FABM 2 MIDTERMS REVIEWER (DARK SOULS DIFFICULTY)

Question 1

The first line of the title

Answer 1

NAME OF THE
COMPANY

Question 2

Second line

Answer 2

Name of the Financial
Statement

Question 3

Third line

Answer 3

Date of the SFP

Question 4

Statement name?

Answer 4

Statement of the Financial
Position (SFP)

Question 5

SFP means what?

Answer 5

Statement of the Financial
Position (SFP)

Question 6

Accounting equation?

Answer 6

ASSETS = LIABILITIES + EQUITY

Question 7

is a resource controlled by the entity as a
result of past events that have the potential to
produce economic benefits.

Answer 7

Asset

Question 8

An asset is a resource controlled by ______________ as a
result of past events that have the potential to
produce economic benefits.

Answer 8

The Entity

Question 9

Asset is a resource controlled by the entity as a
result of what?

Answer 9

Past events that have the potential to
produce economic benefits.

Question 10

An item is an asset if it meets the
following criteria:

Answer 10

(a) resources controlled by the company
(b) potential to produce economic
benefits.

Question 11

This means that, whether directly or indirectly, the
asset can generate or be converted to
cash.

Answer 11

Potential to produce economic
benefits.

Question 12

potential to produce economic
benefits means what?

Answer 12

Whether directly or indirectly, the
asset can generate or be converted to
cash.

Question 13

means that the company can either prevent
unauthorized access to those benefits or
transfer those benefits to others.

Answer 13

Control

Question 14

resources controlled by the company means what?

Answer 14

means that the company can either prevent
unauthorized access to those benefits or
transfer those benefits to others.

Question 15

Are claims of creditors and owners, respectively.

Answer 15

Liabilities and equity

Question 16

Liabilities and equity are claims of whom?

Answer 16

Creditors and owners

Question 17

Claims of creditors on the assets of the
company are?

Answer 17

Legally superior to that of
the owners.

Question 18

Legally superior to that of
the owners.

Answer 18

Claims of creditors

Question 19

Creditors require payments of?

Answer 19

Principal and Interest

Question 20

Who require payment of principal and interest?

Answer 20

Creditors

Question 21

During closure, the owners are
entitled to what? And if only what?

Answer 21

the remaining assets only
after all the liabilities are settled.

Question 22

There is no legal obligation for what?

Answer 22

Companies to pay back the owners for
their investment in the company.

Question 23

Examples of assets?

Answer 23

• CASH
• RECEIVABLES
• INVENTORY
• PREPAID EXPENSES
• PROPERTY, PLANT AND
  EQUIPMENT
• INTANGIBLE ASSETS

Question 24

Is money owned by the company.

Answer 24

Cash

Question 25

Cash kept in the
company’s premises is called what?

Answer 25

Cash on hand

Question 26

refers to money in the bank which can be kept in a savings or checking account.

Answer 26

Cash in Bank

Question 27

Are not categorized as cash.

Answer 27

Time deposits

Question 28

Are time deposits cash?

Answer 28

Fuck No

Question 29

Provide banks with the cash flow they need to lend money to other customers.

Answer 29

Time Deposit

Question 30

Why isn’t time deposit known as cash?

Answer 30

You can’t use it until the fixed term is over

Question 31

Why isn’t time deposit known as cash?

Answer 31

You can’t use it until the fixed term is over

Question 32

Refers only to funds
readily available to be spent on the company’s
operations

Answer 32

Ending balance of cash

Question 33

Ending balance of cash means?

Answer 33

Funds readily spendable for the company’s operations/ Spendable funds

Question 34

Are used for paying suppliers, utilities,
employee salaries, and others.

Answer 34

Cash outflows

Question 35

It also funds the
acquisition of assets.

Answer 35

Cash outflows

Question 36

Cash outflows also funds what?

Answer 36

Acquisition of assets.

Question 37

It is also used for the settlement of
obligations.

Answer 37

Cash outflows

Question 38

Cash outflows can also be used to settle what?

Answer 38

Obligations

Question 39

Are sourced from the contribution of
owners, proceeds from borrowings, sale of assets, or
collections from customers.

Answer 39

Cash inflows

Question 40

Cash Inflows are sourced from what?

Answer 40

contribution of owners, proceeds from borrowings, sale of assets, or collections from customers.

Question 41

CASH Contribution of owners (Debit or credit?)

Answer 41

Debit

Question 42

CASH Proceeds from borrowings (Debit or credit?)

