What is true about Ratio analysis?

a.

The first step in journalizing transactions is to:

d.

To differentiate the different techniques of financial analysis. Analysis based on the changes on the
amounts from one period to another are usually expressed _______________________.
Both absolute numbers and percentages

Another term for foot is :

Gross

It is used to summarize the increases and decreases in the asset, liability and proprietorship of the
busin
Liability

The heading of the trial consists of the following except:

b.

What is true about the General Ledger?

c.

Which is written first?

d. Account to be debited

_____________________ is the comparison of a company's financial statements from one period to

another.
a. Ratio Analysis

The credit accounts are posted on which side of the ledger?

Left

Confines itself in a period of time and compares its components with a base item in the financial
statement
Ratio Analysis

Posting is the _______ step in the accounting process.

b. 3rd

Journalizing is the ____ step in the accounting cycle.

2nd

The most common analytical technique:

Liquidity
Comprises the claims of the owners on the assets of the firm after deducting the claims of the
creditors.
Equity

The following consists a journal except:

Debit column

The process where we transfer the information from the journal to the general ledger.
b. Posting

If the debit total is more than the credit total, the difference is placed on the __________________.
Credit Side

The ____________ column is written to indicate the page number of the ledger in which the entry is
transferred.
c. Amount to be credited

It is done after analyzing the business transaction.

c. Journalizing

The dates of the transactions should be written in

Ordinal

It can be used in exchange for goods, debt, or services.

Check

It is the fund maintained by an individual or an entity in a bank that allowed money to be deposited or
withdrawn
Savings account

The general journal is used in recording business transaction, while general ledger is used in
Posting

Working capital is computed as current assets minus current liabilities. This is an example of what
kind of analysis?
a.Ratio Analysis

When do we prepare the unadjusted trial balance?

After posting

The following consists a journal except:

Debit Column

The normal balance of the following accounts are debit except:

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

This technique confines itself in a period of time and compares its components with a base item in
the financial statement.
Ratio analysis

Which is written first?

Amount to be debited

The process where we transfer the information from the journal to the general ledger.
Posting

An analysis which compares the components of the base item for a particular period of time.
horizontal

The General Ledger is known for:

Consolidating daily transactions into different individual account titles.

This type of analytical technique is considered "static".

Vertical Analysis

The page number of the journal in which the information was taken from is placed in the folio of the
ledger. The page number of the ledger where the information was posted is placed in the folio of the
trial balance.
Both statements are false

What is the effect to equity if a credit balance in the general journal is posted as debit to the general
ledger?
Increase equity

When office supplies are purchased on credit, a liability account is increase~

false

Bank statement shares the same content with:

Financial Statement

The liability account will increase if a credit to this account is posted as credit also to the general
ledger.
a.

A credit account in the general journal should be posted to the general ledger as credit also.
True

It is the method of financial evaluation that interprets the relationship among the different accounts
found in the financial statements.
Horizontal analysis

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

This technique highlights computations that allow the reader to understand how the company
performs and positions itself financially.
Horizontal analysis

To know if the company is capable to pay its expenses when it becomes due
stability

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

The balance of Liability, Equity, or Income Account increases when the amount is entered in the
credit or Right Side Column.
False

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

If the total assets amounts to P100,000, which is the base item, what percent is the current assets of
P20,000?
20%

Credit is the normal balance of the office supplies, rent expense and drawing accounts.
False

The normal balance of accounts receivable is credit.

False

The commonly-used technique is ________________.

Horizontal Analysis

If the transaction in the general journal is on the credit side, it must be posted in what side of the
general ledger?
Debit

A journal is the book of final entry.

False

Known as the "book of original entry".

a.General Journal

__________________ is used to interpret the relationship among the different accounts found in the
financial statements.
Vertical Analysis

To post a debit accounts receivable to the general ledger, we have to place the amount to the
_____________side of the general ledger.
Left

A bank statement is a document that is issued _____________ by the bank

Annually

All the accounts below have debit normal balance except

Salaries payable

Assets, expense and draw normally have a debit balance.

