CB Sample Exam:

1.)​ What accounts will be reflected in the post-closing trial balance?

a.) Real and nominal accounts with balances
b.) Real accounts with balances
c.) All accounts with adjustment (initial)
d.) Nominal accounts with balances

2.)​ Based on the following selected account balances appearing in the trial balance of
Midway Repair Company as of December 31, 2000:

Cash ​ ​ ​ ​ ​ P20,000
Loan Payable ​​ ​ ​ 12,000
Office Equipment​ ​ ​ 60,000
Unearned Rentals​ ​ ​ 5,000
Accrued Salaries​ ​ ​ 25,000
Meg, Drawing​ ​ ​ ​ 8,000
Repair Income​​ ​ ​ 123,000
Prepaid advertising​ ​ ​ 10,000
Rent Expense​​ ​ ​ 15,000
Meg, Capital​ ​ ​ ​ 135,000
Accrued Interest Income​ ​ 1,000

​ How much is the total if the debit balances?

​ a.) 236,000
​ b.) 114,000
​ c.) 261,000
​ d.) 235,000
Solution:
​
DEBIT CREDIT

1.​ Cash 20,000

2.​ Loan Payable 12,000
3.​ Office Equipment 60,000
4.​ Unearned Rentals 5,000
5.​ Accrued Salaries 25,000
6.​ Meg, Drawing 8,000
7.​ Repair Income 123,000
8.​ Prepaid Advertising 10,000
9.​ Rent Expense 15,000
10.​Meg, Capital 135,000
11.​Accrued Interest 1,000
Income

Total 114,000 190,000

 3.)​ Delta Corporation has paid a total of P150,000 representing the salaries of its
employees for the calendar year ended 200x. On December 31, of the same year, there
were accrued salaries of P50,000. How much salaries should be adjusted by the year
ended?
a.) P50,000
​ b.) P150,000
​ c.) P100,000
​ d.) not given

4.)​ Based on the following information provided by Max Trading Company on December
31,200x, the end of its accounting period.

Sales​ ​ ​ ​ ​ ​ P 780,000​
Sales Return & Allowances​ ​ ​ 15,000
Sales Discount​ ​ ​ ​ 19,000​
Purchases​ ​ ​ ​ ​ 420,000​
Freight in​ ​ ​ ​ ​ 12,000​
Purchase Return & Allowances​ 8,000
Purchase Discount​ ​ ​ ​ 2,000
Beginning Inventory​ ​ ​ ​ 50,000
Ending Inventory​ ​ ​ ​ 80,000
Operating Expenses​ ​ ​ ​ 120,000
Other Income​ ​ ​ ​ ​ 16,000
Other Expenses​ ​ ​ ​ 3,000

How much is the net income?

a.) P372,000
​ b.) P354,000 (initial)
​ c.) P356,000
​ d.) P247,000
Solution:
 5.)​ Which of the following journal entries can be eliminated?
a.) Correcting Entry
​ b.) Adjusting Entry
​ c.) Opening Entry
​ d.) Closing Entry

6.)​ Based on the following reconciling items between the bank balance and the book
balance on November 30 of the current year of Rolex Company:

●​ Balance per the bank statement in November 1 showed the amount of P80,161
●​ Deposits of P5,460 made in November 30 were not yet reflected
●​ Checks issued but not yet paid amounted to P12,148
●​ Bank collection of P13,500 was not recorded in the books
●​ Bank service charges for the month amounted to P1,200
●​ A check deposited in the amount of P5,000 was marked by the DAJF (drawn
against insufficient fund)
●​ A deposit for P5,400 was erroneously recorded by the banks as P4,500
​
​ How much is the balance per book, November 1?
a.) P 61,613
​ b.) P 72,073 (initial)
​ c.) P 67,073
​ d.) P 80, 573

7.)​ This deals with the determination of the fairness of the accounting reports and whether
they are in accordance with the generally accepted accounting principles.

a.) Cost Accounting (initial)

​ b.) Management Accounting
​ c.) Auditing
​ d.) Financial Accounting

8.)​ Based on the following post-closing trial balance of Rigodon Corporation on June 30, at
the end of its fiscal year:

Notes Payable​​ ​ P25,000​ Accrued Insurance Expense​ P10,000

Cash​ ​ ​ ​ 50,000​ Office Equipment​ ​ 80,000
Unearned Rental Income​ 5,000​ Accum. Depr. - Office Equip.​ 8,000
Unused Supplies​ ​ 1,500​ Furniture​ ​ ​ 40,000
Accounts Receivable​ ​ 12,000​ Accum. Depr. - Furniture​ 2,000
Allow. For Bad Debts​ ​ 2,000

How much are the total liabilities?

a.) P 40,000 ok
​ b.) P 25,000
​ c.) P 35,000
​ d.) P 30,000
Solution:
​ Notes Payable ​ ​ 25,000
​ Unearned Rental Income​ 5,000
​ Accrued insurance Expense 10,000
​ Total Liabilities​​ ​ 40,000
 9.)​ Assume that the term of shipment is FOB - Destination - Freight Collect. Who should
shoulder the freight and who will pay?
a.) Should Shoulder: Buyer & Will Pay: Seller (initial)
​ b.) Should Shoulder: Seller & Will Pay: Buyer
​ c.) Should Shoulder: Buyer & Will Pay: Buyer not sure
​ d.) Should Shoulder: Seller & Will Pay: Seller

Solution:

FOB - Destination, Freight Collect Shoulders: Seller

Pay: Buyer

FOB - Destination, Freight Prepaid Shoulders: Seller

Pay: Seller

FOB - Shipping Point, Freight Collect Shoulder: Buyer

Pays: Buyer

FOB - Shipping Point, Freight Prepaid Shoulder: Buyer

Pays: Seller

10.)​ Cash (T-account)

