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Far Practice Updated

Mr. AB Cruz started a service business on January 1, 2020. He contributed Php 100,000 in personal savings. On January 15, he bought Php 10,000 in office supplies on account. On January 16, he purchased Php 20,000 in office equipment, paying Php 5,000 and the balance on account. On January 31, he withdrew Php 2,000 cash from the business for personal use.

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Reniella Alleje
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60 views

Far Practice Updated

Mr. AB Cruz started a service business on January 1, 2020. He contributed Php 100,000 in personal savings. On January 15, he bought Php 10,000 in office supplies on account. On January 16, he purchased Php 20,000 in office equipment, paying Php 5,000 and the balance on account. On January 31, he withdrew Php 2,000 cash from the business for personal use.

Uploaded by

Reniella Alleje
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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On January 1, 2020, Mr. AB Cruz started his service business.

The following are the transactions during


the month of January

A. On Jan. 1, 2020, Mr. Cruz contributed his personal savings of Php 100,000 to the business
B. Bought office supplies for Php 10,000 on account on January 15, 2020
C. Purchased office equipment for Php 20,000 on Jan 16,2020. Mr. Cruz paid Php 5,000 and the
balance on account
D. On January 31, 2020. Mr. Cruz is in need of cash so he withdrew Php 2,000 cash of the business

QUESTION

1. The net asset as of January 31, 2020 is: 98,000


2. The total assets of the business as of January 31, 2020 is: 128,000
3. The total equity (capital account) as of Jan 31,2020 is: 98,000
4. The total cash account is: 93,000
5. The total liability of the business as of Jan 31, 2020 is: 15,000

A ___ is an evidence of a business transaction such as official receipt, cash voucher, and invoice SOURCE
DOCUMENT OR BUSINESS DOCUMENT

_____ is a disadvantage from the viewpoint of owners/investors because once business becomes
insolvent, the creditor can attach their personal properties UNLIMITED LIABILITY

There are only three elements of financial statements mentioned in the framework: assets, liabilities,
and equity FALSE

Accounting is considered the __ of business because it communicates relevant financial information to


decision makers LANGUAGE

Investment made by the owner will INCREASE BOTH ASSETS AND OWNER’S EQUITY

A set of moral values and principles that is requires of a professional so that the reports submitted can
be trusted by the users is called ETHICS
Unpaid water bill was not recorded. Which of the following is correct? OWNER’S EQUITY WILL BE
OVERSTATED

The company’s assets are P12,000,000 of which 1/3 represents owner’s equity. How much is total
liabilities? 8,000,000

___ is a financial report prepared to show financial performance of the business INCOME STATEMENT

Which of the following is considered as an asset to be presented in the statement of financial position?
PREPAID INSURANCE EXPENSE

Management accounting is concerned primarily with external reporting FALSE

Identify which statements does not correctly describe net income IT IS THE EXCESS OF EXPENSES OVER
REVENUES

The right side of an account is referred to as a CREDIT

For every debit entry, there must be a corresponding credit entry. The accounting equation must always
be maintained TRUE

Passing the CPA board exam is a requirement in order to join the accountancy profession in the
Philippines TRUE

Users of financial statements include the primary users (existing and potential investors, lenders and
other creditors) and other users such as employees, management, government and their agencies, and
the public TRUE

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