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Final examination

Database Management System (AMA Computer University)

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Question 1
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If the company incurred____, the capital beginning will be decreased by the

same amount.

Select one:
a. None of the choices
b. Retained earnings
c. Net loss 
d. Revenues

Question 2
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The category of ratios that shows the ability of the firm to pay its long-term
obligations is

Select one:
a. Solvency ratios 
b. Liquidity Ratios
c. Market value ratios
d. Profitability ratios

Question 3
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____pertains to the creation of a finished product either by hand or by machine.

Select one:
a. Non-manufacturing costs
b. Manufacturing costs
c. Factory overhead or manufacturing overhead
d. Manufacturing 

Question 4
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The statement of owner's equity of a partnership includes capital reserves.

Select one:
True
False 

Question 5
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The following selected accounts are taken from the ledger of  XYX
Merchandising  on June 30, 2017:  Sales, P 550,000; Sales Discount, 5%; Gross
profit, P209,000; operating expenses, P150,000; merchandise inventory, Jan 1,
2017 , P75,000; merchandise inventory, June 30, 2017, P50,000; Accounts
Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.
(Ignore income tax) if the return on assets is 18%, the average total assets is

Select one:
a. Answer not given
b. P327,778 
c. P655,556
d. P21,240

Question 6
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The elements of an income statement include revenues and prepaid expenses.

Select one:
True
False 

Question 7
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The following selected accounts are taken from the ledger of  XYX
Merchandising  on June 30, 2017:  Sales, P 550,000; Sales Discount, 5%; Gross
profit, P209,000; operating expenses, P150,000; merchandise inventory, Jan 1,

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2017 , P75,000; merchandise inventory, June 30, 2017, P50,000; Accounts

Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.
The receivable turnover is

Select one:
a. 8.71 times 
b. 10.445 times
c. 7.46 times
d. 9.17 times

Question 8
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The primary objective of financial reporting is to provide information about the

firm that will be beneficial to all stakeholders.

Select one:
True 
False

Question 9
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_____are the capsulized reports that show the financial health of a business
entity.

Select one:
a. Revenues

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b. Financial reporting
c. Financial statements 
d. None of the choices

Question 10
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Disclosures can also be presented in the face of a financial statement.

Select one:
True
False 

Question 11
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The statement of financial position shows the net worth of a business.

Select one:
True 
False

Question 12
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Operating profit margin equals

Select one:
a. Profit from operations / cost of sales
b. Gross profit / sales
c. Income from operations / sales 
d. Net income / sales

Question 13
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The following selected accounts are taken from the ledger of  XYX
Merchandising  on June 30, 2017:  Sales, P 550,000; Sales Discount, 5%; Gross
profit, P209,000; operating expenses, P150,000; merchandise inventory, Jan 1,
2017 , P75,000; merchandise inventory, June 30, 2017, P50,000; Accounts
Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.
The cost of sales is

Select one:
a. P522,500
b. P313,500 
c. P341,000
d. P359,000

Question 14
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The category of ratios that determine the economic status of publicly-traded

companies is

Select one:
a. Profitability ratios
b. Market value ratios 
c. Solvency ratios
d. Liquidity Ratios

Question 15
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Share Premium is the term used for the excess of issue price over the ______of
shares.

Select one:
a. None of the choices
b. Par vale 
c. Financing
d. Revenues

Question 16
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Capital is for sole proprietorship and partnership, _____is for corporation.

Select one:
a. Shareholders' Equity 
b. Revenues
c. Retained earnings
d. None of the choices

Question 16
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Dividends declared and paid decrease ______.

Select one:
a. Retained earnings 
b. Revenues
c. None of the choices
d. Shareholders' Equity

Question 17
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NSF checks are those issued by the firm as payment and are not yet presented
to the banks for encashment.

Select one:
True
False 

Question 18
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Quick assets equals

Select one:
a. Total assets less non-current assets
b. All current assets
c. Current assets minus inventory 
d. Cash and Accounts receivable only.

Question 19
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The following selected accounts are taken from the ledger of  XYX
Merchandising  on June 30, 2017:  Sales, P 550,000; Sales Discount, 5%; Gross
profit, P209,000; operating expenses, P150,000; merchandise inventory, Jan 1,
2017 , P75,000; merchandise inventory, June 30, 2017, P50,000; Accounts
Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.
The inventory turnover is

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Select one:
a. 5.02 times 
b. 4.18 times
c. 2.51 times
d. 6.27 times

Question 20
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____-turnover indicated how past the merchandise being sold and inventory are
replenished.