Answer 42

Debit

Question 43

CASH Collections from customers (Debit or credit?)

Answer 43

Debit

Question 44

CASH Withdrawals of owners (Debit or credit?)

Answer 44

Credit

Question 45

CASH Payment of borrowings (Debit or credit?)

Answer 45

Credit

Question 46

CASH Payment to suppliers, utilities,
employees and other operating
expenses Payment to suppliers, utilities,
employees and other operating
expenses (Debit or credit?)

Answer 46

Credit

Question 47

CASH Payment for acquisition of assets (Debit or credit?)

Answer 47

Credit

Question 48

Is classified as part of cash if the date of the
check, referred to as date issue, is on or before the
SFP date

Answer 48

Check

Question 49

A check is only classified as cash if the date on the check is?

Answer 49

On or before the SFP date

Question 50

A check that is not presented to the bank for
payment dated _______________ from the date of
issue is “__________” and is _______________.

Answer 50

Six (6) after months, stale, not reported as cash

Question 51

A check dated after the SFP date is classified as
_____________

Answer 51

Receivable rather than cash.

Question 52

Earns higher interest over an
agreed period of time.

Answer 52

Time Deposit account

Question 53

Those with a term of up to _____ are reported as _____________

Answer 53

90 days, Cash Equivalents

Question 54

A Time Deposit account that
mature longer than ________ are reported as?

Answer 54

90 days, Investments

Question 55

Is a general term that refers to the
company’s right to collect or claim payment.

Answer 55

Receivables

Question 56

Receivables is a general term that refers to the
company’s right to_____________.

Answer 56

Collect or claim payment

Question 57

The right to collect comes from what?

Answer 57

Unpaid sales or lending activities.

Question 58

May promise to pay the seller at some future
time after delivery.

Answer 58

Customer

Question 59

A customer may promise to pay the seller at some?

Answer 59

Future time after delivery.

Question 60

A customer may promise to pay the seller at some future
time after delivery. This is a credit sales agreement and it
gives rise to _____________

Answer 60

Accounts Receivable (AR)

Question 61

The AR account is increased by?

Answer 61

credit sales.

Question 62

Is increased by credit sales.

Answer 62

The AR account

Question 63

The AR account is increased by credit sales. On the
other hand, the account is decreased when the
customers ____________

Answer 63

Pay their accounts

Question 64

Is evidenced by sales invoices and delivery
receipts.

Answer 64

The AR

Question 65

The AR Is evidenced by?

Answer 65

Sales invoices and delivery
receipts.

Question 66

Accounts receivable typically have a term of ______________ , which means a customer should pay ____________ from
the ___________. Some sellers give longer periods of
_________________

Answer 66

30 days, date of delivery, 60, 90, and 180 days.

Question 67

ACCOUNTS RECEIVABLE Credit Sales (Debit or Credit?)

Answer 67

Debit

Question 68

ACCOUNTS RECEIVABLE Customer account collected (Debit or Credit?)

Answer 68

Credit

Question 69

is another kind of receivable.

Answer 69

Notes receivable

Question 70

It is evidenced by a promissory note (PN).

Answer 70

Notes Receivables

Question 71

Notes Receivable is evidenced by what?

Answer 71

Promissory Note

Question 72

PN is a legal document
with the following details:

Answer 72

1. Borrower promise to pay;
2. Scheduled payment dates;
3. Principal and interest rate

Question 73

Reports the cost of unsold
merchandise.

Answer 73

The inventory account

Question 74

The inventory account reports only what?

Answer 74

Unsold Merchandise

Question 75

The inventory account of a trading business contains merchandise held for?

Answer 75

Resale.

Question 76

The ____________ of a trading
business contains merchandise held for resale

Answer 76

Inventory account

Question 77

A ______________ will have more complex
inventories composed of ____________,
unfinished inventories in the middle of the
manufacturing process (may also be called work in
process), and ____________

Answer 77

Manufacturing company, Unused raw materials, Unsold finished goods.

Question 78

The inventory account is increased by ________________. On the other hand, the account is
decreased by the ____________

Answer 78

Purchases of
merchandise, Cost of the merchandise sold

Question 79

The ending balance of the inventory account refers
to the?

Answer 79

Remaining merchandise
Inventory

Question 80

The ______________ refers
to the cost of the unsold or remaining merchandise
Inventory

Answer 80

ending balance of the inventory account

Question 81

Inventory Cost of merchandise purchased (Debit or credit?)

Answer 81

Debit

Question 82

Inventory Cost of merchandise sold (Debit or credit?)

