1. Which of the following items has no effect
on owner’s equity?
a. Expense
b. Owner’s Withdrawal
c. Purchase of land
d. Revenue
2. The asset created by a business when it
makes a sale on account is termed _____.
a. Accounts Payable
b. Accounts Receivable
c. Prepaid expense
d. Unearned Revenue
3. What is the law regulating the practice of
accountancy in the Philippines?
a. R.A. No. 9289
b. R.A. No. 9198
c. R.A. No. 9928
d. R.A. No. 9298
4. All of the following describe accounting,
except:
a. A service activity
b. An information system
c. An exact science rather than an art
d. A universal language of business
5. The overall objective of accounting is
a. To provide the information that the managers
of an entity need to control the operations
b. To provide information that the creditors
can use in deciding whether to make
additional loans
c. To measure the periodic income of the
entity
d. To provide quantitative financial
information about an entity that is useful in
making economic decision
6. These users require information on risk and
return on investment
a. Creditors
b. Investors
c. Lenders
d. Customers
7. Equipment with an estimated market value
of P60,000 is offered for sale at P90,000. The
equipment is acquired for P30,000 in cash
and a note payable of P50,000 due in 20
days. The amount used in buyer’s accounting
records to record acquisition is _____.
a. P80,000
b. P60,000
c. P90,000
d. P30,000
8. Using accrual accounting, revenue
recorded and reported only _____.
is
a. If cash is received after the services are
rendered
b. when cash is received at the time services
are rendered
c. when the services are rendered without
regard to when cash is received
d. when cash is received without regard to
when the services are rendered
9. On January 1, 2022, Potter company bought
a building for P2,750,000 to serve as the
company’s office. It was estimated that the
said building will be useful for 20 years. After
the end of its useful life, the building can still
be sold for P250,000. What is the amount of
depreciation expense that should be
recognized by Potter company on December
31, 2022?
a. P100,000
b. P125,000
c. P150,000
d. P175,000
10. Which of the following entries records the
receipt of a utility bill from the water
company?
a. (DEBIT) Accounts Payable, (CREDIT) Cash
b. (DEBIT) Accounts Payable, (CREDIT)
Utilities Payable
c. (DEBIT) Utilities Expense, (CREDIT)
Accounts Payable
d. (DEBIT) Utilities Payable, (CREDIT)
Accounts Receivable
11. The process of posting is mostly associated
with _____.
a. Financial Statements
b. General Ledger
c. Source documents
d. Worksheet
12. An item retailing for P100,000, subject to a
trade discount of 25% Is paid for within the
discount period of items 2/10, n/30. What is
the amount of payment made?
a. P73,500
b. P74,000
c. P75,000
d. P100,000
100,000 x 25% = 75,000 x 2% = 1,500
75,000 – 1,500 = 73,500
Which of the following is an internal user of
an
entity's
financial
information?
a.
board
of
directors
b.
shareholder
in
the
entity
c.
holder
of
the
entity's
bond
d. creditor with long-term contracts with the
entity
2. These users require information on risk
and return on investment and hence an
entity's
ability
to
pay
dividends.
a.
b.
c.
d.
investors
employees
lenders
customers
3. These users are interested in information
about the profitability and stability of an
entity in order to assess the ability of the
entity to provide remuneration, retirement,
benefits and employment opportunities
a.
b.
c.
d.
the
governments and
customers
public
their agencies
employees
4. These users are interested in information
that enables them to determine whether
amounts owing to them will be paid when
due.
a.
b.
c.
d.
suppliers
and
trade
creditors
lenders
banks
entities
in order to regulate the activities of an entity,
determine taxation policies and provide a
basis
for
national
statistics
a.
b.
c.
d.
governments and their agencies
major
organization
of
users
bureau
of
internal
revenue
department
of
finance
8. These users need information on trends
and recent developments where an entity
makes a substantial contribution to the local
economy providing employment and using
local
suppliers
a.
b.
c.
d.
the
government
and
finance
private
their
public
agencies
entities
entities
9. The providers of risk capital and their
advisers
I. Are concerned with the risk inherent in and
return provided by their investments
II. Need information to help them determine
whether they should buy or sell.
a.
b.
c.
d.
I
II
both
neither
I
I
and
nor
only
only
II
II
10. Which statement is correct regarding
information
needs
5. These users are interested in information
that enables them to assess whether an
entity is able to repay loans and the related
interest when the loans fall due.
I. All information needs of users cannot be
met
by
financial
statements
II. As investors are providers of risk capital to
the entity, the provision of financial
statements that meet their needs will also
meet most of the needs of other users that
financial
statements
can
satisfy.
a.
b.
c.
d.
a.
b.
c.
d.
finance
trade
lenders
borrowers
creditors
owners
6. These users are interested in information
about the continuance of an entity, especially
when they have a long-term involvement
with or are dependent on the entity
a.
b.
c.
d.
trade
customers
employees
unions
suppliers
7. These users are interested in information
Answer:
1.
2.
3.
4.
5.
6.
7.
8.
I
II
both
neither
I
I
and
nor
only
only
II
II
a
a
d
a
a
a
a
a
9.
10. c
c