Select one:
a. Account
b. Destination
c. Sales discount
d. Inventory 

Question 21
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The following are quick assets except;

Select one:
a. Cash
b. Accounts Receivable
c. Merchandise Inventory 

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d. Short-term investments

Question 22

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Nominal accounts include the following except;

Select one:
a. Prepaid Advertising Expense
b. Rent Expense
c. Cost of Sales 
d. Interest Expense

Question 23
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Purchase of plant assets is a financing activity.

Select one:
True
False 

Question 24
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Direct labor and factory overhead are categorized as ______- costs.

Select one:
a. Conversion costs 
b. Goods in Process or Work in Process
c. Selling expenses or distribution expenses
d. Direct materials

Question 25
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The adjusted trial balance is also a financial statement.

Select one:
True
False 

Question 26
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Quick ratio is .9, quick assets totaled P22,500, cash is three times the accounts
receivable,
Current liabilities is

Select one:
a. P20,250
b. Answer not given
c. P25,000 
d. P22,050

Question 27
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The following selected accounts are taken from the ledger of  XYX
Merchandising  on June 30, 2017:  Sales, P 550,000; Sales Discount, 5%; Gross
profit, P209,000; operating expenses, P150,000; merchandise inventory, Jan 1,
2017 , P75,000; merchandise inventory, June 30, 2017, P50,000; Accounts
Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.
If the return on equity is 32%, the average equity is

Select one:
a. P184,375 
b. Answer not given
c. P18,880
d. P368,750

Question 28
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Net sales less cost of sales will give us

Select one:
a. Net profit ratio
b. Cost ratio
c. Gross profit ratio
d. Gross profit 

Question 29
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The normal balance of an account is always on its debit side.

Select one:
True
False 

Question 30

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The following selected accounts are taken from the ledger of  XYX
Merchandising  on June 30, 2017:  Sales, P 550,000; Sales Discount, 5%; Gross
profit, P209,000; operating expenses, P150,000; merchandise inventory, Jan 1,
2017 , P75,000; merchandise inventory, June 30, 2017, P50,000; Accounts
Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.
The operating profit margin(ratio) is

Select one:
a. 28.23%

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b. 40% 
c. 11.29%
d. 10.72%

Question 31
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Payment of the principal amount of loan is a ___ activity.

Select one:
a. Financing 
b. None of the choices
c. Net loss
d. Deposit in transit

Question 32
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The positive bottom line figure in the income statement is called ____.

Select one:
a. Financial statements
b. Net income 
c. None of the choices
d. Revenues

Question 33

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Correct
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The following selected accounts are taken from the ledger of  XYX
Merchandising  on June 30, 2017:  Sales, P 550,000; Sales Discount, 5%; Gross
profit, P209,000; operating expenses, P150,000; merchandise inventory, Jan 1,
2017 , P75,000; merchandise inventory, June 30, 2017, P50,000; Accounts
Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.
If income tax rate is 35%, the net income for the period is

Select one:
a. P153,850
b. P38,350 
c. P73,150
d. P20,650

Question 34
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When using the fluctuation fund system in petty cash fund accounting,
disbursements out of the fund are credited to Cash in Bank.

Select one:
True
False 

Question 35
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Earnings per share is calculated by

Select one:
a. Dividing net income by the authorized ordinary shares.
b. None of the above.
c. Dividing net income less preferred dividends by number of ordinary shares
outstanding. 
d. Dividing net income by the total number of ordinary and preferred shares
issued.

Question 36
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The following selected accounts  were taken from the books  of Santos Trading
on December 31, 2016: Santos, Capital-P150,000; Loss from Operations-P1,500;
Net Sales-P120,000; total Goods Available for Sale-P103,505; Gross Profit-
P60,750; Merchandise inventory , Jan 1, 2016-P27,520.
Santos, Capital, December 31 is

Select one:
a. P151,500
b. P210,750
c. P150,000
d. P148,500 

Question 37
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Revenues, Expenses.

Select one:
a. Statement of Changes in Owner's Equity
b. Accrued Expenses
c. Closing the accounts.
d. Nominal accounts 

Question 38
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____are records and documents that are consolidated to determine and review
the financial status of a firm.

Select one:
a. None of the choices
b. Financial reporting 
c. Shareholders' Equity
d. Financial statements

Question 39
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Current liabilities is P30,000 and the current ratio is 1.9, the current assets is

Select one:
a. P41,211
b. P57,000 
c. P15,789
d. P27,000

Question 40
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The most liquid asset of a company is cash.

Select one:
True 
False

Question 41
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Which of the following a correct statement?

