MODULE WEEK 5-8

Activity no. 1

NAME: YR.&SEC.
COURSE: DATE

MULTIPLE CHOICE

1. If a business is not being sold or closed, the amounts reported in the accounts for
assets used in the business operations are based on the cost of assets. This practice
is justified by
a. Accrual
b. Time period
c. Going concern
d. Accounting entity
2. It is the capacity of information to make a difference in decision by helping users
evaluate past, present and future events, or confirming, or correcting their past
evaluations.
a. Relevance
b. Reliability
c. Understandability
d. Comparability
3. The attributes of relevance include all except
a. Neutrality
b. Materiality
c. Predictive value
d. Feedback value
4. It is the quality of information that assures readers that the information is free from
bias or error and faithfully represents what it purports to show.
a. Relevance
b. Reliability
c. Understandability
d. Comparability
5. The financial accounting information is directed toward the common needs of users
and is independent of presumptions about particular needs and desires of specific.

Ref.:Ballada, Win and Susan Ballada. (2019). Basic Accounting Made Easy 21st Edition.
Manila: Domdane Publishers and Made Easy Books.

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 MODULE WEEK 5-8
a. Neutrality
b. Relevance
c. Completeness
d. Verifiability
6. It is the result of the standard of adequate disclosure
a. Completeness
b. Neutrality
c. Faithful Representation
d. Substance over form
7. The financial information must be comprehensible or intelligible if it is to be useful.
a. Comparability
b. Understandability
c. Relevance
d. Reliability
8. It is the ability to bring together for the purpose of noting similarities and dissimilarities
a. Relevance
b. Reliability
c. Comparability
d. Understandability
9. Financial reporting is concerned only with information that is significant enough to affect
evaluation or decision.
a. Materiality
b. Timeliness
c. Comparability
d. Cost and benefit
10. The purchase of an asset on account will
a. Increase total liabilities and decrease total assets
b. Have no effect on total assets or total liabilities
c. Increase total assets and increase total liabilities
d. Increase total assets and decrease owner’s equity
11. Amounts owed by a business are referred to as
a. Assets
b. Equities

Ref.:Ballada, Win and Susan Ballada. (2019). Basic Accounting Made Easy 21st Edition.
Manila: Domdane Publishers and Made Easy Books.

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 MODULE WEEK 5-8

c. Liabilities
d. Capital
12. Which of the following equations is the fundamental accounting equation?
a. Assets – Liabilities = Owner’s Equity
b. Assets = Liabilities + Owner’s Equity

c. Assets – Owner’s Equity = Liabilities

d. Assets – Owner’s Equity = Liabilities
13. When an owner deposits cash in an account in the name of the business, it is an increase to
a. Cash and Accounts receivable
b. Cash and withdrawals
c. Cash and capital
d. Cash and expenses
14. Which of the following is not considered an account?
a. Equipment
b. Revenues
c. Accounts Payable
d. Cash
e. Accounts Receivable
15. If an owner invests her computer and printer in the business, there is an increase to
a. Cash and capital
b. Computer Equipment and withdrawals
c. Cash and withdrawals
d. Computer equipment and capital
16. The owner invested P50,000 in the business. What are the effects on the fundamental accounting
equation?
a. Assets increase P50,000; liabilities no effect; owner’s equity increase P50,000
b. Assets increase P50,000; liabilities decrease P50,000; owner’s equity increase P50,000
c. Assets increase P50,000; liabilities increase P50,000; owner’s equity no effect
d. Assets increase P50,000; liabilities no effect; owner’s equity decrease P50,000
17. The purchase of an asset for cash will
a. Increase total assets and decrease total liabilities
b. Have no effect on total assets or total liabilities

Ref.:Ballada, Win and Susan Ballada. (2019). Basic Accounting Made Easy 21st Edition.
Manila: Domdane Publishers and Made Easy Books.

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 MODULE WEEK 5-8
c. Increase total assets and increase total liabilities
d. Increase total assets and increase total owner’s equity
18. When the rent for the business is paid with a check
a. Cash is decreased and rent expense is decreased
b. Cash is decreased and rent income is increased
c. Cash is decreased and rent expense is increased
d. Cash is decreased and accounts payable is decreased
19. The purchase of supplies for cash will
a. Increase supplies and decrease cash
b. Increase supplies expense and decrease cash
c. Decrease cash and increase accounts payable
d. Decrease cash and increase capital
20. Which of the following transactions does not include an increase to expense?
a. Received and paid the phone bill
b. Bought office supplies on account
c. Received cash for services performed
d. Paid the week’s salaries

Ref.:Ballada, Win and Susan Ballada. (2019). Basic Accounting Made Easy 21st Edition.
Manila: Domdane Publishers and Made Easy Books.

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 MODULE WEEK 5-8

ACTI
VITY NO. 2
NAME: YR.&SEC.

COURSE: DATE

PROBLEM #1

Assets Liabilities Onwner’s Equity

1 760,000 360,000 400,000
2 860,000 268,000 592,000
3 868,000 108,000 760,000
4 626,600 376,240 250,360
5 700,000 800,000 (100,000)
6 600,000 150,000 450,000
7 940,000 530,000 410,000
8 473,000 153,700 319,300
9 383,500 147,000 236,500
10 624,000 237,000 387,000

 Fill the amount of the missing element of the financial position.

Ref.:Ballada, Win and Susan Ballada. (2019). Basic Accounting Made Easy 21st Edition.
Manila: Domdane Publishers and Made Easy Books.

