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Basic Accounting Qualifying Exam
POM (Saint Louis University (Philippines))
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Name: __________________________________
Section: ________________________________
Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
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1. The work sheet is a:
a. formal statement issued to creditors
b. working paper often used by accountants to summarize adjusting entries
c. replacement for the ledger
d. replacement for a set of financial statements
2. The difference between the totals of the debit and credit columns of the Adjusted Trial Balance columns on a
work sheet:
a. is the amount of net income or loss
b. indicates there is an error on the work sheet
c. is not unusual for preparing the work sheet
d. is the net difference between revenue, expenses, and drawing
3. Net income appears on the work sheet in the:
a. debit column of the Balance Sheet columns
b. debit column of the Adjustments columns
c. debit column of the Income Statement columns
d. credit column of the Income Statement columns
4. A net loss appears on the work sheet in the:
a. debit column of the Balance Sheet columns
b. debit column of the Trial Balance columns
c. debit column of the Income Statement columns
d. credit column of the Adjustments columns
5. A net loss appears on the work sheet:
a. when revenue exceeds expenses
b. when expenses exceed revenues
c. every time the Adjusted Trial Balance columns do not balance on the initial totaling
d. every time the Income Statement columns do not balance on the initial totaling
6. After net income is entered on the work sheet, the Balance Sheet debit and credit columns must:
a. be the same amount as the total amount of the Income Statement debit and credit columns
b. equal each other
c. be the same amount as the total amount in the Adjusted Trial Balance debit and credit
columns
d. not be equal to each other and need not be the same total amounts as any other pair of
columns on the work sheet
7. If the work sheet does not contain a pair of columns for the Retained Earnings Statement, the capital stock and
dividends amounts are:
a. omitted
b. extended to the Balance Sheet columns
c. extended to the Income Statement columns
d. extended to the Adjustments columns
8. Which of the following appears in the Balance Sheet columns of the work sheet?
a. Equipment
b. Fees Earned
c. Depreciation Expense
d. Supplies Expense
9. Which of the following appears in the Balance Sheet columns of the work sheet?
a. Unearned Fees
b. Rent Expense
c. Salaries Expense
d. Service Revenue
10. Which of the following appears in the Balance Sheet columns of the work sheet?
a. Accounts Receivable
b. Rent expense
c. Supplies Expense
d. Service Revenue
11. Which of the following appears in the Balance Sheet columns of the work sheet?
a. Prepaid Insurance
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____ 12.
____ 13.
____ 14.
____ 15.
____ 16.
____ 17.
____ 18.
____ 19.
____ 20.
____ 21.
b. Wages Expenses
c. Rent Revenue
d. Service Revenue
An indication that the work sheet columns are in balance and the work sheet is completed is:
a. the word "Total" is written at the bottom of each pair of columns
b. each pair of columns is double underlined
c. each pair of columns has the totals circled
d. the final figures are written in ink
After all of the account balances have been extended to the Balance Sheet columns of the work sheet, the totals of
the Debit and Credit columns are P39,750 and P21,750, respectively. What is the amount of net income or net
loss for the period?
a. P18,000 net income
b. P18,000 net loss
c. P39,750 net income
d. P21,750 net income
After all of the account balances have been extended to the Balance Sheet columns of the work sheet, the totals of
the Debit and Credit columns are P30,750 and P69,750, respectively. What is the amount of net income or net
loss for the period?
a. P39,000 net income
b. P39,000 net loss
c. P30,750 net income
d. P69,750 net income
After all of the account balances have been extended to the Income Statement columns of the work sheet, the
totals of the debit and credit columns are P89,900 and P67,600, respectively. What is the amount of the net
income or net loss for the period?
a. P22,300 net income
b. P22,300 net loss
c. P89,900 net income
d. P67,600 net loss
After all of the account balances have been extended to the Income Statement columns of the work sheet, the
totals of the debit and credit columns are P92,300 and P67,600, respectively. What is the amount of the net
income or net loss for the period?
