DMC COLLEGE FOUNDATION

BASIC EDUCATION DEPARTMENT – SENIOR HIGH SCHOOL

FUNDAMENTALS IN ACCY, BUS & MGT 1
SUMMATIVE TEST 4th QUARTER SY: 2016-2017

NAME:____________________________________________________________ DATE:__________________________

I. MULTIPLE CHOICE (1 point each)

INSTRUCTION: Encircle the letter of your best choice. Strictly no erasures. Use ballpen only.

1. Which of the following will close the income summary account if revenues are greater than expenses?
a. crediting income summary and debiting retained earnings. .c debiting cash and crediting income summary.
b. debiting income summary and crediting retained earnings. d. debiting income summary and crediting summary.

2. The first step in the accounting cycle is to

a. record transactions in a journal. c. post journal entries to general ledger accounts.
b. analyze transactions from source documents. d. adjust the general ledger accounts.

3. Which of the following would typically be considered a source documents?

a. Chart of accounts c. General journal
b. General ledger d. Invoice received from seller

4. Which of the following documents does not initiate an entry to be made in the accounts?
a. Sales invoice c. Purchase order
b. Purchase invoice d. Credit memorandum

5. Which of the following statements is true when recording business transaction?

a. The word “debit” means increase and the word “credit” means decrease.
b. Assets, expenses, and drawing accounts are debited for increases.
c. Liabilities, revenue, and drawing accounts are debited for increases.
d. Assets, expenses, and capital accounts are debited for increases.

6. Debits
a. increase assets and decrease expenses, liabilities, revenue, and equity.
b. increase assets and expenses and decrease liabilities, revenue and equity.
c. increase assets and equity and decrease liabilities, expenses and revenue.
d. decrease assets and expenses and increase liabilities, revenue and equity.

7. Which of the following describes a simple journal entry?

a. It consists of one debit and one credit. c. It consists of one debit and two credits.
b. It consists of two debits and one credit. d. It is a memorandum entry.

8. A journal entry that contains more than two accounts is called

a. a posted journal entry. c. an erroneous journal entry.
b. an adjusting journal entry. d. a compound journal entry.

9. The debit and credit analysis of a transaction normally takes place

a. before an entry is recorded in a journal. c. when the trial balance is prepared.
b. when the entry is posted to the ledger. d. at some other point in the accounting cycle.

10. An accounting record into which the essential facts and figures in connection with all transactions are initially recorded is called
a. ledger. c. trial balance.
b. account. d. journal.

11. Posting refers to the process of transferring information from

a. journals to general ledger accounts. c. source documents to journals.
b. general ledger accounts to journals. d. journals to source documents.

12. Which business paper below is prepared by an entity for every cash payment?
a. check c. journal
b. voucher d. official receipt

13. The income summary account

a. generally has a credit balance after all the accounts that should be closed have been closed.
b. summarizes revenue, expense, and net earnings or loss for the accounting period.
c. summarizes changes in assets, liabilities, and net earnings or loss for the accounting period.
d. is used to close the retained earnings account.

14. After the accounts have been closed,

a. all the accounts have zero balances.
b. the asset, liability, and stockholders’ equity accounts have zero balances.
c. the revenue, expense, income summary, and retained earnings accounts have zero balances.
d. the revenue, expense, and income summary accounts have zero balances.

15. For sole proprietorship, the net income for the period is
a. credited to capital account. c. credited to drawing account.
b. debited to capital account. d. debited to drawing account.

II. TRUE or FALSE. (1 point each)

Prepared by: Angevin B. Acaylar, CPA Page 1

 INSTRUCTION: Write letter “T” if the statement is correct and letter “F” if incorrect.
________16. A journal entry is said to be complete even without an “explanation”. This statement is true.
________17. Erasures in the journal may impair accounting records and can create suspicious that there are manipulations done. This statement is
false.
________18. An erroneous journal entry cannot be corrected anymore. This statement is true.
________19. Entries in the journal are transferred to the ledger for final recording. This statement is true.
________20. A journal like that of a ledger can also be a “loose-leaf” or “book bound” form. This statement is true.
________ 21. The bookkeeper has the option to indicate a double zero or dash in the centavo column if there is no centavo. This statement is true.
________22. There is no indention for the accounts debited and credited in a journal entry. This statement is false.
________ 23. The use of a peso sign is eliminated specially in the journal because the debit and credit columns are understood to be money columns
and that we use peso as valuation. This statement is false.
________ 24. In the journal, the use of comma for the millions and thousands and the decimal points for the centavo are eliminated. This statement is
true.
________ 25. When the journal entry is erroneous, the best thing to do is to leave it because the owner has no knowledge about accounting. This
statement is true.
________26. Recording is the first phase of accounting. This statement is true.
________27. An opening entry will only occur once in the life of the business. This statement is true.
________28. Folio is the other term for “posting reference”. This statement is true.
________29. The book of final entry is called journal. This statement is true.
________30. The book of original entry is called ledger. This statement is false.

III. ACCOUNTS TO BE DEBITED AND CREDITED. (1 point each blank)

INSTRUCTION: Fill in the blanks with accounts debited and credited in the following given transactions. Use appropriate account titles.
Jan. 3 __________________________
__________________________
________________________
Mr. Kadil Guiamad invested cash and equipment.

8 __________________________
________________________
Purchase supplies inventory on account.

25 __________________________
________________________
Paid the account of Jan. 8.

31 __________________________
Cash
Paid rental for the month.

IV. JOURNALIZING. (2 points each)

INSTRUCTION: For every business transaction/event, make a complete journal entry based on the given chart of accounts in chronological
order.

Mr. Eugenio Fernandez is a professional accountant. He ventured in a milling business to serve the needs of farmers in the rural areas of
Dipolog City. With a given chart of accounts, record in a two-column General Journal the transactions for the first month of operations April
2016.

Dipolog Rice Mill

Chart of Accounts

Assets Owner’s Equity

Cash in Bank E. Fernandez, Capital
Petty Cash Fund E. Fernandez, Drawing
Accounts Receivable Income
Diesoline Inventory Milling Income
Satake Rice Mill Other Income
Furniture and Fixtures Expenses
Liabilities Salaries and Wages
Accounts Payable Taxes and Licenses
SSS Premium Payable Repairs and Maintenance
Philhealth Premium Payable SSS Contribution
Philhealth Contribution

TRANSACTIONS FOR THE MONTH:

April 1 Mr. Eugenion Fernandez invests cash of P100,000. He deposited the P99,000 in Land Bank and kept the P1,000 as the petty cash
fund to pay for small expenses. He also invests a Satake Rice Mill which includes installation cost worth P950,000 and Furniture
and Fixture amounting to P80,000 for a total investments of P1,130,000.
3 Purchased diesoline worth P15,000 on account from Caltex Philippines.
5 Paid licenses and business permits to the City Government, P2,800.
8 Paid for minor repairs, P500. This was taken from the Petty Cash Fund.
14 Received cash for milling services, P9,000.
18 Withdrew P8,000 cash for personal use.
20 Rendered milling services to Zamboanga Traders on account, P18,000.

Prepared by: Angevin B. Acaylar, CPA Page 2

 23 Paid in full the account with Caltex Philippines, P15,000.
27 Collected partially the account of Zamboanga Traders, P10,000.
30 Paid salaries and wages for the month:
Salaries and Wages P17,500.00
Less: Deductions
SSS P583.50
Philhealth 187.50 771.00
Net Payroll P16,829.00
30 Employer’s share: SSS, P936.50 and Philhealth, P187.50.

Prepared by: Angevin B. Acaylar, CPA Page 3