require
a. debit to accounts payable of P16,660
b. credit to purchase discount of P340
c. credit to cash of P19,600
d. credit to cash of P20,000
3. The amount of purchases to be recorded under the net method if the invoice is paid within the discount period on a
purchase of goods having a list price of P20,000 subject to a trade discount of 15 percent with terms 2/10, n/30, is
a. 20,000
c. 16,660
b. 17,000
d. 19,600
4. Assume the same data above, on the date of payment (payment within the discount period), the journal entry would
require
a. debit to accounts payable of P16,660
b. credit to purchase discount of P340
c. credit to cash of P19,600
d. credit to cash of P20,000
5. Assume the same data above, except that the date of payment is beyond the discount period. What is the journal
entry on the date of payment?
a. debit Accounts payable 16,660, credit to cash P16,660
b. debit accounts payable P20,000 and credit to cash P20,000
c. debit accounts payable P17,000 and credit to cash P17,000
d. debit accounts payable P16,660, debit purchase discount lost P340 and credit to cash P17,000.
6. Ending merchandise inventory is P22,000, purchases are P85,000, Purchase discounts are P1,800, freight in is
P3,500, and beginning inventory is P28,000, Cost of goods sold is
a. 80,700
c. 79,700
b. 90,300
d. 92,700
7. Purchases are P100,000, Purchase discounts are P1,000, freight in is P2,500, and beginning inventory is P20,000,
Cost of goods sold is P110,000, Ending merchandise inventory is
a. 16,500
c. 6,500
b. 8,500
d. 11,500
8. Ending merchandise inventory is P40,000, purchases are P150,000, Purchase discounts are P2,000, freight in is
P4,000, and, Cost of goods sold is P132,000 beginning inventory is
a. 20,000
c. 16,000
b. 30,000
d. 52,000
9. Assuming Net Sales are P164,000; Cost of Goods sold is P83,000; Selling expenses, P23,000; and General
Expenses, P24,000, Net income is
a. 200,000
c. 128,000
b. 80,000
d. 34,000
10. Bella Company purchased merchandise on account, P3,000, with terms 2/10, n/30. The entry required of Bella
Company to record the transaction in the cash payments journal assuming payment is made within the discount
period, is
a. debit Accounts payable P3,000, credit Sales discount P60, credit cash P2,940.

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b. debit Accounts payable P2,940, credit cash P2,940.
c. debit Accounts payable P3,000, credit cash P3,000.
d. debit Accounts payable P3,000, credit Purchase discount P60, credit cash P2,940.
11. Which of the following accounts normally has a credit balance?
a. Sales discount
c. Purchases
b. Sales returns and allowances
d. Purchase returns and
Allowances
12. The amount of discount to be recorded if the invoice is paid within the discount period on a purchase of goods having
a list price of P1,600 subject to a trade discount of 25 percent with terms 2/10, n/30, is
a. 450
c. 21
b. 30
d. 29.40
13. The discount on an invoice for P590 dated July 20 and paid July 29 with terms 2/10, n/30 is
a. Zero
c. 5.90
b. 11.80
d. 578.20
14. The amount due on an P835 invoice dated March 12, a P25 return, terms 2/10, n/30, paid March 18 is
c. 810
c. 793.80
d. 16.70
d. 16.20
15. The amount due on an P835 invoice dated March 12, a P25 return, terms 2/10, n/30, paid March 23 is
a. 810
c. 793.80
b. 16.70
d. 16.20
16. The amount of list price of a merchandise purchase on January 10 subject to a trade discount of 20, 10 with terms
2/10, n/30, paid within the discount period, the amount paid is P7,056, is
a. 7,200
c. 8,000
b. 7,056
d. 10,000
17. On January 10, B, buyer, acquired a merchandise with a list price of P20,000 subject to a trade discount of 20
percent with terms 3/10, n/30, freight terms of FOB destination, freight collect. The freight paid is P200. How much is
to be paid by the buyer on January 20?
a. 16,000
c. 15,520
b. 15,720
d. 15,320
18. On January 10, B, buyer, acquired a merchandise with a list price of P20,000 subject to a trade discount of 20
percent with terms 3/10, n/30, freight terms of FOB destination, freight prepaid. The freight paid is P200. How much
is to be paid by the buyer on January 20?
a. 16,000
c. 15,520
b. 15,720
d. 15,320
19. On January 10, B, buyer, acquired a merchandise with a list price of P20,000 subject to a trade discount of 20
percent with terms 3/10, n/30, freight terms of FOB shipping point, freight collect. The freight paid is P200. How much
is to be paid by the buyer on January 20 to the seller?
a. 16,000
c. 15,520
b. 15,720
d. 15,320
20. On January 10, B, buyer, acquired a merchandise with a list price of P20,000 subject to a trade discount of 20
percent with terms 3/10, n/30, freight terms of FOB shipping point, freight prepaid. The freight paid is P200. How
much is to be paid by the buyer on January 20 to the seller?
a. 16,000
c. 15,520
b. 15,720
d. 15,320
21. B, buyer paid P13,580 on its purchase on account within the discount period. The terms of the purchase is 30%,
3/10, n/30. How much is the list price of the merchandise purchased?
a. 20,000
c. 18,818
b. 9,220.82 d. 9,800
22. B, buyer paid P13,580 on its purchase on account within the discount period. The terms of the purchase is 30%,
3/10, n/30. How much is the purchase discount?
a. 6,420
b. 420
c. 5,238
d. 3,780

a.000.000 Accounts receivable 30. proprietor of Forest Swines. The company recorded P30. Shipping Costs incidental to the purchase amounted to P3. The gross profit ratio is 40%. Cash 39.000 29. A P78.200 Sales discounts 800 Accounts receivable 40.000. P700. was P120.000 c. P76.000 Sales 40.000 Accounts receivable 40.000 d. P80.000 c. P180.000 and P300.000 Purchase discounts Cash b.000 credit purchase was made on July 11. P1. 2008 at 1. The journal entry to record the payment of terms 2/15. a. What is the journal entry to be made by Company A to record the transaction? a.000 credit purchase made on June 1.000. P76. Cash 29.000 and P400. Freight was paid by the buyer.000. how much is the ending inventory if cost of goods sold is 280.000 b. A buyer paid his balance on July 13. P40.200 Sales 39. but his ending capital was determined to be P180. respectively.000 Cash d. Accounts payable 50. Accounts payable 50. Compute purchases if sales and gross profit are P1. Cash 29.700 b.000 to Company B for P 22.000 Cash a P50. 2008.000 c.000 49.000 b. P79.000 50.000.000 Sales 10.000 d.000 Cash c. P800.Page 3 of 27 23.000 31.000 respectively and beginning and ending inventory are P200. P80.000 d. P78.000 d. If beginning inventory is 2 times larger than ending inventory and purchases is P240.000 27.000.000 sale on credit at terms 2/10.000 b.000. P100.000 30.000 d.000 50.000. n/60 is a. P36. Compute for the amount of sales if cost of goods sold is P60. The beginning capital of A.400 c. Compute the amount of the settlement. Cash 40.000 .000 25. P80.2008 at terms 2%/15. Cash 10. During the period A made drawings of P40. n/30. P900. n/30 is a.592 d.000 1. The journal entry to record the collection after the discount period is a.200.000 Accounts payable 49. Freight out 3. P60. Cash 30.440 24. 2008 on June 14. Cash 40. P160.000 c.000 28.000 c.000 b.000 credit sales at 1%/10.000 d.000 b. n/60.000 c. Cash 50.700 Sales discount 300 Sales 30. a.000. How much is the net income reported during the period? a. P100.000 b. Cash 39.200 26. The purchase was made on credit and on the terms FOB Destination.000? a. Company A sold goods worth P 20. The journal entry to record collection within the discount period of a P40. Purchases 50. P30. P60.700 Accounts receivable 29.