​ ​
July 1 Investment of the Owner P500,000 July 1 Taxes and Licenses P 1,000
3 Cash Sales 82,000 2 Freight on the equip. 2,000
13 Loans 200,000 4 Rent Expense 5,000
15 Collection of Accounts 42,000 7 Cash Purchases 25,000
20 Purchase returns 6,000 9 Salaries 21,000
29 Rental received 5,000 11 Drawing 20,000
30 Cash Sales 30,000 12 Sales Returns 6,000
31 Sale of Old Equipment 3,000 15 Payment of Account 15,000
30 Salaries 23,000

​ How much is the net cash flow from operating activities?

a.) P 30,000
​ b.) P 34,000
​ c.) P 65,000
​ d.) P 28,000
Solution:
Cash Sales​ ​ ​ -​ 82,000
Collection of Accounts​ -​ 42,000
Purchase returns​ ​ -​ (6,000)
Cash Sales​ ​ ​ -​ 30,000
Rent Expense​​ ​ -​ (50,00)
Cash Purchases​ ​ -​ (25,000)
Salaries​ ​ ​ -​ (21,000)
Sales Returns​​ ​ -​ (6,000)
Salaries​ ​ ​ -​ (23,000)
Freight on the equip.​ ​ -​ (2,000)
Taxes and Licenses​ ​ -​ (1,000)
Total operating activities​ ​ 66,000​​

11.)​ Assume that the term of shipment is FOB - Shipping point - Freight prepaid. Who
should shoulder the freight and who will pay?
a.) Should Shoulder: Seller & Will Pay: Seller (initial)
​ b.) Should Shoulder: Buyer & Will Pay: Seller
​ c.) Should Shoulder: Buyer & Will Pay: Buyer
​ d.) Should Shoulder: Seller & Will Pay: Buyer
Solution:

FOB - Destination, Freight Collect Shoulders: Seller

Pay: Buyer

FOB - Destination, Freight Prepaid Shoulders: Seller

Pay: Seller

FOB - Shipping Point, Freight Collect Shoulder: Buyer

Pays: Buyer

FOB - Shipping Point, Freight Prepaid Shoulder: Buyer

Pays: Seller

12.)​ Which of the following transactions will result in the increase and decrease in
liability?
a.) payment of loan by installment (initial)
​ b.) borrowed money from the bank
​ c.) issued a promissory note in payment of a liability
​ d.) request for an extension of the date of payment

13.)​ Base on the following adjusted trial balance of Lyndon Company on December 31,
200C, the end of accounting period:

​ Cash​ ​ ​ ​ ​ P 67,075
​ Note Receivable​ ​ ​ 70,000
​ Accounts Receivable​ ​ ​ 176,500
​ Allowance for Bad Debts​ ​ ​ ​ ​ 5,400
​ Merchandise Inventory,Jan 31​ 60,900
​ Furniture & Fixtures​ ​ ​ 34,100
​ Accumulated Depr. - F&F​ ​ ​ ​ ​ 3,100
​ Office Equipment​ ​ ​ 15,500
​ Accumulated Depr. - Office Equip.​ ​ ​ ​ 1,500
​ Note Payable​ ​ ​ ​ ​ ​ 20,000
​ Accounts Payable​ ​ ​ ​ ​ 94,750​ ​ ​
​ Leonard Capital​ ​ ​ ​ ​ 265,000
​ Leonard Drawing​ ​ ​ 9,500
​ Sales​ ​ ​ ​ ​ ​ ​ 572,875
​ Sale Returns​ ​ ​ ​ 11,000
​ Sales Discount​ ​ ​ 6,400
​ Purchases​ ​ ​ ​ 390,750
​ Freight in​ ​ ​ ​ 5,415
​ Purchase Returns​ ​ ​ ​ ​ 3,630
​ Purchase Discount​ ​ ​ ​ ​ ​ 6,885
​ Salaries Expense​ ​ ​ 99,550
​ Rent Expense​​ ​ ​ 24,000
​ Insurance Expense​ ​ ​ 5,250
​ Office Supplies Expense​ ​ 2,200
​ Rental Income​​ ​ ​ ​ ​ ​ 5,000

​ Additional Information: Merchandise Inventory, December 31, P 76,000

​ How much is the net income?

a.) P 53,925 (initial)
​ b.) P 63,975
​ c.) P 48,925
​ d.) P 58,925

Solution:
Sales​ ​ ​ ​ ​ ​ 572,875
Less:
Sales Returns​​ 11,000
Sales Discount​ 6,400​ ​ 17,400
Gross Sales​ ​ ​ ​ ​ ​ ​ ​ 555,475

Beginning invty​ ​ ​ ​ 60,900

Purchases​ ​ ​ ​ ​ 390,750
Freight in​ ​ ​ ​ ​ 5,415​ ​ ​
Less:
Purchase returns​ ​ 3,630
Purchase discounts​ ​ 6,885​ ​
Ending invty​ ​ ​ ​ ​ 76,000
COGS​​ ​ ​ ​ ​ ​ ​ ​ 370,550
Gross Income​ ​ ​ ​ ​ ​ ​ 184,925
Salaries Expense​ ​ ​ ​ ​ ​ ​ 99,550
Rent Expense​​ ​ ​ ​ ​ ​ ​ 24,000
Insurance Expense​ ​ ​ ​ ​ ​ ​ 5,250
Office Supplies Expense​ ​ ​ ​ ​ ​ 2,200
Operating Income​ ​ ​ ​ ​ ​ ​ 53,925

Rental Income​​ ​ ​ ​ ​ ​ ​ 5,000

Net Income​ ​ ​ ​ ​ ​ ​ ​ 58,925

​
14.)​ Based on the following selected account balances appearing in the trial balance of
Midway Repair Company as of December 31, 200D.

