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WorksheetsAdditional requirement - Fundamentals of Accounting
Total questions: 90
Worksheet time: 45mins
For accounting purposes, the business and its owner are considered one and the same.
True
False
The terms bookkeeping and accounting are synonymous
True
False
Which of the following is expected to have a normal debit balance?
Assets
Liabilities
Owner's equity
Revenues
Expenses
The left side of an account where the value received from a transaction is recorded.
(a)
A withdrawal by the owner is recorded as an expense of the business
True
False
Which of the following transactions does not represent revenue?
Investment by the owner
Rendering of services
Lease of property
Sale of goods
Every business transaction affects at least one account
True
False
Which of the following equations does not violate the fundamental accounting equation?
Assets + Capital = Liabilities
Liabilities - Capital = Assets
Capital = Assets + Liabilities
Capital = Assets - Liabilities
When an entity acquire computer equipment for cash,
an asset is increased an a liability is decreased.
assets and owner's equiry are increased.
one asset is increased and another is also increased.
one asset is increased while another is increased.
Which of the following transactions will create a liability to the business?
Service vehicle was purchased in cash.
Collected receivables from customers.
Received the electricity bill for the month of August.
Owner withdrew cash from the business
Owner's equity is the excess of the assets of the business over its outstanding liability.
True
False
Withdrawals by the owner has all of the following effects, except
reduction of cash balance
reduction of owner's equity
reduction of profit for the period
reduction of total assets
A credit means an entry on the right side of an account.
True
False
The trial balance will help the account in detecting transactions that were recorded twice.
True
False
The process of transferring journal entry from information from the journal to the ledger is called
analyzing
footing
journalizing
posting
The primary purpose of the trial balance is to test the
analysis of transactions.
equality of debit and credit balances in the ledger.
equality of debit and credit balance in the journal
recording of transactions.
Debits to expense accounts signify
decreases in capital.
increases in assets.
increases in capital
increases in liability.
Which of the following accounts will be debited in a proper journal entry?
Accounts payable, when it has been decreased
Cash, when it has been decreased.
Service income, when it has been increased
Unearned revenue, when it has been increased.
If Cash was debited by P140,000 and credited by P110,000 during the first year of business operations, how much of the ending balance?
P30,000 debit
P30,000 credit
P250,000 credit
P250,000 debit
An entry with more than one debit or credit is called a
compound entry
double entry
dual entry
multiple entry
Which of the following accounts will not affect owner's equity?
Advertising Expense
Land
Owner's withdrawal
Revenues
Every business transaction affects a minimum of two accounts.
True
False
A debit entry will always increase the balance of an account
True
False
Salaries payable is a type of expense
True
False
Increases in revenues is recorded using a credit entry
True
False
Transactions are analyzed on the basis of source documents
True
False
The journal is also known as the book of original entry
True
False
Which of the following is an asset account?
Insurance expense
Office equipment
Sales
Supplies expense
When a company has performed a service but has not yet received payment, it
debits Accounts Receivable and credits Service Revenues.
debits Service Revenues and credits Accounts Payable.
debits Service Revenues and credit Accounts Receivable.
makes no entry until the cash is received.
Which of the following accounts has a normal debit balance?
Service revenues
Mortgage payable
Unearned service revenues
Prepaid insurance
What function do accounting journals serve in the accounting process?
classifying
recording
reporting
summarizing
Payment for expenses that are not yet incurred is called (a) .
Office supplies are expensed
never, since they are assets.
when they are consumed.
when they are paid for.
when they are purchased.
Which of the following transactions will not affect the balance sheet totals?
Collecting P40,000 from customers on account.
Paying a P300,000 not payable.
Purchasing P50,000 supplies on account.
Withdrawal of P80,000 by the firm's owner.
A chart of account is a (an)
accounting procedure manual
flowchart of all transactions
journal
list of names of all account titles
Which of the following does not directly or indirectly affect the owner's capital account?
Earning of revenues
Incurring of expenses
Paying an accounts payable
Withdrawal by the owner
Unearned revenues are recorded by companies that
pay money at the time the performance of a service is complete.
pay money in advance of the performance of a service.
receive money at the time the performance of a service is complete.
receive money in advance of the performance of a service.
The accrual basis of accounting recognizes
expenses when cash is paid.
expenses when resources are consumed as part of operating activities.
revenues when cash is received.
revenues when products are produced as part of operating activities.
Which of the following records the withdrawal of cash for personal use by Rosendo Huerto, the owner of a business?
Debit Cash and credit Huerto, withdrawals
Debit cash and credit Salaries expense
Debit Huerto, Wtihdrawal and credit Cash
Debit Salary Expense and credit Cash
An increase in a liability is recorded by a debit.
True
False
The general ledger is sometimes called the book of final entry
True
False
A credit has an unfavorable effect on an account.
True
False
Another word for liability is debt
True
False
an expense may be recognized and recorded even though there is no cash outlay yet.
True
False
The accounting cycle begins with the recording of the transactions and ends with the financial statements.
True
False
Withdrawals of assets from a business by the owners are considered to be expenses
True
False
Debit entries increases the balance of asset accounts.
True
False
In some transactions, the double entry bookkeeping may not be observed.
