FABM 2nd SEM

These are resources of the firm which were taken by the owner for personal use.

Select one:

  1. Ending Capital
  2. Investments
  3. Withdrawals C
  4. Net Loss

Question 1

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Income statement for merchandising businesses usually have how many sections? Select one: a. 7 C

  1. 3
  2. 5
  3. 8

Question 2

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The heading of a statement of income usually consists of the following except:

Select one:

  1. Period covered by the statement
  2. Business Name
  3. None of the choices C
  4. Statement of Income

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It represents the right of the owner over the resources of the firm. Select one: a. Equity

  1. Stocks
  2. All of the choices
  3. Assets W

Question 4

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How many sections do income statement for merchandising businesses usually have? Select one: a. 5

  1. 10
  2. 7 C

  1. 8

Question 5

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The story of the success, or failure, of operations is shown in the _______________________. Select one:

  1. Statement of Income C
  2. All of the choices
  3. Report
  4. Balance Sheet

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It represents the total amount of inventory on hand.

Select one:

  1. Net cost of goods purchased
  2. Net Sales
  3. Beginning Inventory W
  4. Merchandise Inventory

Question 7

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It is the usual account title used for corporations.

 

Select one:

  1. Both of the given choices correct
  2. None of the choices
  3. Capital
  4. Stockholder's Equity C

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These are deducted in the purchase price either because of returns or reductions due to defects or damages of goods purchased.

Select one:

  1. Sales Allowances
  2. Purchase discounts
  3. Sales Returns W
  4. Purchase returns and allowances

Question 9

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Total is synonymous to ___________.

Select one: a. Net

  1. None of the choices
  2. Gross C
  3. Both A and B

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If the firm has been operating in the past year, the beginning capital of the current year is _____________ the ending capital of the previous year. Select one:

  1. The same
  2. Equal to
  3. None of the choices
  4. Different W

 

This could be deducted to the beginning capital and additional investments done during the year. Select one:

  1. Ending Capital
  2. Net Profit
  3. Net Loss C
  4. Withdrawals and drawings

 

We could find the period covered by the statement at the ________________ of the statement of the account. Select one: a. Heading

  1. None of the choices
  2. Both A and B W
  3. Body

Question 2

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These are added to the capital beginning to arrive at the total investments used during the year Select one:

  1. Investments C
  2. Net Profit
  3. Ending capital
  4. Withdrawals and drawings

Question 3

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These are reductions in the total sales price given to the customer if the account will be paid within a short period of time.

Select one:

  1. Sales discounts C
  2. Purchase Discounts
  3. Cost of goods sold
  4. Sales of returns and allowances

Question 4

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It is consists of the owner's investment and the earned profit less any withdrawals made during a given period. Select one:

  1. Investments
  2. Capital C
  3. Ending Capital
  4. Beginning Capital

Question 5

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An income statement for _________________ could be written using a single-step approach. Select one:

  1. Service Business
  2. Both A and B W
  3. Merchandising Business
  4. All of the choices

Question 6

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It is the difference arrived at after deducting withdrawals from the sum of the beginning capital, additional investments, and profit.

Select one:

a. Beginning Capital

b. Investments

  1. Net Profit
  2. Ending Capital C

Question 7

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These are added to the capital beginning to arrive at the total investments used during the year. Select one:

  1. Investments C
  2. Withdrawals and drawings
  3. Ending Capital
  4. Net Profit Question 8

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The single-step approach could be used in writing the income statement for _______________. Select one:

  1. Manufacturing business
  2. Merchandising business
  3. Service Business
  4. All of the choices W

Question 9

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The following are included in the income statement for merchandising businesses except: Select one:

  1. Net Sales
  2. Operating Expenses
  3. Business name C
  4. Other revenues and gains

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Net Profit is derived from: Select one:

  1. Journal W
  2. Statement of Income
  3. Statement of Changes in Equity
  4. Balance Sheet

 

Question 1

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There are common account titles between assets and liabilities..

Select one:

True C

False

Question 2

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Property, plant, and equipment are assets.

Select one:

True C

False

Question 3

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Assets minus Liabilities is equal to Equity is also considered an Accounting Equation. Select one:

True C

False

Question 4

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This is the type of business which offers services for a fee Select one:

  1. Accounting
  2. Service business C
  3. Fiscal year
  4. Corporate code

Question 5

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Services businesses offer products.

Select one:

True  

False C

Question 6

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Long-term liabilities are noncurrent.

Select one:

True C

False

Question 7

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Cash and cash equivalents are current assets.

Select one:

True C

False

Question 8

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The Calendar year ends on January 01.

Select one:

True C

False  

Question 9

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A liability is a present obligation arising out of past events.

Select one:

True C

False

Question 10

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Liabilities are present obligations arising from past events..

Select one:

True C

False

 

Question 1

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Operating expenses and operating income or operating loss are items which can be found in an income statement prepared in a multi-step approach.

Select one:

True C

False

Question 2

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These are reductions in the total sales price given to the customer if the account will be paid within a short period of time.

Select one:

  1. Sales of returns and allowances
  2. Sales discounts C
  3. Cost of goods sold
  4. Purchase Discounts

Question 3

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Mr. Alvarez , capital is an example of account title used for the equity of the owner in what form of business organization?

Select one:

  1. partnership
  2. corporation
  3. None of the choices
  4. Sole proprietorship C

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This is the common transaction happening in the organization. Select one:

  1. Financing
  2. Operating
  3. All of the choices W
  4. Investing

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What item do we deduct from the beginning capital of the statement of changes in equity to arrive at the ending capital?

