Free Printable FABM1 (THIRD QUARTER -TEACHER MADE EXAM)

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FABM1 (THIRD QUARTER -TEACHER MADE EXAM)

Total questions: 90

Worksheet time: 45mins

Name

Class

Date

Accounting defined as "the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least of financial character, and interpreting the results thereof." This is a definition from :

American Institute of Certified Public Accountant (AICPA)

Accounting Standard Council (ASC)

American Accounting Association (AAA)

Philippine Institute of Certified Public Accountant

Which of the following statements about an account is true?

The right side of an account is the debit or increase side

An account is an individual accounting record of increases and decreases in specific asset, liability, and owner’s equity items

There are separate accounts for specific assets and liabilities but only one account for owner’s

The left side of an account is the credit or decrease side

Debits:

increase both assets and liabilities

decrease both assets and liabilities.

increase assets and decrease liabilities.

decrease assets and increase liabilities.

A revenue account:

is increased by debits.

is decreased by credits

has a normal balance of a debit

is increased by credits.

Accounts that normally have debit balances are:

assets, expenses, and revenues

assets, expenses, and owner’s capital.

assets, liabilities, and owner’s drawings.

assets, owner’s drawings, and expenses

The expanded accounting equation is:

Assets + Liabilities = Owner’s Capital +Owner’s Drawings - Revenues + Expenses

Assets = Liabilities + Owner’s Capital -Owner’s Drawings + Revenues - Expenses

Assets = Liabilities + Owner’s Capital -Owner’s Drawings + Revenues +Expenses

Assets = Liabilities + Owner’s Capital +Owner’s Drawings + Revenues -Expenses

Which of the following is NOT part of the recording process?

Analyzing transactions.

Preparing a trial balance

Entering transactions in a journal

Posting transactions.

Which of the following statements about a journal is FALSE?

It is not a book of original entry.

It provides a chronological record of transactions

It helps to locate errors because the debit and credit amounts for each entry can be readily compared.

It discloses in one place the complete effect of a transaction

A ledger:

contains only asset and liability accounts.

should show accounts in alphabetical order

is a collection of the entire group of accounts maintained by a company

is a book of original entry

10.

Posting:

normally occurs before journalizing.

transfers ledger transaction data to the journal

is an optional step in the recording process.

transfers journal entries to ledger accounts.

11.

Before posting a payment of $5,000, the Accounts Pay�able of Senator Company had a normal balance of $16,000. The balance after posting this transaction was: (a) $21,000. (c) $11,000.(b) $5,000. (d) Cannot be determined.

(a)

12.

A trial balance will not balance if: (a) a correct journal entry is posted twice. (b) the purchase of supplies on account is debited to Supplies and credited to Cash. (c) a $100 cash drawing by the owner is debited to Owner’s Drawings for $1,000 and credited to Cash for $100. (d) a $450 payment on account is debited to Accounts Payable for $45 and credited to Cash for $45.

(a)

13.

The trial balance of Jeong Company had accounts with the following normal balances: Cash $5,000, Service Revenue $85,000, Salaries and Wages Pay�able $4,000, Salaries and Wages Expense $40,000, Rent Expense $10,000, Owner’s Capital $42,000, Owner’s Drawings $15,000, and Equipment $61,000. In preparing a trial balance, the total in the debit col�umn is: (a) $131,000. (c) $91,000. (b) $216,000. (d) $116,000.

(a)

14.

Rivera Company computes depreciation on delivery equipment at $1,000 for the month of June. The adjusting entry to record this depreciation is as follows. (a) dr. Depreciation Expense 1,000 cr. Accumulated Depreciation— Rivera Company 1,000 (b) dr. Depreciation Expense 1,000 cr. Equipment 1,000 (c)dr. Depreciation Expense 1,000 cr. Accumulated Depreciation— Equipment 1,000 (d) dr. Equipment Expense 1,000 cr. Accumulated Depreciation— Equipment 1,000

(a)

15.

