ACLC COLLEGE – ORMOC

Special Examination
Fundamentals of Accountancy, Business, and Management 1
2nd Sem, S.Y. 2021 -2022

Prepared by: Jerelyn C. Panis

Test I: Multiple Choice

1. A branch of accounting that emphasizes the preparation and analysis of accounting information within the organization.
a. Management Accounting
b. Financial Accounting
c. Auditing
d. Accounting Education
2. A branch of accounting that helps clients follow rules set by tax authorities.
a. Management Accounting
b. Financial Accounting
c. Tax Accounting
d. Auditing
3. They use accounting information to determine the ability of a company to pay their obligations a they become due.
a. Prospective Investors
b. Business Owners
c. Government
d. Creditors
4. They use accounting information to helps them in deciding whether to invest or not in a company.
a. Prospective Investor
b. Business Owners
c. Government
d. Creditors
5. They use accounting information for assessing the financial position of its suppliers which is necessary for them to maintain a
stable source of supply in the long term.
a. Consumers
b. Creditors
c. Owners
d. Managers
6. They need accounting information to know the condition of their business.
a. Consumers
b. Creditors
c. Owners
d. Managers
7. This principle, also called measurability concept in accounting, indicates that only transactions that can expressed in
monetary currency should be recorded.
a. Accrual Principle
b. Monetary Unit Principle
c. Cost Principle
d. Business Entity Principle
8. This principle explains that a business enterprise is separate and distinct from its owner or investor.
a. Accrual Principle
b. Monetary Unit Principle
c. Cost Principle
d. Business Entity Principle
9. This is the concept that requires income and expense recognition in the accounting period when they are actually earned and
incurred, rather than when cash are received (for revenues) and disbursed (for expenses). Financial statements are prepared
using the accrual basis accounting.
a. Accrual Principle
b. Monetary Unit Principle
c. Cost Principle
d. Business Entity Principle

10. This principle explains that accounts should be recorded initially at cost.
 a. Accrual Principle
b. Monetary Unit Principle
c. Cost Principle
d. Business Entity Principle
11. Withdrawal of the owner for personal use would
a. Increase asset, decrease owner’s equity
b. Decrease asset, decrease owner’s equity
c. Increase asset, decrease owner’s equity
d. Decrease asset, increase owner’s equity
12. Service rendered on account would
a. Increase asset, decrease owner’s equity
b. Decrease asset, increase owner’s equity
c. Increase asset, increase liability
d. Increase asset, increase owner’s equity
13. Paid expenses incurred would
a. Increase asset, increase liability
b. Increase asset, increase owner’s equity
c. Increase asset, decrease owner’s equity
d. Decrease asset, decrease owner’s equity
14. Received cash for service rendered would
a. Increase asset, increase liability
b. Increase asset, increase owner’s equity
c. Increase asset, decrease owner’s equity
d. Decrease asset, increase owner’s equity
15. Payment to supplier would
a. Increase asset, increase liability
b. Increase asset, increase expense
c. Decrease asset, decrease liability
d. Decrease income, decrease expense
16. Borrowings from the bank would
a. Increase asset, increase liability
b. Increase asset, increase expense
c. Decrease asset, decrease liability
d. Decrease income, decrease expense
17. Purchase of assets on cash basis would
a. Increase owner’s equity
b. Increase asset
c. Not affect total asset
d. Decrease income
18. Withdrawal of the owner for personal use would
a. Increase asset, decrease owner’s equity
b. Decrease asset, decrease owner’s equity
c. Increase asset, decrease owner’s equity
d. Decrease asset, increase owner’s equity
19. Purchase of asset on account would
a. Increase asset, increase liability
b. Increase asset, increase expense
c. Decrease asset, decrease liability
d. Decrease income, decrease expense
20. Asset invested by the owner would
a. Decrease asset, decrease owner’s equity
b. Increase asset, increase owner’s equity
c. Increase asset, decrease owner’s equity
d. Decrease asset, increase owner’s equity
21. This type of business buys at wholesale and later sells the products at retail.
a. Manufacturing
b. Merchandising
c. Service
d. Cooperative

22. This type of business offers professional skills, advice and consultations.
a. Manufacturing
 b. Merchandising
c. Service
d. Cooperative
23. This type of business buys raw materials and uses them in making a new products, therefore combining raw materials, labor
and expenses into a product for sale later on.
a. Manufacturing
b. Merchandising
c. Service
d. Cooperative
24. Shopko is an example of
a. Manufacturing
b. Merchandising
c. Service
d. Cooperative
25. Pongos Hotel is an example of
a. Manufacturing
b. Merchandising
c. Service
d. Cooperative
26. Is the money spent or cost by the business in an effort to generate revenue.
a. Assets
b. Liabilities
c. Expense
d. Income
27. Are properties or rights owned by the business.
a. Assets
b. Liabilities
c. Owner’s Equity
d. Income
28. Refers to the obligation of the business.
a. Assets
b. Liabilities
c. Owner’s Equity
d. Income
29. Prepaid expense is a/an
a. Assets
b. Liabilities
c. Owner’s Equity
d. Income
30. Refers to the obligations of the business that matures within a year.
a. Current Asset
b. Current Liability
c. Non – current Asset
d. Non – current Liability

Test II. Business Transaction Analysis

Date Business Transaction Debit Credit

June 5, 2018 Bought computer for cash, Php15,500

June 8, 2018 Received Php3,000 for service rendered

June 11, 2018 Service rendered on account, Php1,000