EASY ROUND
1. A fixed asset with an estimated life of 10 yrs shall be recorded at:
a. Retail cost
b. Acquisition cost
c. Salvage value
d. Future value
2. An accounting transaction shall at least affect how many accounts?
a. 1
b. 2
c. 3
d. 4
3. The retail value of an equipment purchased by jean is 50,000. How should the equipment be
recorded upon purchase?
a. Retail value
b. 50,000
c. Purchase cost
d. Future cost
4. How many executive officers are there in NFJPIA?
a. 10
b. 11
c. 12
d. 13
5. Which among the following is not considered as cash?
a. Bank deposits
b. Checks
c. Postdated checks
d. Money orders
6. Cash on hand is expressed in peso and is assumed that its purchasing power does not change.
a. Monetary unit
b. Going concern
c. Cost principle
d. Materiality
7. The business’s payments for the owner’s personal expenses shall be reduced from the
owner’s capital contribution and shall be treated as:
a. Liability
b. Expenses
c. Drawings
d. Loss
8. In what Federation Year did NFJPIA received a diamond year award from picpa for its
support in the fulfillment of its objectives to strengthen the bond between JPIA and PICPA?
a. 1998-1999
b. 1999-2000
c. 2000-2001
d. 1997-1998
9. When a corporation records less profit, less asset amount, or a greater liability amount it
follows what principle?
a. Materiality
b. Conservatism
c. Cost principle
d. Matching
10. NFJPIA has over how many accredited local chapters?
a. 275
b. 257
c. 370
d. 730
VOID QUESTIONS (EASY)
11. The retail value of an equipment purchased by jean is 50,000. How should the equipment be
recorded upon purchase?
e. Retail value
f. 50,000
g. Purchase cost
h. Future cost
12. I. Machinery
I. Owner’s Equity
II. Land
III. Cash
IV. Debtor
Which of the following items fall under the definition of an asset ?
a. I, II, III, & IV
b. I, III, & IV
c. IV only
d. I, III, IV, & V
13. Which among the items is/are considered a liability?
a. Cash
b. Debtors
c. Tax Owed
d. Both b & C
14. Assess the following statements:
1. A liability is a debt for your business.
2. Debtors are a debt for your business.
a. Both statements are true
b. Both statements are false
c. Statement 1-true; statement 2-false
d. Statement 1-false; statement 2-true
15. What is obtained when cost of goods sold is subtracted from revenue?
a. Profit
b. Net profit
c. Gross profit
d. Operating profit
AVERAGE ROUND
16. Which among the following is/are the two characteristic/s of the monetary unit principle?
a. transactions are recorded in terms of money
b. purchasing power of the dollar is stable
c. the business enterprise is considered one accounting entity
d. both a & b
1.
17. The following are included in the accounting conventions, except:
a. Depreciation convention
b. Conservatism convention
c. Consistency convention
d. Full disclosure convention
18. Which of the following does not exemplify the materiality concept?
a. Purchase of pencil recorded as an expense instead of including in stock
b. Purchase of car for private use
c. Purchase of plant for business
d. Purchase of building to extend the business
19. Which of the following is true about the disclosure convention?
a. Full disclosure of all material facts that can affect the financial statement
b. That profit should be realized.
c. Matching of incomes and expenses for a particular period
d. The business to avoid being dissolved in the near future
20. Current national council president of the federation
a. ASHERAH J. ENGKONG
b. RHEA ANGIELA V. MENESIS
c. AXL ROME P. FLORES
d. VICENTE L. QUIMBO, JR
21. Which is an example of an invisible transaction?
a. Product is bought at P100.00
b. Depreciation of Building
c. Purchase of furniture
d. Payment of taxes
22. The demerits of double-entry system do not include
a. The complexity of the accounting system
b. Need an experienced person
c. Increase the volume of work
d. Unlimited application
23. Assess the following statements:
1. A business whose assets exceeds its equity simply means that it has debts or liabilities,
which does not necessarily mean a bad financial position.
