Chapter 1

Question 1

Identify:
They are resources owned or controlled by a business that are expected to provide benefits in the future

Answer 1

Assets

Question 2

Identify:
These claims represent obligations to provide assets, products or services to others.

Answer 2

Liabilities

Question 3

True or False:
They are part of liabilities on the following
Wages payable, Accounts receivable, Notes payable, Unearned revenue and Mortgage

Answer 3

False
(A/R is part of Assets)

Question 4

True or False:
Owner’s equity is also called net assets

Answer 4

True

Question 5

Identify:
It is the owner’s claim on the assets.

Answer 5

Owner’s equity

Question 6

What are the permanent accounts?

Answer 6

Assets, Liabilities, Equity account such as Owner’s Capital

Question 7

What are the temporary accounts?

Answer 7

Revenues, Expenses and Owner’s Drawings or Withdrawals

Question 8

Multiple Choice:
The gross increases in equity arising from a business’ earning activities.

A. Net Income
B. Temporary Accounts
C. Revenues
D. Expenses

Answer 8

C. Revenues

Question 9

Identify:
It occurs when revenues exceed expenses

Answer 9

Net Income

Question 10

True or False:
A net loss occurs when expenses exceed revenues which is part of Net Income

Answer 10

True

Question 11

True or False:
Expenses are the cost of assets consumed or services used in the process of earning revenue.

Answer 11

True

Question 12

Multiple Choice:
They are decreases in owner’s equity.

A. Net Income
B. Temporary Accounts
C. Revenues
D. Expenses

Answer 12

D. Expenses

Question 13

True or False:
Accounting is a science of recording, classifying, summarizing, in a significant manner and in terms of money, transactions and events

Answer 13

False

Question 14

Identify:
It is part of financial character, and interpreting the results thereof. (AICPA)

Answer 14

Accounting

Question 15

Multiple Choice:
It is a service activity.

A. AICPA
B. SFAS
C. IAS
D. Service Revenue

Answer 15

B. SFAS

Question 16

Identify:
Its function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions.

Answer 16

SFAS

Question 17

Identify:
Its function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions.

Answer 17

SFAS

Question 18

True or False:
Recording, Analyzing, Summarizing, Interpreting is part of the four phases of Accounting

Answer 18

False (Classifying instead of Analyzing)

Question 19

Identify:
this is the phase of accounting which involves the routine and mechanical process of writing down the business transactions and events in the books of accounts in a chronological manner

Answer 19

Recording

Question 20

True or False:
the process of transferring the entries from the journal to the ledger called “Journalizing”

Answer 20

False

Question 21

Multiple Choice:
It is the phase of accounting which involves sorting or grouping of similar transactions and events into their respective kind and classes.

A. Recording
B. Classifying
C. Summarizing
D. Interpreting

Answer 21

B. Classifying

Question 22

Identify:
This is the phase of accounting which involves the “analytical and interpretative works’

Answer 22

Interpreting

Question 23

True or False:
Bookkeeping is systematical and chronological while Accounting requires complete and accurate bookkeeping records necessary in the performance of its responsibility

Answer 23

True

Question 24

True or False:
Business transactions are exchanges of equal monetary values. Which of the following are true?

A. For every value received, another value is given away as an exchange;
B. These values are measured in terms of pesos which are presumed to be equal.
C. All of the above
D. None of the above

Answer 24

C. All of the above

Question 25

Identify: Classifying is also called as _____

Answer 25

Posting

Question 26

Multiple choice: This starts from striking of a trial balance, plotting down of adjusting entries in the worksheet and the preparation of closing entries, post-closing trial balance and reversing entries. A. Recording B. Classifying C. Summarizing D. Interpreting

Answer 26

C. Summarizing

Question 27

Identify: refers to a business paper or business form that provides details of a transaction and serves as evidence that a transaction has taken place.

Answer 27

Source Document

Question 28

Multiple Choice: To inform the buyer of the amount to pay for goods and services supplied by the seller. This is also called a purchase invoice on the part of the buyer. A. Charge invoice B. Sales Invoice C. Official Receipt (OR) D. Receiving report

Answer 28

A. sales Invoice

Question 29

True or False: Receiving Report contains information about profit received from a vendor

Answer 29

False (Infor of goods and stocks received by the vendor)

Question 30

Identify: This is also called Purchased Invoice

Answer 30

Sales Invoice

Question 31

Identify: An authorization made by the buyer to the seller to deliver goods as detailed in this document.

Answer 31

Purchase Order

Question 32

Multiple Choice: Issued by the seller for the sale of goods on account to the customer A. Sales Invoice B. Receiving Report C. Purchase Order D. Charge Invoice

Answer 32

D. Charge Invoice

Question 33

Identify: the reduction of an Owner’s Equity account arising from cash or property withdrawal of an owner

Answer 33

Drawing Account

Question 34

True or False: Income or Revenue all income earned of the same nature are classified in this account.

Answer 34

False (Summarized not classified)

Question 35

Multiple choice: These are factors that affect Owner’s Equity. A. Liabilities, Expenses, Income B. Income, Costs, Expenses C. None of the choices

Answer 35

B. Income, Costs, Expenses

Question 36

True or False: Check is a slip of paper issued against deposited funds, to pay a specified amount of money to a specific person upon demand.

