1.

Over the year, Assets increased by P 300,000 & Liabilities decreased by P 100,000, then the
Owner's equity account will be increased by
a. 200,000
b. 400,000
c. 100,000
d. 300,000

2. It refers to the company's book of accounts that is also known as the book of original entry
a. General journal
b. Subsidiary ledger
c. General ledger
d. General book

3. This is the body authorized by law to promulgate rules and regulations affecting the practice
of accountancy in the Philippines
a. Board of Accountancy
b. Securities and Exchange Commission
c. Philippine Institute of Certified Public Accountants
d. Commission on Audit

4. Which of the following not an ingredient of relevance?

a. Predictive and/or Confirmatory role
b. Predictive value
c. Confirmatory value
d. Understandability

5. Which of the following accounting entries does not affect totality of the accounting equation?
a. Dr, Accounts Payable 40,000, Dr. Note Payable 50,000, Cr. Cash 90,000
b. Dr. Note Receivable 100,000, Dr. Accumulated Depreciation 120,000, Cr. Equipment
200,000, Cr. Gain on sale 20,000
c. Dr. Cash 10,000, Cr. Accounts Receivable 10,000
d. Dr. Doubtful accounts expense 5,000, Cr. Accounts Receivable 5,000

6. SRA Company issuing its annual financial reports within one month of the end of the year is
an example of which enhancing quality of accounting information?
a. Comparability
b. Timeliness
c. Understandability
d. Verifiability

7. Which of the following is false?

a. Practice of Private Accountancy shall constitute in a person, be it his/her individual
capacity or as a partner or as a staff member in an accounting or auditing firm holding
 himself/herself out as one skilled in the knowledge, science and practice of accounting,
and as a qualified person to render professional services as a certified public accountant
b. One of the objectives of RA 9298 is the supervision, control and regulation of the
practice of accountancy in the Philippines
c. Republic Act 9298 otherwise known as the Philippine Accountancy Act of 2004 is the law
that regulates the practice of Accountancy in the Philippines
d. One of the objectives of RA 9298 is the standardization and regulation of accounting
education

8. Journal this transaction: On February 1, Mr. Clean purchased Washing Machine worth
P150,000 using his own credit card for his Wash & Dry company.
a. Memo Entry due to personal Transaction
b. Washing Machne P150,000, Accounts Payable P150.000
c. Washing Machne P150,000, Clean, Capital P150,000
d. No entry due to non accountable transaction

9. The quality of information that means the numbers and descriptions match what really existed
or happened is
a. Completeness
b. Relevance
c. faithful representation
d. neutrality

10. Which of the following is not a correct accounting equation?

a. Liabilities — Owner's Equity = Asset
b. Assets = Liabilities + Owner's Equity
c. Assets — Liabilities = Owner's Equity
d. Liabilities = Assets — Owner's Equity

11. This is the branch of accounting that is concerned primarily with the preparation of
general-purpose financial statements
a. Financial Accounting
b. Government Accounting
c. Managerial Accounting
d. Forensic Accounting

12. No peso sign, no decimals, no comma is required only figures. Negative answer must be
enclosed in () sign
The information below appears in the financial records at the end of the year of Toby's SPA
which is a health, beauty and fitness center.
Cash P 95,000
Accounts Payable P150,000
Accounts Receivable 70,000
Furniture and Equipment 75,000
Land 150,000
Utilities Payable 55,000
Supplies 15,000
Building 500,000
If the owner's capital at the start of the year was P400,000, no additional investments nor
withdrawals were made, how much was
(1) the net income or loss for the year?
(2) Total assets as of the end of the year?

13. The following are the balances of the different accounts of Malabo Photo Copying Center on
December 31, 2022 which is the end of the accounting period.

