Certified Bookkeeping
Sample Examination
This examination is designed to help you assess your knowledge of essential accounting principles
and basic concepts. This are just sample questions and does not include all the topics discussed bt
the speaker. Make sure to still review your other notes as they may appear in the actual
examination. If you pass this accounting test with 85% or above, it is likely that you have strong
accounting knowledge and are halfway there. Good luck on your examination!
Certified Bookkeeping
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Section A – Multiple Choice Questions
ALL 25 questions are compulsory and MUST be attempted. Two (2) marks will be given for each
correct answer.
1. The cost principle states that:
a. assets should be initially recorded at cost and adjusted when the market value
changes.
b. activities of an entity are to be kept separate and distinct from its owner.
c. assets should be recorded at their cost.
d. only transaction data capable of being expressed in terms of money be included
in the accounting records.
ANSWER: C
2. As of December 31, 20XX, Jade Company has assets of P3,500 and owner’s equity of
P2,000.What are the liabilities for Jade Company as of December 31, 20XX?
a. P1,500.
b. P1,000.
c. P2,500.
d. P2,000.
ANSWER: A
P3,500 – P2,000 = P1,500
3. Which of the following events is not recorded in the accounting records?
a. Equipment is purchased on account.
b. An employee is terminated.
c. A cash investment is made into the business.
d. The owner withdraws cash for personal use.
ANSWER: B
4. On the last day of the period, Jim Otto Company buys a P900 machine on credit. This
transaction will affect the:
a. income statement only.
b. balance sheet only.
c. income statement and owner’s equity statement only.
d. income statement, owner’s equity statement, and balance sheet.
ANSWER: B
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Certified Bookkeeping
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5. The purchase of supplies on account should result in:
a. a debit to Supplies Expense and a credit to Cash.
b. a debit to Supplies Expense and a credit to Accounts Payable.
c. a debit to Supplies and a credit to Accounts Payable.
d. a debit to Supplies and a credit to Accounts Receivable.
ANSWER: C
6. Before posting a payment of P5,000, the Accounts Payable of Senator Company had a
normal balance of P16,000.The balance after posting this transaction was:
a. P21,000.
b. P5,000.
c. P11,000.
d. Cannot be determined.
ANSWER: C
P16,000 – P5,000 = P11,000
7. A trial balance will not balance if:
a. a correct journal entry is posted twice.
b. the purchase of supplies on account is debited to Supplies and credited to Cash.
c. a P100 cash drawing by the owner is debited to Owner’s Drawing for P1,000 and
credited to Cash for $100.
d. a P450 payment on account is debited to Accounts Payable for P45 and credited
to Cash for P45.
ANSWER: C
8. One of the following statements about the accrual basis of accounting is false. That
statement is:
a. Events that change a company’s financial statements are recorded in the periods
in which the events occur.
b. Revenue is recognized in the period in which it is earned.
c. This basis is in accord with generally accepted accounting principles.
d. Revenue is recorded only when cash is received, and expense is recorded only
when cash is paid.
ANSWER: D
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Certified Bookkeeping
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9. The trial balance shows Supplies P1,350 and Supplies Expense P0. If P600 of supplies are
on hand at the end of the period, the adjusting entry is:
a. Debit Supplies 600; credit Supplies Expense 600
b. Debit Supplies 750; credit Supplies Expense 750
c. Debit Supplies Expense 750; credit Supplies 750
d. Debit Supplies Expense 600; credit Supplies 600
ANSWER: C
10. Queen Company computes depreciation on delivery equipment at P1,000 for the month
of June. The adjusting entry to record this depreciation is as follows:
a. Debit Depreciation Expense 1,000; credit Accumulated Depreciation – Queen
Company 1,000
b. Debit Depreciation Expense 1,000; credit Delivery Equipment 1,000
c. Debit Depreciation Expense 1,000; credit Accumulated Depreciation — Delivery
Equipment 1,000
d. Debit Delivery Equipment Expense 1,000; credit Accumulated Depreciation—
Delivery Equipment 1,000
ANSWER: C
11. Kathy Iska earned a salary of P400 for the last week of September. She will be paid on
October 1. The adjusting entry for Kathy’s employer at September 30 is:
a. No entry is required.
b. Debit Salaries Expense 400; credit Salaries Payable 400
c. Debit Salaries Expense 400; credit Cash 400
d. Debit Salaries Payable 400; credit Cash 400
ANSWER: B
12. The trial balance shows Supplies P0 and Supplies Expense P1,500. If P800 of supplies are
on hand at the end of the period, the adjusting entry is:
a. Debit Supplies P800 and credit Supplies Expense P800.
b. Debit Supplies Expense P800 and credit Supplies P800.
c. Debit Supplies P700 and credit Supplies Expense P700.
d. Debit Supplies Expense P700 and credit Supplies P700.