Cash​ ​ ​ ​ P 20,000
Loan Payable​ ​ ​ 12,000
Office Equipment​ ​ 60,000
Unearned Rentals​ ​ 5,000
Accrued Salaries​ ​ 25,000
Meg Drawing​ ​ ​ 8,000
Repair Income​​ ​ 123,000
Prepaid Advertising​ ​ 10,000
Rent Expense​​ ​ 15,000
Meg Capital​ ​ ​ 135,000
Accrued Interest Income​ 1,000

How much is the total of the credit balances?

a.) P 271,000 (initial)
​ b.) P 296,500
​ c.) P 300,000
​ d.) P 276,000

Solution:
DEBIT CREDIT
 1.​ Cash 20,000
2.​ Loan Payable 12,000
3.​ Office Equipment 60,000
4.​ Unearned Rentals 5,000
5.​ Accrued Salaries 25,000
6.​ Meg, Drawing 8,000
7.​ Repair Income 123,000
8.​ Prepaid Advertising 10,000
9.​ Rent Expense 15,000
10.​Meg, Capital 135,000
11.​Accrued Interest Income 1,000

Total 114,000 300,000

15.)​ Based on the following post-closing trial balance of Rigodon Corporation on June 30,
the end of its fiscal year.

Notes Payable​​ ​ P25,000​ Accrued Insurance Expense​ P10,000

Cash​ ​ ​ ​ 50,000​ Office Equipment​ ​ 80,000
Unearned Rental Income​ 5,000​ Accum. Depr. - Office Equip.​ 8,000
Unused Supplies​ ​ 1,500​ Furniture​ ​ ​ 40,000
Accounts Receivable​ ​ 12,000​ Accum. Depr. - Furniture​ 2,000
Allow. For Bad Debts​ ​ 2,000

How much is the owner’s equity?

a.) P 131,500 ok
​ b.) P146,500
​ c.) P141,500
​ d.) P136,500

Solution: A = L + E

Assets Liabilities Equity (x)

171,500 = 25,000 + x
Cash 50,000 N/P 25,000 x = 171,500 - 40,000
A/R 12,000 U RI* 5,000 x = 131,500
ADA 2,000 10,000 AIE* 10,000
Unused Supplies 1,500 ​ 40,000
Office Equipment 80,000
Accum Depr. - OE 8,000 72,000 *unearned rental
Furniture 40,000 income
Accum Depr. - F 2,000 38,000 *accrued insurance
Total 171,500 expense
 16.)​ Based on the following selected accounts provided to you by the chief’s accountant
of Barbi Traders:

Accrued interest income​ ​ P 4,600

Accrued interest expense​ ​ 2,500
Prepaid Rent​ ​ ​ ​ 5,000
Unearned interest​ ​ ​ 1,400
Allowance for Bad Debts​ ​ 5,400
Accumulated Depreciation​ ​ 10,000
Freight in​ ​ ​ ​ 2,000
Freight out​ ​ ​ ​ 1,500
Purchase Returns & Allowances​ 1,400
Purchase discount​ ​ ​ 2,600
Sales Returns & Allowances​ ​ 7,300
Sales discount​​ ​ ​ 3,700

How much is the total of the debit balances?

a.) P 19,500 (initial)
​ b.) not given
​ c.) P 14,900
​ d.) P 17,000 not sure

Solution:

DEBIT CREDIT

1.​ Accrued Interest Income 4,600

2.​ Accrued Interest Expense 2,500
3.​ Prepaid Rent 5,000
4.​ Unearned Interest 1,400
5.​ Allowance for Bad Debts 5,400
6.​ Accumulated Depreciation 10,000
7.​ Freight - in 2,000
8.​ Freight - out 1,500
9.​ Purchase Returns & Allow. 1,400
10.​Purchase Discount 2,600
11.​Sales Returns & Allow. 7300
12.​Sales Discount 3700

Total 19,500

17.)​ A statement which shows where the money of the business is obtained and used.
a.) Statement of Cash Flow
​ b.) Statement of Financial Position
​ c.) Statement of revenues and Expenses
​ d.) Cash Budget (initial)

18.)​ Riggy Company provided you with the unadjusted selected accounts on December
30, 200E

Sales​ ​ ​ ​ P 850,000
Less: Sales Returns​ ​ 50,000
Net Sales​ ​ ​ P 800,000

Accounts Receivable​ ​ P 74,000

Less: Allow. for bad debts​ 12,000
Net realizable value​ ​ 62,000

Beginning inventory​ ​ P 45,000

Ending inventory​ ​ 60,000

Freight in​ ​ ​ 12,000

Freight out​ ​ ​ 20,000

If bad debts are estimated to be 2% of Sales, how much would be debited to bad debts?
a.) P 4,000 (initial)
​ b.) P 17,000
​ c.) P 16,000
​ d.) P 5,000

Solution:
850,000 * 2% = 17,000
17,000 - 12,000 = 5,000

19.)​ Based on the following information provided by Max Trading Company on December
31, 200C, the end of its accounting period:

Sales ​ ​ ​ ​ ​ ​ P 780,000
Sales Returns & Allowances​ ​ ​ 15,000
Sales Discount​ ​ ​ ​ 19,000
Purchases​ ​ ​ ​ ​ 420,000
Freight in​ ​ ​ ​ ​ 12,000
Purchase Returns & Allowances​ ​ 8,000
Purchase Discount​ ​ ​ ​ 2,000
Beginning Inventory​ ​ ​ ​ 50,000
Ending Inventory​ ​ ​ ​ 80,000
Operating Expenses​ ​ ​ ​ 120,000
Other Income​ ​ ​ ​ ​ 16,000
Other Expenses​ ​ ​ ​ 3,000
 How much is the gross profit?
a.) P 380,000 (initial)
​ b.) P 356,000
​ c.) P 358,000
​ d.) P 354,000 ok
Solution:

20.)​ Which of the following accounts is a liability?

a.) Accrued income
​ b.) Deferred expense
​ c.) Prepaid expense (initial)
​ d.) Accrued expense

21.)​ Based on the following audited financial statements of Fast Truckers at the end of
December 31, 200E;
​
​ Using the accrual basis of accounting, how much is the net income?