Select one:

  1. None of the choices
  2. Investment
  3. Withdrawals C
  4. Net Profit Question 6

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It is a basic accounting principle that states that income is earned regardless of when cash is received, and expenses are incurred regardless of when cash is pai~ Select one:

  1. Cash basis
  2. Accrual basis C

Question 7

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The equation for cost of goods sold is:

Select one:

  1. Beginning inventory + Net cost of goods purchased - Ending inventory C
  2. Beginning inventory - Net cost of goods purchased - Ending inventory
  3. Beginning inventory + Net cost of goods purchased + Ending inventory. {
  4. None of the choices

Question 8

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Accrual basis of accounting is a basic accounting principle that states that income is earned regardless of when cash is received, and expenses are incurred regardless of when cash is paid

Select one:

True C

False

Question 9

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Cash receipts from customers is P200,000, cash paid to suppliers is P10,000 and cash paid to employees is P25,000, how much is the net cash from operating activities. Select one:

  1. P190,000
  2. P175,000
  3. P165,000 C
  4. Cannot be determined from the data given

Question 10

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The following consists an income statement for merchandising businesses except: Select one:

  1. None of the choices
  2. Net Profit or Net Loss W
  3. Cost of goods sold
  4. Gross Profit

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The firm can create as many capital accounts as there are owners in a corporation. Select one:

True  

False C

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It is the difference arrived at after deducting withdrawals from the sum of the beginning capital, additional investments, and profit.

Select one:

  1. Withdrawals and drawings
  2. Net Profit W
  3. Beginning Capital
  4. Ending Capital

Question 13

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Cash flows are categorized as follows except:

Select one:

  1. financing activities
  2. Developing activities C
  3. Operating activities
  4. investing activities

Question 14

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An income statement for _________________ could be written using a single-step approach. Select one:

  1. Service Business C
  2. Both A and B
  3. Merchandising Business
  4. All of the choices

Question 15

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It relies entirely on the payment and receipt of cash.

Select one:

  1. Accrual basis of accounting
  2. Investing Activities
  3. Financing Activities
  4. Cash basis accounting C

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Its use varies depending on the form of business organization.

Select one:

  1. Equity Accounts
  2. Capital
  3. Statement of Changes in Equity W
  4. Equity Question 17

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The following are terms pertaining to Owner's Equity except: Select one:

  1. Net Worth
  2. Capital W
  3. Net Gross
  4. Net Assets

Question 18

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It is the common account title in the financial statement.

Select one: a. Equity

  1. Capital
  2. Investment
  3. Cash C

Question 19

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These are deducted in the purchase price either because of returns or reductions due to defects or damages of goods purchased.

Select one:

  1. Purchase returns and allowances C
  2. Purchase discounts
  3. Sales Returns
  4. Sales Allowances

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Activities related to the acquisition and disposal of long-term assets, including investments not considered cash equivalents is called financing activities.

Select one:

True  

False C

 

Question 1

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Merchandising business are charging fees for rendered services.

Select one:

True

False °

Question 2

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Transactions which are financial in nature, such as payment and purchases in cash. Select one:

  1. Partnership
  2. Financial Character
  3. General Accepted Accounting Principles xxx
  4. Government Accounting

Question 3

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A promissory note issued by the customer is an evidence of the notes receivable account. Select one:

True°

False

Question 4

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Noncurrent assets are kept principally for trading.

Select one:

True

False°

Question 5

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Manufacturing business converts raw materials to finished goods.

Select one:

True°

False

Question 6

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What type of accounts are Prepaid Insurance, Prepaid Advertising, and Prepaid Expenses? Select one: a. Equity

  1. Revenue
  2. Asset°
  3. Liability Question 7

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ABC Store records the transaction by a debit to Accounts Receivable for P1,000 and a credit to Service Revenues for P1,000. What is the effect of this entry upon the accounting equation for ABC Store?

Select one:

  1. Asset Decrease, No Effect
  2. Equity Decrease, Equity No Effect
  3. Owner's (or Stockholders')
  4. Asset Increase, Equity Increase°
  5. Liabilities Increase, Equity Increase

Question 8

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Increase in assets is recorded as a Debit..

Select one:

True°

False

Question 9

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Cash and cash equivalents are current assets.

Select one:

True°

False

Question 10

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Revenues are commonly called the "cost of doing business." Select one:

True° False

Question 11

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Property, plant, and equipment are not assets.

Select one:

True

False°

Question 12

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This principle has two aspects, the quantifiability and stability of peso.

Select one:

  1. Stable monetary unit°
  2. Going concern
  3. Matching
  4. Accrual Question 13

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A liability is a present obligation arising out of past events.

Select one:

True° False

Question 14

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If Revenue is greater expenses, there is a Gain.

Select one:

True  

False°

Question 15

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Manufacturing business changes the basic inputs into products that are sold to individual customers. Select one:

True°

False

Question 16

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Capital is another term for equity.

Select one:

True°

False

Question 17

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When the owner makes withdrawal from the business for personal use, only the asset decreases. Select one:

True

False°

Question 18

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The Income Statement is composed of the revenues and expenses. Select one:

True°

False

Question 19

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Which of the following will cause owner's equity to increase? Select one:

  1. Revenue°
  2. Owner Draws
  3. Expenses Question 20

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In August 2016, ABE Store receives the P4,000 for services rendered. What is the effect on the accounting equation and which accounts are affected?

Select one:

  1. Asset Increase, Equity Increase
  2. Equity Decrease, Liability Increase
  3. Liabilities Increase, Equity Increase
  4. Owner's (or Stockholders') xxx
  5. Asset Decrease, No Effect

 

Question 1

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An asset is a present obligation arising out of past events.

