PHINMA UNIVERSITY OF PANGASINAN

COLLEGE OF MANAGEMENT AND ACCOUNTANCY

ACCOUNTANCY DEPARTMENT
ACC 102 SUMMATIVE QUIZ

NAME: _____________________________ SECTION: _________________ SCORE: ____

INSTRUCTIONS: Choose the best answer. Write your answers before each number. USE CAPITAL
LETTERS ONLY.

1. Statement 1: Accounting is a service activity. Its function is to provide qualitative information, primarily
financial in nature, about economic entities that is intended to be useful in making economic decisions.
Statement 2: Accounting is an information system that measures, processes, and communicates
financial information about an economic entity.
a. True, False
b. False, True
c. True, True
d. False, False

2. Which of the following is an appropriate definition of accounting?

a. The measurement, processing, and communication of financial information about an identifiable
economic entity.
b. A means of recording transactions and keeping records.
c. The interconnected network of subsystems necessary to operate a business.
d. Electronic collection, organization, and communication of vast amounts of information.

3. Statement 1: A partnership is always owned by 2 individuals.

Statement 2: A corporation is an economic unit that is legally separate from its owners.
a. True, False
b. False, True
c. True, True
d. False, False

4. Which of the following is false?

a. A sole proprietor has limited risk with respect to the amount of resources he invests in his business.
b. A sole proprietorship has only one owner.
c. A sole proprietorship is easy to set up.
d. A sole proprietorship may not be able to obtain loans easily.

5. Which area of public accounting means the examination of financial statements by a CPA for the
purpose of expressing an opinion as to the fairness of the statements?
a. Management Advisory Services
b. Taxation
c. Internal Auditing
d. External Auditing

6. The periodicity concept

a. Requires that all companies prepare monthly, quarterly, and annual financial statements.
b. Results from the Bureau of Internal Revenue requirement that taxable income be reported on an
annual basis.
c. Requires all companies to use a fiscal year ending December 31.
d. Involves dividing the life of a business entity into accounting periods of equal length thus enabling
the financial users to periodically evaluate the results of business operations.

7. The entity concept means that

a. Because a firm is separate and distinct from its owners, those owners cannot have access to its
assets unless the firm ceases to trade.
b. Accounts must be prepared for every firm.
c. The financial affairs of a firm and its owners are always kept separate for the purpose of preparing
accounts.
d. None of the above.
8. During the lifetime of an entity, accountants produce financial statements at arbitrary points in time in
accordance with the basic accounting concept?
a. Objectivity
b. Periodicity
c. Conservatism
d. Matching

9. The accounting equation may be expressed as

a. Assets = Liabilities - Equity
b. Equity + Assets = Liabilities
c. Liabilities = Assets - Equity
d. Equity = Liabilities - Assets

10. The accounting equation may be expressed as

a. Assets = Equities - Liabilities - Revenue + Expenses
b. Assets + Liabilities = Equity + Revenue - Expenses
c. Assets - Expenses = Revenues - Liabilities + Liabilities
d. Assets - Liabilities = Equity + Revenue - Expenses

11. If total liabilities decreased by P25,000 during a period of time and equity increased by P30,000 during
the same period, the amount and direction (increase or decrease) of the period's change in total assets
is
a. P65,000 increase
b. P5,000 decrease
c. P5,000 increase
d. P65,000 decrease

12. The ABC Company sold land for P60,000 in cash. The land was originally purchased for P40,000, and at
the time of the sale, P15,000 was still owed to PHINMA Bank on that purchase. After the sale, The ABC
Company paid off the loan to PHINMA Bank. What is the effect of the sale and the payoff of the loan on
the accounting equation?
a. assets increase P20,000; liabilities decrease P15,000; equity increases P5,000
b. assets increase P5,000; liabilities decrease P15,000; equity increases P20,000
c. assets increase P60,000; liabilities decrease P15,000; equity increases P20,000
d. assets increase P20,000; liabilities decrease P15,000; equity increases P35,000

13. In preparing the journal entries, which of the following data is not needed?
a. Account title
b. Time of transaction
c. Explanation of transactions
d. Posting reference