Shipping Costs incidental to the purchase amounted to P3. The purchase was made on credit and on the terms FOB Destination.000 Freight in 3.Page 4 of 27 Accounts receivable Sales Cash b.000 22.000 3.000.000 Cash 3. Purchases 17.000 Accounts payable 20.000 Freight in 3. The purchase was made on credit and on the terms FOB Destination.000 Accounts payable 23. Company A sold goods worth P 20. What is the journal entry to be made by Company A to record the transaction? a. Purchases 20.000 Freight in 3.000 Accounts payable 23.000 b. Freight out 3.000 Cash 3.000 22. Freight in Accounts receivable Sales Cash 3.000 22.000.000 22.000 3.000 Cash 3. Company A sold goods worth P 20.000 b.000 Accounts payable 17.000 d.000 d.000 Sales 22. What is the journal entry to be made by Company B to record the transaction? a.000.000 22.000 33.000 34.000 19.000 Accounts payable 19. Accounts receivable 19. Freight was paid by the buyer.000 Sales 22.000 22.000 .000 Freight in 3.000 Freight in 3.000 to Company B for P 22. Company A sold goods worth P 20.000 Accounts payable 20. Purchases 20.000 Accounts payable 20. Purchases 20. Freight out Accounts receivable Sales c. What is the journal entry to be made by Company B to record the transaction? a. The purchase was made on credit and on the terms FOB Destination.000 Sales 22.000 32. Shipping Costs incidental to the purchase amounted to P3. Freight was paid by the seller.000 Accounts receivable 19.000. Freight was paid by the seller. Shipping Costs incidental to the purchase amounted to P3.000 c. Purchases 22.000 d.000 Sales 22.000 c.000 Cash 3.000 Cash 3.000 to Company B for P 22.000 Accounts payable 20.000 c.000 b.000 to Company B for P 22.000 Freight in 3. Freight out 3.000 3. Purchases 20. Purchases 20.000 Accounts receivable 22. Accounts receivable 25. Purchases 20.000 d. Accounts receivable Sales 22.000.000.000 Cash 3.

Freight out 3. Freight was paid by the seller.000 Sales 22.000 c.Page 5 of 27 35.000 d. Purchases 20.000 3.000 to Company B for P 22.000. The purchase was made on credit and on the terms FOB Shipping point. Purchases 20. Freight was paid by the buyer. Shipping Costs incidental to the purchase amounted to P3.000 Accounts receivable 22.000 Accounts payable 23. Company A sold goods worth P 20.000.000 Freight in 3.000 to Company B for P 22.000 Freight in 3.000.000 Accounts payable 20. Company A sold goods worth P 20. Freight was paid by the buyer.000 Cash 3. Purchases 20.000 22. Accounts receivable 22.000 .000 b.000 Sales 22.000 Accounts payable 23. Shipping Costs incidental to the purchase amounted to P3. Freight out 3.000 Accounts receivable 19.000 Sales 22. Purchases 20.000 to Company B for P 22. Accounts receivable Sales Cash 25.000 c.000 3.000 36. Shipping Costs incidental to the purchase amounted to P3.000 d.000 b. Freight was paid by the seller.000 Accounts payable 17. Purchases 17.000 Freight in 3.000. The purchase was made on credit and on the terms FOB Shipping point.000 c.000 22.000 Accounts payable 20. What is the journal entry to be made by Company B to record the transaction? a. What is the journal entry to be made by Company A to record the transaction? a.000 Freight in 3.000 Cash 3.000 38. Company A sold goods worth P 20.000 Cash 3. Freight out 3.000.000 d. The purchase was made on credit and on the terms FOB Shipping point.000 Sales 22. Purchases 17.000 Cash 3.000. Shipping Costs incidental to the purchase amounted to P3. Accounts receivable Sales Cash 25.000. What is the journal entry to be made by Company B to record the transaction? a.000 b. Company A sold goods worth P 20.000 Freight in 3.000 to Company B for P 22.000 c.000 Accounts payable 23.000 Sales 22.000 Cash 3. Purchases 20. Freight out 3. What is the journal entry to be made by Company A to record the transaction? a.000. Purchases 22.000 Sales 22. The purchase was made on credit and on the terms FOB Shipping point. Accounts receivable 19.000 b.000 Accounts receivable 19.000 Freight in 3.000 Accounts receivable 22.000 d.000 37.000 Accounts payable 19.

b. FOB destination freight collect.464 b. and salvage value was estimated to be P60. The cost of goods sold was smaller than net purchases 45.000. how much is the book value at December 31. 60. c.000 293. the net payment should be: 294. The cost of goods sold was smaller than net purchases 44. If a merchandising company ended a period with a larger inventory that it had at the beginning of the period. Dr Cash (invoice amount less 5% discount less freight paid) d. a.000 296. what will be the depreciation expense for the crane in 2003? a. d. If Hendricks uses the straight-line method of depreciation.000 b. the crane was estimated to have a life of six years and a residual value of P6. 27. 570.000 .000. 86. 546. 2001? a. d. Net income was greater than gross profit c. n/30.000 and estimated useful life is 10 years.750.000 d.500 b. 70. d.000 d. 54. 9. 2/10. 89. The cost of goods available for sale was smaller than cost of goods sold d.000. the net payment should be: 294.000. 40.000 d.750 c. 2/10.000 47. The journal entry to record the payment includes.000 The purchase invoice shows the amount of P 300. for P102. P 1. Freight in 3. 30. Cr Cash (invoice amount less 5 % discount) 46. a. Collect. 540. 1/20.000 491. Assume the same data above. the net payment should be: 490. 2/10 n/30. 2002? a. c.000 The purchase invoice shows the amount of P 500.000 c. How much is the depreciation expense in 2001? a. The cost of goods sold was greater than net purchases b.000 491.000. Kerby Keith paid its account on the 11th day. If the account is paid 15 days after the invoice date.000 295.Page 6 of 27 39. P 1. which of the following statements must be true? a. 8.000 296. Andrews Manufacturing Company purchased a new machine on July 1.000.000 The purchase invoice shows the amount of P 300.000 c. 41. 2/10 n/30.000 293. n/30. 64. If the account is paid 15 days after the invoice date. b. The cost of goods available for sale was smaller than cost of goods sold d. with the following terms.000 295.000. 13. EOM.000 Accounts payable 20. 5/15. the net payment should be: 489.000 b. c. Dr Accounts receivable b.000 495. 2001. 16.000 The purchase invoice shows the amount of P 500. c. FOB destination freight prepaid. 42. FOB destination.000 43. which of the following statements must be true? a. The cost of goods sold was greater than net purchases b.000 49.000. how much is the book value at December 31.250 d. Total cost of the machine was P600.750 48. P 1. a. 2001. 573. FOB shipping point freight prepaid. If the account is paid 10 days after the invoice date. a. If a merchandising company ended a period with a smaller inventory that it had at the beginning of the period.000. b. If the account is paid 15 days after the invoice date.000 496. Assuming the same data above. d. At the time of purchase. P 1. a.000 495. Cr Accounts payable c. 1/20. 7/10.000 494. FOB shipping point freight prepaid. Hendricks Construction purchased a crane on January 1. b.000 c.750. Net income was greater than gross profit c.