Cash 37,000
Accounts Receivable 28,000
Prepaid Rent Expense 1,000
Furniture & Fixtures 34,500
Photocopying Equipment 220,000
Accounts Payable 25 500
Unearned Service Income 58,000
Note Payable 3,000
Bugoy Capital 200,000
Bugoy Drawing 5,000
Service Income 150,000
Rental Income 8,000
Salaries Expense 32,000
Supplies Expense 60,000
Utilities Expense 10,000
Advertising Expense 15,000
Miscellaneous Expense 2,000

In preparation of trial balance, calculate the following:

a. Total debits or credits of the trial balance
b. Total Expenses
c. Balance of capital after affecting Net income. & Drawing accounts

14. The following might be a Increase to an item of element of FS except

a. Debit to Bonds Payable
b. Debit to X, Capital
c. Debit entry to Unearned Revenue
d. Debit to Supplies Expense Account

15. Alucard Company has assets of P589,600 and liabilities of P179,700 at the beginning of the
year. During the year, assets decreased to P425,300 and total liabilities increased by P89,620.
Total revenues was P366,720. There were no additional investment nor withdrawal made during
the year.
What and by how much is the result of operation during the year?
a. Loss 253,920
b. Cannot be Determined
c. Loss 74,220
d. Profit 378,860

16. The members of the Board of Accountancy are appointed by the

a. President of the Republic of the Philippines
b. Commissioner of the Profession Regulation Commission
c. House of Representatives
d. President of the Philippine Institute of Certified Public Accountants

17. No peso sign, no decimals, no comma is required only figures. Negative answer must be
enclosed in () sign
The information below appears in the financial records for EVA SARAH'S Health Spa.. Include
money columns for
Cash, Supplies, Land, Building, Equipment, Furniture & Fixtures, Accounts Payable, Loan
Payable, Garcia, Capital 2022
- June 4 Eva Sarah Garcia invested P1,500,000 cash in a health clinic called EVA
SARAH's Health Spa.
- 8 Purchased for cash P900,000 worth of equipment and P15,000 worth of massage oils.
- 10 Bought furniture & fixtures from a friend at a cost of P150,000 promising to pay after 7
days. Only P80,000 was placed in the clinic, the rest were placed in her newly built
house.
- 12 Applied for a P2,500,000 business loan from a bank by mortgaging her farm. She
plans to use this to construct clinic.
- 14 Withdrew supplies worth P1,000 for personal use.
- 15 The loan was approved and the money deposited in the name of the business which
Garcia opened on the same date.
- 17 Paid one half of the account due on the furniture 4nd fixtures.
- 30 A two-story clinic was constructed on a vacant lot Which she owns. The lot is worth
P300,000. The construction cost was P1,500,000 paid in cash. Both registration papers
are in the name of the clinic
Calculate the following:
1. Ending Capital Balance
2. Cash Balance
3. Total Assets at the end of June
4. Amount increased on June 10 for Furniture & Fixture account

18. This accounting organization is tasks to promulgate and improve accounting standards that
will constitute Generally Accepted Accounting Principles (GAAP) in the Philippines
a. Professional Regulation Commission
 b. Board of Accountancy
c. Philippine Institute of Certified Public Accountants
d. Financial Reporting Standards Council

19. Which of the following is true about income?

a. Revenue encompasses both income and gain
b. Income encompasses both revenue and gains
c. Revenue includes income but not gain
d. Income includes revenue but not gain

20. On June 30 of the current year, the assets and liabilities of Phoenix, Inc. are as follows:
Cash P20,500; Accounts Receivable, P7,250; Supplies, P650; Equipment, P12,000; Accounts
Payable, P9,300. What is the amount of owner's equity as of July 1 of the current year?
a. P8,300
b. P13,050
c. P20,500
d. P31,100

21. If accounts payable has debit postings of P 170,000, credit postings of P140,000, and a
normal ending balance of P60,000, which of the following was its beginning balance?
a. 90,000 Cr
b. 90,000 Dr
c. 30,000 Dr
d. 30,000 Cr

22. Which of the following is not an example of Service type of business?

a. GQ Barbers
b. Kingsman Tailor Shop
c. SGV & Co
d. Puregold Hardware

23. Mr. Navarro, CPA represent his clients before government agencies on tax and other
matters related to accounting, he is deemed in a
a. Public practice
b. Practice in government
c. Practice in academe
d. Practice in commerce

