Republic of the Philippines
Department of Education
REGION I
SCHOOLS DIVISION OF LAOAG CITY
GABU NATIONAL HIGH SCHOOL
Laoag City
FIRST PERIODICAL EXAMINATION
GA 7 FUNDAMENTALS OF ACCOUNTANCY, BUSINESS & MANAGEMENT 1
1st SEMESTER, QUARTER 1, S.Y. 2023-2024
MULTIPLE CHOICE. Directions: Read and analyze each of the following questions. Shade the
letter of the correct answer on your answer sheet.
1) It is commonly called the “Language of Business.”
A. Journalizing
B. Posting
C. Accounting
D. Investing
2) Which of the following best characterizes the nature of accounting in an organization?
A. It is a creative process with no set rules.
B. It focuses on predicting market trends.
C. It is a systematic process of recording, summarizing, and reporting financial
information.
D. It is primarily responsible for product design and development.
3) The most important event in accounting history is generally considered to be the dissemination
of double entry bookkeeping by Luca Pacioli that happened during the _______________.
A. Cradle of Civilization
B. French Revolution (1700‟s)
C. Industrial Revolution (1760-1830)
D. 14th century double-entry bookkeeping
4) Which of the following is an internal user of financial information in a company?
A. Shareholders
B. Suppliers
C. Employees
D. Creditors
5) Who among the following are the primary external users of a company’s financial
information?
A. Shareholders and management
B. Customers and employees
C. Regulators and tax authorities
D. Board of directors and internal auditors.
6) How would a company’s financial information typically be used by its external users?
A. To make internal management decisions.
B. To assess the company’s financial health and performance.
C. To improve employee satisfaction.
D. To determine executive compensation.
7) Which accounting concept or principle stipulates that financial information should be recorded
and reported based on the assumption that the business will continue to operate indefinitely?
A. Materiality
B. Going concern
C. Matching
D. Consistency
8) Which accounting concept or principle dictates that expenses should be recognized in the same
period as the revenues they help generate to accurately reflect the relationship between income
and costs?
A. Materiality
B. Matching
C. Conservatism
D. Consistency
9) What is the accounting term for recognizing revenue or expenses when they are earned or
incurred, regardless of cash flow?
A. Depreciation
B. Amortization
C. Accrual
D. Liquidity
10) It is the ownership interest in a company and represents the residual interest in the assets of
the entity after deducting liabilities.
A. Depreciation
B. Amortization
C. Accrual
D. Equity
11) Which accounting method is used to allocate the cost of a tangible asset over its useful life?
A. Depreciation
B. Amortization
C. Accrual
D. Liquidity
12) On April 15, 2023, a company recently purchased a building for PhP500,000. The building
has an estimated useful life of 40 years. Using the straight-line depreciation method, what
would be the estimated annual depreciation expense?
A. PhP5,000
B. PhP10,000
C. PhP12,500
D. PhP20,000
13) What is the fundamental accounting equation?
A. Assets = Liabilities – Equity
B. Assets = Liabilities + Equity
C. Income = Expenses
D. Debits = Credits
14) In the accounting equation, what do assets represent?
A. The owner’s investment in the business.
B. What the business owes to external parties.
C. The resources and properties owned by the business.
D. The net income generated by the business.
15) A business has assets of PhP100,000 and liabilities of PhP40,000. What is the owner’s equity?
A. PhP40,000
B. PhP60,000
C. PhP100,000
D. PhP140,000
16) A business has assets of PhP50,000, liabilities of PhP20,000, and owner’s equity of
PhP30,000. What will be the new owner’s equity if the business acquires an additional
PhP10,000 in assets?
A. PhP20,000
B. PhP30,000
C. PhP40,000
D. PhP50,000
17) Which of the following statements is true about the accounting equation?
I. The accounting equation represents that the sources in a business are not equal
to the resources of that business.
II.
The accounting equation represents that the sources in a business are equal
to the resources of that business.
III. The accounting equation represents that the resources are allocated to the
business at cost price.
A. I
B. II
C. II & III
D. I, II, & III
18) Which of the following system is the Accounting Equation based on?
A. Triple-entry system of accounting
B. Single-entry system of accounting
C. Double-entry system of accounting
D. None of the above
19) Which of the following is an example of an asset account in accounting?