000 Depreciation expense 54. What is the adjusting entry on December 31.080 . b. c. Prepaid Insurance 810 Insurance Expense 810 b.000 c.000 Depreciation expense 205.000 c.000 Accumulated depreciation 205.000 on December 1.000 b.600. what necessary adjustment would be made on December 31? a. Unearned Rental Income 3. debits Supplies on Hand and credits Supplies Expense for P15.825 of Supplies on Hand at the end of the period.000 52. 520. 410.000 Rental Income 3. 55.000. Lane received P12.000 Depreciation expense 150.825 were purchased during the period and debited to Supplies on Hand.600.000 b.000 d.000 from a tenant on December 1 for four months' rent of an office. d. for a two-year insurance policy and recorded the entire amount as Insurance Expense.000 c. adjusting entry is a. Rental Income 9.960 as a debit to Prepaid Insurance and a credit to Cash. Insurance Expense 1.000 Rental Income 9. X Co acquires a machinery on April 1. Supplies totaling P12. Accumulated depreciation 205. c. Arid Company paid P1. what is the adjusting entry to record the depreciation expense in 2002? a. An example of an adjusting entry involving a deferred revenue is a. 2003 at a cost of P820. The December 31.000 Accumulated depreciation 150.000 Accumulated depreciation 54. Accumulated depreciation 60. Accumulated depreciation 54. Ingle Company paid P12. and March.Page 7 of 27 50. 2001. debits Supplies Expense and credits Supplies on Hand for P12. The machine has an estimated useful life of 4 years and an estimated salvage value of P20.000 b. The proper journal entry at the end of the period a. Depreciation expense 54. debits Supplies Expense and credits Supplies on Hand for P15. L. d. 470.600.000 Unearned Rental Income 3. P1.000 Depreciation expense 60. Cash xxx Unearned Rental Revenue xxx b. P1. Depreciation expense 205. 56. February. debit Insurance Expense and credit Prepaid Insurance.000 57. 450. Accumulated depreciation 150. b. P497.000 b. The Supplies on Hand account balance at the beginning of the period was P6. Accounts Receivable xxx Sales xxx 54.000 51.000 53. Unearned Rental Income 9. January.000.000 d. Assume the same data above. A physical count shows P3.000 Unearned Rental Income 9.825. If Lane debited Cash and credited Unearned Rental Income for P12.000 Accumulated depreciation 60. Depreciation expense 150. debits Supplies on Hand and credits Supplies Expense for P9. debit Insurance Expense and credit Prepaid Insurance.000. Assume the same data above. Rental Revenue xxx Cash xxx c. 2004? a. debit Prepaid Insurance and credit Insurance Expense.960 for a four year insurance policy on September 1 and recorded the P12.207. What adjusting entry should Ingle make on December 31. 2001.704 on June 1. Depreciation expense 60.207.000 d. Rental Income 3. debit Prepaid Insurance and credit Insurance Expense. This rent was for December. what would be the net book value on December 31. P497.000 d. Unearned Rental Revenue xxx Rental Revenue xxx d. 2003? a. the end of the accounting period? a.000 c.

What is the adjusting entry on December 31. Prepaid Insurance 48. On November 1. Unearned rent income 300. is shown as an expense on the income statement.000 b. . The company recorded this transaction a debit to Cash and credit to Rent income.000 Insurance expense 48.600 Insurance expense 9. 2003 for P57.000 c.000 Prepaid Insurance 48. d.000 d. 2003 for P57. 2003. one tenant gave P360.240 11. Rent income 300.000 Insurance expense 48. The company recorded this transaction by a debit to Insurance expense and credit to Cash.240 Prepaid Insurance d. On November 1. A contra account on the balance sheet. b.000 cash for one year’s rent.000 Unearned rent income 300.000 Prepaid Insurance 48. Insurance expense 48.000 59.600 Insurance expense 9. Used to show more proper balance in the equipment account by subtracting accumulated depreciation from the equipment account. All of these 63. Prepaid Insurance 48.600 Prepaid Insurance 9. one tenant gave P360.000 c. X Co is engaged in constructing and renting office space to various businesses. The company recorded this transaction by a debit to prepaid insurance and credit to Cash. Unearned rent income 60.000 61. X Co purchased a two-year insurance policy on September 1. a.000 62. A deduction from net income on the statement of owner’s equity.880 58. 2003. Insurance expense 48.880 Insurance Expense c.000 Unearned rent income 300. An estimate of the loss of usefulness of equipment during an accounting period. Unearned rent income 300. 2003? a. c. Unearned rent income 60. Accumulated depreciation.600. X Co is engaged in constructing and renting office space to various businesses.600 d.000 b.080 3. A liability on the balance sheet.600 b. 2003? a.600 b.600 Prepaid Insurance 9.000 cash for one year’s rent. Equipment. Prepaid Insurance 9. Prepaid Insurance 11.000 Rent income 60. 1. What is the adjusting entry on December 31. Insurance expense 9. b. 2003? a.000 Rent income 60. 2003? a. The company recorded this transaction a debit to Cash and credit to Unearned rent income. Depreciation is an expense that is incurred during an accounting period.000 Rent income 300. What is the adjusting entry on December 31.Page 8 of 27 Prepaid Insurance Insurance Expense 3.000 c.600. Rent income 60. a. What is the adjusting entry on December 31. Rent income 60.000 Unearned rent income 60. c.000 60.000 Unearned rent income 60.600 d. X Co purchased a two-year insurance policy on September 1.000 Rent income 300. Insurance expense 9. Rent income 300. d. Prepaid Insurance 9.000 d.000 c.

credit. b. Wages that have been earned but not paid. None of the choices 72. 1.500 b. credit equipment. Wages that have neither been earned nor paid. debit. The conceptual framework specifically mentions two underlying assumptions. d. The cost of services is 60% of service income. credit depreciation expense. how much is the service income? a. P 200. A contra asset Book value An Accrued asset.000 c. Financial Reporting Standards Council 70.500 of accounts receivable was collected. a. Asset. P 22. d.000 69. The adjusting entry to record depreciation of equipment is debit accumulated depreciation. P 66. a.000 of which P 50. debit. Debit Depreciation expense.222.000. P 400. the amount of one year’s depreciation is a. Wages that were earned and have been paid. Debit Depreciation expense.Page 9 of 27 64.000 d. credit Accumulated depreciation. P 300.667 c. the equipment was estimated to have a useful life of nine years and no salvage value at the end of nine years. None of the choices 73. b. P 322. 9. Philippine Accounting Standards Board d. d.000 b. c. Accounting Standards Council b. No. credit Accumulated depreciation.000. Contra asset. c.A. If the gross profit is P 50.500 b. b. 65. 68. P 30.000 . c. 1. d. If the service income is P 750. Auditing and Assurance Standards Council. The type of account and normal balance of Accumulated depreciation is contra asset. P 377. a. P 350. Asset. Accrued wages are wages that have been paid. 9298.000 d. a. Subsequently. P 450. 67. The difference between the balance of the Equipment account and its related Accumulated Depreciation is called trade-in value. namely accrual and going concern accrual and accounting entity going concern and time period time period and monetary unit 71. What is the new balance of its total assets? a. c. Using the straightline method.22 c. what is the gross profit? a. a. At the time of purchase. Porter Company bought equipment on January 3 of this year for P10.000 d.000 is accounts receivable.00. Debit Equipment.000 d. It is the accounting standard body created by PRC upon recommendation of the Board of Accountancy to assist the Board of Accountancy in carrying out its powers and functions under R. c. The cost of services is 75% of the service income. c. b.500 c. d. a. 66. 1. b.111. credit.11 b. P 37. The total assets of X firm is P 350.