Answer 82

Credit

Question 83

Is one that buys and resells merchandise
for a profit

Answer 83

Trading or merchandising business

Question 84

A trading or merchandising business is one that buys and resells merchandise
for what?

Answer 84

Profit

Question 85

• The owner places his goods “_____________” on the
  premises of the ___________
• The store is not obligated to _____________
• The owner may also what?
• On the other hand, the store owner will remit to the
  _________ the proceeds from the sale of the
  consigned items.
• The store owner’s income from this transaction may be in
  the form of ___________ from the sale and/or rent from the
  store space used to display the consigned goods
• The consigned merchandise will be reported as?
• Only the ____________ is reported as inventory
• Those items that are to be used in the day-to-the-day
  activities for the company are ______________

Answer 85

1) On Consignment, Store owner
2) Purchase the goods
3) Withdraw his unsold goods from the
store.
4) Merchandise owner
5) Commissions
6) Inventory by the merchandise owner.
7) Merchandise held for sale
8) Supplies and not inventory.

Question 86

Refer to future expenses that the company had paid for in advance.

Answer 86

Prepaid expenses or prepayments

Question 87

Prepaid Expenses are placed in this account until the services or items are _________________

Answer 87

Used and become expenses

Question 88

Are recorded only when purchased goods
and services are used.

Answer 88

Expenses

Question 89

Expenses are recorded only when purchased goods
and services are ________________

Answer 89

Used

Question 90

The account prepaid expense is increased by the
company’s ______________

Answer 90

Advance payments.

Question 91

On the other hand,
the Advance Payments is decreased by either _______________

Answer 91

Usage or the
passage of time

Question 92

The prepaid expense account will have an ending
balance equivalent to the ______________

Answer 92

Cost of unused services

Question 93

Prepaid Expense Advance payments (Debit or Credit)

Answer 93

Debit

Question 94

Prepaid Expense Cost of services used (Debit or Credit)

Answer 94

Credit

Question 95

are long-term
assets that are used in the operations of the company.
These are classified as long-term assets (or non-current
assets) because these assets will be used in the business
for more than __________________

Answer 95

Property, Plant, and Equipment (PPE), one year

Question 96

are land,
building, warehouse, automobiles, delivery vehicles,
computer equipment, and manufacturing equipment.

Answer 96

Property, Plant, and Equipment (PPE)

Question 97

Only those assets ___________ will be reported as PPE.

Answer 97

owned and controlled by the
company

Question 98

Assets that are subject to long-term lease may be
reported as ___________if certain conditions are satisfied

Answer 98

assets

Question 99

The cost of purchasing PPE is not immediately
reported as an expense, rather, it is recognized as an
_______________

Answer 99

Asset

Question 100

The process of recognizing the asset is called
__________

Answer 100

CAPITALIZATION.

Question 101

As the asset is used, a portion of the cost is
transferred to ___________. This is referred to as
______________.

Answer 101

expense, depreciation

Question 102

Sometimes, the company plans to sell the PPE at the
end of its useful life. The estimated proceeds from the
sale is called _______________

Answer 102

salvage value or residual value

Question 103

Annual depreciation = _____________

Answer 103

Depreciable cost/Useful life

Question 104

Depreciable cost = _________________

Answer 104

Cost – Salvage or residual value

Question 105

have no tangible properties,
These are assets that you cannot see or touch.

Answer 105

Intangible Asset

Question 106

Is a grant conferred by the government
to the creator of an invention, whether a
product or a process, for the sole right to make,
use, and sell that invention for a specified period

Answer 106

A patent

Question 107

_____________ protects the legal rights of owners of
intellectual property such as authors of books
or writers of songs

Answer 107

Copyright

Question 108

The ____________ refers to a word or words
used to identify a specific product and its
manufacturer.

Answer 108

Brand name

Question 109

________ is a sign capable of distinguishing
the goods or services of one enterprise from
those of other enterprises. Trademarks are
protected by _______________

Answer 109

trademark, intellectual property rights.

Question 110

These are obligations that the company are
required to pay

Answer 110

Liabilities

Question 111

Payment for liabilities may be in?

Answer 111

Cash, goods or services

Question 112

Entities to whom the company is indebted
are called ______________

Answer 112

Creditors.

Question 113

obligations to the supplier of inventories

Answer 113

Accounts payable

Question 114

Obligations evidenced by a promissory note.