Select one:

True W

False

Question 2

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Liabilities are present obligations arising from past events..

Select one:

True C

False

Question 3

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Income statement is another term for the Statement of Financial Position.

Select one:

True W

False

Question 4

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The law that manages Corporations Select one:

  1. Corporate code C
  2. Fiscal year
  3. Accounting
  4. Service business

Question 5

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There are common account titles between assets and liabilities..

Select one:

True C

False

Question 6

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Meaning of GAAP Select one:

  1. Government Accounting
  2. General Accepted Accounting Principles C
  3. Partnership
  4. Financial Character

Question 7

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The Calendar year ends on January 01.

Select one:

True

False W

Question 8

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Long-term debts are noncurrent.

Select one:

True C

False

Question 9

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Long-term liabilities are noncurrent.

Select one:

True C

False

Question 10

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Noncurrent assets are assets that are expected to be used within 12 months.

Select one:

True W

False

 

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Losses are outflows that result from the main activity of the business.

Select one:

True W

False

Question 2

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Manufacturing business converts raw materials to finished goods. Select one:

True C

False

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What form of the SFP wherein the assets are listed on the left side and the liabilities and equity are on the right side, and the two sides must equal?

Select one:

  1. Working capital form W
  2. Narrative form
  3. Account form
  4. Report form

Question 4

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Cash and cash equivalents are noncurrent assets..

Select one:

True

False W

Question 5

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Noncurrent assets are kept principally for trading.

Select one:

True

False C

Question 6

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Revenue is synonymous to Gains. Select one:

True W

False

Question 7

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The Fiscal year always ends in December.

Select one:

True W

False

Question 8

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The following are known as Balance Sheet accounts except: Select one:

  1. Equity W
  2. Liability
  3. Income
  4. Asset Question 9

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The financial statement that reports the assets, liabilities, and stockholders' (owner's) equity at a specific date is the __________.

Select one:

  1. Statement of Financial Position
  2. Statement of Cash Flow
  3. Statement of Owner's Equity W
  4. Income Statement

Question 10

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This type of business usually does activities that converts raw materials into finished products, and sells this to other firms or to individuals.

Select one:

  1. Cooperative
  2. Service
  3. Merchandizing
  4. Manfacturing C

Question 11

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When the owner makes withdrawal from the business for personal use, only the asset decreases. Select one:

True

False C

Question 12

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Branch of accounting solely for government purposes such as collecting of taxes, computing of national income, fixing the gross national product target, ascertaining the balance of payments position, etc..

Select one:

  1. Government Accounting C
  2. Partnership
  3. Financial Character
  4. General Accepted Accounting Principles

Question 13

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This principle requires that "those costs and expenses incurred in earning a revenue should be recorded and reported in the same period". Select one:

  1. Dual Effect
  2. Going Concern
  3. Accrual Principle
  4. Matching Principle C

Question 14

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Residual asset is the result of combining liabilities and equity.

Select one:

True C

False

Question 15

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Accrual basis of accounting recognizes income regardless of when cash is received. Select one:

True C

False

Question 16

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Asset are resources owned and/or controlled by the enterprise.Asset are acquired by an enterprise as a result of a past transaction or event.

Select one:

  1. The 1st statement is true
  2. Both statements are false
  3. Both statements are true C
  4. The 1st statement is false
  5. The 2nd statement is true
  6. The 2nd statement is false

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Accounting records and statements are based on the most reliable data available so that they will be as accurate and as useful as possible.

Select one:

  1. stable monetary unit concept
  2. going concern concept
  3. time-period concept
  4. reliability or objectivity principle W

Question 18

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Income from the sale of an equipment of a machine business is considered a gain. Select one:

True W

False

Question 19

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This concept states that assets and services that are acquired should be recorded at their actual cost. Select one:

  1. reliability or objectivity principle
  2. cost concept C
  3. going concern concept
  4. business entity concept

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This occurs whenever the enterprise purchased goods or received services on account issuing a promissory note to settle the account in a specified future date.

Select one:

  1. Accounts Payable W
  2. Mortgage Payable
  3. Notes Payable
  4. Bonds Payable

 

Question 1

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Accounting is the system of measuring business activities of financial character. Select one:

True C

False

Question 2

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Every time a business transaction occurs like purchase of supplies, payment of receivables, granting credit, payment of utilities, etc., we assume that for every value received there is an equivalent value parted with.

Select one:

  1. Going Concern
  2. Matching Principle
  3. Accrual Principle
  4. Dual Effect C

Question 3

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Liabilities are company's obligations.

Select one:

True C

False

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The following are current assets, except::

Select one:

  1. Long-term liabilities
  2. Accounts receivable
  3. Prepaid expense W
  4. Cash Question 5

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Long-term liabilities are noncurrent.

Select one:

True C

False

Question 6

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An asset is a present obligation arising out of past events.

Select one:

True

False C

Question 7

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The Income Statement is composed of the revenues and expenses. Select one:

True C

False

Question 8

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Cash and Accounts Receivable are two examples of accounts that are reported on the classified balance sheet under the heading __________.

Select one:

  1. Current Asset C
  2. Equity
  3. Contra Asset
  4. Current Liability

Question 9

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Withdrawals are also known as "drawings".

Select one:

True C

False

Question 10

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The group of accounts of the entity is called ledger.

Select one:

True C

False

Question 11

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Meaning of GAAP Select one:

  1. Partnership
  2. General Accepted Accounting Principles C
  3. Government Accounting
  4. Financial Character

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Current assets are obligations expected to be settled after a year.

Select one:

True W

False

Question 13

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Question text

A cash withdrawal was made by the owner from the business for personal use.