a. P24,700 net income
b. P24,700 net loss
c. P92,300 net income
d. P92,300 net loss
When preparing the Retained Earnings Statement, the beginning capital balance can always be found:
a. in the Income Statement columns of the work sheet
b. in the statement of cash flows
c. in the general ledger
d. in the general journal
Unearned Fees appears on the:
a. balance sheet
b. Retained Earnings Statement
c. income statement
d. statement of cash flows
Accumulated Depreciation appears on the:
a. balance sheet
b. Retained Earnings Statement
c. income statement
d. statement of cash flows
Salaries Payable appears on the:
a. balance sheet
b. Retained Earnings Statement
c. income statement
d. statement of cash flows
Depreciation Expense appears on the:
a. balance sheet
b. Retained Earnings Statement
c. income statement
d. statement of cash flows
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____ 22. Long-term Liabilities appears on the:
a. balance sheet
b. Retained Earnings Statement
c. income statement
d. statement of cash flows
____ 23. Accounts Receivable appears on the:
a. balance sheet
b. Retained Earnings Statement
c. income statement
d. statement of cash flows
____ 24. Accumulated Depreciation appears on the:
a. balance sheet in the current assets section
b. balance sheet in the fixed assets section
c. balance sheet in the long-term liabilities section
d. income statement as an operating expense
____ 25. Notes Receivable due in 350 days appears on the:
a. balance sheet in the current assets section
b. balance sheet in the fixed assets section
c. balance sheet in the current liabilities section
d. income statement as an expense
____ 26. Unearned Fees appears on the:
a. balance sheet in the current assets section
b. balance sheet as a current liability
c. balance sheet in the Stockholders' equity section
d. income statement as revenue
____ 27. Which one of the fixed asset accounts listed below will not have a related contra asset account?
a. Office Equipment
b. Land
c. Delivery Equipment
d. Building
____ 28. The cost of office supplies to be used in future periods is ordinarily shown on the balance sheet as a:
a. fixed asset
b. current asset
c. contra asset
d. current liability
____ 29. Prepaid insurance is reported on the balance sheet as a:
a. current asset
b. fixed asset
c. current liability
d. long-term liability
____ 30. At the end of an accounting year, in what statement would a balance in the prepaid insurance account appear?
a. balance sheet
b. income statement
c. statement of cash flows
d. Retained Earnings Statement
____ 31. Which of the following is reported on the Retained Earnings Statement for the current year?
a. Accumulated depreciation
b. Stockholders' additional investment made during the current period
c. Rent expense
d. Wages payable
____ 32. Adjusting entries are dated in the journal as of:
a. the date they are actually journalized.
b. the last day of the accounting period.
c. the first day of the accounting period.D. the middle of the accounting period.
____ 33. Adjusting entries:
a. need not be journalized since they appear on the work sheet and the ledger accounts need
not be adjusted.
b. need not be posted if the financial statements are prepared from the work sheet
c. are not needed if reversing entries are prepared
d. must be journalized and posted
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____ 34. Closing entries:
a. need not be journalized if reversing entries are prepared
b. need not be posted if the financial statements are prepared from the work sheet
c. are not needed if adjusting entries are prepared
d. must be journalized and posted
____ 35. Closing entries are dated in the journal as of:
a. the date they are actually journalized, although they are generally prepared after the end of
the accounting period
b. the last day of the accounting period, although they are actually journalized after the end
of the accounting period
c. the first day of the accounting period, although they are actually journalized after the end