2. A business whose assets are greater than its owner’s equity has a bad financial
position.
a. Both statements are true
b. Both statements are false
c. Statement 1-true; statement 2-false
d. Statement 1-false; statement 2-true
24. Assess the following statements:
1. A business whose liabilities are greater than its assets has a bad financial position.
2. A business whose liabilities are greater than its owner’s equity has a bad financial
position.
a. Both statements are true
b. Both statements are false
c. Statement 1-true; statement 2-false
d. Statement 1-false; statement 2-true
25. The founding president of NFJPIA
a. Mr. Samuel Misa
b. Enrique Caguiat
c. Santiago dela Cruz,
d. Clemente Uson
VOID QUESTIONS (AVERAGE)
26. To achieve control objectives, cash sales are to be recorded when
a. cash sales are made
b. purchase order is received from a customer
c. After some period
d. Weekly
27. Assess the following statements:
1. PPE must not be depreciated over their estimated useful life.
2. Stock valuation sticks to the rule of the higher of cost and net realizable value.
a. Both statements are true
b. Both statements are false
c. Statement 1-true; statement 2-false
d. Statement 1-false; statement 2-true
28. A leading company in the Philippines records its income in pesos—rounded to the nearest
1,000. Which accounting principle justifies the rounding off of its income?
a. Monetary unit
b. Materiality
c. Going concern
d. Cost principle
29. Which represents the FIFO method?
a. First units purchased are the first units sold
b. Last units purchased are the last units sold
c. Last units purchased are the first units sold
d. Both a and b
30. The company purchased 2 boxes of staples immaterial relative to its assets. The purchase is
to be recorded as a/an?
a. Asset
b. Purchases
c. Expense
d. Prepaid expense
DIFFICULT ROUND
31. Beginning Inventory, 1,000 units at P4/unit: Purchases, 600 units at P5/unit: Units sold, 700:
Ending Inventory, 900 units: Average cost per, P4.375 per unit. Using the given information,
how should the Cost of goods sold be calculated?
a. Multiply the average cost per unit by the number of units sold.
b. Multiple the average cost per unit by the ending inventory.
c. Multiply the number of units sold by the ending inventory
d. Multiply the number of units sold by the beginning inventory
32. Assess the following statements:
1. The accounting equation shows how much of your assets belong to the owner, and how
much ‘belong’ to people outside the business.
2. If you cannot work out a value for an item that will bring you future benefits, then you
cannot keep this as an asset in your records.
a. Both statements are true
b. Both statements are false
c. Statement 1-true; statement 2-false
d. Statement 1-false; statement 2-true
33. which of the following statements is/are true?
a. Capital is increased by additional contributions and income, and decreased by
expenses and withdrawals.
b. Capital is increased by additional distributions and income, and decreased by expenses
and withdrawals
c. Both a & b
d. None of the above
34. The following are amongst the organization’s objectives, except:
a. To promote fellowship and familiarity among accounting students from all walks of
life
b. To serve as an instrument for the gradual exposure of the students to the network of
opportunities that awaits them
c. To protect the Certificate of Certified Public Accountants granted by the
Republic of the Philippines
d. To adapt necessary measures to foster academic advancement in the field of
accounting.
35. Which statement/s is/are true about the realization concept?
i. The concept stresses that revenues should only be recorded if there is reasonable
certainty about their realization
ii. The concept explains that the comparison of incomes and expenses for a particular
period can give the period's net result.
iii. The concept stresses that revenues should only be recorded if there is reasonable
certainty about their realization.
a. i only
b. ii only
c. iii & ii
d. i & iii
36. Liliana spends P20,000 (cash) on a piece of equipment for use in her restaurant. She plans to
use the straight-line method to depreciate the equipment over 5 years. She expects it to have no
value at the end of the 5 years. If Liliana sells the equipment for P6,000, she will record P2,000
as?
a. A loss—following the conservatism principle
b. A gain
c. Depreciation expense
d. Net profit
37. What are the effects of not charging depreciation?
i. Determine of actual profit or loss
ii. Determining actual financial position
iii.Problem in the determination of actual profit and loss.