Answer 36

False (A negotiable instrument drawn against deposited funds)

Question 37

Identify: Shows the number of hours worked by an employee used as Daily Time record (DTR) as basis for computing payroll.

Answer 37

Time sheet

Question 38

Identify: Indicates a reduction in the bank depositor’s account balance because of a cleared check, electronic transfer or service charge.

Answer 38

Bank's debit memo

Question 39

Multiple choice: A form used by the seller to notify the buyer that his account is decreased due to errors or other factors requiring adjustments. A. Supplier's credit Memo B. Pay slip C. Bank's debit memo D. Petty Cash Slip

Answer 39

A. Supplier's credit Memo

Question 40

Identify: A slip of paper issued by an employer every payday to an employee for services rendered.

Answer 40

Pay slip

Question 41

Identify: A form authorizing a disbursement of cash or a credit against a purchase or expense to be made in the future or used as evidence of payment to a named party.

Answer 41

Vouchers

Question 42

Multiple choice: A document used as evidence that an authorized payment was made and taken from the petty cash fund. A. Vouchers B. Check C. Petty Cash slip D. Pay slip

Answer 42

C. Petty Cash slip

Question 43

Identify: The account title used for all types of income derived from rendering of services.

Answer 43

Service Revenue

Question 44

Multiple Choice: The account title is generally used by professionals for income earned from practice, may be specified as “Accounting or Auditing Fees Income

Answer 44

Professional Income

Question 45

True or False: Rent Income is the account title used for income earned on buildings; space or other properties owned and rented out by the business.

Answer 45

True

Question 46

Identify: Represents revenue derived from the sale of merchandise.

Answer 46

Sales

Question 47

Multiple Choice: The account is used for the cost to produce and sell the goods. A. Cost of Purchase Available B. Cost of Goods Sold C. Sales D. Merchandise

Answer 47

B. Cost of Goods Sold (Cost of Sales)

Question 48

True or False: Insurance Expense is the account title for the expired portion of the insurance premium.

Answer 48

True

Question 49

Multiple choice: The account for any amount paid as expense which is not significant enough to warrant a particular classification. A. Insurance Expense B. Doubtful Accounts Expense C. Expense D. Miscellaneous Expensed

Answer 49

D. Miscellaneous Expensed

Question 50

Identify: presents the revenue and expenses and the resulting net profit or net loss for a specific period of time.

Answer 50

Income Statement

Question 51

True or False: statement of changes in owner’s equity interprets the changes in owner’s capital for specific period of time.

Answer 51

False (summarizes)

Question 52

Multiple Choice: It reports the assets, liabilities and owner’s equity at a specific date. A. Income Statement B. Statement of changes in owner's equity C. Statement of financial Position D. Cash Slow Statement

Answer 52

C. Statement of financial Position

Question 53

Identify: It summarizes information about the cash inflows (receipts) and outflows (payments) for a specific period of time.

Answer 53

Cash flow statement

Question 54

Identify: The one commonly used by a service entity

Answer 54

Single-step income statement

Question 55

True or False: single-step income statement is the one commonly used by a service entity while multi-step income statement is the one commonly used by traders by traders or merchandisers.

Answer 55

True

Question 56

Identify: It is called _______________ because only one step (subtracting total expenses from total revenue) is required to determine profit or loss for the period

Answer 56

single-step income statement

Question 57

Identify: It is called _______________ because only one step (subtracting total expenses from total revenue) is required to determine profit or loss for the period

Answer 57

single-step income statement

Question 58

True or False: Costs are represented by Purchases, Purchase Discounts and Purchase Returns and Allowances

Answer 58

True

Question 59

Multiple Choice: Freight-Out is part of _______ A. Expense B. Revenue C. Income D. Liabilities

Answer 59

A. Expense

Question 60

Identify: these are regarded as substantial evidences which states the validity of a transaction.

Answer 60

Source Document

Question 61

Identify: The process of checking and examining vouchers

Answer 61

Vouching

Question 62

Identify: The process of checking and examining vouchers

Answer 62

Vouching

Question 63

Multiple Choice: It is the process of looking over vouchers to make sure that the entries made in the books are accurate and supported by sufficient evidence. A. Schedule of Vouchers Payable B. Vouching C. Voucher System D. Voucher

Answer 63

B. Vouching

Question 64

Multiple Choice: It is the process of looking over vouchers to make sure that the entries made in the books are accurate and supported by sufficient evidence. A. Schedule of Vouchers Payable B. Vouching C. Voucher System D. Voucher

Answer 64

B. Vouching

Question 65

True or False: Vouchers aims to validate the transactions included in the books of account and is frequently referred to as the backbone of auditing.

Answer 65

True

Question 66

Identify: It is a method for authorizing the cash disbursement in order to ensure that the money of the business is spent only on authorized and approved purchases or cash payments.

Answer 66

Voucher System

Question 67

Multiple Choice: It is a list of all unpaid vouchers in the voucher register.

Question 68

Multiple Choice: It is a list of all unpaid vouchers in the voucher register.