No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile
: 0927 283 8234
Gmail
: icarecpareview@gmail.com
Telephone
: (043) 723 8412
ACCOUNTING PROCESS
1. The accounting equation
a. Is used to determine the amount of liabilities owned
b. Shows the claims on the entity’s assets represented by creditors and owners
c. Shows the claims on the owner’s equity represented by creditors
d. Is used to determine the amount of income earned during the most recent
accounting period
2. The double-entry system of accounting means that every transaction
a. Is recorded initially on both the journal and the general ledger
b. Increases one general ledger account while decreasing another
c. Affects at least two general ledger accounts and is recorded by an equal
amount of debits and credits
d. Results in changes in accounts on both sides of the balance sheet
3. Which among the rules on debit and credit below is not correct?
a. The normal balance of any account appears on the side for recording increases
b. Assets and expenses are debited when increased, and liabilities, revenues and
equity are credited when increased
c. The debit is always on the left side of the accounting double entry
d. Debit means increase, and credit means decrease
4. Debits
a.
b.
c.
d.
Increase assets and decrease expenses, liabilities, revenue, and equity
Increase assets and expenses and decrease liabilities, revenue and equity
Increase assets and equity and decrease liabilities, expenses and revenue
Decrease assets and expenses and increase liabilities, revenue and equity
5. X purchased a new register system for his grocery store, paying P1,000 in cash and
issuing a P6,000 note payable for the balance owed. As a result of this transaction,
X’s balance sheet would reflect
a. An increase in assets and an increase in liabilities
b. A decrease in assets and an increase in liabilities
c. An increase in assets and a decrease in liabilities
d. An increase in assets and an increase in owner’s equity
6. Which among the following is the last step in the accounting cycle?
a. Preparation of reversing entries
b. Preparation of financial statements
c. Journalizing and posting of closing entries
d. Preparation of the post-closing trial balance
7. Which is the correct sequence for recording transactions and preparing financial
statements?
a. Journal, ledger, trial balance, financial statements
b. Ledger, trial balance, journal, financial statements
c. Financial statements, trial balance, ledger, journal
d. Ledger, journal, trial balance, financial statements
8. Journalizing is performed in what phase of the accounting process?
a. Reporting
b. Recording
c. Classifying
d. Summarizing
9. General ledger serves what phase of the accounting process?
a. Reporting
b. Recording
c. Classifying
d. Summarizing
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RSORIANO/JMAGLINAO
No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile
: 0927 283 8234
Gmail
: icarecpareview@gmail.com
Telephone
: (043) 723 8412
10. Which statement about the trial balance is incorrect?
a. A trial balance determines the equality between the total debits and credits
b. A trial balance lists all open accounts in the general ledger as of a time period
c. A trial balance proves that all amounts have been posted to the correct
amounts
d. A trial balance is required in the accounting process
11. X has completed the posting process for the month of June and has prepared a trial
balance in which the debits total P11,000 and the credits total P11,100. Which of the
following errors would be the most likely candidate in causing the trial balance not to
balance by P100?
a. A P100 debit was posted as a P100 credit
b. A P100 debit was posted as a P100 credit and a P100 credit was posted as a
P100 debit
c. A P50 debit was posted as a P50 credit
d. The purchase of supplies on account was never posted to the general ledger
12. The purpose of adjusting entries is to
a. Adjust the owner’s capital account for the revenue, expense and withdrawal
transactions which occurred during the year
b. Adjust daily the balances in asset, liability, revenue and expense accounts for
the effects of business transactions
c. Apply the realization principle and the matching principle to transactions
affecting two or more accounting periods
d. Prepare revenue and expense accounts for recording the transactions of the
next accounting period
13. Adjusting entries are needed because an entity
a. Uses the accrual basis of accounting
b. Has earned revenue during the period by selling products from its central
operations
c. Has expenses
d. Uses the cash basis of accounting rather than the accrual basis
14. Accruals are
a. Adjusting entries where cash flow precedes revenue or expense recognition
b. Adjusting entries where revenue or expense recognition precedes cash flow
c. Adjusting entries where cash flow and revenue or expense recognition are
simultaneous
d. Adjusting entries where revenue or expenses are recognized in the absence
of cash flow evidence
15. Which of the following least resembles a typical adjusting entry?
a. Debit asset, credit revenue
b. Debit expense, credit liability
c. Debit revenue, credit liability
d. Debit asset, credit liability
“There is a time for everything and a season for
every activity under the heavens.”
-Ecclesiastes 3:1
Key Answers - BCDBADABCCCCABD
Accounting Lecture Series - https://www.youtube.com/channel/UCZFe6nDndodLuCmkc9sNlGA
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