iv.Problem of determining the actual financial picture.
v.Replacement of fixed assets
a. i, ii, & v
b. v only
c. iii & iv
d. iii, iv & v
38. What method of depreciation is used when the useful life of an asset is expressed in terms
of the total units of production or use anticipated?
a. unit-of-activity
b. straight-line
c. accelerated depreciation
d. Sinking fund
39. Julie takes out a $10,000 loan for her business. Repayment is due in one year along with
$1,200 interest. When the loan is repaid, Julie shall record which of the following accounts?
a. debit: Note Payable, Interest Payable; credit: Cash
b. debit: Interest Payable; credit: Cash, note payable
c. debit: Note Payable; credit: Cash, interest payable
d. debit: Cash; credit: Note Payable, interest payable
40. Andy runs a real estate development firm. Five years ago, he purchased a piece of land
for $250,000. This year, an appraiser tells Andy that the land is worth $300,000. At what
value should Andy report the land on his balance sheet? Why?
a. Andy should report the land at its current cost: $300,000. Under GAAP’s “Historical Cost”
assumption, assets are reported at their historical cost rather than at their current market
value.
b. Andy should report the land at its original cost: $250,000. Under GAAP’s “Historical
Cost” assumption, assets are reported at their historical cost rather than at their
current market value
c. Andy should report the land at its original cost: $300,000. Under GAAP’s “Historical
Cost” assumption, assets are reported at their historical cost rather than at their current
market value
d. Andy should report the land at its current cost: $250,000. Under GAAP’s “Historical Cost”
assumption, assets are reported at their historical cost rather than at their current market value
VOID QUESTIONS (DIFFICULT)
41. Andy is the sole owner of his firm. In June, he moves $30,000 from his business checking
account to his personal checking account. If Andy wants his financial records to be in
accordance with GAAP, should he record the transaction or not?
a. Yes, in order to be in compliance with GAAP, Andy must record the transaction.
b. No, in order to be in compliance with GAAP, Andy must record the transaction.
c. Yes, in order to be in compliance with GAAP, Andy must not record the transaction
d. No, in order to be in compliance with GAAP, Andy must not record the transaction
42. ABC Hardware makes a sale (on credit) for $2,500 worth of lumber. The lumber
originally cost them $1,300.
In recording the aforementioned transaction what account should be credited?
a. Sales
b. Inventory
c. C. cost of goods sold
d. Both a & b
43. Which statement is true about dividends?
a. dividends are expenses
b. distribution of net income
c. reduction of net income
d. both a & b
44. Which among the following is/are the type/s of change in financial condition?
a. Net or quantitative change
b. Structural or qualitative change
c. both a & b
d. none of the above
45. Assess the following statements:
1. a double-entry accounting system produces two anterograde outcomes of equal value.
2. a double-entry accounting system produces two retrograde outcomes of equal value.
a. Both statements are true
b. Both statements are false
c. Statement 1-true; statement 2-false
d. Statement 1-false; statement 2-true
CLINCHER
46. Trent runs a business as an engineering consultant. He proposed a new system for
constructing bridges to deal with extreme weather conditions. He spends P30,000 securing a 14-
year patent for his invention. To record the amortization expense each year, what account should
be credited?
a. Amortization expense
b. Patent
c. Accumulated amortization
d. Cash
47. Financial transactions are recorded:
a. when cash is received or paid
b. when transaction occurs
c. when profit is computed
d. when balance sheet is prepared
48. Which of the following statements is/are false?
a. Gross profit is equal to revenue less COGS
b. Operating profit is equal to gross profit less COGS
c. Both a and b
d. None of the above
49. In the cash flow statement, Principal paid on loans is considered as
a. operating activity
b. financing activity
c. investing activity
d. none of the above
50. In evaluating audit risk, the auditor is needless to investigate the
a. legal counsel
b. Board of governance
c. Stakeholders
d. Middle-level management