Adjusting entries are made to ensure that:(a) expenses are recognized in the period in which they are incurred.(b) revenues are recorded in the period in which ser�vices are performed.(c) balance sheet and income statement accounts have correct balances at the end of an accounting period.(d) All the responses above are correct

(a)

16.

Which of the following is NOT a step in the accounting process?(a) Identification. (c) Recording.(b) Economic entity. (d) Communication.

(a)

17.

Which of the following statements about users of accounting information is incorrect?(a) Management is an internal user.(b) Taxing authorities are external users.(c) Present creditors are external users.(d) Regulatory authorities are internal users.

(a)

18.

The historical cost principle states that:(a) assets should be initially recorded at cost and adjusted when the fair value changes.(b) activities of an entity are to be kept separate and distinct from its owner.(c) assets should be recorded at their cost.(d) only transaction data capable of being expressed in terms of money be included in the accounting records.

(a)

19.

Which of the following statements about basic assump�tions is correct?(a) Basic assumptions are the same as accounting principles.(b) The economic entity assumption states that there should be a particular unit of accountability.(c) The monetary unit assumption enables account�ing to measure employee morale.(d) Partnerships are not economic entities

(a)

20.

The three types of business entities are:(a) proprietorships, small businesses, and partner�ships.(b) proprietorships, partnerships, and corporations.(c) proprietorships, partnerships, and large busi�nesses.(d) fi nancial, manufacturing, and service companies.

(a)

21.

Net income will result during a time period when:(a) assets exceed liabilities.(b) assets exceed revenues.(c) expenses exceed revenues.(d) revenues exceed expenses.

(a)

22.

As of December 31, 2017, Kent Company has assets of $3,500 and owner’s equity of $2,000. What are the lia�bilities for Kent Company as of December 31, 2017?(a) $1,500. (c) $2,500.(b) $1,000. (d) $2,000.

(a)

23.

Performing services on account will have the follow�ing effects on the components of the basic accounting equation:(a) increase assets and decrease owner’s equity.(b) increase assets and increase owner’s equity.(c) increase assets and increase liabilities.(d) increase liabilities and increase owner’s equity.

(a)

24.

Which of the following events is not recorded in the accounting records?(a) Equipment is purchased on account.(b) An employee is terminated.(c) A cash investment is made into the business.(d) The owner withdraws cash for personal use.

(a)

25.

During 2017, Bruske Company’s assets decreased $50,000 and its liabilities decreased $50,000. Its own�er’s equity therefore:(a) increased $50,000. (c) decreased $100,000.(b) decreased $50,000. (d) did not change.

(a)

26.

Payment of an account payable affects the compo�nents of the accounting equation in the following way.(a) Decreases owner’s equity and decreases liabilities.(b) Increases assets and decreases liabilities.(c) Decreases assets and increases owner’s equity.(d) Decreases assets and decreases liabilities.

(a)

27.

Which of the following statements is false?(a) A statement of cash fl ows summarizes informa�tion about the cash infl ows (receipts) and out�fl ows (payments) for a specifi c period of time.(b) A balance sheet reports the assets, liabilities, and owner’s equity at a specifi c date.(c) An income statement presents the revenues, expenses, changes in owner’s equity, and resulting net income or net loss for a specifi c period of time.(d) An owner’s equity statement summarizes the changes in owner’s equity for a specifi c period of time.

(a)

28.

On the last day of the period, Alan Cesska Company buys a $900 machine on credit. This transaction will affect the:(a) income statement only.(b) balance sheet only.(c) income statement and owner’s equity statement only.(d) income statement, owner’s equity statement, and balance sheet.

(a)

29.

The financial statement that reports assets, liabilities, and owner’s equity is the:(a) income statement.(b) owner’s equity statement.(c) balance sheet.(d) statement of cash fl ows

(a)

30.

Services performed by a public accountant include:(a) auditing, taxation, and management consulting.(b) auditing, budgeting, and management consulting.(c) auditing, budgeting, and cost accounting.(d) auditing, budgeting, and management consulting.

(a)

31.

