QUIZ NO.

8
NAME SCORE
YEAR & SECTION DATE
A. Multiple Choice. Encircle the letter of your choice.

1. Investment made by the owner will

a. increase both assests and liabilities c. increase both assests and owner’s equity
b. decrease both assets ang liabilities d. decrease both assets and owner’s equity
2. Payment of ownwer’s liability out of the cash of the business
a. decrease liabilities and increases ownwer’s equity
b. does not affect the business.
c. decreases both assets and liabilities
d. decreases both assets and owner’s equity.
3. The payment of cash to the bank for money borrowed by the business will
a. decreases assets and liabilities c. increases assets and liabilities
b. decreases assets and owner’s equity d. increases assets and owner’s equity
4. Purchasing supplies for cash
a. decreases assets and liabilities c. increases assets and liabilities
b. does not affect total assests d. increases assets and decreases liabilities
5. The owner of the grocery storre took home a loaf of bread and a bottle of milk from the grocery’s shelf was not
recorded by the accountant. This
a. is not a business transaction c. will understate assets and owner’s equity

b. will understate the assets of the business d. will overstate assets and owner’s equity
6. At the beginning of the year, the habilities of Caltex Service station amounted to P120,000 but it decreased by P50.000
during the year. The assets increased by P160,000 during the year and at the end of the year amounted to P360,000. The
owner's equity at the start 6f the year is
a. P1060,000 b. P80,000 c. P240,000 d. P260,000 e. P200,000 

7. The assets of the business at the start of the month is P1,000,000 and the owner's equity is P800,000 Equipment worth
P500,000 were purchased during the month of which only P150,000 were paid for. At the end of the month, owner's
equity will become
a. P550,000 b. P1,150,000 c. P800,000 d. P1,000,000

8.  An accounting concept that disallows the presentation of the personal assets and liabilities of the owner in
the balance sheet of the owner's business. 
a. Cost b. Entity c. Accounting Equation d. Objectivity

9. An accounting concept that requires assets to be recognized at the price prevailing on the date when the assets
were acquired by the business. 
a. Cost b. Accrual c. Equity d. Objectivity

10. A transaction caused a P10,000 decrease in total assets. This could have been due to a/an
a. payment of a note c. purchase of equipment on account
b. cash investment made by me owner d. purchase of equipment for cash
B. Joe, the sales manager of Sweet Dog Company buys wholesale from Purefoods Co. You complained to the
sales manager of Purefoods that your order has been delayed for a week. You threatened to pull ou your account
from them if the order is not delivered immediately. Purefoods was full of apology and immediately delivered
the order with an era package for the sales manager of Sweet Dog to take home
Answer yes or no:

____ a. If you are Joe, will accepting the package affect your integrity?
____ b. Given this scenario, is accepting "gifts" a violation of good governance"
____ c. What if you accepted the package and share it with your employees Will your answer in a) change?

C. Bess Quedan began operating the Ace Modeling Agency with the following:

1) Invested cash of P500,000, one half of which was paid for the lease contract of a floor space in Makati

2) She also borrowed P500.000 from PNB and issued to PNB a 180-day promissory note

3) One half of the amount borrowed was used to buy furniture and fixtures P100,000 and for a set of a
computer, printer and fax machine, P150,000.

4) She withdrew P50,000 of the amount borrowed.

5) She also 5) bought a car for P400,000 from World Motors paying 50% in cash, with the balance payable
within a yeear.

6) She paid P100,000 of the amount due to World Motors.

Analyze the transactions using the format below and prove the accounting equation:

No. Cash Advance Furniture & Equipment Car Accounts Notes Quedan
Rental Fixture Payable Payble Capital
1

4
5

Assets = Liabilities + Owner’s Equity

P P P
================ ================== ====================
 QUIZ NO. 9
NAME SCORE
YEAR & SECTION DATE

By using the format provided below, indicate the effects of the following transactions on the assets, liabilities
and owner's equity of Teresa's ENT Clinic Place a () sign for a minus figure. Extract the balances only after the
last transaction. Prepare a statement of financial position.

May 1 Teresa Sison, a doctor, invested P100,000 cash and medical equipment worth P500,000 to put up a
clinic.

5 Purchased furniture worth P20,000 from Xavier's Furnishing Home. Paid 50%, with the balance
payable after thirty days.

6 Hired a nurse for a monthly salary of P10,000.

7 Returned a defective chair purchased on May 5. A. credit memo was received

reducing the account by P1,500.

8 Withdrew cash from the business funds to purchase medical supplies needed by the business, P5,000.

9 Purchased a car for personal use. Paid P50,000 from her personal cash and issued
a promissory note for P150.000.

Assets Liabilities Owner’s

Equity

Leasehold Accounts Notes Sison,

Cash Supplies Equipment Furniture Imporvemen Payable Payable Capital
t
 _______________________

STATEMENT OF FINANCIAL POSITION

________________________

ASSETS

____________________________________________ ________________

____________________________________________ ________________

____________________________________________ ________________

____________________________________________ ________________

_____________________________________________ ________________
TOTALS
P ________________

LIABILITIES AND OWNER’S EQUITY

____________________________________________ ________________

____________________________________________ ________________

____________________________________________ ________________

____________________________________________ ________________

_____________________________________________ ________________
TOTALS
P ________________
 QUIZ NO. 10

NAME SCORE
YEAR & SECTION DATE

Mr. Joshua Angelo, finance manager of Dole, Asia retired and put up his own consultancy firm. The
following transactions took place during the first month of organization of the firm:

May 2 Joshua received P2,000,000 from Dole Asia as his retirement pay.

4 Opened a checking account for his consultancy firm with Citibank and deposited P500,000.

5 Opened an express teller account for P100,000 to be used as working fund for his office, the money
coming also from his retirement pay.

6 Paid cash of P5,000 for office stationery and supplies.

10 Purchased furniture and fixtures worth P250,000 from NICFUR and issued a promissory note
payable within six months.

12 Invested his remaining retirement pay in a mix investment of stocks and bonds with Metro Bank.

15 Transferred, to the consultancy firm, a personal computer, printer and fax machine, which he bought a
year ago for P180,000 but which could be currently sold for half the price.

20 Bought an aircon unit and a refrigerator from Surplus International Co. for P28,000. Terms: 50%
down using business cash, balance on credit

27 Paid one half of the balance due to Surplus International.

29 AB Company, a large energy firm, called up Mr. Angelo as the company wishes to hire him in
designing the firm's accounting system for a fee of P250,000.

30 AB Company gave Mr. Angelo an advance fee of P50,000.

31 Paid the note due to NICFUR. 

A. From the above transactions write true if the statement is true, or false if it is not, in the space provided
before the statement:

_____1. Transaction dated May 2 will increase the personal assets of Mr. Joshua.

_____2. Transaction dated May 12 will increase the assets of the business.

_____3. The May 29 transaction cannot be recorded yet because there is no exchange of values.

_____4. The equipments, on May 15, should be recorded at P180,000 following the cost principle.

_____5. Transaction dated May 30 represents liability since no service has been rendered yet by Mr. Angelo
although cash has already been accepted.
B. Analyze the business transactions from the consultancy firm's viewpoint, using the format next page. Get the
balances only after all the transactions have been analyzed. Prove the accounting equation.

Furniture Advance
Date Cash & Equipments Supplies Account Notes from Angelo Angelo
Fixture s Payable clients Capital Drawing
Payable