Placido M. Menaje, Jr.

ACTBAS2 Quiz #1 (3
rd
Term, SY 2008-2009)
Concepts and Journalizing (With Accounting for Payroll and Promissory Notes)
General Instructions: Write all your answers on a 10-column worksheet
TEST I JOURNALIZING (40 pts). Record the following selected transactions of METRO
PHOTOCOPYING SERVICES using 10-column worksheet as the general journal. Explanation is optional.
September 2008
1 CARLOS MARTINEZ, owner, made additional investment as follows: Cash, P150,000; Photocopying
Equipment, P270,000; Photocopying Supplies, P40,000; and Office Equipment, P85,500. The photocopying
equipment was previously acquired for personal use by Carlos from LUZON BUSINESS MACHINES on
August 8, 2008 on terms: 20% down, P100,000 temporarily settled with a 60 day 12% note and the
balance on account. The personal obligations of Carlos will now be assumed by the firm.
4 Paid the bill with MERALCO which was received and recorded on August 30, 2008, P42,930.
8 Completed photocopying services for GEMINI COMPANY, P17,800 on terms P7,800 cash and the balance
settled with a 30-day 15% note.
9 Bought photocopying supplies from ACTBAS2 GENERAL SUPPLIES, P20,000 on terms: 10% down, 60%
settled with a 45-day 10% note and the balance on account.
11 Paid the following: one-year insurance premium, P5,000; two-year advertising P30,000; and rent for the
current month of September, P12,500.
12 Granted cash advance to three employees at P2,000 each.
13 Discounted the note of GEMINI COMPANY with BANCO DE ORO at 18%
15 Paid one-half of the total gross monthly earnings of employees of P60,000. Deductions were made for: SSS
premiums, P2,810; Philhealth contributions, P1,750; and the cash advance granted on the 12
th
.
20 Discounted own 30-day 12% P50,000 note with METRO BANK.
21 Received a 20-day 18% note for P15,000 from GISELLE for photocopying services rendered.
22 CARLOS withdrew office supplies worth P2,500 for personal use.
24 Paid the Accounts Payable with ACTBAS2 GENERAL SUPPLIES.
30 Paid employees second-half payroll. Deductions were made for: 10% withholding tax and Pag-IBIG
contributions, P750.
October 2008
7 Settled all obligations with LUZON BUSINESS MACHINES.
8 Received notice from BANCO DE ORO that GEMINI COMPANY dishonored its note. Paid the bank the
amount due including protest fee of P1,000.
11 GISELLE fully settled her note.
20 Settled the note that matures today.
24 Settled the note with ACTBAS2 GENERAL SUPPLIES.
31 CARLOS permanently withdrew cash amounting to P500,000
TEST II TRUE or FALSE (15 pts) Write TRUE if the statement is correct or FALSE if it is wrong.
1. Discounting of notes always involves recording of interest income.
2. The cash proceeds from a discounted interest bearing note is computed by deducting the bank discount
from the face amount of the note.
3. The entry to record discounting of own note involves a credit to Notes Payable Discounted.
4. Employees contribute to Philhealth fund to enable them to avail of low-cost housing loan.
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5. The employer is not required to make a counterpart contribution for an employee whose monthly gross
earnings is less than P4,000 but opted to contribute to the Pag-IBIG fund.
6. Aside from securing the future benefits of employees, the Social Security System allows employees to avail
of salary loans.
7. A note is said to be dishonored when the firm which discounted the note debits the Notes Receivable
Discounted account.
8. A dishonored note is recorded by the endorsing firm as a debit to Accounts Receivable for the face amount
of the note.
9. The Interest Expense account covers a period from the date of the note up to its maturity date.
10. Interest Income on a discounted 6-month 12% note is computed by the formula: Principal amount
interest rate

.
11. The purpose of discounting a notes receivable is for the payee to get cash before the maturity date of the
said note.
12. The protest fee is recorded by the endorser of the dishonored note as Miscellaneous Expense.
13. The maturity value of the note is equal to the face amount plus interest covering the period from the date
of the note to its maturity date.
14. Only unmatured notes can be discounted with the bank.
15. When the firm credits Notes Payable upon discounting its own note, it means the firm is recognizing a
contingent liability.
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