The three steps in the accounting process are identifi cation, recording, and communi�cation. (T or F)

(a)

32.

Bookkeeping encompasses ALL STEPS in the accounting process. (T or F)

(a)

33.

Accountants prepare, but do not interpret, financial reports. (T or F)

(a)

34.

The two most common types of external users are investors and company officers. (T or F)

(a)

35.

Managerial accounting activities focus on reports for internal users (T or F)

(a)

36.

Congress passed the Sarbanes-Oxley Act to reduce unethical behavior and decrease the likelihood of future corporate scandals. (T or F)

(a)

37.

The primary accounting standard-setting body in the United States is the Financial Accounting Standards Board (FASB). (T or F)

(a)

38.

The historical cost principle dictates that companies record assets at their cost. In later periods, however, the fair value of the asset must be used if fair value is higher than its cost. (T or F)

(a)

39.

Relevance means that financial information matches what really happened; the infor�mation is factual (T or F)

(a)

40.

A business owner’s personal expenses must be separated from expenses of the business to comply with accounting’s economic entity assumption. (T or F)

(a)

41.

Rent Expense.

Rent Expense is an expense (E); it decreases owner’s equity.

Rent Expense is an expense (E); it increases owner’s equity.

42.

Service Revenue.

Service Revenue is revenue (R); it decreases owner’s equity.

Service Revenue is revenue (R); it increases owner’s equity.

43.

Drawings

Drawings is owner’s drawings (D); it increases owners equity

Drawings is owner's drawings (D); it decreases owner’s equity.

44.

Salaries and Wages Expense.

Salaries and Wages Expense is an expense (E); increases owners equity

Salaries and Wages Expense is an expense (E); decreases owner’s equity

45.

_________, “The Father of Accounting and Bookkeeping”, was born in what country______?

LUCIANO MILLAN; ITALY

LUCA PACIOLI; ITALY

LUCA PACIOLI, USA

LUCA PACIOLI; PHILIPPINES

46.

This accounting record is also known as the “Book of Final Entry.”

GENERAL LEDGER

GENERAL JOURNAL

GENERAL MANAGER

47.

This accounting record is also known as the “Book of ORIGINAL Entry.”

GENERAL JOURNAL

GENERAL LEDGER

GENERAL MANAGER

48.

What is primarily centered on the critical examination of financial statements by an independent CPA to express an opinion regarding the fairness of the contents of the financial Statements?

auditing

financial accounting

tax accounting

managerial accounting

49.

Which branch of accounting embraces the preparation of various tax returns and tax planning necessary to minimize the impact of taxes on the firm?

auditing

financial accounting

tax accounting

managerial accounting

50.

Which branch of accounting is primarily concerned with the preparation of specific purpose financial statements for the management to base financial decisions on?

financial accounting

management accounting

auditing

51.

Which branch of accounting is concerned with analyzing costs of products or services rendered in a business?

cost accounting

financial accounting

managerial accounting

52.

Which branch of accounting deals with the calculate the profit or loss of a business during a period and to provide an accurate picture of the financial position of the business as on a particular date to investors or banks?

financial accounting

cost accountig

managerial accounting

53.

Rob is a CPA who inspects the accuracy and consistency of financial statements and certifies the accounts done by the accountants of his clients. Which branch of accounting is Rob doing?

auditing

financial accounting

bookkeeping

54.

What is the system introduced by by Luca Pacioli?

accounting

double entry

double enter

bookkeeping

55.

The process of identify, classify, recording and communicating business transaction is called as book-keeping. (T or F)

True

False

56.

PREPAID EXPENSE is a/an:

expense

current assets

non current assets

revenue

57.

LAND is a/an:

current asset

non current asset

liability

expense

58.