Answer 114

Notes payable

Question 115

refers to the unpaid
expenses of the company as of the cut-off
date of the Statement of Financial Position

Answer 115

Accrued expense

Question 116

An expense that is already incurred but not yet paid

Answer 116

Accrued expense

Question 117

Are accounted for
as accrued expenses until payment is
made to the phone company.

Answer 117

Post-paid service plans

Question 118

Accrued Expenses Account payments (Debit or credit)

Answer 118

Debit

Question 119

Account payments Expenses used and unpaid (Debit or credit)

Answer 119

Credit

Question 120

Are
received before the delivery of goods or
services.

Answer 120

Customer payments or deposits

Question 121

These will not count as Sales or Revenue
until deliveries or the rendering of Unearned Income
services are made.

Answer 121

Unearned Revenue

Question 122

Unearned Revenue is increased by ________
received from customers and decreased by the
__________________

Answer 122

Advance payments, rendering of service or delivery of
merchandise.

Question 123

Unearned Income Rendering of services or delivery
of merchandise (Debit or credit)

Answer 123

Debit

Question 124

Unearned Income Unearned Income (Debit or credit)

Answer 124

Credit

Question 125

refer to obligations
with due dates that fall more than one year
from the date of the SFP.

Answer 125

Long-term liabilities

Question 126

Long-term liabilities are also referred
to as _____________

Answer 126

Non-Current Liabilities

Question 127

Is the net assets of the business.

Answer 127

Equity

Question 128

It is composed of the owners’ investments
and the accumulated net income of the
company and net of any distributions to
the owners

Answer 128

Equity

Question 129

Equity is composed of?

Answer 129

Owners investements, net income, distributions of the owner

Question 130

It reflects the portion of the asset that
belongs to the owners of the business.

Answer 130

Equity

Question 131

May be maintained to
follow the withdrawals of the owners
during the year, this too is closed to the
capital account at the end of the year.

Answer 131

Drawings account

Question 132

is a temporary account that is used to contain profit or loss during the accounting period. The profit or loss summary is also called ____________

Answer 132

The profit or loss summary account, Income summary

Question 133

The result would only show assets, liabilities and equity because
the expense, income and drawings accounts are zeroed in the
closing process

Answer 133

post-closing trial balance

Question 134

After the posting of the closing entries, the balances of the
ledger accounts are determined and reported in a trial balance.

Answer 134

post-closing trial balance

Question 135

is an adjusting entry of the current period that
is reversed and recorded as an opening entry in the following
accounting period.

Answer 135

Reversing entry

Question 136

The preparation of reversing entries is an _______ in
the accounting process.

Answer 136

optional procedure

Question 136

The preparation of reversing entries is an _______ in
the accounting process.

Answer 136

optional procedure

Question 137

The purpose of reversing entry is to facilitate the recording of
_______ in the following accounting period.

Answer 137

expense and income

Question 138

buys goods (i.e. inventories) and sells them to
customers for a profit.

Answer 138

A merchandising business

Question 139

The goods bought by the merchandising business from its suppliers are
called ________

Answer 139

purchases.

Question 140

The merchandiser _______ to the
purchase prices of goods and charges the total amount to the customer.

Answer 140

add-up a value (i.e. markup or gross profit)

Question 141

The total amount charged to customers is called ________

Answer 141

sales.

Question 142

Agreed selling price of the goods in sellers perspective

Answer 142

Sales

Question 143

Return by the buyer of defective or
non-conforming goods to the seller in Buyer’ s perspective

Answer 143

Purchase returns

Question 144

Return by the buyer of defective or
non-conforming goods to the seller in sellers pespective

Answer 144

Sales return

Question 145

Return by the buyer of defective or
non-conforming goods to the seller buyers pespective

Answer 145

Purchase returns

Question 146

Agreed reduction in selling price sellers perspective

Answer 146

Sales discount

Question 147

Agreed reduction in selling price Buyer’s perspective

Answer 147

Purchase discount

Question 148

Agreed reduction in selling price for
poor quality goods which the buyer
agreed to retake at reduced price Seller’s perspective

Answer 148

Sales allowances

Question 149

Agreed reduction in selling price for
poor quality goods which the buyer
agreed to retake at reduced price Buyer’s perspective

Answer 149

Purchases allowances

Question 150

Transportation cost of bringing the
goods to buyer’s place of business Seller’s perspective

Answer 150

Freight-out

Question 151

Transportation cost of bringing the
goods to buyer’s place of business Buyer’s perspective

Answer 151

Freight-in

Question 152

This is an established price determined by reference
to a catalog or general price list before deducting any discounts.