600 75.000 d.600 Purchase discount 400 Cash 20. What is the journal entry on the part of S Company under the net method on the date of payment? a. Cost of goods sold is a.600 Cash 19.000 Sales discount forfeited 400 Accounts receivable 19.000. P 150.000 b.000.Page 10 of 27 74.700 was paid. An account payable of P 11.000 b. The terms of the purchased are 2/10. b. Cash 19. On January 2.000 d. Assume the same data above.000 c.000 of which P 80. The balance of A’s liability is a. 76. purchases are P285. P 125. 395.600 c.600 Sales discount 400 Accounts receivable 20. Luca Pacioli c.600 1 2 3 4 5 6 B B C A D D 41 42 43 44 45 46 C E 301. Napoleon Bonaparte d. Who was the inventor of double-entry bookkeeping and a partner of a merchant partnership a. Cash 19. Cash 19. and beginning inventory is P100. d. The net asset (capital) of Y was P 125.000. Amatino Manucci b. B Company purchase P20.200 d. Accounts payable 19. Who is known as the “Father of Accounting” even if he was not an accountant or merchant? a. Payment was made on January 15. Cash 20.200 d. Amatino Manucci b. P 136. Accounts payable 19.000.600 Sales discount forfeited 400 Accounts receivable 19. Accounts payable 19.000.000. freight in is P15.000 b. 200.700 b. P 60. P 80.000 80.000. Ending merchandise inventory is P145. P 70. 250.600 Accounts receivable 19. Eugen Schmalenbach 78. What is the new balance of Y’s net asset? a. Luca Pacioli c.600 Purchase discount lost 400 Cash 19. c.000. Purchase discounts are P1. Eugen Schmalenbach 77. 255.000 D A C A .300 c.000 was issued with promissory note. n/30.600 Purchase discount lost 400 Cash 20.000 79.000. except that the date of payment was January 12. Napoleon Bonaparte d.000 worth of merchandise from S Company.000 was paid in cash and P 10. P 101. Accounts payable 19. purchase returns and allowances are P4.600 c. P 113. The total liability of A is P 150. What is the journal entry on the part of B Company under the net method on the date of payment? a.000.000.

liability c. do not reflect money amounts b.Page 11 of 27 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 D A D D D E 24 B C A D D C C B A B D D C A C C A D B A A D C D B B C C 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 A C C A B A C D D A B C B A D D D B D D C A D A A C C C B A B B D B 1. are only used by large entities with many transactions ANS: C DIF: Easy OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement 2. transaction ANS: C DIF: Easy OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement . A group of related accounts that comprise a complete unit is called a a. are records of increases and decreases in individual financial statement items d. are not used by entities that manufacture products c. journal b. Accounts a. ledger d.

the same as a balance sheet b. cash will always have more debits than credits b. The gross increases in stockholders' equity attributable to business activities are called a. Revenue should be recognized when a. alphabetically c. net income ANS: C DIF: Easy OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement 7. the customer places an order d. the first entry of the accounting period was posted on the debit side ANS: A DIF: Difficult OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement 10. usually a listing of accounts in financial statement order d. liabilities c. Prepaid Insurance d. cash will never have a credit balance c. The debit side of an account a. cash is increased by debiting d. Accounts Payable c. its normal balance is debit without regard to the amounts or number of entries on the debit side d. A chart of accounts is a. An account is said to have a debit balance if a. can be either side of the account depending on how the accountant set up the system c. cash is received b. the amount of the debits exceeds the amount of the credits b.Page 12 of 27 3. all of the above ANS: C DIF: Moderate OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement . chronologically b. Which statement(s) concerning cash is (are) true? a. Retained Earnings ANS: D DIF: Easy OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement 6. used in place of a ledger ANS: C DIF: Moderate OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement 8. so that accounts used most often are listed first ANS: C DIF: Moderate OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement 4. Cash b. the customer charges an order ANS: B DIF: Moderate OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement 5. is the left side of the account ANS: D DIF: Moderate OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement 9. in accordance with their appearance in the financial statements d. liability or stockholders' equity b. assets b. usually a listing of accounts in alphabetical order c. is the right side of the account d. depends on whether the account is an asset. the service is performed c. revenues d. Accounts are classified in the ledger a. Which of the following accounts is an stockholders' equity account? a. there are more entries on the debit side than on the credit side c.

revenues ANS: D DIF: Moderate OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement 18. increase Supplies Expense with a debit and the normal balance is a debit d. capital stock and dividends ANS: C DIF: Easy OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement 13. dividends d. revenues and liabilities d. A credit may signify a a. A credit signifies a decrease in a. Which of the following applications of the rules of debit and credit is true? a. dividends b. assets b. A debit may signify a(n) a. assets and liabilities b.Page 13 of 27 11. decrease Cash with a debit and the normal balance is a credit ANS: C DIF: Difficult OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement . increase in the capital stock account d. increase Accounts Payable with a credit and the normal balance is a debit c. liabilities c. decrease in liability accounts c. decrease in revenue ANS: A DIF: Moderate OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement 17. assets. decrease in liabilities c. decrease Prepaid Insurance with a credit and the normal balance is a credit b. liabilities and expenses c. Which of the following types of accounts have a normal credit balance? a. decrease in assets b. liabilities. Which one of the statements below is not a purpose for the journal? a. decrease in asset accounts b. decrease in the dividend account ANS: B DIF: Moderate OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement 12. revenue ANS: A DIF: Moderate OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement 16. Which of the following groups of accounts have a normal debit balance? a. stockholders’ equity. stockholders’ equity b. to show a chronological order by date c. to show increases and decreases in accounts b. expenses c. expenses ANS: D DIF: Easy OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement 14. liabilities. assets c. capital stock d. expenses d. to show a complete transaction in one place d. A debit signifies a decrease in a. to help locate errors ANS: A DIF: Moderate OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement 15. decrease in capital stock d. revenues.

