3RD REVIEW-FABM1

Mr. X bought an iPhone as a gift for her wife. He included this as a purchases for his business. What underlying accounting assumptions should you recommend to observe when dealing with this kind of business transaction

• Going concern assumption 

• Economic entity assumption

• Monetary unit assumption

• Accrual basis assumption

The accountant of X and Ys unintentionally record a sales at P2,340 instead of P2,430. What will you recommend to correct the errors?

• Make an adjusting entries

• Leave the transaction as it is

• Do not record the transaction anymore

• Omit the transaction so that the auditor will not found it

Payment of cash for electricity and water bills are recorded in what journal.

• Cash receipts

• Purchase journal

• Cash disbursement

• Sales journal

What does accounts receivable subsidiary ledger provides?

• The basis for account number in the ledger

• Detailed information on the transactions of each credit customers

• Chronology of the transaction

• Historical data of business transaction

Which of the following steps is not part of the posting process?

• In the ledger, enter the appropriate columns of the accounts credited the date, explanation, journal page, and credit amount in the journal

• In the ledger, enter the appropriate columns of the accounts debited the date, explanation, journal page, and debit amount shown in the journal

• In the posting references column of the ledger, write the account number to which the debit amount was posted.

• In the posting reference column of the journal, write the account number to which the credit amount was posted

Accounts in the chart of accounts are arranged according to

• Order of appearance in business transactions

• Account classification

• magnitude

• liquidity

Which of the following is a non-business transaction?

• Payment of advance salary to an employee just hired 

• Setting up of chart of accounts

• payment of rent in advance

• receipt of electricity bill

In a service business, revenue is considered earned when

• When the service is performed

• When the cash is received

• at the end if the month

• at the end of the year

Book of Mr. Soap reflects an ending debit assets balances of P325,000 (July 30, 2022). On July 31, 2022, Mr. Soap purchase a display cabinet on account worth P8,250. Analyze its effect on the assets of Mr. Soap.

• No effects on the assets of Mr. Soap, since it was purchase on accounts.

• It will decrease the assets of Mr. Soap, since it was acquired on account

• It will decrease the accounts receivable, since no cash out was made

• It will increase the assets of Mr. Soap

Journalizing is the process of entering  a business transaction in the form of an accounting entry. What steps this process represents?

• 1st

• 2nd

• 3rd

• 4th