Select one:
a. Acid test ratio includes merchandise inventory and prepaid expenses.
b. Gross profit margin is the ratio of gross profit to cost of goods sold.
c. Day's sales in receivable is the ratio of average inventory and sales.

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d. Return on ordinary equity reveals the relationship between net income and
equity. 

Question 42
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The following are liquidity ratios except

Select one:
a. Earnings per share 
b. Receivable turnover
c. Working capital ratio
d. Quick ratio

Question 43
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The operating section of an income statement consists of ______and expenses.

Select one:
a. Revenues 
b. None of the choices
c. Retained earnings
d. Net loss

Question 44
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Zeroing the temporary accounts.

Select one:
a. Nominal accounts
b. Statement of Changes in Owner's Equity
c. Closing the accounts. 
d. Accrued Expenses

Question 45
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The following selected accounts are taken from the ledger of  XYX
Merchandising  on June 30, 2017:  Sales, P 550,000; Sales Discount, 5%; Gross
profit, P209,000; operating expenses, P150,000; merchandise inventory, Jan 1,
2017 , P75,000; merchandise inventory, June 30, 2017, P50,000; Accounts
Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.
(ignore income tax), if the shares outstanding is 25,000, the earnings per share
is

Select one:
a. P6.00
b. P8.36
c. P2.36 
d. Answer not given

Question 46
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A disclosure on ____ shows the company's recognition policies.

Select one:
a. None of the choices
b. Financing
c. Revenue recognition 
d. Deposit in transit

Question 47
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Accounting concepts related to time-period concept are revenue-recognition and

__________principles.

Select one:
a. Asset
b. Adjusting
c. Matching 
d. Expense

Question 48
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Product costs consist of direct materials, direct labor, freight-in, and

manufacturing overhead.

Select one:
True 
False

Question 49
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Which of the following belong to the profitability ratios?

Select one:
a. All of the above 
b. Rate of return on equity
c. Rate of return on assets
d. Gross Profit Margin

Created by JENRIQ
FINALS –
FUNDAMENTALS OF

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ACCTG
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Grade out of
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Question 1

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Quick assets equals

Select one:

a. All current assets

b. Current assets minus inventory

c. Total assets less non-current assets

d. Cash and Accounts receivable only.

Question 2

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If the company incurred____, the capital beginning will be decreased by the same amount.

Select one:

a. Net loss

b. None of the choices

c. Retained earnings

d. Revenues

Question 3

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The following selected accounts are taken from the ledger of XYX Merchandising on June 30, 2017:
Sales, P 550,000; Sales Discount, 5%; Gross profit, P209,000; operating expenses, P150,000;
merchandise inventory, Jan 1, 2017 , P75,000; merchandise inventory, June 30, 2017, P50,000; Accounts
Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.

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The inventory turnover is

Select one:

a. 2.51 times

b. 6.27 times

c. 4.18 times

d. 5.02 times

Question 4

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The following are quick assets except;

Select one:

a. Cash

b. Short-term investments

c. Accounts Receivable

d. Merchandise Inventory

Question 5

correct

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Prime Cost is direct materials plus factory overhead.

Select one:

True

False

Question 6

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Cost of transporting goods from seller to the customers.

Select one:

a. Cost of goods sold

b. Gross profit ratio

c. Free On Board

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d. Freight-out

Question 7

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Paint in an automobile.

Select one:

a. Selling, General, and Administrative Expenses

b. Direct Materials

c. Direct Labor

d. Factory Overhead

Question 8

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Depreciation of office equipment.

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Select one:

a. Direct Labor

b. Factory Overhead

c. Direct Materials

d. Selling, General, and Administrative Expenses

Question 9

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The following selected accounts are taken from the ledger of XYX Merchandising on June 30, 2017:
Sales, P 550,000; Sales Discount, 5%; Gross profit, P209,000; operating expenses, P150,000;
merchandise inventory, Jan 1, 2017 , P75,000; merchandise inventory, June 30, 2017, P50,000; Accounts
Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.

If the return on equity is 32%, the average equity is

Select one:

a. P18,880

b. Answer not given

c. P368,750

d. P184,375

Question 10

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Correct

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The following selected accounts are taken from the ledger of XYX Merchandising on June 30, 2017:
Sales, P 550,000; Sales Discount, 5%; Gross profit, P209,000; operating expenses, P150,000;
merchandise inventory, Jan 1, 2017 , P75,000; merchandise inventory, June 30, 2017, P50,000; Accounts
Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.

The receivable turnover is

Select one:

a. 8.71 times

b. 7.46 times

c. 9.17 times

d. 10.445 times

Question 11

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The elements of an income statement include revenues and prepaid expenses.