Answer 152

List price

Question 153

This list price less any trade discounts.

Answer 153

Invoice price

Question 154

This is the gross billable amount by the seller to the buyer.

Answer 154

Invoice price

Question 155

This is the
amount that is indicated in the billing statement of the seller.

Answer 155

Invoice price

Question 156

Also called volume discount or quantity discount, trade
discount pertains to a direct deduction to the invoice price on account of
volume purchases made by a buyer.

Answer 156

Trade discount

Question 157

This discount is usually given when the
buyer is a fellow merchandiser in order to allow him to profit for the resale
of the goods to his customers.

Answer 157

Trade discount

Question 158

Also called settlement discount, this is an additional
discount to the invoice price aside from the trade discount which is given to
the buyer for early payment.

Answer 158

Cash discount

Question 159

An account used to record the cost of goods or merchandise bought for resale during the current reporting
period. This is normally a _______ balance.

Answer 159

Purchase, debit

Question 160

An account used to record the transport cost of the goods purchased. This is an adjunct account (addition) to the
purchases account; and hence, it has a normal _____ balance.

Answer 160

Freight-in, debit

Question 161

An account used for the agreed reduction in the price of goods.
Is a contra-account to the purchase account; hence, it has a normal ______
balance.

Answer 161

Purchase discount, Credit

Question 162

This is normally given by the supplier on
account of early payment.
Is a contra-account to the purchase account; hence, it has a normal ______
balance.

Answer 162

Purchase Discount, Credit

Question 163

An account used to record the cost of merchandise returned to the supplier and including
price reductions to the purchase which is granted by a supplier on account of unsatisfactory goods delivered. Just like the
purchase discount account, this is normally a ____ balance.

Answer 163

Purchase returns and allowances, credit

Question 164

An account used to record advance payments made to a supplier for goods to
be purchased in the future. This is an asset account and has a normal _____balance.

Answer 164

Advances to supplier, debit

Question 165

involves selling of
goods and collecting customers’ accounts.

Answer 165

The sale and collection function

Question 166

An account used to record the selling price of goods to a customer. The sales account has a normal _____balance

Answer 166

Sales ,credit

Question 167

An account used to record the transport cost of the goods sold to customers.

Answer 167

Freight-out, expense

Question 168

If goods are purchased from
the business warehouse, _______ normally shoulder the freight of their goods.

Answer 168

customers

Question 169

An account used to record the agreed reduction in the price of goods sold to customers. Sales discount is a contra-account to the sales account;
hence, it has a normal _______ balance.

Answer 169

Sales discount, debit

Question 170

This is the
equivalent a of purchase discount from the buyer’s perspective. ____________ is a contra-account to the sales account;
hence, it has a normal _____balance.

Answer 170

Sales Discount, debit

Question 171

An account used under a periodic inventory system to record the amount of sales returned
by customers including reductions in selling prices granted to customers because the merchandise was not satisfactory to a
buyer. This is also a contra-account to the sales account and has a normal _________ balance.

Answer 171

Sales returns and allowances, debit

Question 172

An account representing advance payment made by a customer for goods to be delivered in the
future. This is a liability account and has a normal _______balance.

Answer 172

Advances from customer, credit

Question 173

Ownership to the transfer of the goods to
the buyer from the moment the goods leave the warehouse of the seller which is normally the shipping date or invoice date.

Answer 173

FOB shipping point

Question 174

Ownership to the goods transfer to the
buyer from the moment the goods arrive at the warehouse of
the buyer which is normally the delivery receipt date.

Answer 174

FOB Destination

Question 175

The freight shall be paid by the
seller to the freight or cargo forwarder upon release
of the goods in his premises

Answer 175

Freight prepaid -

Question 176

The freight shall be paid by the
buyer to the freight or cargo forwarder upon arrival
of the delivery in his premises

Answer 176

Freight collect

Question 177

FOB destination date of recognition of sale and purchase

Answer 177

When the buyer receives the goods, When the buyer receives the goods,

Question 178

FOB shipping point date of recognition of sale and purchase

Answer 178

At the point of shipment, at the point of shipment

Question 179

The amount of purchases or sales to be recorded includes
the possible cash discount

Answer 179

Gross method

Question 180

The amount of purchases or sales to be recorded excludes
the1 possible cash discount

Answer 180

Net method

Question 181

After the recording of all merchandising transactions, an
unadjusted trial balance of the ledger accounts is drawn
similar to the process employed with servicing concern.

Answer 181

TRIAL BALANCE