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University of St.

La Salle
Elementary Accounting _ Actg1_I
Prelim Examination AY 2015-2016
College of Business and Accountancy
Students Name: ______________________________________
Course & Year: ______________________________________
_________________

Instructors Name:_________________
Score:

ANSWER SHEET

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University of St. La Salle


Elementary Accounting _ Actg1_I
Prelim Examination AY 2015-2016
College of Business and Accountancy

Students Name: ______________________________________


Course & Year: ______________________________________

Instructors Name:_________________
Score:
_________________

General Instructions: Write all answers in the given answer sheet. Use black or blue pen only. Use of
cellular phone is not allowed. For multiple choice questions, write the CAPITAL LETTER of the chosen
answer. Avoid erasures.
Test I. Multiple Choice. Please write your answers on the answer sheet.
1. Profit is the difference between
a.
assets and liabilities
b.
the incoming cash and outgoing cash
c.
the assets purchased with cash contributed by the owner and the cash spent to operate the
business
d.
the assets received for goods and services and the amounts used to provide the goods and services
2. Which of the items below is not a business organization form?
a.
entrepreneurship
b.
proprietorship
c.
partnership
d.
Corporation
3. Financial reports are used by
a.
Management
b.
Creditors
c.
Investors
d.
all of the above
4. Which of the following best describes accounting?
a.
records economic data but does not communicate the data to users according to any specific rules
b.
is an information system that provides reports to stakeholders
c.
is of no use by individuals outside of the business
d.
is used only for filling out tax returns and for financial statements for various type of governmental
reporting requirements
5. The two most common specialized fields of accounting in practice are
a.
forensic accounting and financial accounting
b.
managerial accounting and financial accounting
c.
managerial accounting and environmental accounting
d.
financial accounting and tax accounting systems
6. Equipment with an estimated market value of $45,000 is offered for sale at $65,000. The equipment is
acquired for $10,000 in cash and a note payable of $40,000 due in 30 days. The amount used in the
buyer's accounting records to record this acquisition is
a.
$50,000
b.
$65,000
c.
$10,000

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d.

$45,000

7. Owned resources of a business are referred to as


a.
assets
b.
liabilities
c.
equities
d.
revenues
8. Assets are
a.
always greater than liabilities.
b.
either cash or accounts receivables
c.
the same as expenses because they are acquired with cash
d.
financed by the owner and/or creditors
9. Debts owed by a business are referred to as
a.
accounts receivables
b.
equities
c.
owners equity
d.
Liabilities
10 .The accounting equation may be expressed as
a.
Assets = Equities - Liabilities
b.
Assets + Liabilities = Owner's Equity
c.
Assets = Revenues less Liabilities
d.
Assets - Liabilities = Owner's Equity
11. Which of the following is not a business transaction?
a.
make a sales offer
b.
sell goods for cash
c.
receive cash for services to be rendered later
d.
pay for supplies
12. A business paid $9,000 to a creditor in payment of an amount owed. The effect of the transaction on
the accounting equation was to
a.
increase one asset, decrease another asset
b.
increase an asset, increase a liability
c.
decrease an asset, decrease a liability
d.
increase an asset, increase owner's equity
13. Earning revenue
a.
increases assets, increases owners equity.
b.
increases assets, decreases owner's equity
c.
increases one asset, decreases another asset
d.
decreases assets, increases liabilities
14. The financial statement that presents a summary of the revenues and expenses of a business for a
specific period of time, such as a month or year, is called a(n)
a.
prior period statement
b.
statement of owner's equity
c.
income statement
d.
balance sheet

15. How does the purchase of equipment by signing a note affect the accounting equation?

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a.
b.
c.
d.

assets
assets
assets
assets

increase;
increase;
increase;
increase;

assets decrease
liabilities decrease
liabilities increase
owner's equity increases

16. How does the purchase of supplies on account affect the accounting equation?
a.
assets increase; owner's equity decreases
b.
assets increase; liabilities increase
c.
assets increase; liabilities decrease
d.
liabilities increase; owner's equity decreases
17. Revenue should be recognized when
a.
cash is received
b.
the service is performed
c.
the customer places an order
d.
the customer charges an order
18. Which of the following accounts is an owner's equity account?
a.
Cash
b.
Accounts Payable
c.
Prepaid Insurance
d.
Julia Davis, Capital
19. The debit side of an account
a.
depends on whether the account is an asset, liability or owner's equity
b.
can be either side of the account depending on how the accountant set up the system
c.
is the right side of the account
d.
is the left side of the account
20. An account is said to have a debit balance if
a.
the amount of the debits exceeds the amount of the credits
b.
there are more entries on the debit side than on the credit side
c.
its normal balance is debit without regard to the amounts or number of entries on the debit side
d.
the first entry of the accounting period was posted on the debit side
21. A debit may signify a(n)
a.
decrease in asset accounts
b.
decrease in liability accounts
c.
increase in the capital account
d.
decrease in the drawing account
22. Which of the following types of accounts have a normal credit balance?
a.
assets and liabilities
b.
liabilities and expenses
c.
revenues and liabilities
d.
capital and drawing

23. A credit signifies a decrease in


a.
drawing
b.
liabilities
c.
capital

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d.