LAND is held for sale :

current asset

non current asset

liability

expense

59.

accumulated depreciation , allowance for doubtful account or accounts which are deducted to the particular account is a/an:

contra account

adjunct account

60.

unamortized bond premium account, which is used when a business sells bonds at a premium. this unamortized bond premium account is a/an:

contra account

adjunct account

61.

cash, interest receivable, accounts receivable, short term investment, merchandise inventory, supplies, prepaid expense are:

non current assets

current assets

expenses

liabilities

62.

land, equipment, furniture and fixtures, building or property plant and equipment are:

current assets

non current assets

liabilities

expenses

63.

notes payable, accounts payable, income tax payable, salaries payable, mortgage payable, bonds payable, unearned revenue or any payables that is OWED are:

assets

liabilities

capital

revenues

64.

utilities expense (water, electricity bill), rent expense, salaries expense, advertising expense, insurance expense, miscellaneous expenses are:

assets

liabilities

expenses

revenue

65.

REAL ACCOUNTS are _______ and found in the __________; while NOMINAL ACCOUNTS are______and found in the__________.

permanent accounts, balance sheet ; temporary accounts, income statements

temporary accounts, balance sheet ; permanent accounts, income statement

66.

The primary objective of financial accounting is to:

Serve the decision-making needs of internal users.

Provide accounting information that serves external users.

Monitor and control company activities.

Provide information on both the costs and benefits of looking after products and services.

67.

The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange, is the:

Accounting equation.

Cost principle.

Going-concern assumption.

Realization principle.

68.

If a company purchases equipment costing $4,500 on credit, the effect on the accounting equation would be:

Assets increase $4,500 and liabilities decrease $4,500

Equity decreases $4,500 and liabilities increase $4,500.

Liabilities decrease $4,500 and assets increase $4,500

Assets increase $4,500 and liabilities increase $4,500

69.

Resources a company owns or controls that are expected to yield future benefits are:

Assets

Revenues

Liabilities

Expenses

70.

On May 31 of the current year, the assets and liabilities of Riser, Inc. are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of owner's equity as of May 31 of the current year?

$8,300

$13,050

$20,500

$31,100

71.

Assets created by selling goods and services on credit are:

accounts payable

accounts receivable

liabilities

expenses

72.

Saddleback Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?

Assets, $30,000 increase; equity, $30,000 increase

Assets, $30,000 decrease; liabilities, $30,000 decrease

Assets, $30,000 decrease; liabilities, $30,000 increase

Liabilities, $30,000 decrease; equity, $30,000 increase.

73.

A concept that states that all the components of a complete set of financial statement are INTERRELATED.

Entity Principle

Articulation

74.

Adjustments are often prepared:

After the statement of financial position date but dated as of that date

Before the statement of financial position date and dated after that date

After the statement of financial position date and dated after that date

Before the statement of financial position date but dated as of that date

75.

A WORKSHEET is useful for all the following, EXCEPT:

recording transactions from source documents

recording adjusting entries

recording closing entries

preparing financial statements

76.

On the WORKSHEET, under what circumstances will the last two columns be in balance after the initial footing?

under no circumstances

under all circumstances, assuming no arithmetical errors have been made

when net income is zero

when no adjustment has been entered on the work sheet

77.

Closing Entries will ultimately affect:

total liabilities

the Cash account

total assets

the owner’s Capital account

78.

At the beginning of the year 2019, the assets of Monkey Business Co. were P495,765 and its owner’s equity was P257,321. During the year, assets increases BY P123,456 and liabilities increased BY P25,677. What was the owner’s equity at the end of the year?

P336,223

P355,100

P593,544

P282,998

79.

If NO adjustments are needed for a company, its

post-closing trial balance will be identical to its trial balance

adjusted trial balance will be identical to its post-closing trial balance

trial balance will be identical to its adjusted trial balance

trial balance, adjusted trial balance, and post-closing trial balance will be identical

80.

Which of the following sequences represents the normal flow of accounting data from the journal to the ledger?

Transaction occurs; source documents are prepared; transaction analysis; transaction is journalized and posted.

Source documents are prepared; transaction analysis; transaction is journalized and posted; transaction occurs.

Transaction analysis; transaction is journalized and posted; transaction occurs; source documents are prepared.

Transaction occurs; transaction analysis; transaction is journalized and posted; source documents are prepared.

