Fundamentals of Accountancy, Business and Management 2 It helps to determine transactions

that must be recorded to update or correct the depositor's accounting records and to determine the
actual amount of the cash deposit balance at the end of the month. Bank Reconciliation
Statement

These are receipts by the depositor that reached the bank too late to appear in the bank statement
for the current month. Deposits in transit

These are adjustments in the unadjusted book balance. Outstanding checks

These are adjustments in the unadjusted bank balance. Deposits in transit and outstanding checks

Freight in refers to costs incurred in transporting inventory that are sold. True

Inventory is a tangible product. True

FOB shipping point means that if the good is lost or damaged while in transit, such shall be
borne by the buyer. True

A manufacturing business does not need to alter completely the materials they purchased before
selling it to the public. FALSE

Purchases, unlike sales, does not have discounts. FALSE

These are issued and recorded by the depositor but not yet presented to the bank for encashment.
Outstanding checks

These are usually representing fees for handling small accounts. Service Charges

These are caused by timing differences and errors committed by the depositor or the bank.
Differences in the Cash in Bank and the Current Account

Inventory is exclusive only to merchandising business. FALSE

Other miscellaneous bank charges like fees for printing checks, handling collections of notes
receivable, and processing NSF checks falls under ________________. Service charges

Freight refers to costs incurred for transportation, True

A reconciliation statement is prepared ________. Monthly When should depositors prepare a

Every month Purchase have discount. True These are caused by timing differences and errors
committed by the depositor or the bank. Differences in the Cash in Bank and the Current
Account
A merchandising business needs to alter completely the materials they purchased before selling it
to the public. False

The depositor will keep _____________. An asset

Freight refers to costs incurred for transportation. True

Freight out is included in the cost of goods. False Credit and debit memoranda are
_______________________. Adjustments in the unadjusted book balance.

The balances between the Cash in Bank and the Current AccountDepositor accounts
_______________. Seldom equal

The balances between the Cash in Bank and the Current AccountDepositor accounts are always
_____________ Either A or C

Dealers of cars, retail shops, and sari-sari stores are examples of manufacturing business. False

It is an internal control tool that helps the company identify and check for irregularities in their
cash in bank. Bank reconciliation

Service business have tangible products. False When should depositors prepare a bank
reconciliation? Every month

Inventory is a tangible product. True The balances shown in the bank statement and in the
accounting records are ________________________. Adjusted and corrected

FOB destination retains the ownership with the seller until the goods reach the destination. True
This account shows the balance at the beginning of the month, the deposits and other additions
(credits), the checks paid and other deductions (debits) during the month, and the ending balance.
Current Account

Other miscellaneous bank charges like fees for printing checks, handling collections of notes
receivable, and processing NSF checks falls under __________________. Service chargers

A merchandisingg business has two different systems in accounting for their sales and purchases.
True

The bank on the other hand keeps record of the depositor's transactions in a _____________.
Current Account

Freight in is included as part of the total cost of inventory purchased. True The most common tax
rate system is ______________. Progressive

These are taxes imposed on specified goods manufactured or produced in the Philippines. Excise
Tax
FOB shipping point means that if the good is lost or damaged while in transit, such shall be
borne by the buyer. True

These are usually representing fees for handling small accounts. Service Charges

BIR Form 0605 is known as _________________________. Payment form It is the most

This type of tax is also a common transaction in accounting. Value Added-Tax

It is the one recorded by the seller upon the sale of the good or service. Output Tax A
reconciliation statement is prepared __________. Monthly

A merchandising business has two different systems in accounting for their sales and purchases.
True These are receipts by the depositor that reached the bank too late to appear in the bank
statement for the current month. Deposits in transit

Excise tax is a form of ________________ Business Tax

Value-added taxes fall under _________________. Business Tax

Inventory is a tangible product. True The balances between the Cash in Bank and the Current
AccountDepositor accounts are always _____________ Undetermined

VAT in the Philippines is set to how many percent? 12

A type of tax system wherein the government imposes higher taxes on higher earnings.
Progressive

Tax imposed on the privilege to sell products and services are called Value-Added Tax

Service business have tangible products. True

These are caused by timing differences and errors committed by the depositor or the bank.
Differences in the Cash in Bank and the Current Account

The most common tax rate system is ______________. Progressive

1.

The period covered by the prepared financial statements:

= D. Cannot be longer than 12 months. Or A. Cannot be shorter. (Di ko sure.)