Revenue

24. Which of the following applications of the rules of debit and credit is true?
a.
decrease Prepaid Insurance with a credit and the normal balance is a credit
b.
increase Accounts Payable with a credit and the normal balance is a debit
c.
increase Supplies Expense with a debit and the normal balance is a debit
d.
decrease Cash with a debit and the normal balance is a credit
25. The classification and normal balance of the accounts payable account is
a.
an asset with a credit balance
b.
a liability with a credit balance
c.
owner's equity with a credit balance
d.
revenue with a credit balance
26. The classification and normal balance of the supplies expense account is a(n)
a.
asset with a debit balance
b.
asset with a credit balance
c.
expense with a debit balance
d.
liability with a credit balance
27. The process of initially recording a business transaction is called
a.
trial balancing
b.
posting
c.
journalizing
d.
Balancing
28. If the two totals of a trial balance are not equal, it could be due to
a.
failure to record a transaction
b.
recording the same erroneous amount for both the debit and the credit parts of a transaction
c.
an error in determining the account balances, such as a balance being incorrectly computed
d.
recording the same transaction more than once
29. A trial balance is prepared to
a.
prove that there were no errors made in recording transactions into the journal
b.
prove that no errors were made in posting to the ledger
c.
prove that each account balance is correct
d.
summarize the account balances to help prepare financial statements
30. A credit balance in which of the following accounts would indicate a likely error?
a.
Fees Earned
b.
Salary Expense
c.
Peter Penn, Capital
d.
Accounts Payable

Test II. Short Problems. Please write your answers on the answer sheet. 2 pts each.
1. The total assets of company A is P1,500,000. After deducting all liabilities, owners claim over the
assets amounts to P700,000.00. How much was the companys liabilities?
A. P2,200,000.00
C. P1,500,000.00

B. 800,000.00
D. P700,000.00

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2. Given the following data, determine the total assets.


Cash 50,000.00
Rent Expense
15,000.00
Land160,000.00
Inventories20,000.00

Accounts Payable75,000.00
Unearned Income 25,000.00
Insurance Expense- 30,000.00
Prepaid Insurance- 27,000.00

A. 257,000.00
C. 302,000.00

B. 402,000.00
D. 182,000.00

3. At the end of 2009, the Accounts Receivable balance of Company B is P 300,000.00. During 2010,
the company collected 2/3 of these receivables. In addition, sales on account during 2010 are P
100,000.00. What is the balance of Accounts Receivable at the end of 2010?
A. 300,000.00
C. 200,000.00

B. 100,000.00
D. 400,000.00

4. At the beginning of 2010,Company C had P 350,000.00 of liabilities. During the period, the entity
purchased P 50,000.00 worth of supplies for cash. Payments for liabilities totaled P 275,000.00. The
company also received an advance payment from a customer worth P 40,000.00 for which the
necessary service was not yet rendered. Given these information, determine the total liabilities at
the end of 2010.
A. 125,000.00
B. 115,000.00

C. 75,000.00
D. 65,000.00

5. The complete accounts for the Balance sheet of Company D are shown below:
Cash
Accounts Receivable
Equipment
Notes Payable
Inventories
Accounts Payable
Unearned Rent Income
Prepaid Insurance
Bonds Payable
D, Capital

Debit
100,000.00
350,000.00
200,000.00

Credit

30,000.00

175,000.00

300,000.00
72,000.00
15,000.00

215,000.00
?

Given the above details, solve for the owners equity of Comp. D.
A. 840,000.00
B. 617,000.00

C. 299,000.00
D. 223,000.00

6. Supplies Inventory, beginning


Supplies additionally purchased
Supplies used during the period

25,000.00
15,000.00
30,000.00

Based on the above data, what is the supplies expense for the period?
A. 30,000.00
B. 10,000.00
7. Beginning owners equityAdditional InvestmentsNet LossWithdrawal-

C. 40,000.00
D. 70,000.00
210,000.00
40,000.00
25,000.00
15,000.00

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Based on the above details, determine the ending balance of the Owners Equity.
A. 260,000.00
B. 235,000.00
C.