True

. The depositor will record bank transactions in a _________________

Deposit account

Freight refers to costs incurred for transportation.

True

A merchandising business needs to alter completely the materials they purchased before selling it to
the public.
True

Inventory is exclusive only to merchandising business

True

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

FOB destination retains the ownership with the seller until the goods reach the destination.

True

Who should prepare a bank reconciliation?

Both A and B

The cost of goods sold determines the value of the inventory that was sold for the year.
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

Purchase have discounts.

True

These are caused by timing differences and errors committed by the depositor or the bank.
Preparation of Bank reconciliation

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

In accounting, this type of tax is also a common transaction.

Value-Added Tax

These are adjustments in the unadjusted bank balance.

Deposits and Outstanding checks

The government agency assigned to collect taxes from the people.

BIR

Estate tax falls _________________.

Business Tax

The most common tax rate system is ______________.

Proportionate

This account shows the cash balance at the beginning of the month, cash receipts and deposits
(debits), cash payments and withdrawals (credits), and the new balance at the end of the month.
Deposit Account

The most common tax rate system is _________________

Proportionate

A merchandising business uses periodic inventory system for their sales and purchases.
True

The balances shown in the bank statement and in the accounting records are:
Adjusted and uncorrected

Donor's Tax and Estate Tax are types of _______________.

Business Tax
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 usually representing fees for handling small accounts.

Service Charges

Which is NOT a major type of tax

Donor's tax

The liability account will increase if a credit to this account is posted as credit also to the general
ledger.
Accounts payable

Amusement tax is under Percentage tax.

False

A savings account is only supported by an ATM car~

False

It is the tax shouldered by the buyer when purchasing the goods.

Value Added Tax

Tax imposed on the privilege to sell products and services are called "sin tax".
True

This is prepared after all adjustments have been recorded and posted.
Adjusted trial balance

It contains accounts transferred from the general journal.

General ledger

It is the most common type of Business Tax.Answer

VAT

A journal is composed of a group of accounts.

False

If on the base year 2015 total assets is P200,000 and P400,000 on 2016, what is the percentage
increase(decrease)?
decrease by 50%

Banks in the Philippines usually credit the depositor's account once the check is cleare~
True

Percentage tax is the most common type of business tax.

True
In the Philippines, Excise tax is also called as
Sin Tax

What is the effect to cash if a debit balance in the general journal is posted as credit to the general
ledger?

Output tax is the tax shouldered by the buyer when purchasing the goods.
True

A journal contains a list of accounts with open balances in the general ledger for a given period.
True

Bank statement is the same as a passbook account in terms of content.

False

The transactions recorded in the Cash in Bank is not reflected in the Current Account.
True

What is the ratio to test ability to meet sudden & immediate demands on current assets?
Current assets - current liabilities

The bank sends a bank statement to a depositor every month.

False

When a depositor open an account with a bank, the relationship existing between the parties is a
lender (the bank), and a borrower (the depositor) relationship.
False

It is necessary to understand the normal balances of accounts to know if they shall be debited or
credited
True

Freight out is included in the cost of goods.

True

If on the base year 2016 the current assets is P300,00 and P100,00 on 2017, how much is the
increase/decrease?
increase by P200,000

In accounting, Value-added Tax is a common transaction.

False

Only the errors of the depositor could create differences in the Cash in Bank and Current Account.
False
Credit is the normal balance of purchases.
False

How much is the Value-added Tax in the Philippines?

12

Business transactions affects the assets, liabilities and proprietorship of the business
True

The balances shown in the bank statement and in the accounting records are both adjusted for any
unrecorded transactions.

True

Freight refers to costs incurred for transportation.

True

In the operation of law, corporations are artificial beings thus, BIR forms and taxes paid by the
company is under the Corporation's name and not under the owners'.
True

You always pay for VAT.

True

Account is used to summarize the increases and decreases in the asset, liability and proprietorship
of the business.