ANSWER: A
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Certified Bookkeeping
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13. Which of the following statements is incorrect concerning the worksheet?
a. The worksheet is essentially a working tool of the accountant.
b. The worksheet is distributed to management and other interested parties.
c. The worksheet cannot be used as a basis for posting to ledger accounts.
d. Financial statements can be prepared directly from the worksheet before
journalizing and posting the adjusting entries.
ANSWER: B
14. When a net loss has occurred, Income Summary is:
a. debited and Owner’s Capital is credited.
b. credited and Owner’s Capital is debited.
c. debited and Owner’s Drawing is credited.
d. credited and Owner’s Drawing is debited.
ANSWER: B
15. The proper order of the following steps in the accounting cycle is:
a. prepare unadjusted trial balance, journalize transactions, post to ledger accounts,
journalize and post adjusting entries.
b. journalize transactions, prepare unadjusted trial balance, post to ledger accounts,
journalize and post adjusting entries.
c. journalize transactions, post to ledger accounts, prepare unadjusted trial balance,
journalize and post adjusting entries.
d. prepare unadjusted trial balance, journalize and post adjusting entries, journalize
transactions, post to ledger accounts.
ANSWER: C
16. When Alexander Company purchased supplies worth P500, it incorrectly recorded a
credit to Supplies for P5,000 and a debit to Cash for P5,000. Before correcting this error:
a. Cash is overstated and Supplies is overstated.
b. Cash is understated and Supplies is understated.
c. Cash is understated and Supplies is overstated.
d. Cash is overstated and Supplies is understated.
ANSWER: D
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Certified Bookkeeping
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17. In a classified balance sheet, assets are usually classified using the following categories:
a. current assets; long-term assets; property, plant, and equipment; and intangible
assets.
b. current assets; long-term investments; property, plant, and equipment; and
tangible assets.
c. current assets; long-term investments; tangible assets; and intangible assets.
d. current assets; long-term investments; property, plant, and equipment; and
intangible assets.
ANSWER: D
18. Which of the following is not an advantage of computerized accounting systems?
a. Data is entered only once in computerized accounting systems.
b. Computerized accounting systems provide up-to-date information.
c. Computerized accounting systems eliminate entering of transaction information.
d. Computerized accounting systems eliminate many errors resulting from human
intervention.
ANSWER: C
19. Which of the following statements is correct?
a. The sales discount column is included in the cash receipts journal.
b. The purchases journal records all purchases of merchandise whether for cash or
on account.
c. The cash receipts journal records sales on account.
d. Merchandise returned by the buyer is recorded by the seller in the purchases
journal.
ANSWER: A
20. If a customer returns goods for credit, the selling company normally makes an entry in
the:
a. cash payments journal.
b. sales journal.
c. general journal.
d. cash receipts journal.
ANSWER: C
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Certified Bookkeeping
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21. Under a perpetual inventory system, when goods are purchased for resale by a
company:
a. purchases on account are debited to Merchandise Inventory.
b. purchases on account are debited to Purchases.
c. purchase returns are debited to Purchase Returns and Allowances.
d. freight costs are debited to Freight-out.
ANSWER: A
22. A credit sale of P750 is made on June 13, terms 2/10, net/30.A return of P50 is granted on
June 16. The amount received as payment in full on June 23 is:
a. P700.
b. P686.
c. P685.
d. P650.
ANSWER: B
P750 – P50 = P700 x 98% = P686
23. To record the sale of goods for cash in a perpetual inventory system:
a. only one journal entry is necessary to record cost of goods sold and reduction of
inventory.
b. only one journal entry is necessary to record the receipt of cash and the sales
revenue.
c. two journal entries are necessary: one to record the receipt of cash and sales
revenue, and one to record the cost of goods sold and reduction of inventory.
d. two journal entries are necessary: one to record the receipt of cash and reduction
of inventory, and one to record the cost of goods sold and sales revenue.
ANSWER: C
24. If sales revenues are P400,000, cost of goods sold is P310,000, and operating expenses are
P60,000, the gross profit is:
a. P30,000.
b. P90,000.
c. P340,000.
d. P400,000.
ANSWER: B
P400,000 – P310,000 = P90,000
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Certified Bookkeeping
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25. When goods are purchased for resale by a company using a periodic inventory system:
a. purchases on account are debited to Merchandise Inventory.
b. purchases on account are debited to Purchases.
c. purchase returns are debited to Purchase Returns and Allowances.
d. freight costs are debited to Purchases.
ANSWER: B
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