Select one:

  1. Equity Decrease, Liability Increase W
  2. Owner's (or Stockholders')
  3. Liabilities Increase, Equity Increase
  4. Asset Decrease, Equity Decrease
  5. Asset Decrease, No Effect

Question 14

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The income statement line gross profit will appear on which income statement format? Select one:

  1. none of the choices
  2. Multiple-step
  3. Single-step W
  4. Dual-step

Question 15

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Going-concern is a concept where accountants assume that the business will continue to operate for a foreseeable future.

Select one:

True C

False

Question 16

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The financial statement that reports the revenues and expenses for a period of time such as a year or a month is the ___________.

Select one:

  1. Statement of Cash Flow
  2. Statement of Financial Position W
  3. Income Statement
  4. Statement of Owner's Equity

Question 17

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Also known as Time Period Concept Select one:

  1. Periodicity C
  2. Fiscal year
  3. Service business
  4. Accounting

Question 18

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Cash, Accounts receivable and Office supplies are examples of current assets. Select one:

True C

False

Question 19

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Question text

All of the following are general and administrative expenses except Select one:

  1. Depreciation expense (office equip) W
  2. Taxes and business licenses
  3. Advertising & promotional expenses
  4. Office salaries

Question 20

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The T-account is the simplest form of account.

Select one:

True C

False

 

Question 1

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Question text

The following are examples of non-current assets except Select one:

  1. Intangible asset
  2. Long-term investment
  3. Property, plant and equipment
  4. Accounts Receivable C

Question 2

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What type of accounts are Deferred Revenues and Unearned Revenues? Select one: a. Equity

  1. Revenue W
  2. Liability
  3. Asset Question 3 Correct

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Wages are considered expenses.

Select one:

True C

False

Question 4

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The business receives cash from a bank loan.

Select one:

  1. Liabilities Increase, Equity Increase
  2. Equity Decrease, Equity No Effect W
  3. Asset Increase, Equity Increase
  4. Asset Decrease, No Effect
  5. Owner's (or Stockholders')

Question 5

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Increases in the assets are recorded on the right side of the account.

Select one:

True W

False

Question 6

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Question text

AICPA means Select one:

  1. Fiscal year
  2. American Institute of Certified Public Accountants C
  3. Service business
  4. Corporate code

Question 7

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Salaries are considered income to the business.

Select one:

True W

False

Question 8

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Question text

The Statement of Financial Position commonly adopts the Calendar Year. Select one:

True

False W

Question 9

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Question text

Merchandising business usually does activities that converts raw materials into finished products, and sells this to other firms or to individuals.

Select one:

True

False C

Question 10

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Which of the following names is NOT associated with the income statement?

Select one:

  1. Statement of Gains and Losses
  2. Statement of Operations
  3. P & L
  4. Statement of Financial Position C

Question 11

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We technically call recording as bookkeeping or journalizing because we use the book we call _________________.

Select one:

  1. General ledger W
  2. Trial Balance
  3. Worksheet
  4. General journal

Question 12

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This principle has two aspects, the quantifiability and stability of peso.

Select one:

  1. Stable monetary unit C
  2. Going concern
  3. Accrual
  4. Matching Question 13

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Debit entries with a larger number would always possess a debit balance. Select one:

True C

False

Question 14

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What type of accounts are Prepaid Insurance, Prepaid Advertising, and Prepaid Expenses? Select one: a. Liability

  1. Revenue
  2. Asset C
  3. Equity Question 15

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This concept ensures that accounting information is current and is reported at regular intervals. Select one:

  1. going concern concept
  2. stable monetary unit concept
  3. reliability or objectivity principle
  4. time-period concept C

Question 16

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What is the effect on Single Lady's accounting equation when it pays the account to the supplier P22,500? And which accounts are affected?

Select one:

  1. Owner's (or Stockholders')
  2. Liabilities Increase, Equity Increase
  3. Asset Increase, Equity Increase
  4. Equity Decrease, Equity No Effect
  5. Asset Decrease, Liability Decrease C

Question 17

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Capital are claims by creditors against the company's assets.

Select one:

True W

False

Question 18

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Question text

Transactions which are financial in nature, such as payment and purchases in cash.

Select one:

  1. Government Accounting
  2. General Accepted Accounting Principles
  3. Financial Character C
  4. Partnership

Question 19

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A Statement of Financial Position is a formal statement presenting the three accounting elements which are?

Select one:

  1. Net sales, cost of goods sold, net income
  2. Revenue, expense and profit W
  3. Cash, accounts receivable, prepaid expense
  4. assets, liabilities and equity

Question 20

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Revenues are also known as income.

Select one:

True C

False

 

We use a multi-step approach in preparing a statement of income for ______________________.

Select one:

  1. Both A and C
  2. None of the choices
  3. Merchandising Business C
  4. Service Business

Question 2

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It is consists of the owner's investment and the earned profit less any withdrawals made during a given period.

Select one:

  1. Ending Capital
  2. Capital C
  3. Investments
  4. Beginning Capital

Question 3

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These are added to the capital beginning to arrive at the total investments used during the year Select one:

  1. Investments C
  2. Net Profit
  3. Ending capital
  4. Withdrawals and drawings

Question 4

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We could find the period covered by the statement at the ________________ of the statement of the account.

Select one:

  1. Both A and B
  2. Heading C
  3. None of the choices
  4. Body Question 5

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How many parts does the Statement of Changes in Equity have? Select one: a. 7

  1. 3
  2. 8
  3. 5 C

Question 6

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Capital is the account title used for____________________.