​ Trucking Services fees collected​ ​ P 32,000

​ Trucking Services fees uncollected​ ​ 18,000
​ Expenses paid​ ​ ​ ​ 27,000
​ Expenses unpaid​ ​ ​ ​ 2,000
​ Non-cash expenses​ ​ ​ ​ 1,000
​ Total assets​ ​ ​ ​ ​ 180,000
​ Total liabilities​ ​ ​ ​ ​ 25,000
 a.) 20,000 ok
​ b.) 5,000 (initial)
​ c.) 30,000
​ d.) 23,000

Solution:

Income:
Trucking Services fees collected​ ​ P 32,000
​ Trucking Services fees uncollected​ ​ 18,000​ ​ 50,000​​
Expense:
Expenses paid​ ​ ​ ​ 27,000
​ Expenses unpaid​ ​ ​ ​ 2,000
​ Non-cash expenses​ ​ ​ ​ 1,000​ ​ (30,000)​
​ Net Income​ ​ ​ ​ ​ ​ ​ ​ 20,000

22.)​ Based on the following information provided by Max Trading Company on December
31, 200C, the end of its accounting period:

Sales​ ​ ​ ​ ​ ​ P 780,000
Sales Returns & Allowances​ ​ ​ 15,000
Sales Discount​ ​ ​ ​ 19,000
Purchases​ ​ ​ ​ ​ 420,000
Freight in​ ​ ​ ​ ​ 12,000
Purchase Returns & Allowances​ ​ 8,000
Purchase DIscount​ ​ ​ ​ 2,000
Beginning Inventory​ ​ ​ ​ 50,000
Ending Inventory​ ​ ​ ​ 80,000
Operating expenses​ ​ ​ ​ 120,000
Other Income​ ​ ​ ​ ​ 16,000
Other Expenses​ ​ ​ ​ 3,000

How much is the cost of goods sold?

a.) P 366,000 (initial)
​ b.) P 390,000
​ c.) P 388,000
​ d.) P 392,000
Solution:
 23.)​ Based on the following information provided by Max Trading Company on December
31, 200C, the end of its accounting period:

Sales​ ​ ​ ​ ​ ​ P 780,000
Sales Returns & Allowances​ ​ ​ 15,000
Sales Discount​ ​ ​ ​ 19,000
Purchases​ ​ ​ ​ ​ 420,000
Freight in​ ​ ​ ​ ​ 12,000
Purchase Returns & Allowances​ ​ 8,000
Purchase DIscount​ ​ ​ ​ 2,000
Beginning Inventory​ ​ ​ ​ 50,000
Ending Inventory​ ​ ​ ​ 80,000
Operating expenses​ ​ ​ ​ 120,000
Other Income​ ​ ​ ​ ​ 16,000
Other Expenses​ ​ ​ ​ 3,000

How much is the net profit from operations?

a.) P 367,000
​ b.) P 234,000
​ c.) P 356,000
​ d.) P 370,000
Solutions:
 24.)​ Based on the following post-closing trial balance of Rigodon Corporation on June 30,
the end of its fiscal year.

Notes Payable​​ ​ P25,000​ Accrued Insurance Expense​ P10,000

Cash​ ​ ​ ​ 50,000​ Office Equipment​ ​ 80,000
Unearned Rental Income​ 5,000​ Accum. Depr. - Office Equip.​ 8,000
Unused Supplies​ ​ 1,500​ Furniture​ ​ ​ 40,000
Accounts Receivable​ ​ 12,000​ Accum. Depr. - Furniture​ 2,000
Allow. For Bad Debts​ ​ 2,000

If the owner’s drawing is P 100,000 and the beginning owner’s equity is P 185,000. How
much is the net profit?
a.) P 109,000
​ b.) P 101,000 (wa jud ko ka kakuha ani)
​ c.) P 102,000
​ d.) P 121,000

25.)​ Selected accounts of X Company after adjusting entries appearing in the trial
balance are shown below.
​ ​ ​ ​ DR​​ ​ ​ CR
Cash​ ​ ​ ​ P 200,000​ ​ ​ P 80,000
 Notes Receivable​ ​ 50,000​ ​ ​ 24,000
Accounts Payable​ ​ 120,000​ ​ ​ 300,000
Sales​ ​ ​ ​ ​ ​ ​ 1,240,000
Salaries Expense​ ​ 68,000

What kind of trial balance is shown above?

a.) Trial Balance of Balances
​ b.) Preliminary Trial Balance
​ c.) Post- closing Trial Balance (initial)
​ d.) Trial Balance of Totals

26.)​ The cost of office equipment less accumulated depreciation is called

a.) Net realizable value
​ b.) Liquidation value
​ c.) Amortized value (initial)
​ d.) Carrying amount

27.)​ Which of the following end of the accounting period (12-month period) is the most
ideal for a business?
a.) Natural business year which ends in the month business activities are at their lowest
​ b.) The accounting period should end in the month business activities are at their highest
​ c.) Calendar year which ends December 31
​ d.) Fiscal year which ends on any month except December 31

28.)​ Who is the head of the accounting department?

a.) Treasurer
​ b.) Chief Accountant
​ c.) Controller ok
​ d.) Bookkeeper (initial)

