Funacc

Question 1

. Furniture factory is an example of this business activity.

Answer 1

• Manufacturing

Question 2

ABC Company bought assets three years ago. This year, the company decided to write up the cost of these assets since their fair market value has increased. What concept or principle was violated?

This is used as a basis in accounting for the assets of a business because it can be measured objectively

Answer 2

Historical Cost

Question 3

The start of A company’s accounting period is October 1 and ends September 30 of the following year. What kind of period is followed by A Company.

Answer 3

• Fiscal Year

Question 4

Z Co. bought a pencil sharpener at a cost of P100.00. It is estimated to have a useful life of 10 years. Because of the length of its useful life, the accountant recorded this as a debit to office equipment. The accounting principle violated is.

Answer 4

• Materiality

Question 5

A company that is engaged in the processing of raw materials to finished goods intended for sale.

Answer 5

• Manufacturing Company

Question 6

This does not consider liquidation in accounting for the affairs of the business.

Answer 6

• Going Concern

Question 7

The concept that requires the distinction between the personal assets and liabilities of a
proprietor from his business assets and liabilities.

Answer 7

• Entity

Question 8

8. This is the phase of accounting that makes accounting the language of business.

Answer 8

• Interpreting

Question 9

9. This is the exchange price considered in the accounting books upon recognition of the business transaction.

Answer 9

• Cost

Question 10

Sorting similar and related business transactions into the three categories of assets, liabilities, and owner’s equity.

Answer 10

• Classifying

Question 11

Note bearing 10% interest already earned but still uncollected. The interest is recorded as:

Answer 11

• Interest Receivable

Question 12

The Final figure in the income statement when expenses exceed revenues.

Answer 12

• Net Loss

Question 13

Good will Bookstore received a 10% commission from C & E Publishing House although it has not yet sold the books. The commission received will be recorded as _

Answer 13

• Unearned Commission

Question 14

14. The amount of assets consumed or services used in the process of earning a revenue:

Answer 14

• Expenses

Question 15

When an owner issued a personal checking account in payment of the business liability, this is recorded as _

Answer 15

• Owner’s Capital

Question 16

Expenses related to the use of electricity, fuel, water, and telecommunications facilities

Answer 16

• Utilities Expense

Question 17

. A report showing the business worth as of a given period in terms of the business resources,
debts as well as the investments and withdrawals of the owner

Answer 17

1

- Balance Sheet

Question 18

18. Six-month rent received but not yet earned is recorded as

Answer 18

• Unearned Rent

Question 19

The difference between Accounts Receivable and Allowance for Bad Debt

Answer 19

• Not Realizable Value

Question 20

20. Which of the following has a positive effect on owner’s equity?

Answer 20

• Revenue

Question 21

21. A company that purchases a finish product for future sale

Answer 21

• Merchandising Company

Question 22

22. The accountant should apply the same accounting methods to like items from one period to another

Answer 22

• Consistency

Question 23

23. This concept or principle will not apply if a business has declared bankruptcy or insolvency

Answer 23

Going Concern

Question 24

This is the period of time, usually a span of one year, over which changes in the owner’s equity are summarized

Answer 24

Periodicity

Question 25

25. The total assets of the company are equal to its

Answer 25

- Liabilities plus Capital

Question 26

26. The cost allocated to the expiration of certain assets due to wear and tear is recorded as ___

Answer 26

- Depreciation Expense

Question 27

The effects on accounting equation of payment of Furniture and Fixtures purchased on account will _____

Answer 27

-Decrease in assets, decrease in liabilities

Question 28

Which of the following is an expense?

Answer 28

- Payment of worker's salaries

Question 29

The Capital account of the owner of a sole proprietorship is comprised of

Answer 29

- His original investment

Question 30

30. Checks received from customers are recorded as an increase to

Answer 30

- Accounts Receivable

Question 31

The account charged to customers for goods sold or services rendered

Answer 31

- Accounts Receivable

Question 32

Revenue is recognized when goods have been delivered or services performed

Answer 32

- Accrual Principle

Question 33

A completed action which can be expressed in monetary terms

Answer 33

Transaction

Question 34

Which of the following transactions will give rise to a revenue?

Answer 34

- Rendition of services to a customer on account

Question 35

Payment of government taxes is an example of cash flow activity from __________

Answer 35

- Operating

Question 36

When an owner uses the business funds to pay for his own personal debt, this is recorded as ___

Answer 36

- Owner’s drawing

Question 37

37. Proceeds of a bank loan is an example of cash flow activity from __________

Answer 37

- Financing

Question 38

These increase owner's equity

Answer 38

Investment and Net Income

Question 39

Proceeds from sale of truck is an example of cash flow activity from__________

Answer 39

Investing