FINALS_FIRST YEARS

FINALS _ 1ST YEAR

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SURNAME_YEAR
EX. SIALANA_4TH YEAR

EASY ROUND 15 ITEMS

Multiple Choice

1. This type of discount is given to encourage buyers to order products in larger quantities. This is deducted before the invoice price is determined. It does not have or require a book/journal entry of either the buyer or seller.

• A. Cash Discount

• B. Sales Discount

• C. Trade Discount

• D. Promo Discount

Multiple Choice

2. This type of discount is given to encourage prompt payments. It is recorded in the books of the seller with an account title of “Sales Discount” and “Purchase Discount” in the books of the buyer.

• A. Cash Discount

• B. Sales Discount

• C. Trade Discount

• D. Promo Discount

Multiple Choice

3. It is a method of accounting for purchases in which purchases are recorded at the total invoice price. Purchase Discounts are recorded only when taken into account. It is the method of recording the whole amount acquired from the transaction.

• A. Perpetual Method

• B. Gross Method

• C. Net Method

• D. Net Price Method

Multiple Choice

4. It is a method of accounting for purchases in which purchases are recorded at the invoice price NET OF CASH DISCOUNTS available whether it is taken or not.

• A. Perpetual Method

• B. Gross Method

• C. Net Method

• D. Net Price Method

Multiple Choice

5. It is a form of indirect tax placed on the buyer of goods or services or the transferee of a property lease. The VAT rate is set at 12% of gross revenue.

• A. Value - Added Tax

• B. Value – Additional Tax

• C. Value – Addition Tax

• D. Valued – Additional Tax

Multiple Choice

6. Value-Added Tax or VAT is a tax imposed by the government on some providers of goods and services. The revised tax law (_ _) that went into effect in January 2018 mandates a 12% VAT to be paid in addition to income tax when gross sales or gross revenues exceed P 3,000,000.

• A. TARAN ACT

• B. TRAAN ACT

• C. TAXAT ACT

• D. TRAIN ACT

Multiple Choice

7. If Freight on Board (Buyer) = Shipping point, then Freight on Board (Seller) = ?

• A. Point of Transaction

• B. Point of VAT Transaction

• C. Point of Destination

• D. Point of Delivery

Multiple Choice

8. This term indicates that the buyer is the owner of the goods from shipping point. The Buyer should then pay the freight price. However, it is the seller who pays the freight. It appears, therefore, that the buyer owes the seller freight charges.

• A. FOB SHIPPING POINT. Freight Returns

• B. FOB SHIPPING POINT. Freight Prepaid

• C. FOB SHIPPING POINT. Freight Collect

• D. FOB SHIPPING POINT. Freight Rent

Multiple Choice

9. This term states that, the buyer is the owner of the goods while it is in transit. As the owner, He has the responsibility to pay the freight charges and he is the one who paid it in the first plays. He does not owe anything to the seller.

• A. FOB SHIPPING POINT. Freight Collect

• B. FOB SHIPPING POINT. Freight Returns

• C. FOB SHIPPING POINT. Freight Rent

• D. FOB SHIPPING POINT. Freight Prepaid

Multiple Choice

10. The Following are BANK RECONCILING ITEMS except:

• A. Deposit in Transit

• B. Bank Charges

• C. Bank Errors

• D. Outstanding Checks

Multiple Choice

11. The Following are BOOK RECONCILING ITEMS except:

• A. NSF (DAUD OR DAIF)

• B. Bank Errors

• C. Book Errors

• D. Collections

Multiple Choice

12. It is the concept that states “All cash receipts should be remained intact and deposited to the account on the next day and any LARGE disbursements should be in the form of checks, while using a petty cash fund for small disbursements. “

• A. Good Petty Control

• B. Good Issue Control

• C. Good Cash Control

• D. Good Bank Control

Multiple Choice

13. A___________ is a key control for many companies when, on an ongoing basis, accounting teams take necessary steps to substantiate cash on the balance sheet.

• A. Bank Reconciliation

• B. Bank Recognition

• C. Bank Redemption

• D. Bank Value Reflection

Multiple Choice

14. These are cash and checks that have been received and recorded by the company but have not yet been recorded on the bank statement.

• A. Deposits in Transport

• B. Deposits in Transit

• C. Outstanding Checks

• D. Post – Dated Checks

Multiple Choice

15. These are checks that have been issued by the company to creditors but the payments have not yet been processed.

• A. Deposits in Transport

• B. Deposits in Transit

• C. Outstanding Checks

• D. Post – Dated Checks

AVERAGE ROUND 10 ITEMS

Multiple Choice

1. Sales revenue less cost of good sold is called

• a. Gross profit.

• b. Net profit.

• c. Net income

• d. Marginal income.

Multiple Choice

2. After gross profit is calculated, operating expenses are deducted to determine

• a. Gross margin

• b. Net income

• c. Gross profit on sales

• d. Net margin

Multiple Choice

3. Cost of goods sold is determined only at the accounting period in

• a. A perpetual inventory system

• b. A periodic inventory system

• c. Both a perpetual and periodic system

• d. Neither a perpetual nor a periodic inventory system

Multiple Choice

4. Which of the following expressions is incorrect?

• a. Gross profit – operating expenses = net income

• b. Sale – cost of goods sold – operating expenses = net income

• c. Net income + operating expenses = gross profit

• d. Operating expenses – cost of good sold = gross profit

Multiple Choice

5. Detailed records of goods held for sale are not maintained under a

• a. Perpetual inventory system.

• b. Periodic inventory system

• c. Double accounting system.

• d. Single entry accounting system

Multiple Choice

6. In a perpetual inventory system, the cost of goods sold account is used

• a. Only when a cash sale of merchandise occurs.