29.)​ Based on the following reconciling items between the bank balance and the book
balance on November 30 of the current year of Rolex Company:
●​ Balance per the bank statement in November 1 showed the amount of P 80,161
●​ Deposits of P 5,460 made in November 30 were not yet reflected
●​ Checks issued but not yet paid amounted to P 12,148
●​ Bank collection of P 13,500 was not recorded in the books
●​ Bank services charges for the month amounted to P 1,200
●​ A check deposited in the amount of P 5,000 was marked by the DAIF (drawn
against insufficient fund)
●​ A deposit for P 5,400 was erroneously recorded by the bank as P 4,500

​ How much is the adjusted bank balance?

a.) P 73,173 (initial)
​ b.) P 75, 573
​ c.) P 75, 273
​ d.) P 74, 373

Solution:

30.)​ Dated checks issued but not yet paid by the bank are called
a.) Post dated checks
​ b.) Cancelled checks (initial)
​ c.) Outstanding checks
​ d.) Dishonored checks

31.)​ Nelsie Corporation has an outstanding 60- day 6% note receivable amounting to P
15,000 dated December 1 of the current year. The company is using the calendar year in
preparing its financial statements. What account should be credited and what is the
amount?
a.) Interest Income, P 75
​ b.) Interest Income, P 900
​ c.) Accrued Interest Income, P 150
​ d.) Unearned Interest Income, P 150

32.)​ Based on the following selected accounts provided to you by the chief accountant of
Barbi Traders:

Accrued interest income​ ​ P 4,600

Accrued interest expense​ ​ 2,500
Prepaid Rent​ ​ ​ ​ 5,000
Unearned interest​ ​ ​ 1,400
Allowance for Bad Debts​ ​ 5,400
Accumulated Depreciation​ ​ 10,000
Freight in​ ​ ​ ​ 2,000
Freight out​ ​ ​ ​ 1,500
 Purchase Returns & Allowances​ 1,400
Purchase discount​ ​ ​ 2,600
Sales Returns & Allowances​ ​ 7,300
Sales discount​​ ​ ​ 3,700

How much is the total of the credit balances?

a.) P 25,400
​ b.) P 23,300
​ c.) not given (initial)
​ d.) P 27,900
Solution:

DEBIT CREDIT

13.​Accrued Interest Income 4,600

14.​Accrued Interest Expense 2,500
15.​Prepaid Rent 5,000
16.​Unearned Interest 1,400
17.​Allowance for Bad Debts 5,400
18.​Accumulated Depreciation 10,000
19.​Freight - in 2,000
20.​Freight - out 1,500
21.​Purchase Returns & Allow. 1,400
22.​Purchase Discount 2,600
23.​Sales Returns & Allow. 7300
24.​Sales Discount 3700

Total 19,500 27,900

33.)​ Merchandise with a list of price of P 20,000 was purchased under the terms 2/10,
n/30 with trade discount of 10% and 5%. How much is the cost of purchases to be
recorded?
a.) P 16,758
​ b.) P 17,000 pinakaduol
​ c.) P 17,100
​ d.) P 20,000

34.)​ Based on the following adjusted trial balance of Lyndon Company on December 31,
200C, the end of the accounting period:

Cash​ ​ ​ ​ ​ P 67,075
​ Note Receivable​ ​ ​ 70,000
​ Accounts Receivable​ ​ ​ 176,500
​ Allowance for Bad Debts​ ​ ​ ​ ​ 5,400
​ Merchandise Inventory​ ​ 60,900
​ Furniture & Fixtures​ ​ ​ 34,100
​ Accumulated Depr. - F&F​ ​ ​ ​ ​ 3,100
​ Office Equipment​ ​ ​ 15,500
​ Accumulated Depr. - Office Equip.​ ​ ​ ​ 1,500
​ Note Payable​ ​ ​ ​ ​ ​ 20,000
​ Accounts Payable​ ​ ​ ​ ​ 94,750​ ​ ​
​ Leonard Capital​ ​ ​ ​ ​ 265,000
​ Leonard Drawing​ ​ ​ 9,500
​ Sales​ ​ ​ ​ ​ ​ ​ 572,875
​ Sale Returns​ ​ ​ ​ 11,000
​ Sales Discount​ ​ ​ 6,400
​ Purchases​ ​ ​ ​ 390,750
​ Freight in​ ​ ​ ​ 5,415
​ Purchase Returns​ ​ ​ ​ ​ 3,630
​ Purchase Discount​ ​ ​ ​ ​ ​ 6,885
​ Salaries Expense​ ​ ​ 99,550
​ Rent Expense​​ ​ ​ 24,000
​ Insurance Expense​ ​ ​ 5,250
​ Office Supplies Expense​ ​ 2,200
​ Rental Income​​ ​ ​ ​ ​ ​ 5,000

​ Additional Information: Merchandise Inventory, December 31, P 76,000

How much are the total assets?

a.) P 492,175 (initial)
​ b.) P 427,195
​ c.) P 421,975
​ d.) P 429,175
 35.)​ How many of the following statements is/are FALSE?
​ ​
1.)An increase in revenue is on the credit side hence a decrease in expense is
also on the credit side
2.)A balanced trial balance means that the recording is free from errors.
3.)A simple entry has only one debt and credit while a compound entry has two or
more debits and credits
4.)Tangible assets have values but intangible assets have no values.

a.) 2
​ b.) 1 (initial)
​ c.) 3
​ d.) 4

36.)​ On March 1 of the current year, Dexter Company acquired a machine costing P
650,000 with an estimated useful life of 15 years with salvage value of P 50,000. The
end of the fiscal year is July 31 of the current year.