been incurred. which of the following describes the effect of the credit portion of the entry? a. a liability with a credit balance c. but have been recorded c. been incurred and accrued expenses have not b. been recorded and accrued expenses have not been incurred d. stockholders' equity. The primary difference between deferred and accrued expenses is that deferred expenses have a. increases the balance of an liability account c. Prior to the adjusting process. If the effect of the debit portion of an adjusting entry is to increase the balance of an expense account. not yet been incurred. not been earned but recorded as revenue d. decreases the balance of an stockholders’ equity account b. credit ANS: D DIF: Easy OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement 20. increases the balance of a contra asset account b. increases the balance of an asset account d. been paid but have not yet been incurred ANS: C DIF: Difficult OBJ: 03-01 NAT: AACSB Analytic | AICPA FN-Measurement 10. been incurred. revenue with a credit balance ANS: B DIF: Easy OBJ: 02-01 NAT: AACSB Analytic | AICPA FN-Measurement ADJUSTING ENTRIES 6. been earned and not recorded as revenue c. The classification and normal balance of the accounts payable account is a. been earned and cash received b. accrued expenses have a. and not recorded d. stockholders' equity with a credit balance d. Which of the following describes the classification and normal balance of the fees earned account? a. accrued revenue has a. paid. not been incurred and accrued expenses have been incurred c. decreases the balance of an stockholders’ equity account d. which of the following describes the effect of the debit portion of the entry? a. Prior to the adjusting process. increases the balance of an expense account ANS: D DIF: Difficult OBJ: 03-01 NAT: AACSB Analytic | AICPA FN-Measurement 8. decreases the balance of an expense account ANS: B DIF: Difficult OBJ: 03-01 NAT: AACSB Analytic | AICPA FN-Measurement 7. an asset with a credit balance b. credit c. not been recorded and accrued expenses have been incurred ANS: B DIF: Difficult OBJ: 03-01 NAT: AACSB Analytic | AICPA FN-Measurement 9. debit d. liability. not paid. asset.Page 14 of 27 19. or recorded b. increases the balance of an asset account c. If the effect of the credit portion of an adjusting entry is to increase the balance of a liability account. not been recorded as revenue but cash has been received ANS: B DIF: Difficult OBJ: 03-01 NAT: AACSB Analytic | AICPA FN-Measurement . credit b. not paid. revenue.

$10. not earned but the cash has been received ANS: D DIF: Difficult OBJ: 03-01 NAT: AACSB Analytic | AICPA FN-Measurement 13. not yet been recorded as expenses or paid b. $10. Adjusting entries are a. been recorded as expenses and paid c. The balance in the prepaid rent account before adjustment at the end of the year is $15. debit Rent Expense. $5.000. $5. accrual d. Revenues and expenses are reported in the period in which cash is received or paid b. optional under generally accepted accounting principles d. which represents three months' rent paid on December 1. rarely needed in large companies ANS: B DIF: Moderate OBJ: 03-01 NAT: AACSB Analytic | AICPA FN-Measurement 14. The general term employed to indicate an expense that has not been paid and has not yet been recognized in the accounts by a routine entry is a. Revenues are reported in the income statement in the period in which they are earned c. not yet been recorded as expenses ANS: D DIF: Difficult OBJ: 03-01 NAT: AACSB Analytic | AICPA FN-Measurement 12. credit Prepaid Rent. debit Prepaid Rent. credit Rent Expense.000.000.000 ANS: A DIF: Difficult OBJ: 03-02 NAT: AACSB Analytic | AICPA FN-Measurement . ANS: A DIF: Difficult OBJ: 03-01 NAT: AACSB Analytic | AICPA FN-Measurement 29.000. the same as correcting entries b. deferral c.Page 15 of 27 11. Deferred revenue is revenue that is a. The adjusting entry required on December 31 is a. asset and one stockholders’ equity account d. Which of the following is not a characteristic of accrual basis of accounting? a. revenue and one capital stock account ANS: A DIF: Moderate OBJ: 03-01 NAT: AACSB Analytic | AICPA FN-Measurement 15. $5.000 c. earned and the cash has been received b. been incurred and paid d. Deferred expenses have a. Adjusting entries affect at least one a. debit Rent Expense. All are correct.000. $5. not earned and the cash has not been received d. $5.000 d. inventory ANS: C DIF: Easy OBJ: 03-01 NAT: AACSB Analytic | AICPA FN-Measurement 16. needed to bring accounts up to date and match revenue and expense c. credit Prepaid Rent. Supports the matching concept d. earned but the cash has not been received c. $5. credit Rent Expense. revenue and the dividend account c. capital b. income statement account and one balance sheet account b.000 b. debit Prepaid Rent.

$4. debit Salary Expense. The adjusting entry necessary at the end of the fiscal period ending on Thursday is a. debit. The balance in the prepaid insurance account before adjustment at the end of the year is $10. the debit and credit amount for (1) would be the same as (2) but the accounts would be different b. $11. $16. debit Accumulated Depreciation. debit. $11. $16.500 b.500.500? a. credit Dividends. $15.500.500 c. credit Cash.000.700 d.000 on Friday for a five-day week ending on that day.700 ANS: D DIF: Difficult OBJ: 03-02 NAT: AACSB Analytic | AICPA FN-Measurement 31. debit Salaries Payable. The amount to be used for the appropriate adjusting entry is a. $16. debit." as compared to additional data stating (2) "the amount of unexpired insurance applicable to a future period is $1.000. $16. the end of the fiscal year. The entry to adjust for the cost of supplies used during the accounting period is a. credit Insurance Expense.500. contra asset c. and unexpired amounts per analysis of policies. credit Capital Stock ANS: A DIF: Moderate OBJ: 03-02 NAT: AACSB Analytic | AICPA FN-Measurement 33. $4.000 b.000 c. market value ANS: C DIF: Easy OBJ: 03-02 NAT: AACSB Analytic | AICPA FN-Measurement 36. $15.200. The adjusting entry to record the depreciation of equipment for the fiscal period is a. $16. debit Salary Expense. What is the proper adjusting entry at June 30.000." for the adjusting entry: a. credit Depreciation Expense ANS: B DIF: Moderate OBJ: 03-02 NAT: AACSB Analytic | AICPA FN-Measurement .000 ANS: C DIF: Difficult OBJ: 03-02 NAT: AACSB Analytic | AICPA FN-Measurement 34. credit Depreciation Expense d. the accounts for (1) would be the same as the accounts for (2) but the amounts would be different c. A business pays weekly salaries of $20. credit b. credit Cash. historical cost b. debit Insurance Expense. The balance in the office supplies account on June 1 was $5. $15.Page 16 of 27 30.500 d. supplies purchased during June were $2. Supplies.000 d. Supplies. credit Prepaid Insurance. credit c. Supplies. and the supplies on hand at June 30 were $2.000 ANS: D DIF: Difficult OBJ: 03-02 NAT: AACSB Analytic | AICPA FN-Measurement 32. debit Depreciation Expense.500.000. $11. there is not enough information given to determine the correct accounts and amounts ANS: C DIF: Difficult OBJ: 03-02 NAT: AACSB Analytic | AICPA FN-Measurement 35. Accounts Payable. credit Equipment b.500. $11. the accounts and amounts would be the same for both (1) and (2) d. $5. credit d. $2. $4.000. $9. $16. credit Prepaid Insurance. The difference between the balance of a fixed asset account and the related accumulated depreciation account is termed a. $16.000. debit Drawing. $16. debit Equipment. $4.000.500 b.500.500 c. credit Accumulated Depreciation c. debit. Supplies. debit Insurance Expense. based on a prepaid insurance account balance before adjustment. debit Insurance Expense. debit Depreciation Expense.500. debit Prepaid Insurance. If the additional data for the adjusting entry is (1) "the amount of insurance expired during the year is $8. Supplies Expense. book value d. credit Prepaid Insurance. Capital Stock. credit Salaries Payable.