• b. Only when a credit sale of merchandise occurs.

• c. Only when a sale of merchandise occurs.

• d. Whenever there is a sale of merchandise or return of merchandise sold.

Multiple Choice

7. Sale revenues are usually considered earned when

• a. Cash received from credit sale.

• b. An order is received.

• c. Goods have been transferred from the seller to the buyer.

• d. Adjusting entries are made.

Multiple Choice

8. A sale of invoice is a source document that

• a. Provides support for good purchased for resale.

• b. Provides evidence of incurred operating expenses.

• c. Provide evidence of credit sale.

• d. Serves only as a customer receipt.

Multiple Choice

9. All of the following are allowed presumptive input tax, except for one.

• a. Processor of sardines, mackerel and milk.

• b. Manufacturer of refined sugar and cooking oil.

• c. Producers/ manufacturer of packed noodles.

• d. Supplier of books and other school supplies.

Multiple Choice

10. Tax credit for input tax shall be allowed if:

• a. Both the seller and the purchaser is VAT registered.

• b. Either one of the seller or the purchaser is VAT registered as long as VAT invoice is issued.

• c. Neither one of the seller or purchaser is VAT registered as long as VAT invoice is issued.

• d. The seller is VAT registered regardless of whether the purchaser is VAT registered or not.

DIFFICULT ROUND 5 ITEMS

Multiple Choice

The auditor for JPIA INC. examined the petty cash fund immediately after the close of business, July 31, 2020, the end of the company’s natural business year. The petty cash custodian presented the following during the count:

Currency P 1,650

Petty cash vouchers:

Postage 420

Office supplies expense 900

Transportation expenses 340

Computer repairs 800

Advances to office staff 1.500

A check drawn by JPIA INC. payable to the petty cash custodian 7,200

Postage stamps 300

An employee’s check, returned by bank, marked as NSF 1,000

An envelope containing currency of P 1,890 for a gift for retiring employee 1,890

P 16, 000

The general ledger shows and imprest petty cash fund balance of P 16,000 1. How much is the petty cash shortage or overage?

• a. P 2,190 overage

• b. P 2, 190 shortage

• c. P 1, 890 shortage

• d. P 1, 890 overage

Solution:
Currency P 1,650
Petty cash vouchers:
Postage 420
Office supplies expense 900
Transportation expenses 340
Computer repairs 800
Advances to office staff 1,500
Replenishment check 7,200
Employee’s NSF check 1,000
Petty cash accounted 13,810
Petty cash fund per ledger (16,000)
Petty cash shortage (2,190)

CASH COUNT < ACTUAL PETTY CASH = SHORTAGE
CASH COUNT > ACTUAL PETTY CASH = OVERAGE

Multiple Choice

Maasim Corp. imported an article from Japan. The invoice value of imported articles was $7,000 (1$ - P 50). The following were incurred in connection with the importation:

Insurance P 15,000

Freight from Japan 10,000

Postage 5,000

Wharfage 7,000

Arrastre 8,000

Brokerage Fees 25,000

Facilitation Fee 3,000

The imported article was imposed P 50,000 customs duty and P 30,000 excise tax. The company spent P 5,000 for trucking from the customs warehouse to its warehouse in QC. The carrier is not subject to VAT.

The VAT on importation:

• a. 60,000

• b. 42,000

• c. 60,600

• d. 80,000

​SOLUTION:

Purchase price ($7,000 x 50) P 350,000
Insurance 15,000
Freight from Japan 10,000
Postage 5,000
Wharfage 7,000
Arrastre 8,000
Brokerage Fees 25,000
Customs duty 50,000
Excise Tax 30,000
Total P 500,000
Vat (500,000 x 12% ) P 60,000

Multiple Choice

3. 1.     On January 5, 2018, Towel Co., VAT-registered person, sold on account goods for P 112,000. The term was:  2/10, n/30. Payment was made on January 10, 2018. The total amount is inclusive of VAT, what is the total amount due?

• a. P 110,000

• b. P 107,800

• c. P 112,000

• d. P 98,000

​SOLUTION:

The taxpayer avails the cash discount. Discount shall be computed based on the invoice price, that is inclusive of VAT. Thus,

Sales, net of VAT (112,000/1.12) 100,000
Discount (100,000 x 2%) (2,000)
Receivables 98,000

Multiple Choice

4. In preparing the bank reconciliation for the month of August, Apex Company provided the following information:

Balance per bank 1,805,000

Deposit in transit 325,000

Return of customer’s check for insufficient fund 60,000

Outstanding checks 275,000

Bank service charge for August 10,000

What is the adjusted cash in bank?

• a. 1,855,000

• b. 1,795,000

• c. 1,785,000

• d. 1,755,000

​SOLUTION:

Balance per bank 1,805,000
Deposit in transit 325,000
Outstanding checks (275,000)
Adjusting bank balance 1,885,000

Multiple Choice

5. In preparing the bank reconciliation for the month of December, CaseCompany provided the following data:

Balance per bank statement 3,800,000

Deposit in transit 520,000

Amount erroneously credited by bank to Case’s account 40,000

Bank service charge for December 5,000

NSF Check 50,000

Outstanding checks 675,000

What is the unadjusted cash in bank balance per book?

• a. 3,550,000

• b. 3,660,000

• c. 3,610,000

• d. 3,655,000

SOLUTION:

Balance per bank statement 3,800,000
Deposit in transit 520,000
Bank error- erroneous bank credit (40,000)
Outstanding checks (675,000)
Adjusted bank balance 3,605,000

Unadjusted book balance (squeeze) 3,660,000
Bank service charge (5,000)
NSF check (50,000)
Adjusted cash in bank balance 3,605,000