12/26/21, 9:43 PM Quiz: Basic Accounting Level 1

Basic Accounting Level 1

Started:
Dec 26 at 5:20am

Quiz Instructions

Question 1 1 pts

The Double Entry System of accounting originated in__

England

Europe

Spain

Italy

Question 2 1 pts

An increase to an account is recorded

Beside the account

In the debit side of that account

In the side of that account that represents its normal balance

In the credit side of that account

Question 3 1 pts

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12/26/21, 9:43 PM Quiz: Basic Accounting Level 1

A general ledger is defined as 

A group of transactions

A group of all income statement accounts

The entire group of accounts

A group of transactions

Question 4 1 pts

Which of the following is the correct journal entry to record a credit note issued to a
customer for goods returned?

Debit Trade receivables and Credit Sales returns

Debit Sales returns and Credit Trade receivables

Debit Cash and Credit Sales returns

Debit Sales returns and Credit Cash

Question 5 1 pts

A bookkeeper discovers that an amount paid to a supplier has been wrongly entered
into another supplier’s account. Which book of original entry will the bookkeeper use
when correcting this error?

Sales Journal

Purchase Journal

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General Journal

Cash Journal

Question 6 1 pts

Premier Corp reported that its net assets during the year 2018 is P168,000 while its
net liabilities amounted to P80,000. Assuming that income is P50,000 and expenses
incurred were P10,000 during the year, how much is the equity of the corporation?

P55,000

P48,000

P53,000

P49,000

Question 7 1 pts

What are the effects on the balance sheet when a company borrows a two-year bank
loan of P5,000

P 5,000 credit in current liabilities; P 5,000 debit in current assets

P 5,000 credit in non-current liabilities; P 5,000 debit in current assets

P 5,000 credit in non-current liabilities; P 5,000 debit in non-current assets

P 5,000 credit in current liabilities; P 5,000 debit in non-current assets

Question 8 1 pts
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12/26/21, 9:43 PM Quiz: Basic Accounting Level 1

Which of the following is incorrect regarding adjusting entries?

Adjusting entries affect profit or loss.

Adjusting entries involve at least one balance sheet account and one income statement
account

The process of splitting mixed accounts into their expired and unexpired portions or earned
and unearned portions refer to accrual.

In layman’s terms, “to accrue” means to accumulate while “to defer” means to postpone.

Adjusting entries are typically prepared only when financial statements are prepared

Question 9 1 pts

The beginning-of-the-year total equity for a firm was P40, 000. During the year, the
firm issued ordinary shares for total proceeds of P20, 000, earned P20, 000 net
income, and paid P5,000 in cash dividends. If ending total liabilities are P100, 000
what are the ending total assets?

P175,000

P100,000

P165,000

P 45,000

Question 10 1 pts

One Premier purchased equipment on November 1, 2017, by giving its supplier a 12-
month, 9 percent note with a face value of P48,000. The December 31, 2017,

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adjusting entry is

 Debit Interest Expense and credit Interest Payable, P720

Debit Interest Expense and credit Cash, P720

Debit Interest Expense and credit Interest Payable, P720

Debit Interest Expense and credit Interest Payable, P720.

Question 11 1 pts

The preparation of adjusting entries is

Often an involved process requiring the skills of a professional.

Optional when financial statements are prepared.

Optional when financial statements are prepared

Straight forward because the accounts that need adjustment will be out of balance.

Question 12 1 pts

On June 1, during its first month of operations, PREMIER purchased supplies for P
5,025 and debited the supplies account for that amount. At January 30, an inventory
of supplies showed P 1,200 of supplies on hand. What adjusting journal entry should
be made for June?

Debit Inventory and Credit Supplies 3,825

Debit Supplies and Credit Inventory 3,825

Debit Supplies and Credit Supplies Expense 3,825

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Debit Supplies Expense and Credit Supplies 3,825

Question 13 1 pts

On May 1, 2008, JPIA Corp. paid P 3,600 for computer equipment. The equipment
will be used for three (3) years, according to the company. It has no salvage value. If
monthly financials are prepared, what adjusting journal entry should the company
make at the end of each month?