14. ABC Company bought inventories on account from PHINMA Inc worth P5,000. What is the journal entry
in the books of PHINMA Inc? Debit and credit, respectively
a. Accounts Payable; Inventory
b. Inventory; Accounts Payable
c. Sales; Accounts receivable
d. Accounts Receivable; Sales

15. Which of the following does not have a normal debit balance?
a. Accounts receivable
b. Accumulated depreciation
c. Sales Discount
d. Withdrawals

16. If the ending balance of accounts payable is ₱100,000 and the total debits and credits to that account
during period were ₱60,000 and ₱40,000, respectively, the beginning balance must be
a. 0
b. 20,000
c. 80,000
 d. 120,000

17. What is the logical order of the following steps in the accounting cycle?
a. Post journal entries to the ledger accounts, prepare a worksheet, and then a trial balance.
b. Journalize the closing entries, post the closing entries, and then take a post closing trial balance.
c. Prepare the income statement, prepare the statement of financial position and then prepare a
worksheet
d. Post the closing entries, take a post closing trial balance, then journalize the closing entries

18. Which of the following is a business event that is not considered a recordable transaction?
a. An entity receives product previously ordered
b. An entity pays an employee for work performed
c. A customer inquires about the availability of a service
d. A customer purchases a service

19. Meenen Company purchases equipment for P1,200 and supplies for P400 from Sanders Co. for P1,600
cash. The entry for this transaction will include a
a. debit to Equipment P1,200 and a debit to Supplies Expense P400 for Sanders.
b. credit to Cash for Sanders.
c. credit to Accounts Payable for Meenen.
d. debit to Equipment P1,200 and a debit to Supplies P400 for Meenen.

20. Jack Wiser withdraws P300 cash from his business for personal use. The entry for this transaction will
include a debit of P300 to
a. Jack Wiser, Drawing.
b. Jack Wiser, Capital.
c. Owner's Salary Expense.
d. Salaries Expense.

21. The usual sequence of steps in the transaction recording process is:
a. Journal, analyze, ledger.
b. Analyze, journal, ledger.
c. journal, ledger, analyze.
d. ledger, journal, analyze.

22. An account consists of

a. a title, a debit balance, and a credit balance.
b. a title, a left side, and a debit balance.
c. a title, a debit side, and a credit side.
d. a title, a right side, and a debit balance.

23. An accountant has debited an asset account for P1,000 and credited a liability account for P500. Which
of the following would be an incorrect way to complete the recording of the transaction?
a. Credit an asset account for P500.
b. Credit another liability account for P500.
c. Credit an owner's equity account for P500.
d. Debit an owner's equity account for P500.

24. Which of the following accounts is most likely not subject to adjusting entries?
a. Land
b. Depreciation Expense
c. Prepaid Rent
d. Interest Payable

25. The entry to record expired insurance is omitted. This error causes
a. assets to be overstated.
b. expenses to be overstated.
c. liabilities to be overstated.
d. liabilities to be understated.

26. An adjusting entry must contain

 a. two balance sheet accounts.
b. two income statement accounts.
c. a balance sheet account and an income statement account.
d. an asset account and a liability account.

27. The word "accrued" implies which of the following?

a. Money has been paid but no services have been provided.
b. Money has been paid for a service to be performed during the next period.
c. Money has been paid and the service has been provided.
d. Money has not been paid or received but the service has already been performed or rendered.
28. A business pays weekly salaries of P200,000 on Friday for a five-day week ending on that day. If the
fiscal period ends on Wednesday, the adjusting entry is
a. debit Salaries Expense, P120,000; credit Withdrawals, P120,000.
b. debit Salaries Expense, P120,000; credit Salaries Payable, P120,000.
c. debit Withdrawals, P120,000; credit Salaries Expense, P120,000.
d. debit Salaries Payable, P120,000; credit Salaries Expense , P120,000.

29. An adjusting entry made to record accrued interest on a note payable due next year consists a debit to
a. Interest Expense and credit to Interest Payable.
b. Interest Receivable and credit to Interest Income.
c. Interest Expense and credit to Notes Payable.
d. Interest Expense and credit to Cash.

30. A one-year insurance policy was purchased for P20,000. Three months have passed since the
purchase. The adjusting entry for the insurance policy would include a
a. debit to Prepaid Insurance for P5,000.
b. credit to Prepaid Insurance for P5,000.
c. credit to Insurance Expense for P15,000.
d. debit to Insurance Expense for P15,000.