credit d. debit Insurance Expense. The type of account and normal balance of Accumulated Depreciation is a. If $750 of supplies are on hand at the end of the year. as a. is a. matching ANS: B DIF: Easy OBJ: 03-02 NAT: AACSB Analytic | AICPA FN-Measurement 38. Wages Payable. and if the monthly rent was $800. The adjusting entry on December 31 is a. contra asset b. representing the total of supplies purchased during the year. contra asset. A company purchases a one-year insurance policy on June 1 for $840. Wages Payable. $720 ANS: C DIF: Difficult OBJ: 03-02 NAT: AACSB Analytic | AICPA FN-Measurement 41.800 d. $3. expense. $2. and credit Prepaid Insurance.400 d. The supplies account has a balance of $1. depreciation c. $490.Page 17 of 27 37. $3. debit Prepaid Insurance. As time passes. Wages Income. the supplies expense to be reported on the income statement for the year is a. $350 and credit Prepaid Insurance. contra liability c. Wages Expense.600 ANS: A DIF: Moderate OBJ: 03-02 NAT: AACSB Analytic | AICPA FN-Measurement 42. and credit Cash. credit c. Wages Payable. asset. d. $800 b. The entry to adjust the accounts for wages accrued at the end of the accounting period is a.550 c. debit Insurance Expense. debit. equipment allocation b. debit Insurance Expense. expense ANS: A DIF: Easy OBJ: 03-02 NAT: AACSB Analytic | AICPA FN-Measurement 43. asset. accumulation d. debit ANS: C DIF: Easy OBJ: 03-02 NAT: AACSB Analytic | AICPA FN-Measurement . debit.800.000 at the beginning of the year and was debited during the year for $2. $3. Wages Income. credit b. credit ANS: D DIF: Moderate OBJ: 03-02 NAT: AACSB Analytic | AICPA FN-Measurement 39. asset. representing a payment made on the first day of the month.600. Wages Expense. debit. credit d. the amount of prepaid rent that would appear on the balance sheet at the end of the month. $750 b. If the prepaid rent account before adjustment at the end of the month has a debit balance of $1. Wages Payable. To account for this decrease in usefulness. contra asset.050 ANS: D DIF: Moderate OBJ: 03-02 NAT: AACSB Analytic | AICPA FN-Measurement 40. after adjustment. $280 c. credit b. contra asset. respectively. $1. Depreciation Expense and Accumulated Depreciation are classified. $720. debit. $400 c. the cost of fixed assets is systematically allocated to expense through a process called a. debit c. asset d. $350 b. revenue. fixed assets other than land lose their capacity to provide useful services. $280 and credit Prepaid Insurance. $490.

b. $40.Page 18 of 27 44. $43. Select the best explanation for the entry. the amount of the adjusting entry is a.000 is unearned at the end of the accounting period. credit d. The following adjusting journal entry was found on page 4 of the journal. ANS: NAT: 4. credit b.000 ANS: C DIF: Moderate OBJ: 03-02 NAT: AACSB Analytic | AICPA FN-Measurement 61.500 4. b. Unearned Revenue Fees earned ???????????????? a. debit ANS: C DIF: Easy OBJ: 03-02 NAT: AACSB Analytic | AICPA FN-Measurement 60. Select the best explanation for the entry.000 of the $40. d. liability.000 c. c.000.000 b. $37. The unearned rent account has a balance of $40. B DIF: Moderate OBJ: 03-02 AACSB Analytic | AICPA FN-Measurement 62. c. Supplies Expense Supplies ???????????????? a. The type of account and normal balance of Unearned Rent is a.000 d. c. liability. $3. The following adjusting journal entry was found on page 4 of the journal. The following adjusting journal entry was found on page 4 of the journal. Select the best explanation for the entry. ANS: NAT: Record the payment of wages Record wages to be paid this month Record wages paid in advance Record wages expense incurred and to be paid next month D DIF: Moderate OBJ: 03-02 AACSB Analytic | AICPA FN-Measurement 2. d. If $3. expense. revenue. d. b. ANS: NAT: 360 360 Adjust supplies inventory to actual Record purchase of supplies Adjust supplies expense Record sale of supplies A DIF: Moderate OBJ: 03-02 AACSB Analytic | AICPA FN-Measurement 63.555 2. debit c.555 . Wages Expense Wages Payable ???????????????? a.500 Record payment of fees earned Record fees earned at the end of the month Record fees that have not been earned at the end of the month Record the payment of fees to be earned.

d. Income Summary 677 Rent Expense 240 Supplies Expense 220 Utilities Expense 130 Miscellaneous Exp 87 7. d. Utilities Expense 123 Cash 123 4. Closing journal entries 1. ANS: B DIF: Moderate NAT: AACSB Analytic | AICPA FN-Measurement OBJ: 04-05 OBJ: 04-05 OBJ: 04-05 OBJ: 04-05 . b. What affect will this adjusting journal entry have on the accounting records? Supplies Expense Supplies a. ANS: A DIF: Moderate NAT: AACSB Analytic | AICPA FN-Measurement 2. D DIF: Easy OBJ: 03-02 AACSB Analytic | AICPA FN-Measurement 65. Unearned revenue 498 Fees Earned 498 6.500 4. ANS: A DIF: Moderate NAT: AACSB Analytic | AICPA FN-Measurement 4. Income Summary 465 Retained earnings 465 3.500 Increase net income Increase revenues reported for the period Decrease liabilities All are true. Dividends 175 Cash 175 8. ANS: C DIF: Moderate NAT: AACSB Analytic | AICPA FN-Measurement 3. ANS: NAT: 678 678 Increase income Decrease net income Decrease expenses Increase assets B DIF: Easy OBJ: 03-02 AACSB Analytic | AICPA FN-Measurement COMPLETING THE ACCOUNTING CYCLE MATCHING Identify the following transactions as either: a. ANS: NAT: 4. c. b. Accounts Receivable 400 Fees earned 400 (Customer billed for services performed) 1. Cash 500 Fees Earned 500 2. Wages Expense 790 Wages Payable 790 5. c. Adjusting journal entries c.Page 19 of 27 64. What affect will this adjustment have on the accounting records? Unearned Revenue Fees earned a. Journal entries b.