How much depreciation is to be charged on July 31 of the current year?

a.) P 36,667
​ b.) P 13,333
​ c.) P 16,667
​ d.) P 40,000 (initial)

Solution:

​ 650,000 - 50,000
​ 15 years
​ = 40,000
​
​ 40,000 * 5/12
​ = 16,6667

37.)​ Based on the following adjusted trial balance of Lyndon Company on December 31,
200C, the end of the accounting period:

Cash​ ​ ​ ​ ​ P 67,075
​ Note Receivable​ ​ ​ 70,000
​ Accounts Receivable​ ​ ​ 176,500
​ Allowance for Bad Debts​ ​ ​ ​ ​ 5,400
​ Merchandise Inventory​ ​ 60,900
​ Furniture & Fixtures​ ​ ​ 34,100
​ Accumulated Depr. - F&F​ ​ ​ ​ ​ 3,100
​ Office Equipment​ ​ ​ 15,500
​ Accumulated Depr. - Office Equip.​ ​ ​ ​ 1,500
​ Note Payable​ ​ ​ ​ ​ ​ 20,000
​ Accounts Payable​ ​ ​ ​ ​ 94,750​ ​ ​
​ Leonard Capital​ ​ ​ ​ ​ 265,000
​ Leonard Drawing​ ​ ​ 9,500
​ Sales​ ​ ​ ​ ​ ​ ​ 572,875
​ Sale Returns​ ​ ​ ​ 11,000
​ Sales Discount​ ​ ​ 6,400
​ Purchases​ ​ ​ ​ 390,750
​ Freight in​ ​ ​ ​ 5,415
​ Purchase Returns​ ​ ​ ​ ​ 3,630
​ Purchase Discount​ ​ ​ ​ ​ ​ 6,885
​ Salaries Expense​ ​ ​ 99,550
​ Rent Expense​​ ​ ​ 24,000
​ Insurance Expense​ ​ ​ 5,250
​ Office Supplies Expense​ ​ 2,200
​ Rental Income​​ ​ ​ ​ ​ ​ 5,000

​ Additional Information: Merchandise Inventory, December 31, P 76,000

How much is the gross profit?

a.) P 186,925
​ b.) P 194,825
​ c.) P 189,425
​ d.) P 184,925 ok
 38.)​ Which of the following adjusting entries need to be reversed in the following year?
a.) Adjusting entry for the depreciation
​ b.) Adjusting entries for the accruals
​ c.) Adjusting entry for the bad debts
​ d.) Adjusting entries are not reversed (initials)

39.)​ On January 1 of the current year, the furniture account had a balance of P 24,000
with accumulated depreciation of P2,400. In May, additional furniture costing P 12,000
was bought. The furniture is depreciated at the rate of 10% per annum.

What is the carrying amount (net book value) of the furniture on December 31, the end
of the accounting period?
a.) P 30,400
​ b.) P 34,000 (initial)
​ c.) P 34,000
​ d.) P32,400

Solution:
Old Furniture​ ​ ​ ​ 24,000
Accum. Depr.​ ​ ​ ​ (2,400)
C/A​ ​ ​ ​ ​ 21,600
Depreciation ​ ​ ​ ​ (2,400)
Net Realizable Value​ ​ ​ ​ ​ 19,200

New Furniture ​ ​ ​ 12,000

Depr. (12,000 * 10% *8/12)​ ​ (800)
Net Realizable Value​ ​ ​ ​ ​ 11,200
Total​ ​ ​ ​ ​ ​ ​ 30,400

40.)​ If the unearned interest is credited in the adjusting entry, which of the following will
be affected?
a.) a liability account ok
​ b.) a nominal account
​ c.) a capital account (initial)
​ d.) an asset account

41.)​ The owner’s equity is computed as follows:

a.) Cash inflows less cash outflows (initial)
​ b.) Revenues less expenses
​ c.) Assets less Liabilities
​ d.) Beginning capital plus net profit

42.)​ Based on the following adjusted trial balance of Lyndon Company on December 31,
200C, the end of the accounting period:

Cash​ ​ ​ ​ ​ P 67,075
​ Note Receivable​ ​ ​ 70,000
​ Accounts Receivable​ ​ ​ 176,500
​ Allowance for Bad Debts​ ​ ​ ​ ​ 5,400
​ Merchandise Inventory​ ​ 60,900
​ Furniture & Fixtures​ ​ ​ 34,100
​ Accumulated Depr. - F&F​ ​ ​ ​ ​ 3,100
​ Office Equipment​ ​ ​ 15,500
​ Accumulated Depr. - Office Equip.​ ​ ​ ​ 1,500
​ Note Payable​ ​ ​ ​ ​ ​ 20,000
​ Accounts Payable​ ​ ​ ​ ​ 94,750​ ​ ​
​ Leonard Capital​ ​ ​ ​ ​ 265,000
​ Leonard Drawing​ ​ ​ 9,500
​ Sales​ ​ ​ ​ ​ ​ ​ 572,875
​ Sale Returns​ ​ ​ ​ 11,000
​ Sales Discount​ ​ ​ 6,400
​ Purchases​ ​ ​ ​ 390,750
​ Freight in​ ​ ​ ​ 5,415
​ Purchase Returns​ ​ ​ ​ ​ 3,630
​ Purchase Discount​ ​ ​ ​ ​ ​ 6,885
​ Salaries Expense​ ​ ​ 99,550
​ Rent Expense​​ ​ ​ 24,000
​ Insurance Expense​ ​ ​ 5,250
​ Office Supplies Expense​ ​ 2,200
​ Rental Income​​ ​ ​ ​ ​ ​ 5,000
​ Additional Information: Merchandise Inventory, December 31, P 76,000

How much is the ending Owner’s Equity?

