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WorksheetsAVERAGE ROUND
Total questions: 10
Worksheet time: 5mins
Which of the following statement is correct?
account.
a. Under the expense method, the prepaid item is initially debited to an asset account.
b. Under the income method, the income collected in advance is initially credited to an income account.
c. Under the liability method, the income collected in advance is initially debited to a liability account
d. Under the asset method, the prepaid item is initially debited to an expense account.
One of the major disadvantages of a sole proprietorship is
a. that there is unlimited liability to the owner
b. the simplicity of decision making
c. low organizational costs
d. low operating costs
Which is not part of the complete financial statements?
a. Statement of Financial Position
b. Statement of Cash Flows
c. Statement of Retained Earnings
d. Statement of Comprehensive Income
On April 30, 2021, Bautista, Jimenez and Laxamana formed a partnership by combining their separate business proprietorships. Bautista contributed cash of P100,000. Jimenez contributed property with a carrying amount of P72,000, original cost of P80,000, and fair value of P160,000. The partnership accepted responsibility for the P70,000 mortgage attached to the property. Laxamana contributed equipment with a carrying amount of P60,000, original cost of P150,000, and fair value of 110,000. The partnership agreement specifies that profits and losses are to be shared equally but is silent regarding capital contributions. Which partner has the largest capital account balance as of April 30, 2021?
a. Bautista
b. Jimenez
c. laxamana
d. All capital account balances are equal
Star Division reported the following results in 2021:
Annual Sales P500,000
Net Profit P80,000
Investment P250,000
What is the assets turnover?
a. 0.5
b. 1.0
c. 2.0
d. 3.125
An income statement showing only component percentages is known as
a. Common pesos statement
b. Condensed income statement
c. Common-size income statement
d. Comparative income statement
Which of the following is an appropriate computation for return on investment?
a. Income divided by total assets
b. Income divided by sales
c. Sales divided by total asse
d. Sales divided by shareholder’s equity
The main difference in accounting for a partnership and a corporation is:
a. In the recording of sales transactions because a corporation has bigger sales
b. in the treatment of assets and liabilities
c. in the accounting for changes in equity or capital accounts
d. in the computation of depreciation expense because a corporation has more assets
When ordinary shares are sold on subscription
a. Shareholders’ equity account called Subscriptions Receivable is used to record the par value of the shares issues
a. Shareholders’ equity account called Subscriptions Receivable is used to record the par value of the shares issues
c. the Ordinary Shares account is credited when the subscription price has been fully paid and the share is issued
d. the Ordinary Shares account is not used. Shares issued on subscription are credited to Subscribed Ordinary Shares, a permanent shareholders’ equity account.
Malaki Corporation has a total shareholders’ equity of P1,000,000, including retained earnings of P190,000. The cash balance is P350,000. The maximum cash dividend the corporation can declare and pay its shareholders is
a. P1,000,000
b. P650,000
c. P350,000
d. P190,000
