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WorksheetsDIFFICULT ROUND
Total questions: 10
Worksheet time: 9mins
Short-term creditors would probably most interested in which ratio?
a. Current ratio
b. Earnings per share
c. Debt-to-Equity ratio
d. Quick Ratio
Star Division reported the following results in 2021:
Annual Sales P500,000
Net Profit P80,000
Investment P250,000
What is the return on sales?
A. 16%
B. 20%
C. 25%
D. 32%
OFW Corporation has current assets totaling P15 million and a current ratio of 2.5. What is OFW’s current ratio immediately after it has paid P2 million of its accounts payable?
a. 3.75
b. 2.75
c. 3.25
d. 4.75
Working capital is the difference between
a. Current assets and current liabilities
b. Fixed assets and current liabilities
c. Total assets and total liabilities
d. Equity and cash
a. Current assets and current liabilities
b. Fixed assets and current liabilities
c. Total assets and total liabilities
d. Equity and cash
The Prepaid Insurance account has a balance of P19,200 before adjustment. The amount represents an annual insurance policy that is already 8 months expired. What is the correct entry to adjust the account at the end of accounting period?
a. DR. Insurance Expense – P19,200; CR. Prepaid Insurance – P19,200
b. DR. Insurance Expense – P6,400; CR. Prepaid Insurance – P6,400
c. DR. Insurance Expense – P12,800; CR. Prepaid Insurance – P12,800
d. CR. Prepaid Insurance – P12,800; CR. Insurance Expense – P12,800
The allowance for Bad Debts of Union Enterprises has a credit balance of P4,000 at the end of the accounting period on December, 2021. The estimated bad debts at the end of the year is P9,000 which is 2% of P450,000. What is the adjusting entry?
a. DR. Allowance for Bad Debts – P4,000; CR. Bad Debts Expense – P4,000
b. DR. Bad Debts Expense – P5,000; CR. Allowance for Bad Debts – P5,000
c. DR. Bad Debts Expense – P9,000; CR. Allowance for Bad Debts – P9,000
d. DR. Bad Debts Expense – P13,000; CR. Allowance for Bad Debts – P13,000
On June 30, 2021, the statement of financial position of Urzula Marketing, a partnership, is summarized as follows:
Assets P600,000
Oro, Capital P360,000
Sola, Capital P240,000
Oro and Sola share profit and losses at a 6:4 ratio, respectively. They agreed to take in Yan as a new partner, who purchased 1/8 interest of Oro and Sola for P100,000. What is the amount of Yan, Capital to be taken in the partnership book?
a. P75,000
b. P50,000
c. P100,000
d. P125,000
After operating for 10 years, the books of partnership of Gomez and Mendrez showed the following balances:
Net Assets P130,000
Gomez, Capital P85,000
Mendrez, Capital P45,000
If liquidation of the company takes place at this point, and the net assets are realized at book value, the partners are entitled to receive:
a. Gomez – P97,500; Mendrez – P32,500
b. Gomez – P90,000; Mendrez – P40,000
c. Gomez – P85,000; Mendrez – P45,000
d. Gomez – P65,000; Mendrez – P65,000
If a corporation reissued at P200 per share 100 shares of treasury stock that it had previously acquired for P280 per share and there was not any Share Premium – Treasury account, it would debit
a. Loss of Sale of Treasury Stock for P8,000
b. Share Premium – Ordinary for P8,000
c. Retained Earnings for P8,000
d. Treasury Stock for P8,000
What is the primary goal of financial management?
a. Increase earnings
b. Maximizing cash flow
c. Maximizing shareholders’ wealth
d. Minimizing risk of the firm