Select one:

  1. Sole proprietorship W
  2. Corporation
  3. Sole proprietorship and Corporation
  4. Partnership
  5. Sole proprietorship and Partnership
  6. Partnership and Corporation

Question 7

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These are reductions in the total sales price given to the customer if the account will be paid within a short period of time.

Select one:

  1. Sales returns and allowances
  2. Net Sales
  3. Sales discount C
  4. Cost of goods sold

Question 8

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It refers to the right of the owner over the resources of the firm after deducting the claims of creditors. Select one:

  1. Capital W
  2. Statement of Changes in Equity
  3. Investment
  4. Equity C Question 9

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It is the difference arrived at after deducting withdrawals from the sum of the beginning capital, additional investments, and profit. Select one:

  1. Net Profit
  2. Beginning Capital
  3. Investments
  4. Ending Capital C

Question 10

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If the firm has been operating in the past year, the beginning capital of the current year is _____________ the ending capital of the previous year. Select one: a. Different

  1. None of the choices

  1. Equal to
  2. The same C

 

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In the statement of changes in equity of a sole proprietor, this is deducted from the beginning capital to arrive at the ending capital.

Select one:

  1. investment W
  2. withdrawal
  3. Net profit
  4. None of the choices

Question 2

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This accounting principle relies entirely on the payment and receipt of cash.

Select one:

  1. Accrual basis W
  2. Cash basis Question 3

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The first part of a statement of income for a merchandising business is composed of the following except: Select one:

  1. sales discount
  2. sales
  3. beginning inventory
  4. sales returns and allowances W

Question 4

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It represents the total amount of inventory on hand.

  1. Merchandise Inventory C
  2. None of the choices
  3. Beginning Inventory
  4. Net Profit Question 5

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The customer paid his account to us. This represents:

Select one:

  1. Cash receipts
  2. Cash payments W
  3. Investment
  4. not a cash flow item

Question 6

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The income statement for merchandising businesses usually has eight sections: Net sales, Cost of goods sold, Gross profit, Operating expenses, Operating income or operating loss, Other revenues and gains (expenses and losses), Net profit or net loss. Select one:

True C

False

Question 7

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Cash flows are categorized into three types: operating, investing, and financing activities. Select one:

True C

False

Question 8

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An accounting principle where in income shall only be recognized when cash is received, and expenses shall only be recorded when cash is paid.

  1. Accrual Basis Accounting W
  2. Cash Basis Accounting

Question 9

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The ________________represents the total capital at the start of the business. Select one:

  1. investment
  2. Beginning capital W
  3. Ending capital
  4. net profit

Question 10

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Beginning inventory is P50,000, net cost of purchases is P125,000, and ending inventory is P35,000. Compute for the cost of goods sol~ Select one:

  1. P210,000
  2. Cannot be determined from the given data
  3. P140,000 C
  4. P110,000 Question 11

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Merchandising business' statement of income include the following except: Select one: a. Sales

  1. Operating Expenses
  2. Cost of goods sold
  3. Drawing C

Question 12

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A form of business organization whose statement of income does not include sales.

  1. service business C
  2. merchandising business

Question 13

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It is consists of the owner's investment and the earned profit less any withdrawals made during a given period. Select one:

  1. Investments
  2. Beginning Capital
  3. Ending Capital W
  4. Capital Question 14

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Question text

Cash withdrawal of an owner for personal use falls in what cash flow category? Select one:

  1. Financing C
  2. Assessing
  3. Investing
  4. Operating Question 15

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_____________________ involves transactions showing those related to gross cash receipts and gross cash payments.

Select one:

  1. expense method
  2. asset method
  3. direct method C
  4. indirect method

Question 16

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Financing activities are those which involve changes in the equity and liability accounts in the accounting records.

Select one:

True C

False

Question 17

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_____________________ is acceptable in the accounting industry.

Select one:

  1. Accrual basis of accounting
  2. None of the choices
  3. Cash basis of accounting
  4. Both A and B W

Question 18

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The statement of cash flows starts with cash on hand, beginning and ends with ________________?

Select one:

  1. Ending inventory W
  2. Net Profit
  3. Cash on hand, end
  4. Cost of goods sold

Question 19

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Question text

Owner's equity represents the right of the owner over the resources of the firm. Select one:

True C

False

Question 20

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It states that income shall only be recognized when cash is received, and expenses shall only be recorded when cash is paid.

Select one:

  1. Cash basis of accounting
  2. Accrual basis of accounting W
  3. Financing activities
  4. None of the choices

 

Question 1

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In August 2016, ABE Store receives the P4,000 for services rendered. What is the effect on the accounting equation and which accounts are affected?

Select one:

  1. Equity Decrease, Liability Increase
  2. Asset Decrease, No Effect
  3. Liabilities Increase, Equity Increase
  4. Owner's (or Stockholders')
  5. Asset Increase, Equity Increase C

Question 2

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If revenue increases and cost of goods sold remains constant, gross profit also increases. Select one:

True C

False

Question 3

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Question text

Long-term debts are noncurrent.

Select one:

True W

False

Question 4

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A debit account in excess of credits would possess a credit balance. Select one:

True C

False

Question 5

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Question text

Land is a current asset..

Select one:

True

False W

Question 6

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Question text

SFP is also the Balance sheet.

Select one:

True C

False

Question 7

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What is the effect on accounting equation of Triple A when it records the transaction as a debit to Rent Expense for P8,000 and a credit to Accounts Payable for P8,000?Owner's (or Stockholders') Select one:

  1. Asset Increase, Equity Increase
  2. Asset Decrease, No Effect
  3. Owner's (or Stockholders') W
  4. Equity Decrease, Liability Increase
  5. Liabilities Increase, Equity Increase

Question 8

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Question text

Ownership of a cooperative is divided into shares of stock.