24. Land P 150,000

Accounts receivable P 6,000
Accounts payable 33,000
Prepaid expense 750
Cash 10,500
Inventory 5,000
Building 1,000,500
Bonds payable 25,000
Accrued Salaries 5,000
Patent and secret formulas 90,000
Capital, Yoneh ?
a. 1,199,000
b. 1,325,750
c. 1,199,750
d. 1,262,750

25. Analyze this transaction:

On March 1, 2022, Ms. JM, owner of printing shop, purchased Photocopy Machine costing
P488,250. Terms of purchase was to make a down payment of 40% and the balance on equal
monthly payment for 6 months starting on April 1, 2022.
Which of the following is true?
a. Photocopy Machine is debited P195,300 on March 1, 2022
b. Accounts Payable will credited by P48,825 on April 1, 2022
c. Accounts Payable will debited by P48,825 on April 1, 2022
d. Photocopy Machine is debited P292,950 on March 1, 2022

26. Analyze this transaction:

Night of March 1, 2022, Ms. JM, owner of coffee shop, has issued official receipts under the
company's name totaling P25,830.
This indicates that
a. There's no expense yet, since it was not yet incurred.
b. The business has paid total expense of P25,830
c. Total revenue for that day is P25,830
d. There's no revenue yet, since it was not earned yet.

27. Alucard Company has assets of P589,600 and liabilities of P179,700 at the beginning of the
year. During the year, assets decreased to P425,300 and total liabilities increased by P89,620.
Total revenues was P366,720. There were no additional investment nor withdrawal made during
the year.
How much is the amount of expenses for the period?
a. 335,680
b. 440,940
c. 620,640
d. 31,040

28. Which of the following is true? A collection of accounts receivable

a. Has no effect on total assets
b. Will decrease the total assets
 c. Will increase capital account
d. Will increase the total assets.

29. Asset
a. is a resource controlled by the entity arising from past transactions or events and from
which future economic benefits are expected to flow to the entity
b. is a resource owned by the entity arising from past transactions or events and from
which future economic benefits are expected to flow from the entity
c. is a resource owned by the entity arising from past transactions or events and from
which future economic benefits are expected to flow to the entity
d. is a resource controlled by the entity arising from past transactions or events and from
which future economic benefits are expcted to flow from the entity

30. Pitbul Company has the following income and expenses:

Revenue P 800,000
Net Income 20% of revenue
Salaries expense 27.5% of revenue
Utilities expense 12.5% of revenue
Miscellaneous expense 10,000
Interest expense 30,000
Rent expense 170,000
Supplies expense ?
Supplies expense was
a. 0
b. 110,000
c. 160,000
d. 270,000

31. Albus Percival Wulfric Brian Dumbledore established a Wand factory, The Wonderful World
of Wands. Dumbledore paid P 522,258.98 from his personal account for assets consisting of
supplies for wand making, P 189,732.36 and enchantment equipment, P 332,526.62. The
company should record a credit to
a. Accounts payable, P 332,526.62
b. Factory supplies, P 189,732.36
c. Cash, P 522,258.98
d. Dumbledore, Capital, P 522,258.98

32. Intended to meet the needs of users who are not in the position to require an entity to
prepare reports tailored to their particular needs
a. Special Purpose Financial Statements
b. Special Purpose Financial Reports
c. General Purpose Financial Statements
d. General Purpose Financial Reports
33. At the end of the fiscal year the Assets, Liabilities & Owner's Equity account of Jer Co. were
P 1,000,000, P 510,000 and P 490,000, respectively. If during that year his assets increased by
P 280,000 & liabilities decreased by P 20,000, what was his total Assets, Liabilities & Owner's
Equity, respectively during the beginning of the year?
a. 720.000; 530,000; 190,000
b. 280,000; 20,000; 260,000
c. 1,280,000; 500,000; 780,000
d. 280.000; (20,000); 300,000

34. Ms. Amper, CPA represent her employer before government agencies on tax and other
matters related to accounting, she is deemed in a
a. Practice in government
b. Public practice
c. Practice in academe
d. Practice in commerce & industry

Key Answers

1. 13. 25.
2. 14. 26.
3. 15. 27.
4. 16. 28.
5. 17. 29.
6. 18. 30.
7. 19. 31.
8. 20. 32.
9. 21. 33.
10. 22. 34.
11. 23.
12. 24.