Debit Accumulated Depreciation, Credit Depreciation Expense 175

Debit Depreciation Expense, Credit Allowance for Depreciation 125

Debit Allowance for Depreciation, Credit Depreciation Expense 135

Debit Depreciation Expense, Credit Accumulated Depreciation 100

Question 14 1 pts

On May 1, 2008, JPIA Corp. paid P 3,600 for computer equipment. The equipment
will be used for three (3) years, according to the company. It has no salvage value.
What is the book value of the equipment at May 31, 2008?

P3,175

P3,135

P3,160

P3,500

Question 15 1 pts
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12/26/21, 9:43 PM Quiz: Basic Accounting Level 1

It is an account used temporarily to store discrepancies in the accounts pending their

analysis and permanent classification.

Suspense Account

Adjunct Account

Contra Account

Control Account

Question 16 1 pts

Which of the following methods of initial recording of prepayments is used?

                  Prepaid Insurance                    150,000          

                              Insurance Expense                               150,000

Income Method

Liability Method

Asset Method

None of the choices

Question 17 1 pts

Advance collections are initially recorded as liability under this method of initial
recording of income items.

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Asset Method

Income Method

Liability Method

Expense Method

Question 18 1 pts

It is an analytical device used to facilitate the gathering of data for adjustments,

preparation of financial statements, and closing entry

Ledger

Journal

Worksheet

T-account

Question 19 1 pts

What are the adjusting entries that may be reversed?

All of the choices

Advanced collections initially recorded using the liability method

Prepayments initially recorded using asset method

Accruals for income or expense

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Question 20 1 pts

Entries that are made on the first day of the next accounting period to reverse certain
adjusting entries made in the preceding period.

Worksheet

Reversing Entries

T-account

Journal Entry

Question 21 1 pts

AMDC uses periodic inventory system. At the start of the period AMDC has a
Beginning inventory of P 150,000, Purchases of 489,600, and Ending inventory of
125,000. How much is the Goods Available for sale

614,600

P 518,600

614,600

P 639,600

Question 22 1 pts

Entity A is a known merchandising company in the Philippines. The company

provided the following costs incurred during the current year:

 
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Merchandise purchased for resale                   300,000

Vendor interest on notes payable                     250,000

Commission of Salesman                                500,000

How much should be added to the cost of purchasing merchandise?

300,000

800,000

750,000

500,000

Question 23 1 pts

Following are the balances of Glutton Company’s income statement

Beginning Inventory                            P 120,000

Purchases                                                  25,000

Purchase Returns and Allowance                2,000

Freight Out                                                  5,000

Ending Inventory                                      20.000

How much is the Cost of goods sold of Glutton Company?

118,000

152,000

138,000

120,000

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Question 24 1 pts

Under this inventory system, physical count is necessary in order to determine the
inventory on hand and cost of goods sold.

Perpetual system

Inventory system

COGS system

Periodic system

Question 25 1 pts

Net sales minus cost of sales is equal to

Gross Profit

Net income

Net income

Net income

Question 26 1 pts

Which of the following assets is not subject to depreciation?

Art Equipment

Computers
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Store Fixtures

Land

Question 27 1 pts

Which accounting process is the recognition or non-recognition of business activities

as accountable events?

Measuring

Communicating

Recording

Identifying

Question 28 1 pts

Which of the following are the types of financial statements

I. Statement of Cash Flow

II. Statement of Comprehensive Income

III. Statement of Financial Position

IV. Trial Balance

1, 2, and 3

2,3 and 4

2 and 4

1,2,3 and 4

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12/26/21, 9:43 PM Quiz: Basic Accounting Level 1

Question 29 1 pts

The Balance Sheet reflects

Beginning owner’s equity + Revenues= Expenses

Assets + Liabilities = Owner’s Equity

Asset= Liabilities + (Beginning Owner’s Equity + Revenues – Expenses – Withdrawal)

Revenues- Expenses

Question 30 1 pts

Regarding one purchase of merchandise, the following entries were made by

PREMIER Company.

