1. Which of the following will not result in an increase in revenues?
a. Sales of goods on credit.
b. Accumulation of interest in bank account.
c. Sale of services for cash.
d. An investment in the business by the owner.
2. Which of the following transactions will not result in the recognition of expenses?
a. A cash withdrawal by the owner.
b. Expiration of prepaid insurance.
c. Interest accrued on a bank loan
d. Use of machinery during the period.
3. The recording of an expense could result in a corresponding increase in
a. An asset.
b. Owner’s equity.
c. A liability.
d. Revenue.
4. The accountant may spread the cost of a building over many years primarily because of
the
a. Periodicity assumption.
b. Going concern assumption.
c. Fiscal year assumption.
d. Periodicity assumption and going concern assumption.
5. Which of the following accounts would probably need to be adjusted at year-end?
a. Supplies
b. Land
c. Withdrawals
d. Notes Payable
6. Which of the following transactions during the year would most likely not need an
adjusting entry at the end of the period?
a. Purchase of a two-year insurance policy.
b. Cash withdrawal by the owner.
c. Purchase of office equipment.
d. Performance of a service that previously was paid for.
7. Which of the following accounts would likely not need to be adjusted at year-end?
a. Office Supplies
b. Prepaid Advertising
c. Unearned Revenues
d. Land
8. Which of the following is an example of a deferral?
a. A commission collected in advance.
b. Interest earned on a bank account.
c. Interest expense incurred but not yet paid.
d. Medical fees earned but not yet collected.
9. Which of the following is an example of an accrual?
a. Equipment purchased for use in the business.
b. Bookkeeping fees collected but not yet earned.
c. Interest earned but not yet received.
d. Six months’ rent paid in advance.
10. An adjusting entry would not include which of the following accounts?
a. Interest Receivable
b. Property Taxes Payable
c. Unearned Revenues
d. Cash
11. An adjusting entry cannot include a debit to a (n)
a. Expense and a credit to an asset.
b. Asset and a credit to a revenue.
c. Liability and a credit to a revenue.
d. Asset and a credit to a liability.
12. An adjusting entry can include a debit to a (n)
a. Asset and a credit to a liability.
b. Expense and a credit to a revenue.
c. Revenue and a credit to an asset.
d. Liability and a credit to a revenue
13. The adjustment for that portion of revenue received in advance which now has been
earned is to debit
a. Unearned Revenues and credit Cash.
b. Service Revenues and credit Unearned Revenues.
c. Cash and credit Unearned Revenues.
d. Unearned Revenues and a credit Service Revenues.
14. An adjusting entry made to record accrued interest on a note payable due next year
consists of a debit to
a. Interest Expense and a credit to Interest Payable.
b. Interest Receivable and a credit to Interest Earned.
c. Interest Expense and a credit to Notes Payable.
d. Interest Expense and a credit to Cash.
15. Failure to adjust for accrued wages at year-end will result in an
a. Overstatement of liabilities.
b. Understatement of owner’s equity.
c. Overstatement of profit.
d. Understatement of assets.
16. Failure to record depreciation at year-end will result in an
a. Overstatement of total liabilities.
b. Overstatement of total assets.
c. Understatement of profit.
d. Understatement of total liabilities.
The following information pertains to Ryan’s Barber Shop:
a.
b.
c.
d.
e.
Accrued interest on a note receivable amounted to P1,000.
A one-year insurance policy was purchased for P20,000. Three months have passed since the purchase.
Depreciation on buildings is at P50,000.
The company received a P36,000 advance payment during the year on services still to be performed. By
the end of the year, one-fourth of the services had been performed.
The company’s Supplies account showed a beginning debit balance of P2,000 and supplies purchased of
P8,000; P3,000 of supplies were on hand at year-end.
1. The adjusting entry for Supplies would include
A.Credit to Supplies for P3,000.
Credit to Supplies Expense for P8,000.
C. Debit to Supplies Expense for P7,000.
D. Debit to Supplies Expense for P8,000.
B.