Select one:

True

False

Question 12

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Share Premium is the term used for the excess of issue price over the ______of shares.

Select one:

a. Par vale

b. Financing

c. None of the choices

d. Revenues

Question 13

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The following are liquidity ratios except

Select one:

a. Earnings per share

b. Receivable turnover

c. Working capital ratio

d. Quick ratio

Question 14

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_____are the capsulized reports that show the financial health of a business entity.

Select one:

a. Revenues

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b. None of the choices

c. Financial statements

d. Financial reporting

Question 15

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The following selected accounts are taken from the ledger of XYX Merchandising on June 30, 2017:
Sales, P 550,000; Sales Discount, 5%; Gross profit, P209,000; operating expenses, P150,000;
merchandise inventory, Jan 1, 2017 , P75,000; merchandise inventory, June 30, 2017, P50,000; Accounts
Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.

(Ignore income tax) if the return on assets is 18%, the average total assets is

Select one:

a. P655,556

b. Answer not given

c. P327,778

d. P21,240

Question 16

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Disclosures can also be presented in the face of a financial statement.

Select one:

True

False

Question 17

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The operating section of an income statement consists of ______and expenses.

Select one:

a. Net loss

b. Revenues

c. None of the choices

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d. Retained earnings

Question 18

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Dividends declared and paid decrease ______.

Select one:

a. Shareholders' Equity

b. Revenues

c. None of the choices

d. Retained earnings

Question 19

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The following selected accounts are taken from the ledger of XYX Merchandising on June 30, 2017:
Sales, P 550,000; Sales Discount, 5%; Gross profit, P209,000; operating expenses, P150,000;
merchandise inventory, Jan 1, 2017 , P75,000; merchandise inventory, June 30, 2017, P50,000; Accounts
Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.

(ignore income tax), if the shares outstanding is 25,000, the earnings per share is

Select one:

a. P2.36

b. Answer not given

c. P6.00

d. P8.36

Question 20

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A purchase of raw materials on credit is debited to ______.

Select one:

a. Direct materials

b. Goods in Process or Work in Process

c. Cost of goods manufactured

d. Raw Materials Purchases

Question 21

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Earnings per share is calculated by

Select one:

a. Dividing net income by the total number of ordinary and preferred shares issued.

b. Dividing net income less preferred dividends by number of ordinary shares outstanding.

c. None of the above.

d. Dividing net income by the authorized ordinary shares.

Question 22

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Liquidity ratios include the following except;

Select one:

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a. Working capital ratio

b. Inventory turnover

c. Times interest-earned ratio

d. Receivable turnover

Question 23

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The following selected accounts are taken from the ledger of XYX Merchandising on June 30, 2017:
Sales, P 550,000; Sales Discount, 5%; Gross profit, P209,000; operating expenses, P150,000;
merchandise inventory, Jan 1, 2017 , P75,000; merchandise inventory, June 30, 2017, P50,000; Accounts
Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.

If income tax rate is 35%, the net income for the period is

Select one:

a. P73,150

b. P153,850

c. P38,350

d. P20,650

Question 24

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NSF checks are those issued by the firm as payment and are not yet presented to the banks for
encashment.

Select one:

True

False

Question 25

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Current liabilities is P30,000 and the current ratio is 1.9, the current assets is

Select one:

a. P27,000

b. P15,789

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c. P57,000

d. P41,211

Question 26

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A disclosure on ____ shows the company's recognition policies.

Select one:

a. Financing

b. None of the choices

c. Deposit in transit

d. Revenue recognition

Question 27

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All Nominal accounts are presented in the

Select one:

a. Statement of changes in Owners' Equity

b. Statement of Cash Flows

c. Statement of Financial Position

d. Income Statement

Question 28

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The formula for Accounts Receivable turnover is

Select one:

a. Cost of goods sold / average accounts receivable

b. Net Sales / average accounts receivable

c. 360 days / average accounts receivable

d. Net Sales / average merchandise inventory

Question 29

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Payment of the principal amount of loan is a ___ activity.

Select one:

a. Net loss

b. None of the choices

c. Financing

d. Deposit in transit

Question 30

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The category of ratios that shows the ability of the firm to pay its long-term obligations is

Select one:

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a. Profitability ratios

b. Solvency ratios

c. Market value ratios

d. Liquidity Ratios

Question 31

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The statement of financial position shows the net worth of a business.

Select one:

True

False

Question 32

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Capital is for sole proprietorship and partnership, _____is for corporation.

Select one:

a. None of the choices

b. Shareholders' Equity

c. Retained earnings

d. Revenues

Question 33

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____are records and documents that are consolidated to determine and review the financial status of a
firm.