ANS: A DIF: Moderate NAT: AACSB Analytic | AICPA FN-Measurement OBJ: 04-05 OBJ: 04-05 OBJ: 04-05 OBJ: 04-05 MULTIPLE CHOICE 1. ANS: C DIF: Moderate NAT: AACSB Analytic | AICPA FN-Measurement 7. preparing a post-closing trial balance d. cross-referencing. journalizing and posting the closing entries ANS: C DIF: Moderate OBJ: 04-01 NAT: AACSB Analytic | AICPA FN-Measurement 2. verify that the debits and credits are in balance. Preparation of adjustments. balance sheet in the long-term liabilities section d. Preparation of adjusted trial balance. When preparing the statement of retained earnings. ANS: C DIF: Difficult OBJ: 04-01 NAT: AACSB Analytic | AICPA FN-Measurement 4. The Adjusted Trial Balance will show the net income (loss) as an additional account. In the accounting cycle. adjusted trial balance. posting ANS: A DIF: Difficult OBJ: 04-01 NAT: AACSB Analytic | AICPA FN-Measurement 3. c. Preparation of adjustments. ANS: B DIF: Moderate NAT: AACSB Analytic | AICPA FN-Measurement 6. balance sheet in the property. in the general ledger d. b. preparing the financial statements b. During the end-of-period processing which of the following best describes the logical order of this process a. The Adjusted Trial Balance includes the postings of the adjustments for the period in the balance of the accounts. verify the correct flow of accounts into the financial statements. financial statements b. journalizing and posting the adjusting entries c. Balance Sheet c.Page 20 of 27 5. in the Income Statement columns of the work sheet b. balance sheet in the current assets section b. Both will need to be in balance in order to continue with the end-of-period processing c. d. What is the major difference between the Unadjusted Trial Balance and the Adjusted Trial Balance? a. ANS: A DIF: Moderate OBJ: 04-01 NAT: AACSB Analytic | AICPA FN-Measurement 5. journalizing d. Once the adjusting entries are posted. in the Balance Sheet columns of the work sheet ANS: C DIF: Moderate OBJ: 04-02 NAT: AACSB Analytic | AICPA FN-Measurement 6. in the statement of cash flows c. plant and equipment section c. verify that the net income (loss) is correct for the period. adjusted trial balance. d. adjusted trial balance. the Adjusted Trial Balance will prepared to a. Accumulated Depreciation appears on the a. the beginning retained earnings balance can always be found a. Preparation of Income Statement. income statement as an operating expense ANS: B DIF: Moderate OBJ: 04-02 NAT: AACSB Analytic | AICPA FN-Measurement . The Unadjusted Trial Balance will be used to record the adjustments for the period. b. verify that all of the adjustments were posted in the correct accounts. the last step is a. ANS: A DIF: Moderate NAT: AACSB Analytic | AICPA FN-Measurement 8.

income statement as an expense ANS: A DIF: Moderate OBJ: 04-02 NAT: AACSB Analytic | AICPA FN-Measurement 8.Page 21 of 27 7. The income statement should be prepared a. before the statement of retained earnings and balance sheet b. before the income statement and after the balance sheet b. balance sheet in the current liabilities section d. after the income statement and before the balance sheet ANS: A DIF: Moderate OBJ: 04-02 NAT: AACSB Analytic | AICPA FN-Measurement 14. The income statement is prepared from the a. Delivery Equipment d. a selling company lends money to a customer company to be used to purchase goods from the selling company. after the balance sheet and before the statement of retained earnings ANS: A DIF: Moderate OBJ: 04-02 NAT: AACSB Analytic | AICPA FN-Measurement . The Statement of Retained Earnings should be prepared a. either the adjusted trial balance or the income statement columns of the work sheet d. income statement as revenue ANS: B DIF: Easy OBJ: 04-02 NAT: AACSB Analytic | AICPA FN-Measurement 9. after the income statement and balance sheet d. a selling company pretends to sell to a fictitious company with the intend of inflating revenues c. current liability d. Unearned Fees appear on the a. balance sheet as a current liability c. after the statement of retained earnings and balance sheet d. Office Equipment b. before the income statement and balance sheet c. Which one of the fixed asset accounts listed below will not have a related contra asset account? a. current asset b. balance sheet in the stockholders’ equity section d. a selling company sells to a customer company with huge discounts. a selling company lends money to a customer company to increase assets. Building ANS: B DIF: Easy OBJ: 04-02 NAT: AACSB Analytic | AICPA FN-Measurement 10. Round-tripping is when a. b. after the statement of retained earnings and before the balance sheet c. Prepaid insurance is reported on the balance sheet as a a. d. balance sheet in the fixed assets section c. adjusted trial balance b. Land c. balance sheet in the current assets section b. income statement columns of the work sheet c. ANS: D DIF: Difficult OBJ: 04-02 NAT: AACSB Analytic | AICPA FN-Measurement 13. both the adjusted trial balance and the income statement columns of the work sheet ANS: C DIF: Moderate OBJ: 04-02 NAT: AACSB Analytic | AICPA FN-Measurement 12. long-term liability ANS: A DIF: Easy OBJ: 04-02 NAT: AACSB Analytic | AICPA FN-Measurement 11. Notes Receivable due in 345 days appear on the a. fixed asset c. balance sheet in the current assets section b.

550 d. Determine the net income (loss) for the period. When preparing the Statement of Retained Earnings the beginning balance should be followed by ____ to arrive and the ending balance of retained earnings. a.380 d.680 ANS: A DIF: Difficult OBJ: 04-02 NAT: AACSB Analytic | AICPA FN-Measurement 18.380 c. $11. $22.550 ANS: D DIF: Moderate OBJ: 04-02 NAT: AACSB Analytic | AICPA FN-Measurement 17. a. $15. a.400 870 Totals 16. Steely Company Adjusted Trial Balance For the Year ended December 31.Page 22 of 27 15.500 b.500 . $2. Determine the stockholders’ equity ending balance for the period. investments plus net income (loss) less dividends ANS: A DIF: Moderate OBJ: 04-02 NAT: AACSB Analytic | AICPA FN-Measurement The following is the adjusted trial balance for Steely Company.550 d.000 12. Net Income 26. Determine total assets. $21. investments plus net income (loss) b. investments less dividends c.680 b. Net Income 3.130 2. Net Loss 870 c.580 ANS: C DIF: Moderate OBJ: 04-02 NAT: AACSB Analytic | AICPA FN-Measurement 1.700 5.130 c. net income (loss) less dividends d.450 900 475 150 75 26.500 b.500 1. Net Loss 3.200 1.600 26.300 750 13. 2008 Cash Accounts Receivable Prepaid Expenses Equipment Accumulated Depreciation Accounts Payable Notes Payable Capital Stock Dividends Fees Earned Wages Expense Rent Expense Utilities Expense Depreciation Expense Miscellaneous Expense 6. $15. $14. $26.000 6. a.

it is possible to isolate next period’s information correctly. the net income or (loss) for the period. revenues for the period d.700 ANS: A DIF: Moderate OBJ: 04-02 NAT: AACSB Analytic | AICPA FN-Measurement 29. Cash d. ANS: C DIF: Difficult OBJ: 04-03 NAT: AACSB Analytic | AICPA FN-Measurement 31. the balance will be equal to a. d. c. Determine the current assets. the closing account b. Fees Earned ANS: B DIF: Easy OBJ: 04-03 NAT: AACSB Analytic | AICPA FN-Measurement .500 ANS: B DIF: Moderate OBJ: 04-02 NAT: AACSB Analytic | AICPA FN-Measurement 20. the clearing account c. $9. The income summary account is also called a.180 c. What is the last account that should be listed in the Post Closing Trial Balance? a. b. No financial statement ANS: D DIF: Moderate OBJ: 04-03 NAT: AACSB Analytic | AICPA FN-Measurement 30. Income Summary b. the temporary account ANS: B DIF: Easy OBJ: 04-03 NAT: AACSB Analytic | AICPA FN-Measurement 32. $26. the nominal account d. b. stockholders’ equity. $18. $22. $5. the income summary account is equal to the net income or (loss) for the period. On which financial statement will Income Summary be shown? a. Balance Sheet c.Page 23 of 27 19. After posting the second closing entry to the income summary account.000 d.700 c. c. zero. After the second closing entry. Income Statement d. Retained Earnings c. a. Statement of retained earnings b.580 b. Determine the total liabilities for the period. $6. There are four closing entries that update the stockholders’ equity account. All real accounts are closed at the end of the period. ANS: D DIF: Easy OBJ: 04-03 NAT: AACSB Analytic | AICPA FN-Measurement 33.700 b. $1.380 d. a. $21. By closing nominal accounts at the end of the period to zero. Which is the following that is not true about closing entries? a.