2. The adjusting entry for depreciation on buildings would include a:
A. Creditto Accumulated Depreciation-Buildings for P50,000.
Credit to Buildings for P50,000.
Credit to Depreciation Expense-Buildings for P50,000.
D. Debit to Accumulated Depreciation-Buildings for P50,000.
B.
C.
53.
54.
The adjusting entry for the insurance policy would include a: A.
Credit to Insurance Expense for P15,000.
B. Credit to Prepaid Insurance for P5,000.
C. Debit to Insurance Expense for P15,000.
D. Debit to Prepaid Insurance for P5,000.
The adjusting entry to record the accrued interest on the note would include a: A. Credit
to Interest Income for P1,000.
B. Credit to Interest Receivable for P1,000.
C. Debit to Interest Expense for P1,000.
D. Debit to Interest Payable for P1,000.
55. The
adjusting entry to record the amount of service revenues earned during the period would include
a:
Credit to Unearned Service Revenues for P9,000.
B. Debit to Service Revenues for P27,000.
C. Debit to Unearned Service Revenues for P9,000.
D. Debit to Unearned Service Revenues for P27,000.
A.
The trial balance for Jisoo Clothing Shop appears as follows:
Jisoo Clothing Shop
Trial Balance
December 31, 2019
Cash
Accounts receivable
Prepaid insurance
Supplies
Office equipment
Accumulated depreciation-office equipment
Accounts payable
Jisoo, capital
Service revenues
Salaries expense
Rent expense
P20,000
50,000
5,000
15,000
40,000
P20,000
30,000
60,000
50,000
10,000
20,000
P 160 ,000
Totals
P160,000
56. If
on December 31, 2019, supplies on hand were P2,000, the adjusting entry would contain a: A. Credit
to Supplies Expense for P13,000.
B. Credit to Supplies for P2,000.
C. Debit to Supplies Expense for P13,000.
D. Debit to Supplies for P2,000.
57. If on December 31, 2019, the insurance still unexpired amounted to P2,000, the adjusting entry would
contain a:
A. Credit to Prepaid Insurance for P2,000.
B. Credit to Prepaid Insurance for P3,000.
C. Debit to Insurance Expense for P2,000.
D. Debit to Prepaid Insurance for P3,000.
58. If the estimated depreciation for office equipment were P20,000, the adjusting entry would include a:
Credit to Accumulated Depreciation-Office Equipment for P20,000.
B. Credit to Depreciation Expense-Office Equipment for P20,000.
C. Credit to Office Equipment for P20,000.
D. Debit to Accumulated Depreciation-Office Equipment for P20,000.
A.
59. If on December 31, 2019, the rent of P10,000 for December had not been recorded or paid, the
adjusting entry would include a:
A. Credit to Accumulated Rent for P10,000.
B. Credit to Cash for P10,000.
C. Debit to Rent Expense for P10,000.
D. Debit to Rent Payable for P10,000.
If services totaling P12,500 had been performed but not yet billed, the adjusting entry to record this
would include a:
A. Credit to Service Revenues for P12,500.
B. Credit to Service Revenues for P62,500.
C. Credit to Unearned Service Revenues for P12,500.
D. Debit to Service Revenues for P12,500.
60.
The income statement for Porfirio Abas Engineering Services included the following expenses for 2019:
Rent expense
Interest expense
Salaries expense
P700,000
120,000
1,250,000
Listed below are the related balance sheet account balances at year-end and for last year and this year:
Last Year
P–
20,000
75,000
Prepaid rent
Interest payable
Salaries payable
This Year
P15,000
–
120,000
Compute for the following:
61.
Cash paid for rent during the year
P715,000
62.
Cash paid for interest during the year P140,000
63.
Cash paid for salaries during the year P1,205,000
(for numbers 64-66)
Fill in the Blanks (Adjusted Balances). Using black PERMANENT ink, write your answers on the spaces provided.