of the accounting period
d. the first day of the subsequent accounting period
____ 36. Which of the following accounts should be closed to Income Summary at the end of the fiscal year?
a. Supplies Expense
b. Accumulated Depreciation
c. Prepaid Expenses
d. Unearned revenues
____ 37. Which of the following accounts will not be closed to Income Summary at the end of the fiscal year?
a. Salaries Expense
b. Fees Earned
c. Unearned Rent
d. Depreciation Expense
____ 38. Which of the following accounts will be closed to Retained Earnings at the end of the fiscal year?
a. Rent Expense
b. Fees Earned
c. Income Summary
d. Depreciation Expense
____ 39. Which of the following accounts ordinarily appears in the post-closing trial balance?
a. Dividends
b. Supplies Expense
c. Fees Earned
d. Unearned Rent
____ 40. The entry to close the appropriate insurance account at the end of the accounting period is debit:
a. Income Summary; credit Prepaid Insurance
b. Prepaid Insurance; credit Income Summary
c. Insurance Expense; credit Income Summary
d. Income Summary; credit Insurance Expense
____ 41. Which of the following accounts appears on a post-closing trial balance?
a. Insurance Expense
b. Prepaid Insurance
c. Dividends
d. Fees Earned
____ 42. Which of the following accounts appears on a post-closing trial balance?
a. Insurance Expense
b. Fees Earned
c. Dividends
d. Unearned Fees
____ 43. The following accounts were taken from the Adjusted Trial Balance columns of the work sheet:
Accumulated Depreciation
Fees Earned
Depreciation Expense
Insurance Expense
Prepaid Rent
Supplies
P 3,000
20,000
3,500
1,000
4,000
500
Net income for the period is:
a. P15,500
b. P 8,000
c. P15,000
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d. P11,000
____ 44. The following accounts were taken from the Adjusted Trial Balance columns of the work sheet:
Accumulated Depreciation
Fees Earned
Depreciation Expense
Insurance Expense
Prepaid Insurance
Supplies
Supplies Expenses
____ 45.
____ 46.
____ 47.
____ 48.
____ 49.
____ 50.
P 6,000
25,000
1,500
1,000
4,000
500
4,500
Net income for the period is:
a. P18,000
b. P7,500
c. P8,000
d. P19,000
A fiscal year:
a. ordinarily begins on the first day of a month and ends on the last day of the following
twelfth month
b. for a business is determined by the federal government
c. always begins on January 1 and ends on December 31 of the same year
d. should end at the height of the business's annual operating cycle
In the normal accounting cycle the:
a. financial statements are prepared after the adjusting entries are posted
b. financial statements are prepared before the closing entries are posted
c. adjusting and closing entries are journalized after the financial statements are prepared
d. post-closing trial balance is prepared before the closing entries are posted
In the accounting cycle of a manual accounting system, the last step is:
a. preparing the financial statements
b. journalizing the adjusting entries
c. posting the closing entries
d. preparing a post-closing trial balance
Work sheets are not usually prepared:
a. during the accounting cycle of a manual accounting system
b. during the accounting cycle of a computerized system
c. unless they must be present to the bank when applying for a loan
d. if the financial statements are going to be prepared by an experienced accountant
Reversing entries are:
a. used by all entities
b. simply the analysis and recording of entries in the subsequent period
c. needed to correct closing entries
d. not used by all entities
A reversing entry reverses a(n):
a. closing entry
b. transaction entry
c. adjusting entry
d. correcting entry
TEST II – PROBLEM
1. List the errors in the following trial balance. All accounts have normal balances.
Hondo Auto Services, Inc.
Trial Balance
For Month Ending, September 30, 20-Cash
Accounts Receivable
Supplies
Equipment
Prepaid Insurance
Accounts Payable
19,475
?
1,000
15,000
500
2,500
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Capital Stock
Dividends
Fees Earned
Salary Expense
Rent Expense
Utilities Expense
Supplies Expense
Miscellaneous Expense
(A)
17,000
1,000
49,600
14,500
9,000
1,400
3,900
250
55,000
81,575
What would be the new balance of the trial balance after errors are corrected? Accounts receivable?
2. After all adjustments have been made, but before the accounts have been closed, the following balances were
taken from the ledger:
Accounts payable
Accounts receivable
Accumulated depreciation
Capital Stock
Cash
Depreciation expense
Dividends
Equipment
P 40,000
54,500
83,325
20,000
7,150
23,500
28,000
155,000
Insurance expense
Prepaid insurance
Rent expense
Retained earnings
Salary expense
Salaries payable
Service revenue
Supplies
Supplies expense
P
8,600
5,275
21,400
80,950
66,000
150
151,000
2,500
3,500
Journalize the entries to close the appropriate accounts.
3. Presented below are a number of adjusting entries:
1.) Dec 31
Printing supplies expense
Printing supplies
20,000
2.)
Subscription revenues
Unearned subscription revenues
15,000
Insurance expense
Prepaid insurance
12,000
3.)
4.)
5.)
6.)
7.)
8.)
9.)
10.)
20,000
15,000
12,000
Interest receivable
Interest income
500
Bad debt expense
Allowance for bad debt
5,000
500
5,000
Salaries expense
Salaries payable
25,000.
Rent revenues
Unearned rent revenues
30,000
Depreciation expense-Equipment
Accumulated depreciation-Equipment
10,000
Interest expense
Interest payable
Rent expense
Prepaid rent
25,000
30,000
10,000
600
600
20,000
20,000
Required:
Prepare the reversing entries. (Indicate “no reversing entry” if not applicable.)
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