Select one:

True W

False

Question 9

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Question text

The business bought furniture for office use on account.

Select one:

  1. Owner's (or Stockholders')
  2. Asset Decrease, No Effect
  3. Equity Decrease, Liability Increase W
  4. Asset Increase, Equity Decrease
  5. Asset Increase, Liability Increase

Question 10

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Question text

The owner invests trucksto be used in the business.

Select one:

  1. Asset Decrease, No Effect
  2. Liabilities Increase, Equity Increase W
  3. Asset Increase, Equity Increase
  4. Equity Decrease, Equity No Effect
  5. Owner's (or Stockholders')

Question 11

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Capital is equal to Asset minus Liability. Asset is equal to Liability minus Capital.

Select one:

  1. The 2nd statement is false.
  2. Both statements are false
  3. The 2nd statement is true.
  4. The 1st statement is false.
  5. The 1st statement is true.
  6. Both statements are true W

Question 12

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The accounts in the report form of SFP are arranged in a single column wherein assets are listed first, followed by the liabilities and owner's equity..

Select one:

True

False W

Question 13

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The difference between revenues and gains, and expenses and losses when the expenses and losses are greater than the revenues and gains. Select one: a. Net loss

  1. Net assets W
  2. Net worth
  3. Net profit Question 14

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Net income is a result of expenses higher than revenues.

Select one:

True W

False

Question 15

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Question text

Prepaid rent is an asset..

Select one:

True C

False

Question 16

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Refers to the outflows of resources usually paid in cash or incurred on credit resulting from the main operating activities of the business.

Select one:

  1. Expenses C
  2. Asset
  3. Losses
  4. Liabilities

Question 17

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Cash and cash equivalents are current assets.

Select one:

True C

False

Question 18

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Question text

Businesses usually have three activities: investing, financing, and recording. Select one:

True

False C

Question 19

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Cash basis accounting only records transaction when cash is received or paid. Select one:

True C

False

Question 20

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It refers to total or gross sales less any sales discounts, and sales returns and allowances. Select one:

  1. Net Operating Income
  2. Cost of Goods Sold
  3. Net Sales C
  4. Net Income

 

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BL-FABM-2121-LEC-1922S FUNDA OF ACCOUNTANCY B&M2

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 BL-FABM-2121-LEC-1922S

 Week 8 and 9: Cash Flow Statement

 Long Quiz 002

Started on        Sunday, 8 December 2019, 6:59 PM State        Finished

Completed on Sunday, 8 December 2019, 7:06 PM

Time taken        7 mins 28 secs

Grade 11.00 out of 20.00 (55%)

Question 1

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In preparing the income statement for service businesses, expenses are deducted from the revenue to arrive at the net profit or loss.

Select one:

True  

False

Question 2

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Question text

These involve changes in the equity and liability accounts in the accounting records. Select one:

  1. Operating Activities
  2. Investing Activities W
  3. Financing Activities
  4. All of the choices

Question 3

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Question text

Which transaction represents accrual basis of accounting?

Select one:

  1. Cash paid to suppliers
  2. Interest paid W
  3. Depreciation of old service vehicle
  4. None of the choices

Question 4

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Question text

In the preparation of cash flow, the following items are considered using accrual basis of accounting except:

Select one:

  1. increase in trade payables W
  2. interest paid
  3. depreciation
  4. None of the choices

Question 5

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The income statement for merchandising businesses usually has the following sections, namely: revenue, expenses and net profit or loss.

Select one:

True W

False

Question 6

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Question text

These are reductions in the total sales price given to the customer if the account will be paid within a short period of time.

Select one:

  1. Cost of goods sold
  2. Net Sales
  3. Sales discount C
  4. Sales returns and allowances

Question 7

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Question text

Among all the activities, only ____________________ have different ways of being presented. Select one:

  1. Financing Activities
  2. Investing Activities
  3. Operating Activities C
  4. None of the choices

Question 8

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Question text

It represents the total amount of inventory on hand. Select one:

  1. Net Sales
  2. Net cost of goods purchased
  3. Beginning Inventory
  4. Merchandise Inventory C

Question 9

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Question text

To arrive at the net cash from operating activities using the direct method we add/deduct the following except:

Select one:

  1. Cash paid to suppliers
  2. Decrease in inventory C
  3. Cash receipts from customers
  4. Cash paid to employees

Question 10

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Question text

What is the effect of cash paid to supplier of P20,000 to the cash beginning of P100,000? Select one:

  1. increase of P20,000
  2. not a cash flow item
  3. no effect W
  4. decrease of P20,000

Question 11

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Cash receipts from customers is P200,000, cash paid to suppliers is P10,000 and cash paid to employees is P25,000, how much is the net cash from operating activities. Select one:

  1. P190,000
  2. P165,000 C
  3. P175,000
  4. Cannot be determined from the data given

Question 12

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This is the common transaction happening in the organization. Select one:

  1. Operating
  2. Investing
  3. All of the choices
  4. Financing W

Question 13

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Question text

Which one does not form part of cost of goods sold?

Select one:

  1. Purchase returns and allowances
  2. Merchandise inventory
  3. Purchases
  4. owner's equity C

Question 14

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Income shall only be recognized when cash is received, and expenses shall only be recorded when cash is paid.

Select one:

  1. Financing Activities
  2. Accrual Basis of Accounting
  3. Cash Basis of Accounting C
  4. Cash Flow

Question 15

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Question text

The heading of a statement of income usually consists of the following except:

Select one:

  1. Period covered by the statement
  2. None of the choices C
  3. Statement of Income
  4. Business Name

Question 16

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If the firm has been operating in the past year, the beginning capital of the current year is the same as the ending capital of the previous year.