True
False
Hiring of employees is considered an event with financial impact.
True
False
Entering transactions into the ledger is called posting.
True
False
As equipment is depreciated, its book value increases and its accumulated depreciation increases.
True
False
Accounting periods should be of equal length to facilitate comparisons between periods.
True
False
All increases in cash represent revenues earned.
True
False
Accrual accounting recognized revenues and expenses at the point that cash is exchanged.
True
False
Failure to record the adjusting entry for depreciation will overstate assets on the balance sheet.
True
False
Acquiring a computer for cash is merely an exchange of one asset for another that will not affect profit or loss for the current or future period.
True
False
Assets become liabilities upon expiration
True
False
Adjusting entry to allocate part of the cost of a one-year fire insurance policy to expense will cause total assets to decrease.
True
False
Recording incurred but unpaid expenses is an example of an accrual.
True
False
A calendar period always begin on January 1 and ends on December 31.
True
False
Which of the following is not an application of accrual accounting?
Adjusting the accounts
Applying the cash basis of accounting
Applying the matching rule
Recognizing revenues when expenses and expenses when incurrec.
Accrued revenues
decrease assets.
decrease liabilities
increase assets
increase liabilities
Accrued expenses
decrease assets
decrease liabilities
increase assets
increase liabilities
Which of the following transactions will result in an increase in expenses?
Cost of employee salaries
Payment of accounts payable
Purchase of office equipment on credit
Repayment of principal of bank loan
On January 1, supplies costing P15,000 were purchased and recorded under the Office Supplies account. On December 31, remaining supplies has a value of P5,000. Which of the following is the appropriate adjusting entries for this situation?
Debit Office Supplies P5,000 and credit Office Supplies Expense P5,000
Debit Office Supplies P10,000 and credit Office Supplies Expense P10,000
Debit Office Supplies Expense P10,000 and credit Office Supplies P10,000
Debit Office Supplies Expense P5,000 and credit Office Supplies P5,000
On December 31, electricity cost incurred but not yet paid is estimated at P24,300. Which of the following is the appropriate adjusting entry?
Debit Utilities Expenses P24,300 and credit Accrued Utilities expense P24,300
Debit Utilities Expenses P24,300 and credit Prepaid Utilities P24,300
Debit Utilities Expenses P24,300 and credit Cash P24,300
Debit Accrued Utilities Expenses P24,300 and credit Utilities Expense P24,300
Which of the following could not be credited in an adjusting entry?
Interest receivable
Office supplies
Prepaid rent
Service revenues
A prepaid expense is recorded when
an expense is incurred as cash is paid
a non-cash resource is consumed after the cash is paid
a service is rendered before payment of cash
cash is paid before an expense has been incurred.
Deferred expenses should be reported as
assets on the balance sheet
expenses on the income statement
income on the income statement
liabilities on thee balance sheet.
A deferred revenue should be recorded by a
buyer when a service is received on payment of cash.
seller when a customer pays for a service before the service is rendered.
seller when a service is rendered before receipt of cash.
seller when service is rendered on receipt of cash.
The worksheet is used to pull together up-to-date account balances needs to prepare the financial statements.
True
False
Preparation of worksheets is mandatory in the accounting process
True
False
Cash loaned from a bank constitute income.
True
False
When expenses exceeds revenues, the business is said to incur a net loss
True
False
When preparing worksheets, income and expense accounts are moved to the balance sheet columns of the worksheet.
True
False
Liquidity refers to the availability of cash in the near future after taking account of the financial commitments over this period.
True
False
Paying taxes to the government is an example of a financing activity
True
False
Worksheets are prepared because
they aid in the preparation of the financial statements, adjusting entries, and closing entries.
they are necessary in the preparati0on of the financial statements.
they are required by generally accepted accounting principles
they constitute a permanent record of all adjusting entries made for the period.
During first year of operations, the owner of JF Treasured invested P500,000 and withdrew P100,000 to the business. If the business earned P150,000 of profit during the year, owner's equity at the end of the year will be
P550,000
P400,000
P750,000
P250,000
Which of the following is a cash outflow from operating activities?
Payment for interest expense
Payment to acquire property and equipment
Payment to settle a utility bill
Payment to owners in the form of withdrawals
Closing entries deal primarily with the balance of real accounts.
Triue
False
All accruals made in the current period may be reversed in the succeeding period.
True
False
The post closing trial balance will contain only real account.
True
False
Salaries expense is a temporary account
True
False
Reversing entries are never required.
True
False
Closing entries reduce the following types of accounts to a zero balance at the end of the period
Income accounts
Expense accounts
Withdrawals account
All options given are correct
Which of the following accounts will not appear in the post-closing trial balance
Accumulated depreciation - Office Equipment
Owner's Capital
Owner's Withdrawal
Unearned Legal Fees
Reversing entries are
made to record a change in corporate objectives
made prior to preparing the post-closing trial balance
optional
required
Which of the following account will never be involved when preparing reversing journal entries?
Cash
Interest expensse
Interest income
Prepaid rent
Which of the following comes last in the accounting process?
journalizing external transactions
preparation of an adjusted trial balance
preparation of a post-closing trial balance
worksheet preparation