NO ERASURES or ALTERATIONS allowed. (2 points each)
The adjusted trial balances of Gleceria Abas Cleaning Services as at December 31, 2019, and November 30,
2019, include these amounts:
Supplies
Salaries payable
Unearned service revenues
Dec. 31, 2019
P20,000
30,000
145,000
Analysis of the accounts revealed these transactions for December:
Supplies purchased
Salaries paid
Cash received in advance
for service revenues
P85,000
850,000
1,850,000
Nov. 30, 2019
P15,000
40,000
165,000
Compute for the amounts to be reported on the December 31, 2019 income statement:
64.
Supplies Expense
P80,000
65.
Salaries Expense
P840,000
66.
Service Revenues
P1,870,000
Use the following table, indicate the effect of the following errors of omission on the financial
statement classifications listed. If as a result of the omission a classification is overstated,
place a (+) in the appropriate space. An understatement is to be indicated by a (-). If the
omission has no effect on the classification, place a
(o) in the appropriate space.
Classification
Revenues
Expenses
Profit
Total Assets
Total Liabilities
Owner’s Equity
67.
68.
69.
70.
71.
72.
73.
74.
75.
67
68
+
69
Effect of Omission
70
71
72
+
+
+
+
+
+
+
+
+
+
+
+
+
+
73
-
74
75
-
+
+
+
-
-
+
o
o
Payment for repairs erroneously debited to Building account.
Recorded collection of an account receivable by debiting Cash and crediting a revenue account.
Depreciation for the month was omitted.
Recorded twice an acquisition of office equipment on account.
Recorded the acquisition of office equipment for cash as a debit to Office
Equipment and a credit toDepreciation Expense
Recorded cash payment for advertising by debiting Repairs Expense and crediting Cash.
Rendered services for cash but made no record of the transaction.
Uncollectible accounts expense was mistakenly omitted.
A withdrawal was debited to an expense account.
Fill in the Blanks (Corrected Balances). Using black PERMANENT ink, write your answers on the
spaces provided.NO ERASURES or ALTERATIONS allowed. (2 points each)
The December 2019 unadjusted trial balance for Duplicators, owned by Jathniel Rei Abas is
presented below.The regular bookkeeper has resigned and left the following unadjusted trial
balance. It did not balance.
Duplicators
Unadjusted Trial Balance
December 31, 2019
Cash
Accounts receivable
Supplies
Equipment
Accounts
payable
P72,600
Rei,
capital
513,000
Rei,
withdrawals
P44,800
189,600
70,800
560,000
50,000
Revenues
371,600
Salaries expense
Rent
expense
35,000
10,000
Utilities
6,400
Totals
P916,600
P1,017,200
Upon reviewing the trial balance and the process of transferring the amounts in the ledger
accounts to the trialbalance, two errors were discovered:
a.
b.
The debit column in the trial balance was footed incorrectly.
The balance in the accounts payable ledger account of P62,700 was transferred as P72,600.
When the balances of the ledger accounts were recomputed, two ore errors were discovered:
c.
The Utilities Expense account balance was overstated by P1,800.
d.
The total debits in the Cash account amounted to P184,600 and the credits totaled P149,800.
Discovered four more errors when postings were retraced from the journal to the ledger:
e.
A debit posting to Accounts Receivable in the amount of P52,000 should have been P5,200.
f.
A debit posting to Accounts Payable for P46,000 was missing.
g.
A credit posting to Revenues in the amount of P7,600 was missing.
h.
A credit of P31,000 was posted to Accounts Payable rather than P30,100.
Corrected
Balances
39.
Cash
P34,800
40.
Accounts Receivable
P142,800
41.
Supplies
P70,800
42.
Equipment
P560,000
43.
Accounts Payable
P15,800
44.
Rei, Capital
P513,000
45.
Rei, Withdrawals
P50,000
46.
Revenues
P379,200
47.
Salaries Expense
P35,000
48.
Rent Expense
P10,000
49.
Utilities Expense
P4,600
50.
Total Debits
P908,000