Select one:

True C

False

Question 17

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These are deducted in the purchase price either because of returns or reductions due to defects or damages of goods purchased.

Select one:

  1. Purchase discounts
  2. Sales Allowances
  3. Sales Returns
  4. Purchase returns and allowances C

Question 18

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The cash in a financing activity mostly involve current assets or income and expense accounts. Select one:

True W

False

Question 19

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Question text

Sale of equipment for P500,00 is an example of what activity? Select one:

  1. Investing
  2. Developing
  3. Operating W
  4. Financing Question 20

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Question text

Capital is the account title used for____________________.

Select one:

  1. Corporation  
  2. Sole proprietorship W
  3. Sole proprietorship and Corporation W
  4. Partnership and Corporation
  5. Partnership
  6. Sole proprietorship and Partnership

 

Question 1

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Question text

There are common account titles between assets and liabilities..

Select one:

True C

False

Question 2

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Question text

Manufacturing business converts raw materials to finished goods.

Select one:

True C

False

Question 3

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Question text

Bank loans are credited to Loans Payable or Mortgage Payable.

Select one:

True C

False

Question 4

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Which of the following is a current liability?

Select one:

  1. Deferred tax liability W
  2. Long-term obligations of company officers
  3. Long-term deferred revenue
  4. Accounts payable

Question 5

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This form of business organization has limited liability, meaning creditors cannot go after their personal property in case of bankruptcy.

Select one:

  1. Single Proprietor
  2. Partnership W
  3. Cooperative
  4. Corporation

Question 6

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Current assets are expected to be used after 12 months.

Select one:

True W

False

Question 7

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Revenues are commonly called the "cost of doing business." Select one:

True C

False

Question 8

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Entity principle separate business from personal transactions.

Select one:

True C

False

Question 9

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As compared to the corporation, single proprietorship is easier to form because of its simplicity in operation.

Select one:

True C

False

Question 10

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Asset is equal to Liability plus Capital. Liability is equal to Asset minus Capital.

Select one:

  1. The 2nd statement is true.
  2. The 1st statement is false.
  3. Both statements are false
  4. The 1st statement is true.
  5. Both statements are true C
  6. The 2nd statement is false.

Question 11

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The language of business Select one:

  1. Corporate code
  2. Service business
  3. Accounting C
  4. Fiscal year

Question 12

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Utilities include electric bills and internet fees.

Select one:

True C

False

Question 13

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The difference between net sales and the cost of goods sold.

Select one:

  1. Gross profit C
  2. Operating income
  3. Net profit
  4. Net loss Question 14

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Stockholders are the owners of a corporation.

Select one:

True C

False

Question 15

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Assets minus Liabilities is equal to Equity is also considered an Accounting Equation. Select one:

True C

False

Question 16

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This type of business is concerned with buying and selling of goods for profit.

Select one:

  1. Service business
  2. Merchandizing W
  3. Manufacturing
  4. Cooperative

Question 17

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Single proprietorship is concerned with the manufacture of goods into finished product. Select one:

True W

False

Question 18

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Noncurrent assets are assets that are expected to be used within 12 months. Select one:

True

False C

Question 19

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Capital is another term for equity.

Select one:

True C

False

Question 20

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This is the type of business which offers services for a fee Select one:

  1. Corporate code
  2. Fiscal year
  3. Service business C
  4. Accounting

 

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The transactions falling under __________________________ shall primarily involve cash received from customers and paid to suppliers, lenders, or employees.

Select one:

  1. Investing Activities
  2. All of the choices
  3. Operating Activities
  4. Financing Activities W

Question 2

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It states that income shall only be recognized when cash is received, and expenses shall only be recorded when cash is paid.

Select one:

  1. Accrual basis of accounting
  2. None of the choices
  3. Financing activities
  4. Cash basis of accounting C

Question 3

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If all business transactions uses cash, then income between accrual basis and cash basis of accounting shall be _____.

Select one:

  1. None of the choices
  2. Same C
  3. Either A or B
  4. Different Question 4

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It is the difference arrived at after deducting withdrawals from the sum of the beginning capital, additional investments, and profit.

Select one:

  1. Investments
  2. Ending Capital C
  3. Net Profit
  4. Beginning Capital

Question 5

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Refers to total or gross sales less any sales discounts, and sales returns and allowances.

Select one:

  1. Net cost of goods purchased
  2. Purchase discounts
  3. Net Sales C
  4. Sales returns and allowances

Question 6

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Sale of equipment for P500,00 is an example of what activity?

Select one:

  1. Developing
  2. Financing W
  3. Operating
  4. Investing Question 7

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Income of a merchandising business comes from _________________. Select one:

  1. Rendered Services
  2. None of the choices
  3. Sales of the product C
  4. Both A and B

Question 8

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These are added to the capital beginning to arrive at the total investments used during the year Select one:

  1. Ending capital
  2. Net Profit
  3. Withdrawals and drawings
  4. Investments C

Question 9

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It represents the right of the owner over the resources of the firm. Select one:

  1. Stocks W
  2. Equity
  3. Assets W
  4. All of the choices

Question 10

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The income statement for service businesses does not include.

Select one:

  1. cost of goods sold
  2. net profit or net loss W
  3. revenue
  4. expenses Question 11

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The equation for cost of goods sold is:

Select one:

  1. None of the choices
  2. Beginning inventory - Net cost of goods purchased - Ending inventory
  3. Beginning inventory + Net cost of goods purchased + Ending inventory
  4. Beginning inventory + Net cost of goods purchased - Ending inventory C

Question 12

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An accounting principle where in income shall only be recognized when cash is received, and expenses shall only be recorded when cash is paid.