81.

The process of converting non-cash resources and rights into cash or equivalent claims to cash is called ________________.

RECOGNITION

REALIZATION

82.

Norman Company purchased office supplies on August 2021 amounting P100,000 in which the company immediately paid in cash. At December 2021, which coincides to be the end of the accounting period, the inventory records show that the amount of remaining office supplies amount to P40,000. The following entry made on August 1 : debit office supplies P100,000 and credit cash P100,000. What is the adjusting entry come December 31, 2021?

debit: office supplies P60,000; credit: office supplies expense P60,000

debit: office supplies expense P60,000; credit: office supplies P60,000

debit: office supplies P40,000; credit :office supplies expense P40,000

debit: office supplies expense P40,000; credit :office supplies P40,000

83.

Valena Tax Consultancy received P150,000 representing advanced payment for six (6) months tax compliance and consultancy services from one of their clients on November 1, 2021. The accounting period of the entity ends on December 31, 2021. The initial entry made on November 1, 2021 is debit: Cash P150,000 and credit: Unearned Tax Consultancy Fees P 150,000. What is the adjusting entry come December 31,2021?

debit: Unearned Tax Consultancy Fees P50,000; and credit: Tax Consultancy Fees earned P50,000

debit: Tax Consultancy Fees Earned P50,000; and credit: Unearned Tax Consultancy Fees P50,000

debit: Unearned Tax Consultancy Fees P25,000; and credit: Tax Consultancy Fees earned P25,000

debit: Tax Consultancy Fees Earned P100,000; and credit: Unearned Tax Consultancy Fees P100,000

84.

A business pays a weekly salary of 200,000 every Friday for a 5-day-work ending on that day. If the fiscal period ends on Wednesday, the adjusting entry is

debit: Salaries Expense P120,000; and credit: Salaries Payable P120,000

debit: Salaries Expense P40,000; and credit: Salaries Payable P120,000

debit: Salaries Payable P120,000; and credit: Salaries Expense P120,000

debit: Salaries Payable P40,000; and credit: Salaries Expense P40,000

85.

At the beginning of the current year, DI KA CRUSH NG CRUSH MO Company bought machinery under a contract that required a down payment of P100,000, plus 24 monthly payments of 50,000 each, for total cash payment of 1,300,000. The cash equivalent price of the machine was P1,100,000.The machinery has estimated useful life of 10 years and estimated residual value of 50,000. The entity used straight line depreciation. What amount should be reported as depreciation of machinery for the current year?

105,000

125,000

110,000

130,000

86.

This is otherwise known as the “Philippine Accountancy Act of 2004”, is the law that regulates the practice of the accounting profession in the Philippines. Accordingly, the law recognizes the invaluable contributions of accountants in nation building and development. This is referred to:

Republic Act No 9298

Republic Act No 9892

Republic Act No 9598

Republic Act No 2998

87.

The ______________ is a federal law that established sweeping auditing and financial regulations for public companies.

Sarbanes-Oxley Act of 2005

Sarbanes-Oxley Act of 2022

Sarbanes-Oxley Act of 2012

Sarbanes-Oxley Act of 2002

88.

Which of the following accounts does NOT require a closing entry?

Fees Earned

Interest Expense

Income Summary

Samera, Capital

89.

Adjusting entries are necessary to:

Update and correct the accounts at the end of the period

record the sales of the period

balance the books at the end of the period

ensure the equality of the debits and credits

90.

This book was published in Venice in 1494 by Fra Luca Pacioli, traditionally known as the "Father of Accounting." What is the complete title of the book?

Suma de Arithmetica, Geometria, Proprtioni et Proportional

Suma de Arithmetica, Geometry, Proprtioni et Proportionalita

Suma de Arithmetica, Geometria, Proportioni et Proportionalita

Suma de Arithmetic, Geometria, Proprtioni et Proportionalita

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FABM1 (THIRD QUARTER -TEACHER MADE EXAM)

Total questions: 90

Worksheet time: 45mins

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