31. If a company acquired a 3-year insurance policy fro P36,000 paid in advance on October 1, 20AA, the
adjusting entry using asset method would likely include a
a. debit on Insurance Expense, P3,000.
b. debit on Prepaid Insurance, P33,000.
c. credit on Insurance expense, P33,000.
d. credit on Prepaid Insurance, P33,000.

32. The journal entry to record an accrued revenue results in which of the following types of accounts
being debited and credited?
a. asset and income
b. asset and liability
c. expense and asset
d. expense and liability

33. If a journal entry is initially recorded to debit to an asset, the adjusting entry shows a
a. a debit to an expired portion of an asset.
b. a debit to an unexpired portion of an asset.
c. a debit to an expired portion of an expense.
d. a debit to an unexpired portion of an expense.

34. Deferred revenues should be reported as

a. income on the income statement.
b. contributed capital on the balance sheet
c. liabilities on the balance sheet
d. expenses on the income statement.

35. The company received a P36,000 advance payment during the year on services still to be performed.
By the end of the year, one-fourth of the services had been performed. The adjusting entry to record
the amount of service revenues earned during the period would include a
a. debit to Unearned Service Revenues for P27,000.
b. credit to Unearned Service Revenues for P9,000.
 c. debit to Service Revenues for P27,000.
d. debit to Unearned Service Revenues for P9,000.

36. The adjustment for that portion of revenue received in advance which now has been earned is to debit
a. Unearned Revenues and credit cash
b. Service Revenues and credit Unearned Revenues
c. Cash and credit Unearned Revenues
d. Unearned Revenues and credit Service Revenues

37. On July 1, 20AA, Seph Munoz Company received a P48,000 check for 2 years' rent paid in advance and
initially recorded credit to Rent Revenues. The adjusting entry using a calendar year would include a
a. debit to Rent Revenues of P36,000.
b. debit to Unearned Revenues of P12,000.
c. credit to Rent Revenues of P12,000.
d. credit to Cash of P36,000.

38. The decrease in usefulness of property and equipment as time passes is called
a. Consumption.
b. Deterioration.
c. Depreciation.
d. contra asset.

39. Joseph Company bought equipment on January 3 this year for P100,000. At the time of purchase, the
equipment was estimated to have a useful life of nine years and a scrap value of P10,000 at the end of
its useful life. What is the amount of one year's depreciation?
a. P11,110
b. P10,000
c. P90,000
d. P20,000

40. Mark Company has a credit revenues of P100,000, projection shows that it will not collect 2% of the
revenues to its customers. How much should be recorded as Uncollectible Accounts Expense?
a. P2,000 credit
b. P20,000 debit
c. P20,000 credit.
d. P2,000 debit.

41. The Balance Sheet is dated

a. as of a given date
b. Covering a period of time
c. December 31
d. Any of these

42. What is the difference between the balance sheet columns in the worksheet and the post - closing trial
balance?
a. Owner's Capital in the post-closing trial balance represents the ending balance, after closing profit
or loss and Owner's drawings
b. The post-closing trial balance includes real accounts
c. Owner's capital in the balance sheet columns represents the ending balance
d. Owner's capital in the post-closing trial balance has a higher amount compared with the Owner's
capital in the balance sheet columns.

43. The balancing figure in the balance sheet and income statement columns of the worksheet represents
the
a. Profit or loss for the period
b. Cash at the end of the period
c. The amount that the accountant cannot balance
d. Receivable or payable of the business

44. When preparing a worksheet, real accounts in the adjusted trial balance are extended to the
a. Balance sheet columns
 b. Income statements columns
c. Real columns
d. Post closing columns

45. Closing entries reduce the following type of accounts to a zero balance at the end of the period.
a. income and expenses
b. income summary
c. Withdrawal
d. all of the above

46. Which of the following accounts will appear on the post-closing trial balance?
a. Building
b. Depreciation Expense - Building
c. Owner’s Withdrawals
d. Service Revenues

47. Reversing entries are

a. Optional
b. made to record a change in corporate objectives
c. required by generally accepted accounting principles
d. made prior to preparing a post-closing trial balance