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 MODULE WEEK 5-8

PROBEM #2

1. Expenses = 480,000
2. Expenses= 1,860,000
3. Profit = 440,000
4. Income = 2,720,000
5. Income = 1,400,000
6. Profit = 250,000
7. (Loss) = (100,000)
8. Expenses= 550,000
9. Expenses = 750,000
10. Net Income = 0

 Fill the amount of the missing element of the financial performance.

PROBEM #3

1. At the beginning of the year, the assets of Luke Services were P360,000 and its
owner’s equity was P200,000. During the year, assets increased by P120,00 and
liabilities increased by P20,000. What was the owner’s equity at the end of the
year?
Assets = Liabilities + Equity
Beg.360,000 160,000 200,000
+120,000 +20,000
End 480,000 180,000 300,000

2. The liabilities of Neechee Company equal one-third of the total assets, and the
owner’s equity is P240,000. What is the amount of the liabilities?
Assets = 360,000 (240,000 ÷ 2/3)
Liab = 120,000 (360,000-240,000) 1/3
Equity = 240,000 2/3

Ref.:Ballada, Win and Susan Ballada. (2019). Basic Accounting Made Easy 21st Edition.
Manila: Domdane Publishers and Made Easy Books.

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 MODULE WEEK 5-8

3. At the beginning of the year, Cora Station had liabilities of P100,000 and
owner’s equity of P96,000. If assets increased by P40,000 and liabilities
decreased by P30,000. What was the owner’s equity at the end of the year?
Assets = Liabilities + Equity
Beg. 196,000 100,000 96,000
+ 40,000 -30,000
End 236,000 70,000 166,000

❖ Use the accounting equation to answer each of the questions above.

ACTI
VITY NO. 3
NAME: YR.&SEC.
COURSE: DATE

PROBLEM #1 Instruction: Indicate on the space provided,(1)(X)on the element where

the account belong (2) BS if the account is Balance Sheet account and IS if the account is income
statement account; Dr (debit) or Cr (credit) to identify the normal balance of the account.
OWNER’S
Accounts ASSET LIABILITES BS or IS Dr or Cr
EQUITY
1. Repairs and Maintenance
X IS Dr
Expense
2. Salaries and Wages Expense
X IS Dr

3. Notes Payable X BS Cr
4. Notes Receivable X BS Dr
5. Service Vehicle X BS Dr
6. Mortgage Payable X BS Cr
7. Utilities Expense X IS Dr
8. Furniture and Fixtures X BS Dr
9. Communication Expense X IS Dr
10. Employees’ benefits payable
X BS Cr
11. Office Equipment X BS Dr
12. Prepaid Insurance X BS Dr
13. Owner’s Withdrawal X BS Dr

Ref.:Ballada, Win and Susan Ballada. (2019). Basic Accounting Made Easy 21st Edition.
Manila: Domdane Publishers and Made Easy Books.

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 MODULE WEEK 5-8

14. Professional fees earned

X IS Cr
15. Accounts Receivable X BS Dr
16. Representation Expense X IS Dr
17. Salaries Payable X BS Cr
18. Office Supplies Expense X IS Dr
19. Office Supplies X BS Dr
20. Accounts payable X BS Cr
21. Cash X BS Dr
22. Inventory X BS Dr
23. Land X BS Dr
24. Accumulated
X BS Cr
Depreciation
25. Miscellaneous Expense X IS Dr
26. Prepaid Rent X BS Dr
27. Rent Expense X IS Dr
28. Juan, Capital X BS Dr
29. Insurance Expense X IS Dr
30. Depreciation Expense X IS Dr

Ref.:Ballada, Win and Susan Ballada. (2019). Basic Accounting Made Easy 21st Edition.
Manila: Domdane Publishers and Made Easy Books.

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 MODULE WEEK 5-8

ACTI
VITY NO. 4
NAME: YR.&SEC.
COURSE: DATE

PROBLEM #1 Identifying the effects of a transaction

Instruction: Indicate the following sign in the appropriate column; (+) for increases, (-)
for decreases, and (+/-) for both increase and decrease.
Owner’s
Assets Liabilities
Equity
1. Cash payment by the owner
+ +
(investment)
2. Payment for taxes and licenses expense - -
3. Repair and maintenance of office - -
4. payment of rent expense - -
5. Purchase of office supplies on account + +
6. Purchase of office supplies for cash +-
7. Payment of accounts payable - -
8. Provide services for cash + +
9. Purchase of equipment and furniture for
+-
cash
10. Purchase of equipment and furniture giving
a 30day promissory note + +

11. Payment of salaries of employees - -

12. Personal transaction like
- -
withdrawal of the owner
13. Provide services on account + +
14. Provide services for cash + +
15. Collection of account from a customer +-
16. Payment of utility bills - -
17. Provide services receiving a
+ +
30day promissory note
18. Payment for other expenses - -
19. Bought supplies paying 50% on cash, and
+- +
the remaining on account.

Ref.:Ballada, Win and Susan Ballada. (2019). Basic Accounting Made Easy 21st Edition.
Manila: Domdane Publishers and Made Easy Books.

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 MODULE WEEK 5-8

20. Rendered service receiving partial

payment on cash and the remaining on + +
account.

Ref.:Ballada, Win and Susan Ballada. (2019). Basic Accounting Made Easy 21st Edition.
Manila: Domdane Publishers and Made Easy Books.

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