Purchases                                           18,000

            Accounts Payable- Supplier                18,000

Transportation- in                                2,900

            Accounts Payable- Supplier                  2,900

FOB destination, freight collect

FOB destination, freight prepaid

FOB shipping point, freight collect

FOB shipping point, freight prepaid

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Question 31 1 pts

A debit entry to the Cash account indicates

The payment of money from a bank

The withdrawal of funds from the business by the owner

The borrowing of money from a bank

The billing of a client for services, payment subsequent to invoicing

Question 32 1 pts

The post-closing trial balance is prepared as the next step in the accounting cycle
after

Combining the trial balance and adjustment figures

Preparing the trial balance

None of these

Journalizing and posting the closing entries

Question 33 1 pts

A debit column total greater than the credit column total under the Income Statement
portion of the worksheet would mean

The company had a profitable year

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Mistakes were made in the preparation of the adjusted trial balance

The company had a loss this year

The Income Summary account will have a credit balance after the nominal accounts are
closed

Question 34 1 pts

When a company receives a “debit memorandum” from the supplier, the company
should

Debit “Cash” for the amount of the debit memo

Debit “Accounts Payable” account for the amount of the purchase return made

Credit “Accounts Receivable” account for the amount of customer return

Credit “Cash” for the amount of the debit memo

Question 35 1 pts

The start-up capital of a business consisted of ₱2,500,000 cash provided by the

business owner and an additional ₱750,000 from a bank loan. The total start-up
assets of the business therefore is

₱3,250,000

₱2,500,000

₱750,000

₱1,750,000

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Question 36 1 pts

A business earns total income of ₱1,230,000 and incurs total expenses of

₱1,300,000. How much is the profit (loss)?

₱70,000

₱30,000

(₱30,000)

(₱70,000)

Question 37 1 pts

At the start of the period, a business has total assets of ₱1,500,000 and total
liabilities of ₱1,300,000. During the period, the business earned total income of
₱2,000,000 and incurred total expenses of ₱1,640,000. No additional investments or
withdrawals were made by the owner. How much is the total equity at the end of the
period?

₱560,000

₱480,000

₱520,000

₱640,000

Question 38 1 pts

The collection of a ₱6,000 account within 2% discount period would result it

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12/26/21, 9:43 PM Quiz: Basic Accounting Level 1

Credit to Accounts Receivable for ₱5,880

Debit to Accounts Receivable for ₱5,880

Credit Cash for ₱5,880

Debit to Sales Discount for ₱120

Question 39 1 pts

A business received cash of ₱30,000 in advance for service that will be provided
later. The cash received entry debited Cash and credited Unearned Revenue for
₱30,000. At the end of the period, ₱P11,000 is still unearned. The adjusting entry in
this situation is

debit Unearned Revenue and credit Revenue for ₱19,000

debit Unearned Revenue and credit Revenue for ₱11,000

debit Revenue and credit Unearned Revenue for ₱19,000

debit Revenue and credit Unearned Revenue for ₱11,000

Question 40 1 pts

At December 31, 2021, the JPIA Company had ₱990,000 balance in its Advertising
Expense account before any year-end adjustments relating to the following:

Radio advertising spots broadcast during December 2015 were billed to JPIA on
January 4, 2016. The invoice cost of ₱50,000 was paid on January 15, 2016.
Included in the amount reported as expense is ₱60,000 for newspaper advertising
for a January 2016 sales promotional campaign.

JPIA’s advertising expense for the year ended December 31, 2015 should be:

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₱930,000

₱1,000,000

₱980,000

₱1,040,000

Question 41 1 pts

Market Consulting bought ₱10,000 of furniture. Accumulated Depreciation had a

balance of ₱4,000 prior to the recording of this year’s depreciation. Depreciation
Expense at the end of the year is ₱3,000. What is the book value of the furniture at
the end of the year?