a.) P 341,125
​ b.) P314,425 ok
​ c.) P 344,425
​ d.) P 341,425

Solution:

43.)​ Based on the following adjusted trial balance of Lyndon Company on December 31,
200C, the end of the accounting period:

Cash​ ​ ​ ​ ​ P 67,075
​ Note Receivable​ ​ ​ 70,000
​ Accounts Receivable​ ​ ​ 176,500
​ Allowance for Bad Debts​ ​ ​ ​ ​ 5,400
​ Merchandise Inventory​ ​ 60,900
​ Furniture & Fixtures​ ​ ​ 34,100
​ Accumulated Depr. - F&F​ ​ ​ ​ ​ 3,100
​ Office Equipment​ ​ ​ 15,500
​ Accumulated Depr. - Office Equip.​ ​ ​ ​ 1,500
​ Note Payable​ ​ ​ ​ ​ ​ 20,000
​ Accounts Payable​ ​ ​ ​ ​ 94,750​ ​ ​
​ Leonard Capital​ ​ ​ ​ ​ 265,000
​ Leonard Drawing​ ​ ​ 9,500
​ Sales​ ​ ​ ​ ​ ​ ​ 572,875
​ Sale Returns​ ​ ​ ​ 11,000
​ Sales Discount​ ​ ​ 6,400
​ Purchases​ ​ ​ ​ 390,750
​ Freight in​ ​ ​ ​ 5,415
​ Purchase Returns​ ​ ​ ​ ​ 3,630
​ Purchase Discount​ ​ ​ ​ ​ ​ 6,885
​ Salaries Expense​ ​ ​ 99,550
​ Rent Expense​​ ​ ​ 24,000
​ Insurance Expense​ ​ ​ 5,250
​ Office Supplies Expense​ ​ 2,200
​ Rental Income​​ ​ ​ ​ ​ ​ 5,000

​ Additional Information: Merchandise Inventory, December 31, P 76,000

How much are the total liabilities?

a.) P 114,750 ok
​ b.) P 147,750
​ c.) P 174,750 (initial)
​ d.) P 141,750

44.)​ Which of the following accounts will be affected by the adjusting entries?
a.) Only nominal accounts
​ b.) None (initial)
​ c.) Both real and nominal accounts
​ d.) Only real accounts

45.)​ On July 31, the end of the accounting period of Jigi Company, the unadjusted trial
balance showed supplies expense with a balance of P 23,000. However, P 3,000 worth
of supplies were still unused.

​ Give the adjusting entry.

a.) Supplies Inventory 20,000 ; Supplies Expense 20,000
​ b.) Supplies Expense 20,000 ; Supplies Inventory 20,000
​ c.) Supplies Expense 3,000 ; Supplies Inventory 3,000
​ d.) Supplied Inventory 3,000 ; Supplied Expense 3,000

46.)​ Which of the following errors cannot be detected by the trial balance?
a.) incorrect accounts were used to record a given transaction
b.) incorrect amounts were recorded for a given transaction
c.) a journal entry was posted twice
d.) a journal entry was not posted to the general ledger.

a.) All of the Letters

​ b.) C & D
​ c.) A & B
​ d.) B & C (initial)

47.)​ The exchange of goods or services that results in mutual benefit for both parties
involved.
a.) Sales
​ b.) Business
​ c.) Servicing
​ d.) Trading (initial)

48.)​ ​ ​ ​ ​ ​ Cash (T-account)

​ ​
July 1 Investment of the Owner P500,000 July 1 Taxes and Licenses P 1,000
3 Cash Sales 82,000 2 Freight on the equip. 2,000
13 Loans 200,000 4 Rent Expense 5,000
 15 Collection of Accounts 42,000 7 Cash Purchases 25,000
20 Purchase returns 6,000 9 Salaries 21,000
29 Rental received 5,000 11 Drawing 20,000
30 Cash Sales 30,000 12 Sales Returns 6,000
31 Sale of Old Equipment 3,000 15 Payment of Account 15,000
30 Salaries 23,000

​ How much is the net cash flow from investing activities?

a.) (P 1,000)
​ b.) (P 2,000)
​ c.) P 1,000
​ d.) P 2,000 (initial)

49.)​ Riggy Company provided you with the unadjusted selected accounts on December
31, 200E.

Sales​ ​ ​ ​ P 850,000
Less: Sales Returns​ ​ 50,000
Net Sales​ ​ ​ P 800,000

Accounts Receivable​ ​ P 74,000

Less: Allow. for bad debts​ 12,000
Net realizable value​ ​ 62,000

Beginning inventory​ ​ P 45,000

Ending inventory​ ​ 60,000

Freight in​ ​ ​ 12,000

Freight out​ ​ ​ 20,000

If bad debts instead are estimated to be 10% of accounts receivable, what is the
adjusted balance of the allowance for bad debts accounts?

a.) P 53,800 (initial)

​ b.) P 52,600
​ c.) P 66,200
​ d.) P 7,400

Solution:

Accounts Receivable ​​ 74,000

Multiply​ ​ ​ 10%
ADA​ ​ ​ ​ 7,400​
 50.)​ Based on the following post-closing trial balance of Rigodon Corporation on June 30,
the end of its fiscal year.