48. Which of the following comes last in the accounting process?

a. preparation of a post-closing trial balance
b. preparation of na adjusted trial balance
c. worksheet preparation
d. journalizing external transactions

49. Closing entries will

a. increase the Owner’s Capital balance
b. decrease the Owner’s Capital balance
c. not affect the Owner’s Capital balance
d. either increase or decrease the Owner’s Capital balance

50. In which of the following have the correct order in purchasing?

a. Decision, consideration, awareness
b. Consideration, decision, awareness
c. Awareness, consideration, decision
d. Decision, awareness, consideration

51. Which of the following is true?

a. A purchase order is an official document, created by the buyer, which authorizes a purchase
transaction for goods or services from a supplier.
b. Purchase requisition and purchase order is the same.
c. Purchase requisitions are first filled out by a vendor who sees the need for a product or a service.
d. None of the following

52. Arrange the following to make an order to the suppliers:

I. Create purchase order
II. Supplier approves purchase order
III. Approval and payment
IV. Create purchase reuisity.

53. Supposed BTS catering's inventory account showed a balance of P100,000 before year end
adjustments. The physical count of goods on hand totaled P97,000. To adjust the accounts, BTS would
make this entry
a. Debit Inventory 3,000 Credit Accounts Receivable 3,000
b. Debit Cost of Goods Sold 3,000 Credit Inventory 3,000
 c. Debit Inventory 3,000 Credit Cost of Goods Sold 3,000
d. Debit Accounts Payable Credit Inventory

54. On a worksheet for a merchandising entity that uses the perpetual inventory system,
a. the cost of goods sold is contained in one account in the balance sheet
b. the cost of goods sold is contained in one account in the Income Statement Column
c. the cost of goods sold is created by an entry in the adjustments columns
d. the items composing cost of goods sold are scattered through the income statement columns

55. Company records disclose the following:

 Sales P95,000 Beginning merchandise inventory P10,000
 Purchases 45,000 Gross profit from sales 50,000
 Transportation-In 500 Purchases discounts 1,000

The ending merchandise inventory (periodic)

a. P5,000
b. P6,000
c. P9,500
d. P10,000

56. Which of the following accounts should not be closed by a merchandising entity that uses the perpetual
inventory system?
a. Cost of Goods Sold
b. Income Summary
c. Merchandise Inventory
d. Sales Returns and Allowances

57. The Merchandise inventory account balance in the Trial Balance columns of a worksheet for a
merchandising entity that uses the periodic inventory system
a. appears in both the debit and credit columns
b. appears in the credit columns only
c. is correct as stated
d. is the same as it was at the beginning of the period

58. The classification and normal balance of the sales discount account would be
a. contra revenue and debit
b. contra revenue and credit
c. expense and debit
d. revenue and credit

59. An item retailing for P10,000, subject to a trade discount of 25%, is paid for within the discount period
on terms of 2/10, n/30. What is the amount of payment?
a. P10,000
b. P7,500
c. P7,400
d. P7,350

60. Each time an entry is recorded in the purchases journal, the credit would be entered in the
a. Accounts Payable column
b. Accounts Receivable column
c. Purchases column
d. Supplies column

61. A firm that uses special journals acquired merchandise for P5,000, giving a P5,000 note payable. In
which journal would the transaction be recorded?
a. cash disbursements journal
b. cash receipts journal
c. general journal
 d. purchases journal

62. A special journal contained columns for cash, purchases discounts and accounts payable. This journal is
called
a. cash disbursements journal
b. cash receipts journal
c. purchases journal
d. sales journal

63. Infrequent sales returns would be recorded in which journal?

a. cash payments
b. cash receipts
c. general journal
d. sales returns

64. When merchandise is returned or a price adjustment is granted, an entry is made in the
a. adjustments journal
b. cash receipts journal
c. general journal
d. purchases journal

65. The controlling account in the general ledger that summarizes the debits and credits to the individual
accounts in the customers’ ledger is called
a. accounts payable
b. accounts receivable
c. Purchases
d. sales

66. The receipt of cash arising from a sales transaction would be recorded in the
a. cash payments journal
b. cash receipts journal
c. purchases journal
d. sales journal