₱3,000

₱13,000

₱7,000

₱4,000

Question 42 1 pts

Which of the following statements is correct?

Income decreases equity

Expense increases equity

Income and Expense do not affect equity

income increases equity

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Question 43 1 pts

A business has total assets, liabilities, and total equity of ₱150,000 ,₱90,000
and₱50,000, respectively, at the beginning of the period. During the period, total
liabilities decreased to ₱50,000. The business reported profit of P60,000 for the
period. How much is the ending balance of assets?

₱150,000

₱190,000

₱110, 000

₱160,000

Question 44 1 pts

The following accounts were closed to the Income Summary account: Salary
Expense, ₱450 debit; Telephone Expense, ₱750 debit; Utilities Expense, ₱200 debit;
Service Revenue, ₱1,000 credit. The amount and entry to close Income Summary to
the Capital account would be 

₱2,400 credit to the Income Summary account

₱400 credit to the Income Summary account

₱1,000 debit to the Income Summary account

₱400 debit to the Income Summary account

Question 45 1 pts

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12/26/21, 9:43 PM Quiz: Basic Accounting Level 1

The creative chief executive of a corporation who is personally responsible for

numerous inventions and innovations is not reported as an asset on the corporation's
balance sheet. The accounting principle/guideline that prevents the corporation for
reporting this person as an asset is

Going Concern

Matching

Cost

Conservatism

Question 46 1 pts

A Mamshies company borrowed ₱200,000 in December and will make its only
payment for interest when the note comes due six months later. The total interest for
the six months will be ₱7,200. On the December income statement the accountant
reported Interest Expense of ₱1,200. This action was the result of which accounting
principle/guideline?

Revenue Recognition

Going Concern

Matching

Cost

Question 47 1 pts

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12/26/21, 9:43 PM Quiz: Basic Accounting Level 1

If the assets of a business are ₱1,820,000 and equity is ₱465,000, the value of
liability will be

₱465,000

₱2,285,000

₱1,820,000

₱1,355,000

Question 48 1 pts

An entity provided the following trial balance on June 30, 2015:

Cash overdraft (₱200,000) Property, plant and eq

Accounts receivable, net ₱ 700,000 Accounts payable and

Inventory ₱1,200,000 Share capital

Prepaid expenses ₱ 200,000 Share premium

Land held for resale ₱2,000,000 Retained earnings

Checks amounting to ₱600,000 were written to vendors and recorded on June 30

resulting in cash overdraft of ₱200,000. The checks were mailed on July 9. Land held
for resale was sold for cash on July 15. The financial statements were issued on July
31. On June 30, 2015, what total amount should be reported as current assets?

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₱4,100,000

₱2,500,000

₱4,500,000

₱4,300,000

Question 49 1 pts

An entity had the following liabilities on December 31, 2015:

Accounts payable

Unsecured notes, 8% due 7/1/2016

Accrued expenses

Contingent liability

Deferred tax liability

Senior bonds, 7%,  due 3/31/2016

The contingent liability is an accrual for possible loss on a ₱1,000,000 lawsuit filed
against the entity. The legal counsel expects the suit to be settled in 2016 and has
estimated that the entity will be liable for damages in the range of ₱450,000 to
₱750,000. The deferred tax liability is expected to reverse in 2016. What amount
should be reported  on December 31, 2015 for current liabilities?

₱940,000

₱1,490,000

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₱1,515,000

₱515,000

Question 50 1 pts

An entity reported current receivables on December 31, 2015 which consisted of the
following:

Trade accounts receivable

Allowance for uncollectible accounts

Claim against shipper for goods lost in transit in November 2015

Selling price of unsold goods sent by the entity on consignment at 130% of      cost an
ending inventory

Security deposit on lease of warehouse used for storing inventories

What is the correct total of current net receivables on December 31, 2015?

₱1,240,000

₱1,500,000

₱940,000

₱1,200,000

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12/26/21, 9:43 PM Quiz: Basic Accounting Level 1

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