BA Cup

Multiple Choice

What is the capital of the Philippines?

• Baguio

• Boracay

• Davao

• Manila

Multiple Choice

Under this concept, some costs are initially recognized as assets and charged as expenses only when related revenue is recognized.

• Materiality

• Matching Principle

• Contra- Asset

• Adjusting Entry

Multiple Choice

These are the gross increases in equity resulting from business activities entered for the purpose of earning income.

• Revenues

• Income

• Assets

• Expense

Multiple Choice

Those who lend money or deliver goods and services before being paid are called

• Investors

• Creditors

• Underwriter

• Debtor

Multiple Select

Select all correct statements about the rules of debit and credit.

• Debit means to increase and credit means to decrease.

• Increases in assets and expenses are debit entries.

• Increases in liabilities, equity, and revenue are credit entries.

• The normal balance of any account appears on the side for recording increases.

Multiple Choice

Which is false concerning the rules of debit and credit?

• The left side of an account is always the debit side and the right side is always the credit side.

• The word "debit" means to increase and the word "credit" means to decrease.

• Increases in assets and expenses are debit entries, and increases in liabilities, equity and revenue are credit entries.

• The normal balance of any account appears on the side for recording increases.

Multiple Choice

The proper order of the following steps in the accounting cycle is:

• Prepare unadjusted trial balance, journalize transactions, post to ledger accounts, journalize and post adjusting entries.

• Journalize transactions, prepare unadjusted trial balance, post to ledger accounts, journalize and post adjusting entries.

• Journalize transactions, post to ledger accounts, prepare unadjusted trial balance, journalize and post adjusting entries.

• Prepare unadjusted trial balance, journalize and post adjusting entries, journalize transactions, post to ledger accounts.

Multiple Choice

What function do accounting journals serve in the accounting process?

• Classifying

• Summarizing

• Reporting

• Recording

Multiple Choice

Adjusting entries involve

• Only real accounts

• Only capital accounts

• Only nominal accounts

• At least one real and one nominal account

Multiple Choice

If services totaling P12,500 had been performed but not yet billed, the adjusting entry to record this would include

• Debit to Service Revenue for P12,500

• Credit to Unearned Service Revenues for P12,500

• Credit to Services Revenues for P62,500

• Credit to Services Revenues for P12,500

Multiple Choice

Profit for Queen Bee Merchandise is P250,000 for the current year. The owner withdrew P30,000 per month for personal living expenses. The Owner's Capital account will show a net

• Decrease of P110,000

• Increase of P610,000

• Increase of P110,000

• Decrease of P610,000

Multiple Choice

If the income statement debit and credit columns are not equal after adding the respective columns,

• An error has been made.

• The company generated a profit

• The liabilities must exceed the assets.

• The company either generated a profit or incurred a loss.

Multiple Choice

Sharp Company prepays one-year insurance for P240,000 on Sept. 1, 20X1. If they use the asset method of initial recording of prepayments of expenses, the year-end adjustment would include a

• Debit to prepaid insurance of P80,000

• Credit to prepaid insurance of P80,000

• Debit to insurance expense of P160,000

• Credit to insurance expense of P160,000

Multiple Choice

What is the adjusted (net) carrying amount of accounts receivable to be presented in the year end statement of financial position?

• P271,600

• P288,400

• P280,000

• P276,100

Multiple Choice

What is the adjusted (net) carrying amount of the equipment to be presented in the year end statement of financial position?

• P360,000

• P216,000

• P144,000

• P72,000

Multiple Choice

How would a share split in which the par value per share decreases in proportion to

the number of additional shares issued affect each of the following?

• A

• B

• C

• D

Multiple Choice

Tibay Company issued 200,000 ordinary shares when it began operations in 2019 and issued an additional 100,000 shares in 2020. Then entity also issued preference shares convertible into 100,000 ordinary shares. In 2020, the entity purchased 75,000 ordinary shares to be held in treasury. On December 31, 2020, how many ordinary shares were outstanding?

• P225,000

• P325,000

• P300,000

• P200,000

Multiple Choice

The total cost of treasury shares shall be reported as

• Deduction from share premium

• Deduction from shareholders' equity

• Deduction from retained earnings

• Asset

Multiple Choice

Villon invested P 600,000 for a 30% interest in a partnership in which the other partners have capital totaling P 1,000,000 before admitting Villon. After distribution of the bonus, what is Villon's capital balance?

• 300,000

• 600,000

• 480,000

• 720,000

Multiple Choice

A partnership showed the following account balances: Sales, P 70,000; Cost of Sales , P 40,000; Operating Expenses, P 10,000; Partners' salaries, P 13,000; Interest paid to the banks, P 2,000 and Partners' drawings, P 8,000. The partnership profit is 

• 5,000 

• 18,000

• 20,000 

• (3,000)

Multiple Choice

The building is subject to mortgage loan of P80,000 which is to be assumed by the partnership. Agreement provides that Kalaw and Borromeo share profits and losses 30% and 70% respectively. On March 1, 20X1 the balance in Borromeo's capital account should be:

• P225,000

• P290,000

• P370,000

• P65,000

Multiple Choice

Which of the following statements about partnership liquidation is/are correct?

Statement I: Partnership liquidation involves winding up of affairs, realization of assets, and settlement of liabilities.

Statement II: The partners' personal creditors are paid before the partnership's creditors during liquidation.

Statement III: Any deficiency in a partner's capital should be absorbed by the remaining partners based on their profit and loss ratio.

Statement IV: A partnership may be liquidated even without dissolution.

• I, II and III only 

• I and II only

• I and III only 

•  I, III and IV only

Multiple Choice

Instant Company had outstanding 300,000 ordinary shares of P 20 par and 60,000 preference shares no- par 8% with a stated value of P 50.

The preference shares are cumulative and nonparticipating. Dividends have been paid in every year except the past two years and the current year.

The entity paid dividend of P 500,000 in the current year.

What is the dividend payable to the preference shareholders in the current year?

• 480,000
  

• 240,000

• 720,000

• 500,000

Multiple Choice

Which of the following statements is correct with regard to the contribution of assets and associated liabilities to a partnership?

• Liabilities associated with assets contributed to a partnership become the liability of the partnership 

• Liabilities associated with assets contributed to a partnership remain the liability of the contributing partner 

• Assets may not be contributed to a partnership if there is a liability associated with the asset

• Liabilities associated with assets contributed to a partnership become the liability of both the contributing partner and the partnership 

Multiple Choice

When a new partner is admitted into a partnership and the capital of the old partners decreases, which of the following explains the reason for the decrease? 

I. Undervalued liabilities were written up to their fair values 

II. Undervalued assets were written up to their fair values.

• II only 

• Neither I nor II 

• I only 

• Both I and II 

Multiple Choice

Which of the following best describes the dissolution of a partnership?

• The end of the business operations of the partnership

• The legal termination of the partnership entity

•  A change in the relation of the partners caused by any partner ceasing to be associated in the carrying on of the business

• The liquidation of all partnership assets and liabilities

Multiple Choice

Which of the following events would most likely result in the dissolution of a partnership?

• A partner’s death

• Admission of a new partner

• Revaluation of partnership assets

• Allocation of net income to partners

Multiple Choice

Income increases the owner's equity and is recorded by a debit.

• TRUE

• FALSE

Multiple Choice

When shares without par value are sold, the excess proceeds overstated value shall be credited to

• Share Capital

• Share Premium

• Income

• Retained Earnings