67. Manufacturing costs would not include

a. Depreciation on factory equipment
b. Indirect labor costs
c. Indirect materials used
d. Sales salaries expense

68. Each of the following is true with respect to product costs, except
a. Direct labor is an example of product cost.
b. Product costs are deducted from revenue when the manufacturing process is completed.
c. Product costs are not regarded as expenses of the current period.
d. Product costs represent inventoriable costs

69. Which of the following is not likely to be treated as a product cost?

a. Depreciation on the factory
b. Interest paid on notes payable
c. Portion of the cost of running the quality control department
d. Wages paid to factory workers

70. The purchases – raw materials account is debited when

a. Direct materials are placed into production
b. Direct materials are purchased
c. Indirect materials are placed into production
d. Indirect materials are purchased

71. The direct labor account is debited

a. At the end of the payroll period, when the employees are paid
 b. When a new factory employee begins work
c. When related labor costs are transferred into the work in process inventory account
d. When the goods manufactured are completed
For the next 8 questions, use the following information:

Beginning Ending
Raw Materials 57,600 48,200
Work in Process 145,900 126,000
Finished Goods 62,250 54,780

 Purchases – Direct Materials: P123,760

 Freight in: P5,000
 Purchase Returns and Allowances: P3,400
 Direct Labor: P153,600
 Indirect Labor: P38,620
 Indirect Materials: P24,900
 Depreciation Expense: Factory Building: P52,750
 Depreciation Expense: Administrative Building: P25,000
 Repairs and Maintenance: Factory Building: P7,000
 Repairs and Maintenance: Administrative Building: P2,500
 Miscellaneous Factory Expenses: P4,300

72. What is the prime cost?

a. P221,200
b. P210,800
c. P288,360
d. P192,220

73. What is the conversion cost?

a. P207,670
b. P308,670
c. P281,170
d. P262,330

74. What is the direct materials used?

a. P57,600
b. P48,200
c. P134,760
d. P129,760

75. What is the Manufacturing Overhead

a. P150,070
b. P155,070
c. P127,570
d. P123,270

76. What is the Total Manufacturing Cost

a. P361,270
b. P443,430
c. P415,930
d. P415,390

77. What is the Total Cost of Goods Placed in Process

a. P541,930
b. P589,330
c. P561,830
d. P569,430

78. What is the Cost of Goods Manufactured

 a. P443,430
b. P561,830
c. P435,830
d. P435,380

79. What is the Total Goods Available for Sale

a. P498,210
b. P624,080
c. P498,080
d. P498,800

80. What is the Cost of Goods Sold

a. P435,960
b. P569,300
c. P443,300
d. P440,300

81. This refers to any individual who is a recipient of salaries or wages. It includes an officer, employee or
elected official of the Government of the Philippines of any political division, agency or instrumentality
thereof.
a. Employee
b. Worker
c. Laborer
d. Employer

82. This is the enumeration applied to management supervisory and administrative services.
a. Salary
b. Wages
c. Gross Pay
d. Earnings

83. Miss Dee Company consumed P450,000 worth of direct materials during May, 2020. At the end of the
month, the direct materials inventory of Miss Dee was P25,000 lower than the May 1 inventory level.
How much was the direct materials procured during May 2020?
a. P475,000
b. P375,000
c. P425,000
d. P400,000
Use the following information for Questions 84- 85:
Let us assume that an employee receives a monthly salary of P10,500. His contribution to the SSS during
the month is P381.50 and same amount is to be deducted by his employer from his salary. The employer
counterpart share is P10.00 which is also treated as business expense. For Pag-ibig, the contribution of the
said employee is P100.00 and the counterpart of its employer is also P100.00 which is treated business
expense.
The contribution of the employee and his employer contribution are shown below
Items Employee Share Employer Share
SSS P 381.50 P 773.50
ECC None 10.00
Philhealth 125.00 125.00
Pag-ibig 100.00 200.00

84. The amount of the employee’s net pay is

a. P10,500
b. P9,893.50
c. P8,785.00
d. none of these

85. Total remittances to the different agencies (SSS, HDMF and Philhealth) by the employer amounted to
a. P606.50
b. P1,108.50
c. P1,700.00
d. 1,715.00