Select one:

  1. Cash Basis Accounting C
  2. Accrual Basis Accounting

Question 13

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If the beginning capital of Mrs. Castro is P200,000 and she made an additional investment during the year of P100,000 with a net profit of P52,000, how much is the ending capital? Select one:

  1. P300,000
  2. P248,000
  3. P352,000 C
  4. P252,000 Question 14

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This accounting principle relies entirely on the payment and receipt of cash. Select one:

  1. Cash basis C
  2. Accrual basis

Question 15

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Cash basis accounting relies entirely on the payment and receipt of cash. Accrual basis of accounting recognizes expenses when incurred, whether or not any cash is received or pai~ Select one:

  1. The 1st statement is true. The 2nd statement is false.
  2. Both statements are false
  3. Both statements are true C
  4. The 1st statement is false. The 2nd statement is true.

Question 16

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The heading of the statement of changes in equity will have to show the following except: Select one:

  1. Name of business
  2. Period covered by the statement
  3. Statement of changes in equity
  4. Address of the business C

Question 17

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The corporation uses this account title for the equity of the owner or owners.

Select one:

  1. None of the choices
  2. Name of owner, capital
  3. Stockholder's equity
  4. Name of owner, capital (create as many capital accounts as there are owners) W Question 18

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We use this account title for the equity of the owner in constructing a Statement of Changes in Equity for a Sole Proprietorship.

Select one:

  1. None of the choices
  2. Name of owner, capital C
  3. Name of owner, capital (create as many capital accounts as there are owners) d. Stockholder's equity

Question 19

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Revenues of a service business is synonymous to the following except:

Select one:

  1. service income
  2. Sales C
  3. Professional fees
  4. commission income

Question 20

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To arrive at the net cash from operating activities using the direct method we add/deduct the following except:

Select one:

  1. Cash paid to employees
  2. Decrease in inventory C
  3. Cash receipts from customers
  4. Cash paid to suppliers

 

Question 1

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_____________________ involves transactions showing those related to gross cash receipts and gross cash payments.

Select one:

  1. expense method
  2. asset method
  3. indirect method
  4. direct method C

Question 2

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It is consists of the owner's investment and the earned profit less any withdrawals made during a given period.

Select one:

  1. Ending Capital
  2. Capital C
  3. Investments

  1. Beginning Capital

Question 3

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This is derived from the income statement and is also added to the beginning capital and additional investments done during the year. Select one:

  1. withdrawal
  2. Net profit
  3. investment W
  4. None of the choices

Question 4

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It is the total or gross purchases less any purchase discounts and purchase returns and allowances.

Select one:

  1. Sales discounts
  2. Purchase returns and allowances
  3. Cost of goods sold
  4. Net cost of goods purchased C

Question 5

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It details the movement of cash in the business.

Select one:

  1. Cash flow statement C
  2. Statement of Financial Position
  3. Statement of Changes in Equity
  4. Statement of Income

Question 6

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Which form of business organization's statement of income has cost of goods sold?

  1. merchandising business C
  2. service business

Question 7

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In cash basis accounting, companies who sell their goods on credit will record the said transactions as sales even if they have not paid cash.

Select one:

True W

False

Question 8

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This shows relationship between the inflows and outflows of resources within the firm is an indicator of how successful the business operation was for a given period.

Select one:

  1. Balance Sheet
  2. Statement of Financial Position
  3. Statement of Income C
  4. None of the choices

Question 9

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We use the account title "name of owner, capital" for the equity of the owner or owners considering what form of business organization? Select one:

  1. partnership
  2. corporation W
  3. None of the choices
  4. Sole proprietorship

Question 10

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The heading of a statement of income usually consists of the following except:

  1. Net Profit or Net Loss
  2. Operating Expenses
  3. None of the choices W
  4. Both A and B

Question 11

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The statement of income of a service business does not include this item. Select one:

  1. Revenues
  2. Expenses
  3. Cost of goods sold
  4. Net profit W

Question 12

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Operating activities may be presented using either the direct method or indirect method. Select one:

True C

False

Question 13

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If the firm has been operating in the past year, the beginning capital of the current year is _____________ the ending capital of the previous year. Select one: a. Equal to

  1. The same C
  2. Different
  3. None of the choices

Question 14

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These are the common transactions happening in the organization.

  1. Both A and C W
  2. Financing Activities
  3. Investing Activities
  4. Operating Activities

Question 15

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Which one is not a cash flow activity?

Select one:

  1. Assessing C
  2. Investing
  3. Operating
  4. Financing Question 16

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In the preparation of cash flow, the following items are considered using accrual basis of accounting except:

Select one:

  1. interest paid C
  2. increase in trade payables
  3. depreciation
  4. None of the choices

Question 17

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The __________________are added to the capital beginning to arrive at the total investments used during the year. Select one: a. Net loss

  1. Net profit
  2. Investments C
  3. Withdrawal Question 18

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Net sales is P450,000, sales discounts is P35,000, and sales returns and allowances is P15,000. Compute for the gross sales. Select one:

  1. P500,000
  2. P430,000
  3. P400,000 W
  4. Cannot be determined from the given data

Question 19

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Which of the following is not a part of the Statement of Changes in Equity?

Select one:

  1. Accounts Payable
  2. Beginning capital
  3. Investment W
  4. Withdrawal

Question 20

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Which of the following is not part of the cash basis of accounting?

Select one:

  1. Cash paid to employees
  2. Interest accrued but not yet paid C
  3. Cash receipts from customer
  4. Cash paid to suppliers