Notes Payable​​ ​ P25,000​ Accrued Insurance Expense​ P10,000

Cash​ ​ ​ ​ 50,000​ Office Equipment​ ​ 80,000
Unearned Rental Income​ 5,000​ Accum. Depr. - Office Equip.​ 8,000
Unused Supplies​ ​ 1,500​ Furniture​ ​ ​ 40,000
Accounts Receivable​ ​ 12,000​ Accum. Depr. - Furniture​ 2,000
Allow. For Bad Debts​ ​ 2,000

How much are the total assets?

a.) P 171,500 ok
​ b.) P 181,500 (initial)
​ c.) P 176,500
​ d.) P 169,500

Solution: A = L + E

Assets Liabilities Equity (x)

171,500 = 25,000 + x
Cash 50,000 N/P 25,000 x = 171,500 - 25,000
A/R 12,000 U RI* 5,000 x = 141,500
ADA 2,000 10,000 30,000
Unused Supplies 1,500
Office Equipment 80,000
Accum Depr. - OE 8,000 72,000 *unearned rental
Furniture 40,000 income
Accum Depr. - F 2,000 38,000
Total 171,500

51.)​ Which of the following is not a function of accounting?

a.) Interpreting
​ b.) Bookkeeping
​ c.) Budgeting
​ d.) Reporting

52.)​ Give the journal entry for the following transaction. Received a promissory note in
payment of an account.
a.) Notes Receivable, Notes Payable
​ b.) Notes Payable, Notes Receivable (initial)
​ c.) Notes Receivable, Accounts Receivable
​ d.) Accounts Receivable, Notes Receivables

53.)​ Arrange the following functions of accounting in a sequential manner.

​
 ​ Classifying
​ Recording
​ Interpreting
​ Summarizing

​ Recording, Interpreting, Summarizing, Classifying (initial)

Answer:
​ Recording, Classifying, Summarizing, Interpreting

54.)​ Based on the following information provided by Max Trading Company on December
31, 200C, the end of its accounting period:

Sales​ ​ ​ ​ ​ ​ P 780,000
Sales Returns & Allowances​ ​ ​ 15,000
Sales Discount​ ​ ​ ​ 19,000
Purchases​ ​ ​ ​ ​ 420,000
Freight in​ ​ ​ ​ ​ 12,000
Purchase Returns & Allowances​ ​ 8,000
Purchase DIscount​ ​ ​ ​ 2,000
Beginning Inventory​ ​ ​ ​ 50,000
Ending Inventory​ ​ ​ ​ 80,000
Operating expenses​ ​ ​ ​ 120,000
Other Income​ ​ ​ ​ ​ 16,000
Other Expenses​ ​ ​ ​ 3,000

How much is the cost of goods available for sale?

a.) P 460,000 (initial)
​ b.) P 472,000
​ c.) P 448,000
​ d.) P 470,000
Solution:
 55.)​ On December 1, 200D, Marimar, a lessee paid P 18,000 to XYZ Company
representing the rent for 3 months. Rent income was credited on this date by XYZ
Company.

In the books of the lessor, what amount should be recognized as liability on

December 31, 200D, the end of the accounting period.
a.) P 12,000
​ b.) P 18,000 (initial)
​ c.) P 16,000
​ d.) P 3,000

Solution:

Total rent paid for 3 months = 18000

Liability of lessor = prepaid rent received

= 18000 × 2/3 = 12000

56.)​ Riggy Company provided you with the unadjusted selected accounts on December
31, 200E.

Sales​ ​ ​ ​ P 850,000
Less: Sales Returns​ ​ 50,000
Net Sales​ ​ ​ P 800,000

Accounts Receivable​ ​ P 74,000

Less: Allow. for bad debts​ 12,000
Net realizable value​ ​ 62,000

Beginning inventory​ ​ P 45,000

Ending inventory​ ​ 60,000

Freight in​ ​ ​ 12,000

Freight out​ ​ ​ 20,000

What is the journal entry to set up the ending inventory?

a.) Ending inventory 60,000;Beginning Inventory 15,000;Income& Exp. Summary 45,000
​ b.) Inventory 60,000; Accounting Payable 60,000 (initial)
​ c.) Inventory 15,000; Income & Exp. Summary 15,000
​ d.) Inventory 60,000; Income & Exp. Summary 60,000

57.)​ Based on the following audited financial statements of Fast Truckers at the end of
December 31, 200E;
​
​ Using the accrual basis of accounting, what is the beginning capital?

​ Trucking Services fees collected​ ​ P 32,000

​ Trucking Services fees uncollected​ ​ 18,000
​ Expenses paid​ ​ ​ ​ 27,000
​ Expenses unpaid​ ​ ​ ​ 2,000
​ Non-cash expenses​ ​ ​ ​ 1,000
​ Total assets​ ​ ​ ​ ​ 180,000
​ Total liabilities​ ​ ​ ​ ​ 25,000
​
a.) P 100,000
​ b.) P 135,000
​ c.) P 75,000 (initial)
​ d.) P 145,000

Solution:

(Workback)
End, Capital​ ​ ​ 155,000
Net Income​ ​ ​ ( 20,000)
Beginning Capital ​ ​ 135,000​

58.)​ Accounts Receivable less Allowance for bad debts equals

a.) Net appraised value
​ b.) Net book value
​ c.) Carrying amount (initial)
​ d.) Net realizable value

59.)​ Which of the following checks can not be encashed but instead merely deposited?
a.) Stale check (initial)
​ b.) Crossed check
​ c.) Dishonored check
​ d.) Post dated check

60.)​ Cash (T-account)

​ ​
July 1 Investment of the Owner P500,000 July 1 Taxes and Licenses P 1,000
3 Cash Sales 82,000 2 Freight on the equip. 2,000
13 Loans 200,000 4 Rent Expense 5,000
15 Collection of Accounts 42,000 7 Cash Purchases 25,000
20 Purchase returns 6,000 9 Salaries 21,000
29 Rental received 5,000 11 Drawing 20,000
 30 Cash Sales 30,000 12 Sales Returns 6,000
31 Sale of Old Equipment 3,000 15 Payment of Account 15,000
30 Salaries 23,000

​ How much is the net cash flow from financing activities

​ a.) 500,000
​ b.) 480,000
​ c.)700,000
​ d.) 680,000