FUNDA-average

1. What is an accrual basis of accounting?

• A requirement of the government

• A synonym for cash basis accounting

• An adjustment only to statement of comprehensive income items

• A generally accepted accounting principle

1. If the pre-collection is initially recorded as income, what will be the year-end adjustment?

• Debit to income

• Debit to liability

• Credit to asset

• Credit to expense

If an unpaid expense pertaining to consumption for the period is to be part of the year-end adjustments, what entry will it require?

• Debit to asset

• Debit to income

• Credit to expense

• Credit to liability

Which of the following will appear in the statement of comprehensive income?

• Prepaid expense

• Unearned rent

• Unused supplies

• Expired insurance

What kind of system of recording goods intended for sale maintains the merchandise inventory account in every transaction?

• Periodic inventory

• Perpetual inventory

• Just-in-time inventory

• Maintenance Inventory

Which of the following statements are true

• Journals are used under both the double-entry system and single-entry system.

• The accrual basis of accounting cannot be applied when using the single-entry system.

• The cash basis and accrual basis of accounting can both be used under double-entry systems but not under single-entry systems.

• Subsidiary ledgers are used under both double and single-entry systems.

Which of the following represents the expanded basic accounting equation?

• Assets = Liabilities + Common Shares + Dividends – Income – Expenses

• Assets + Dividends + Expenses = Liabilities + Equity + Income

• Assets – Liabilities – Dividends = Equity + Income – Expense

• Assets = Income + Expenses – Liabilities

Choose the incorrect statement

• An accounting information system is designed to collect data about each transaction and event that should be recorded by an entity during a reporting year.

• Posting is a transfer process which reclassifies chronological information into account classification format in the ledger

• In recording transactions, an external transaction is more likely to be overlooked and not recorded than is an internal transaction

• A trial balance is prepared after adjusting entries are recorded but before closing entries

The following information pertains to Arones Co. for the year:

Net assets, Jan 1, 2019 1,008,480

Net assets, Dec 31, 2019 2,112,960

Share capital issued in 2019 335,520

Dividends declared in 2019 195,120

How much is the profit(loss)?

• 964,800

• 573,840

• 964,080

• 674,040

Robert Co. recorded accrued salaries of P2,500 at Dec 31, 2018. During 2019, Robert paid salaries of P87,200. Unpaid salaries at Dec 31, 2019 amounted to P3,400. Robert prepared adjustments only at Dec. 31 and also reversing entries on Jan 1. The balance of the salaries expense account that would appear in the post-closing trial balance at Dec 31, 2019 is

• 88,100

• 87,200

• 86,300

• Nil