C. 210,000.00
D. 200,000.00

8. As of December 31, 2010, Loans Payable of Co. F had a balance of P 2,100,000.00. Out of this
liability, P 700,000.00 is to be paid on or before December 31, 3011. At December 31, 2010, how
much was the non-current portion of Co. Fs Loans Payable?
A. 1,400,000.00
B. 700,000.00

C. 2,100,000.00
D. 2,800,000.00

9. The following are the transactions undertaken by Co. G on its 2 nd year of operations:
a. Received P 15,000.00 cash for service rendered
b. Paid expense worth P 10,000.00
c. The owner, Mr. Gonzaga invested an equipment worth P100,000.00
Before the preceding transactions, Co. G has a cash balance of P 223,000.00. What will be the
balance of cash after recording transactions a, b and c?
A. 328,000.00
C. 228,000.00
B. 223,000.00
D. 248,000.00
10. A business has a cash of P 3,000.00; Notes payable of P2,500.00; Accounts Payable of P 4,300.00;
Service Revenue of P 7,000.00 and Rent Expense of P 1,800.00. On the basis of these data, how
much is the total liability?
A. 18,600.00
B. 6,800.00

C. 8,600.00
D. 5,500.00

11. On Jan. 1. 2010, Co. H has an owners equity of P 270,000.00. Additional investments during the
year amounted to P 75,000.00 and revenue earned was P 105,000.00. At the end of the year,
owners equity has a balance of P 385,000.00. Determine the total expenses incurred during the
period based on the given information.
A. 65,000.00
B. 300,000.00

C. 108,000.00
D. 180,000.00

12. At the start of the business, Co. J has supplies inventory of P40,000.00. Additional purchases of
supplies amounted to P20,000.00. At the end of the period, the company determined that the
supplies inventory on hand were valued at P 30,000.00. What is the effect of the transaction to the
net income for the period?
A. Increase by 60,000.00
B. Decrease by 30,000.00

C. Decrease by 20,000.00
D. Increase by 40,000.00

13. Use the following data to answer for question numbers 13, 14 and 15:
L Company
Balance Sheet
As of December 31, 2009
Assets
Cash

200,000.00

Liabilities
Accounts Payable

100,000.00

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Accounts Receivable 50,000.00


Furniture
50,000.00
Total Assets

300,000.00

Notes Payable

50,000.00

Total Liabilities
L, Capital
Total Liabilities and Capital

150,000.00
150,000.00
300,000.00

If the accounts Receivable were all collected, how much is the cash balance?
A. 200,000.00
B. 250,000.00

C. 150,000.00
D. 300,000.00

14. If the accounts payable were paid after recording the collection of all receivables, how much is the
total assets?
A. 250,000.00
B. 150,000.00

C. 300,000.00
D. 200,000.00

15. After effecting the changes on numbers 13 and 14, how much is the capital balance?
A. 250,000.00
B. 200,000.00

C. 150,000.00
D. 300,000.00

Test III. Long Problem. Please write your answers on the answer sheet. You may write at the
back of the answer sheet.
The following are the transactions of Commanders Barber Shop. You are to record them using these
accounts: Cash; Accounts Receivable; Shop Supplies Inventory; Furniture and Fixtures; Shop Equipment;
Accounts Payable; Salva, Capital;
June 2014
1 - He made the following investments: Cash P 250,000; Furniture and Fixtures P120,000; Shop
Equipment P 210,000.
3 Paid business permits and licenses, P 3,250.
5 Bought supplies on account, P18,350.
7 Income for the week: Cash P 16,000; On account P 5,000.
8 Salva withdrew P 20,000 from the business for his personal use.
11 Bought additional barbers chair (furniture) for cash, P 65,000.
13 Partial payment of June 5 account, P 15,000.
14 Income for the week: Cash P 25,000; On account P 4,000.
15 Payment of commissions to barbers, P 12,000.
16 Collected in full the customers accounts of June 7 and 14 in the amount of P 9,000.
17 Received a laundry bill from ACA Laundry Shop, P 5,680.
19 Payment of account with ACA Laundry Shop, P 5,680.
21 Income for the week: Cash P 18,000; On account P 20,000.
22 Full payment of June 5 account, P 3,350.
28 Paid light and water bills, P 10,000.
29 Bought shop supplies for cash, P 7,830.
30 - Income for the week: Cash P 15,000; On account P 25,000.

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Payment of commission to barbers, P 16,000

Received a laundry bill from ACA Laundry Shop,


P 3,950.

Required:
Record the foregoing transactions in Financial Transaction worksheet. For changes affecting the capital
account, identify the items as revenue, expense, withdrawal or investment by writing R, E, W or I,
respectively, beside the amounts. Compute the ending balances of each account.

Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more
time.
~Thomas A. Edison
God Bless!!!

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