A. Accounts payable
B. Rent expense
C. Equipment
D. Owner’s drawings
20) In a chart of accounts, what is the purpose of assigning a unique account number to each
account?
A. To indicate the account’s balance.
B. To track the account’s activity.
C. To sort accounts alphabetically.
D. To provide a unique identifier for each account.
21) In which type of journal would you typically record a transaction for the sale of merchandise
on credit to a customer?
A. General Journal
B. Cash Receipts Journal
C. Sales Journal
D. Purchases Journal
22) In which ledger would you typically find detailed records of individual customer accounts,
including transactions, payments, and outstanding balances?
A. General Ledger
B. Accounts Receivable Ledger
C. Accounts Payable Ledger
D. Cash Ledger
23) In analyzing common business transactions using the rules of debit and credit, which of the
following is true about an increase in liabilities?
A. Liabilities are debited.
B. Liabilities are credited.
C. Liabilities have no effect on the accounting equation.
D. It depends on the specific transaction.
24) When a business receives cash from a customer as payment for services rendered, which
accounts are typically affected following the rules of debit and credit?
A. Cash (debit), Service Revenue (credit)
B. Cash (credit), Service Revenue (debit)
C. Accounts Payable (debit), Cash (credit)
D. Service Revenue (debit), Accounts Receivable (credit)
25) A business purchases office supplies on credit. How would you record this transaction using
the rules of debit and credit?
A. Office Supplies (debit), Accounts Payable (credit)
B. Accounts Payable (debit), Cash (credit)
C. Office Supplies (debit), Cash (credit)
D. Cash (debit), Accounts Receivable (credit)
26) A business receives a utility bill and pays it immediately with cash. Which accounts are
affected, following the rules of debit and credit?
A. Utility Expense (debit), Cash (credit)
B. Cash (debit), Utility Expense (credit)
C. Accounts Payable (debit), Cash (credit)
D. Cash (debit), Accounts Receivable (credit)
27) If a business pays its rent expense for the month in cash, how would this transaction affect the
accounting equation?
A. Assets increase, equity increases
B. Assets decrease, liabilities decrease
C. Assets decrease, equity decreases
D. Assets increase, liabilities decrease
28) A business purchases inventory on credit. How does this transaction affect the accounting
equation?
A. Assets increase, liabilities increase
B. Assets decrease, equity decreases
C. Assets increase, equity decreases
D. Assets decrease, liabilities decrease
29) A business collects cash from a customer who had previously purchased goods on credit. How
does this transaction affect the accounting equation?
A. Assets increase, liabilities decrease
B. Assets decrease, equity decreases
C. Assets increase, equity increases
D. Assets decrease, liabilities increase
30) A business receives a loan from a bank and deposits the loan amount into its checking account.
How does this transaction affect the accounting equation?
A. Assets increase, liabilities increase
B. Assets increase, equity increases
C. Assets increase, liabilities decrease
D. Assets decrease, liabilities decrease
31) In a service business, which type of transaction typically occurs when a customer receives a
bill for services that have been provided but not yet paid for?
A. Revenue transaction
B. Expense transaction
C. Equity transaction
D. Accounts receivable transaction
32) The following statements are true when journalizing EXCEPT
A. Debit accounts are written first before credit accounts.
B. Credit accounts are indented after debit accounts.
C. The explanation may or may not be indented.
D. The posting reference or PR is filled up.
33) It is the book of original entry.
A. General journal
C. Chart of accounts
B. General ledger
D. Worksheet
34) When posting a transaction to the ledger, which accounts are updated directly from the journal
entry?
A. Assets
B. Liabilities
C. Owner’s Equity
D. All of the above
35) When posting a transaction to the ledger, what is the purpose of the posting reference (PR) or
journal page number?
A. To track the date of the transaction.
B. To indicate the account being debited.
C. To identify the source in the journal.
D. To calculate the closing balance.
36) This refers to process of transferring the amounts of debits and credits in a recorded journal
entry to the ledger accounts.
A. Analyzing
B. Journalizing
C. Posting
D. Trial balancing
37) The primary purpose of posting is to _______.
A. record transactions.
B. classify transactions.
C. summarize transactions is a report form.
D. all of these.
38) Among these, which of the item is used as the base for preparing trial balance:
I. Cash account
II. Balance sheet
III. Journal
IV.Ledger account
A. I
B. IV
C. II & IV
D. I, II, & III
39) Which of the following is correct about an agreed trial balance?