2.
Which of the following would NOT be a current asset? = Land.

3.

Blend Foods purchased a two-year fire and extended coverage insurance policy on August 1,
2015, and charged the P4,200 premium to Insurance expense. At its December 31, 2015, year-
end, Bland Foods would record which of the following adjusting entries? = Prepaid insurance
3,325 Insurance expense 3,325

4.

Unearned revenues is what type of account? = Liability

5.

Posting references indicate: = B. The destinations of the postings. Or C. Both sources and
destinations of the postings. (Dito ata ako nagkamali.)

6.

An item NOT generally classified as a current liability is: = Accounts payable.

7.

The net income of a reporting period is equal to: = Income – Expenses.

8.

Which of the following transactions would increase Cash and cash equivalents and increase Non-
current liabilities? = Bank loan.

9.

The accounting elements in the balance sheet include: = Assets, liabilities and equity.

10. The debts which are to be repaid within a short period (year or less) are known as? = Current
liabilities.

11. The assets that can be converted into cash within a short period (1 year or less) are known as?
= Current assets.

12. The long-term assets that have no physical existence but are right that have value is known
as: = Intangible assets.

13. Which trial balance lists all the business accounts before year-end adjusting journal entries
are made. = Unadjusted trial balance.

14. A transaction is first recorded in a record called? = Journal. 15. Books of accounts include: =
Journals and Ledgers. 16. The residual equity over the assets of a business enterprise is also
called. = Net assets.

17. All of these are done in the pre-recording phase of the accounting cycle, EXCEPT?
=Journalizing.

18. The account of a supplier would be found in: = Purchases ledger. 19. At the end of an
accounting period, adjusting journal entries are made to: = Bring the accounts up to date.

20. A transaction that involves an increase in an asset and a decrease in a

liability would not affect the equality of the fundamental accounting equation. = False.

23. The page number of the journal in which the information was taken from is placed in the
folio or reference column of the ledger. True

Vertical analysis is also known as static analysis as it only looks at financial statement
information one period at a time. True

To total is to ___________. Foot Vertical analysis is the comparison of a company's financial

Vertical analysis, as compared to horizontal, confines itself in a period of time and compares its
components with a base item in the financial statement.

True

It is the most common type of deposit account. Savings Account Journalizing is the
___________ step in the accounting cycle. 2nd

The financial analysis is the comparison of a company's financial statements from one period to
another. Horizontal analysis

To test a company's ability to meet its short term-debt payments. Current ratio

This type of analytical technique is considered "static". Vertical Analysis

The normal balance of accounts receivable is credit. True

Vertical analysis makes use of common size financial statements to convert each financial
statement item to its base year. True

The following are the common types of transactions that may conduct in the bank except:
Investing

Credit is on the _________ side of the T-account. Right

The dates of the transactions could be Written in a chronological order On September 1, 2016,
Mr. Bruno invested P100,000 to open up a barber shop, what is the entry to record the
transaction? dr Mr. Bruno, Capital cr Cash It makes use of common size financial statements to
convert each financial statement item to its base year. Vertical analysis

Horizontal analysis only looks at financial statement information one period at a time. Vertical
analysis is the comparison of a company's financial statements from one period to another. Both
statements are false Posting is the _______ step in the accounting process. 3rd

What do you call the process of getting the difference between the totals of the debits and
credits? Footing

Internal and external users depend on the _________________ in order to make sound decisions
for the business.

Select one: a. Financial statements These are used to asses' financial information. Financial
statement What should be done first? Prepare the unadjusted trial balance When do we prepare
the unadjusted trial balance? After posting Purchases account is only seen in the periodic
inventory system. False The cost of goods sold determines the value of the inventory that was
sold for the year. Select one: True

The unadjusted trial balance is the key in the preparation of financial statements. False A bank
statement is a document that is issued _____________ by the bank. Upon request The entry to
record the 1 month expired portion of the insurance paid in advance is? dr insurance expense cr
prepaid insurance It is considered as the key in the preparation of financial statements. Balance
Sheet This number can be found at the right upper portion of the general ledger which is special
to a particular account.

Account number The adjusted trial balance is the last report prepared before the ____________
is made. financial statement This column of the general ledger describes what the transaction is
all about. Explanation The normal balance of the following accounts are debit except: Accrued
salaries The entry to record the salary that has accrued? dr cash cr salary payable A statement of
account is issued ____________ by the bank. Monthly ______________refers to how easily can
an individual convert an asset into cash. Liquidity