True

The adjusted trial balance is the last report prepared before the ____________ is made.
General ledger

The transactions recorded in the Cash in Bank is not reflected in the Current Account.
True

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

Excise Tax are taxes on property.

True

Analysis based on the changes on the amounts from one period to another.
Horizontal analysis

Excise tax is a form of Business Tax.

False
All the accounts below have debit normal balance except
Salaries payable

Purchases, unlike sales, does not have discounts.

False

A bank statement is a document that is issued annually by the bank.

False

It means how quickly you can get your hands on your cash
profitability

VAT are imposed on the privilege to sell products and services.

True

A bank statement is also referred as statement of account

True

If the total assets amounts to P100,000, which is the base item, what percent is the current assets of
P20,000?
5%

BIR Form 0605 is also known as ______________.

Payment Form

The balances between the Cash in Bank and the Current Account-Depositor accounts are always
equal
False

If the total liabilities is P200,000, it being the base item, what percent is current liabilities of 20,000?
10%

The entry to record the advance collection of service revenue is?

dr cash cr unearned service revenue

A bank statement is also referred as statement of account.

True

The depositor should prepare a bank reconciliation each month to verify that these independent set
of records are in agreement.
True

It means how quickly you can get your hands on your cash.
Liquidity

Certificate of Final Income Tax Withheld and Payment Form are kinds of BIR Forms
True

Checks are not considered as cash.

True

These are adjustments in the unadjusted book balance

In a proportionate tax system, when an individual earns more, the taxable income
_________________.
Decreases

__________________________ is the department that is tasked to collect taxes

Bureau of Internal Revenue

The balances between the Cash in Bank and the Current Account-Depositor accounts
_______________.
Unequal

This type of tax is also a common transaction in accounting.

Value Added-Tax

BIR Form 2306 is known as _______________________.

Certificate of Final Tax Withheld at Source

It is the tax shouldered by the buyer when purchasing the goods

Output Tax

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

Percentage Tax is applied on which type of product?

Alcohol

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

Freight in is included as part of the total cost of inventory purchased.

True

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

If taxable income is not over than P10, 000, the tax due is _____.
5%

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

Which is NOT a major type of tax

Donor's tax

The leading country in Asia who has the highest percentage of income tax.
Philippines

Tax imposed on the privilege to sell products and services are called
Sin Tax

BIR Form 0605 is known as _________________________.

Payment form

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

Inventory is a tangible product.

True

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

A service business relies on time, effort, and skill.

True

Credit and debit memoranda are _______________________.

Adjustments in the unadjusted bank balance.

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

The depositor will record bank transactions in a _________________.

Savings account

Inventory is exclusive only to merchandising business.

False

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

Service business have tangible products.

False
Materials could be altered before selling in merchandising business.
True

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

False

The depositor will keep _____________.:

Both A and B

Income from a merchandising business is entered in the journal entries as revenues.

True

In vertical analysis, if the base item is total assets, we compute how each of its components
composes the base item.
False

What is true about a journal

All of the choices

A general ledger contains a page number, columns for the date, explanation, folio, debit and credit
True

A small business entity makes use of the simplest form of journal which is the general journal in
recording their transactions.
False

The accounting equation is followed in arranging accounts according to _______________.

All of the choices

It is supported by an ATM card or a passbook.

Savings Account

Allows account holders to issue checks against their deposi

Savings Accounts

The most common analytical technique:

Liquidity

These are used to asses' financial information

Financial statement

This is the book used in recording the business transaction. It is also known as the book of original
entry.
General journal
What should be done first?

How many columns does a general journal consists of?

5

__________________ is used to interpret the relationship among the different accounts found in the
financial statements.
Horizontal Analysis

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

In preparing the trial balance, the account should be arranged according to _____________.
Liquidity

Debit is on which side of the ledger?

Left

Decrease in liabilities falls under:

Equities

What is the accounting equation?

Liability + Equity + Income – Expense

It shows the fair measure of assets, liabilities and owner's equity.

Posting

Increase in asset is considered as:

Account Debited