I.Both debit and credit aspects of each transaction have been recorded.
II. The books are arithmetically correct.
III. The debit and credit columns of trial balance have been correctly summed
A. I
B. IV
C. II & IV
D. I, II, & III
40) Which of the following errors in the journal entry will not detected by trial balance?
A. The debit part is overstated but the credit part is correctly recorded.
B. The debit part is correctly recorded but the credit part is overstated.
C. Both the debit and credit parts are overstated by the same amount.
D. The debit part is correctly recorded but the credit part is understated.
41) Does a trial balance guarantee the absence of errors in the accounting records?
A. Yes, a trial balance guarantees the absence of errors.
B. No, a trial balance does not guarantee the absence of errors.
C. A trial balance guarantees errors only in the credit column.
D. A trial balance guarantees errors only in the debit column.
42) In addition to the arithmetical accuracy of ledger, a trial balance provides a summary of
_________.
A. total capital invested in the business during the period
B. sales made during the period
C. total cash collected from customers during the period
D. all transactions made since the end of the previous accounting period
43) If the trial balance agrees, it implies that there _________
A. are no errors in the book.
B. may be two-sided errors in the book.
C. may be one-sided errors in the book.
D. may be both one-sided errors and two-sided errors in the books.
44) A business records a payment of PhP5,000 for rent in its journal by debiting Rent Expense
and crediting Cash. How does this journal entry affect the ledger?
A. Expenses increase, assets decrease
B. Expense decrease, liabilities decrease
C. Expenses increase, equity increases
D. Liabilities increase, equity decreases
45) A business records a purchase of office supplies on credit in its journal by debiting Office
Supplies and crediting Accounts Payable. How does this journal entry affect the ledger?
A. Assets increase, liabilities increase
B. Assets decrease, liabilities decrease
C. Expenses increase, equity decreases
D. Liabilities increase, equity decreases
For 46-50. JOURNALIZATION. Prepare the journal entries for the transactions below. Write
your answers at the back of your answer sheet. (Note: Omit the explanatory note.) The Chart of
Accounts of Mapangarap Accounting Firm is as follows:
101 Cash
102 Accounts Receivable
103 Office Supplies
201 Accounts Payable
202 Utility Payable
301 MM, Capital
401 Service Revenue
501 Utilities Expense
46) Sept. 1, 2023, May Mapangarap invested PhP150,000 cash into her newly formed accounting
firm.
47) Sept. 2, 2023, purchased PhP5,000 worth of office supplies on account.
48) Sept. 10, 2023, received PhP9,500 cash for services rendered.
49) Sept. 21, 2023, billed several clients, PhP25,400 for services rendered.
50) Sept. 28, 2023, received utility bill for the month, PhP2,650.
Prepared by
Recommending Approval
Approved by
ANGELITO B. CORPUZ
Teacher II
ROMEO G. UGANIZA
Assistant Principal II
ARNEL C. SABUCO, JR.
School Principal IV
Republic of the Philippines
Department of Education
REGION I
SCHOOLS DIVISION OF LAOAG CITY
GABU NATIONAL HIGH SCHOOL
Laoag City
FIRST PERIODICAL EXAMINATION
FUNDAMENTALS OF ACCOUNTANCY, BUSINESS & MANAGEMENT 1
1st SEMESTER, QUARTER 1, S.Y. 2023-2024
ANSWER KEY
1.
2.
3.
4.
5.
6.
7.
8.
9.
C
C
D
C
C
B
B
B
C
10. D
11. A
12. B
13. B
14. C
15. B
16. C
17. B
18. C
19. C
20. D
21. C
22. B
23. B
24. A
25. A
26. A
27. B
28. A
29. A
30. A
31. D
32. D
33. A
34. D
35. C
36. C
37. B
38. B
39. D
40. C
41. B
42. D
43. B
44. A
45. A
For 46-50
46. Sept. 1, 2023
Cash
5,000
MM, Capital
47. Sept. 2, 2023
48. Sept. 10, 2023
5,000
Office Supplies
Accounts Payable
5,000
Cash
9,500
5,000
Service Revenue
49. Sept. 21, 2023
50. Sept. 28, 2023
9,500
Accounts Receivable
Service Revenue
25,400
Utility Expense
Utility Payable
2,650
25,400
2,650