1.
Daguiman Company received P 9,600 on April 1,2014 for one year’s rent in advance and
recorded the transaction with a credit to an Income account. The December 31,2014 adjusting
entry should be.
A. Debit Rent Income and ans unearned rent Income P 2,400
B. Debit Rent Income and ans unearned rent Income P 7,200
C. Debit unearned rent Income and credit rent Income P.2400
D.Debit unearned rent Income and credit rent Income P7,200
2. Which of the following is an example of a deferral?
a. the accumulation of interest in a bank account
b. property taxes accrued but not yet paid
c. the purchase of a company vehicle
d. legal fees already collected but not yet earned
3. On May 1, 2008, JimboyMe2x Co. borrowed P840,000 from Karen Savings Bank. He issued a
promissory note that earned a 20% interest per annum. Both the interest and principal will be
payable in one year. How much interest interest will be recorded for the year 2008?
a. 168,000 b. 112,000 c. 126,000 d. 56,000
4. A company has P1,500 of supplies on hand at the end of 2007. During 2008, P2,750 of
supplies were purchased. A count of supplies on hand at the end of 2008 found an inventory of
P875. What was the amount of supplies expense for 2008?
a. 1,875 b. 5,125 c. 3,375 d. 4,250
5. Rice Corporation loaned P 60,000 to another corporation on December 1, 2014 and received a
3- month , 8% interest-bearing note with a face value of P 60,000. What adjusting entry should
Rice make on December 31, 2014.
A. Debit Interest Receivable and credit Interest Income P 1,200
B. Debit Cash and credit Interest Income, P 400
C. Debit Interest Receivable and credit Interest Income, P 400
D. Debit Cash and credit Inrerest Recievable, P 1,200
6. The adjusting entry to accrue salaries expense,
a. debit salaries expense and credit cash
b. debit salaries payable and credit salaries expense
c. debit salaries payable and credit cash
d. debit salaries expense and credit salaries payable
7.On Jan 1, 20A Dolotallas Enterprise bought a brand new Service Vehicle costing P250,000. It
has an estimated life of five years and a salvage value of P 50,000 at the end of its life . The
accounting period ends on December 31, 20A.
How much is the annual depreciation?
8. A company that receives money in advance of performing a service
a. debit cash and credit prepaid fees
b. debit unearned revenues and credit accounts payable
c. debit cash and credit unearned revenues
d. debit cash and credit accounts receivable
9.Gabutan Security Services, owned and managed by Rembert Suico, bought office supplies
costing P15,000. The purchase was recorded by a debit to an account “Supplies’. At the end of
the accounting period, it was ascertained that P4,000 cost of supplies were on hand. What is the
adjusting entry?
10. On August 1, 20A, Ronah Company insured its property with consolidated Insurance
Company pays premium of P 24,000 for a one -year policy contract covering the period form
August 1,20A to August 1, 20B . The accounting period ends on December 31, 20A.
If asset method is used, what is the adjusting journal entry on December 31,20A?
11. The carrying value or net book value of a depreciable asset equals
a. the estimated cost to replace the asset
b. the original cost minus accumulated depreciation
c. the estimated amount for which the asset could be sold
d. the original cost minus depreciation expense for the current period
12. At the beginning of 2008, a company purchased a fire insurance policy covering a property
for a period of two years. The P5,600 cost of the policy was paid in cash. At the end of 2008, the
company will reduce Prepaid insurance for this policy by
a. 0 b. 467 c. 5,600 d. 2,800