Select one:

a. None of the choices

b. Shareholders' Equity

c. Financial statements

d. Financial reporting

Question 34

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The following selected accounts were taken from the books of Santos Trading on December 31, 2016:
Santos, Capital-P150,000; Loss from Operations-P1,500; Net Sales-P120,000; total Goods Available for
Sale-P103,505; Gross Profit-P60,750; Merchandise inventory , Jan 1, 2016-P27,520.

Purchases of merchandise during the year amounted to

Select one:

a. P103,505

b. P71,275

c. P75,985

d. P59,750

Question 35

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The positive bottom line figure in the income statement is called ____.

Select one:

a. Financial statements

b. Net income

c. Revenues

d. None of the choices

Question 36

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The following selected accounts are taken from the ledger of XYX Merchandising on June 30, 2017:
Sales, P 550,000; Sales Discount, 5%; Gross profit, P209,000; operating expenses, P150,000;
merchandise inventory, Jan 1, 2017 , P75,000; merchandise inventory, June 30, 2017, P50,000; Accounts
Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.

The cost of sales is

Select one:

a. P313,500

b. P359,000

c. P522,500

d. P341,000

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Question 37

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The primary objective of financial reporting is to provide information about the firm that will be
beneficial to all stakeholders.

Select one:

True

False

Question 38

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The working capital ratio is

Select one:

a. Current assets/current liabilities

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b. Working capital /current liabilities

c. Quick assets / current liabilities

d. Current assets minus current liabilities

Question 39

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Debt to equity ratio is a

Select one:

a. Solvency ratio

b. Market value ratio

c. Profitability ratio

d. Current ratio

Question 40

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The most liquid asset of a company is cash.

Select one:

True

False

Question 41

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The following selected accounts are taken from the ledger of XYX Merchandising on June 30, 2017:
Sales, P 550,000; Sales Discount, 5%; Gross profit, P209,000; operating expenses, P150,000;
merchandise inventory, Jan 1, 2017 , P75,000; merchandise inventory, June 30, 2017, P50,000; Accounts
Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.

The operating profit margin(ratio) is

Select one:

a. 40%

b. 10.72%

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c. 11.29%

d. 28.23%

Question 42

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Which of the following a correct statement?

Select one:

a. Acid test ratio includes merchandise inventory and prepaid expenses.

b. Gross profit margin is the ratio of gross profit to cost of goods sold.

c. Day's sales in receivable is the ratio of average inventory and sales.

d. Return on ordinary equity reveals the relationship between net income and equity.

Question 43

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The following selected accounts are taken from the ledger of XYX Merchandising on June 30, 2017:
Sales, P 550,000; Sales Discount, 5%; Gross profit, P209,000; operating expenses, P150,000;
merchandise inventory, Jan 1, 2017 , P75,000; merchandise inventory, June 30, 2017, P50,000; Accounts
Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.

The cost of sales ratio or cost ratio is

Select one:

a. Answer not given.

b. 60%

c. 62%

d. 40%

Question 44

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The following selected accounts are taken from the ledger of XYX Merchandising on June 30, 2017:
Sales, P 550,000; Sales Discount, 5%; Gross profit, P209,000; operating expenses, P150,000;
merchandise inventory, Jan 1, 2017 , P75,000; merchandise inventory, June 30, 2017, P50,000; Accounts
Receivable Jan1, P 70,000; Accounts Receivable, June 30, P50,000.

The days in inventory is

Select one:

a. 71.71 days

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b. 86.12 days

c. 143.43 days

d. 57.42 days

Question 45

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Which is the nature of a manufacturing type of business?

Select one:

a. It converts raw materials to a finished product.

b. All of these.

c. Its finished products are sold to a merchandiser.

d. The production can be either manually or by machine.

Question 46

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Cebu Trading sold to Manila Store goods with a listed price of P100, 000. Term of sale: Trade discount of
3% and 2%. Payment terms: 2/10,n/30.

Cebu Trading will record a sale of

Select one:

a. P100,000

b. P97,000

c. P95,060

d. P95,000

Question 47

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The category of ratios that determine the economic status of publicly-traded companies is

Select one:

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a. Profitability ratios

b. Market value ratios

c. Liquidity Ratios

d. Solvency ratios

Question 48

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Net sales less cost of sales will give us

Select one:

a. Gross profit

b. Gross profit ratio

c. Net profit ratio

d. Cost ratio

Question 49

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The statement of owner's equity of a partnership includes capital reserves.

Select one:

True

False

Question 50

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Purchase of plant assets is a financing activity.

Select one:

True

False

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