dividends account b.800 57. $450. A company. At year-end. Purchases Discounts. dividends account. $550 c. c. Fees Earned c. income summary.000 25. Unearned Revenues b. Revenues. $360 d. merchandise costing $400 is purchased. income summary. Dividends. Cash. a. income summary.500 750 1. $220. the third one is to close ____.Page 24 of 27 34. b. the second one is to close ____. The cost of merchandise purchased is equal to a. Using the following information. Expenses. Fees Earned.930 c.000 880 .489 d. Transportation-In. expenses. $12. Rent Expense ANS: D DIF: Moderate OBJ: 04-03 NAT: AACSB Analytic | AICPA FN-Measurement 35. expenses. $14520 ANS: B DIF: Difficult OBJ: 05-02 NAT: AACSB Analytic | AICPA FN-Measurement 7. has merchandise inventory costing $140 on hand at the beginning of the period. Which of the following account groups are all considered nominal accounts? a. and the last one is to close ____. income summary. During the period. $9. Income Summary d.780 23. Dividends account. $4. d.220 24.000 6. $140 ANS: C DIF: Difficult OBJ: 05-02 NAT: AACSB Analytic | AICPA FN-Measurement 22.020 A DIF: Difficult OBJ: 05-02 AACSB Analytic | AICPA FN-Measurement Purchases discounts Merchandise inventory April 30 Sales Transportation In $800 7. Purchases Returns and Allowances.930 b. $9. $720 b. There are four closing entries.300. Purchases. Capital Stock. Prepaid Expenses. The cost of merchandise sold for the year is a. $13. Dividends.000. Unearned Revenues. Fees Earned. assets d. revenues ANS: A DIF: Moderate OBJ: 04-03 NAT: AACSB Analytic | AICPA FN-Measurement MERCHANDISING 6. merchandise inventory costing $180 is on hand. Capital stock account. using the periodic inventory system. assets. what is the amount of cost of merchandise sold? Purchases Merchandise inventory April 1 Sales returns and allowances Purchases returns and allowances a. capital stock account c.270 31. A company using the periodic inventory system has the following account balances: Merchandise Inventory at the beginning of the year. $2. ANS: NAT: $28.000. The first one is to close ____.

P995.000 During April.000 Purchases discounts Merchandise inventory April 30 Sales Transportation In $800 7.000 b. P88.520 d. Using the following information.000 Raw materials purchased 430.000. what is the amount of net sales? Purchases Merchandise inventory April 1 Sales returns and allowances Purchases returns and allowances a. the cost of good manufactured is: a. c.200 16.000 880 25.500 Merchandise inventory April 1 April 30 Sales returns and 750 Sales allowances Purchases returns and 1. The following data were available at the beginning and ending of April: Beginning Ending Materials inventory P32.240 Finished goods inventory 8.780 56.000 Work in process inventory 7.800 57.000 Decrease in finished goods inventory 35. d.000 were purchased. b. P81. b.560 b. P965. direct materials costing P40. ANS: NAT: $28.470 25.000 d. P90. Zeta Company manufactures special machines according to customers’ specifications. direct labor cost totaled P33.800 57.520 c. d.250 D DIF: Moderate OBJ: 05-02 AACSB Analytic | AICPA FN-Measurement ACCOUNTING FOR MANUFACTURING 1.Page 25 of 27 23.780 57. The following information was taken from Crimson Company’s accounting records for the year ended December 31. ANS: NAT: $800 7. what is the amount of gross profit? Purchases $28.000 Direct-labor payroll 200.970 30.000 2.000 6. The cost of goods sold is: a. and factory overhead was P17.000 Transportation In allowances a. 2008: Increase in materials inventory P 15.400 P34. P79.000 c. Using the following information.250 B DIF: Difficult OBJ: 05-02 AACSB Analytic | AICPA FN-Measurement 24.000 Freight-out 45. For April.000 Factory overhead 300.000 There was no work-in-process inventory at the beginning or end of the year.000 57.000 . c.000 6.560 3.750 56. The accounting department of Eiffel Company provided the following data for 2008: Sales P144. P975. P950.000 Purchases discounts Merchandise inventory 6.000 880 31.160.500 750 1.

000 The cost of goods sold during the period was: a. respectively. December 31: Finished goods Work in process Materials 7.000 Taxes. 2008: Inventories Opening Closing Raw materials P 150. Factory overhead.000 100. P460.000 c. 2007.042.000 Finished goods 50.078. P170. The factory ledger of Zircon contains the following cost data for the year-ended December 31.000 Finished goods 180.000 Compute the cost of raw materials purchased and the direct labor charged to production during the year.000 Indirect labor cost 120. 2008.000 d. P34.000 30.000 Total materials used 652.000 d.044. P72. Direct materials. A manufacturing company had inventories at the beginning and end of 2008 as follows: Beginning End Materials P44. P360. December 31. P480.028.400 4.000 17.000 Total manufacturing costs charged to production during the year (including raw materials. December 31.000 60.000 Work in process 80.000. 20%.000 20. P1. Gross profit rate on sales.000. a.000.000 96.000 36. P500. utilities and depreciation of factory building 100. P62.000 220. The resulting fire completely destroyed the plant and its contents.000. Cost of goods available for sale.000 P 170. The insurance company wants to know the approximate cost of the inventories as a basis for negotiating a settlement.000 c.000 b. Fortunately.000. .000.000. December 31. P71.400 30. 2007 to February 20. Work in process. P1. Direct materials purchased. 2008: Prime cost. the following costs and expenses were incurred: Raw materials purchased P600.000. P632. A mentally deranged employee. direct labor and factory overhead applied at the rate of 50% of direct labor costs) 1.000. P672.000 16.000 Direct labor cost 240.000 6.000 16.000 P 60. January 1: Finished goods Work in process Materials Inventories. P180.000 b. Finished goods. P480.000 Compute for 2008 the cost of materials purchased: a.000 14. Sales. certain accounting records were kept in another building. P16.200 1.000. P1. put a torch to a factory on February 20.000 c. they revealed the following for the period December 31.440 720 ? 20. P82. P30. 2007.372. P301.000.000.Page 26 of 27 Marketing expenses Administrative expense Other expenses Purchases Factory overhead Direct labor Cost of goods sold Inventories. P720. P240.640 b.000 Sales and office salaries 128. Mr. Direct labor. Amereil Umbra Katok. 2007. 40% of conversion cost.000 d.000 During 2008. P1.000 5. P672.000 Work in process 160.

P60. P65.Page 27 of 27 Compute for February 20. P25.000.000 d.000. P25. P30.000 . P30. P 6. P49.000 c.000 b. and finished goods inventory.000.400. 2008 the direct materials inventory. P65.000. P60. work in process inventory.000. respectively: a. P25. P25.400.000.