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ABM_Acctg Equation and Types of Accounts

Total questions: 60

Worksheet time: 20mins

Name
Class
Date
1.

Accounts receivable is a/an ______

a)

liability

b)

asset

c)

capital

2.

The basic accounting equation is ____

a)

assets + liabilities = capital

b)

assets = liabilities - capital

c)

assets = liabilities + capital

d)

assets - liabilities = capital

3.

Any "payable" account is _____

a)

a liability

b)

an asset

c)

a capital

d)

a revenue

4.

The term that refers to the equity of the owners.

a)

asset

b)

revenue

c)

expense

d)

capital

5.

Prepaid expenses are part of _____

a)

assets

b)

expenses

c)

liabilities

d)

capital

6.

What business transactions result to a decrease in capital?

a)

a. withdrawal by the owner

b)

b. purchase of an asset

c)

c. payment of expenses

d)

d. a and c

e)

e. b and c

7.

State the effect of the business transaction:

Invested land and building to the business.

a)

increase in one form of asset accompanied by a decrease in another form of asset

b)

increase in assets accompanied by increase in liabilities

c)

increase in assets accompanied by an increase in capital

d)

increase in liability accompanied by a decrease in capital

8.

State the effect of the business transaction:

Purchase of supplies for cash.

a)

Decrease in liability accompanied by an increase in capital

b)

Increase in one asset with a corresponding decrease in another asset account

c)

Decrease in asset because of a decrease in capital

d)

Increase in assets accompanied by an increase in capital

9.

Asset, liability and equity accounts are extended to

a)

balance sheet section

b)

income statement section

c)

retained earnings

d)

trial balance

10.

Revenue and expense accounts are extended to

a)

retained earning statement

b)

balance sheet section

c)

income statement

d)

accounts payable section

11.

Which one is not belongs to liability?

a)

Mobile Phone Bill

b)

Bank Loan

c)

Bank Balance

d)

Owed To Friends

12.

Property owned by an individual

a)

Liability

b)

Asset

c)

Property

d)

Net Worth

13.

Debts and financial obligations (responsibilities).

a)

Liabilities

b)

Assets

c)

Negative Net Worth

d)

Property

14.

Examples of Liabilities include which of the following:

a)

Loans, credit cards, and real property

b)

Loans, mortgage, and credit cards

c)

Loans, Art collection, and savings account

d)

Mortgage, credit card, and real property

15.

Examples of assets include:

a)

Real Property, Car, and credit cards

b)

Car, Jewelry, and Checking account

c)

Art collection, Jewelry, and unpaid taxes

d)

Real Property, Car loan, Jewelry

16.
Which of the following is considered an asset?
a)
Bank Loan
b)
Mortgage
c)
Debit Card
d)
Savings account
17.
Which of the following is considered a liability?
a)
Savings Account
b)
Mortgage
c)
Savings bond
d)
Coin Collection
18.

Solve for the asset

Total liabilities (323,528) + Equity (186,422)

a)

509,905

b)

509,950

c)

510,950

d)

509,955

19.

What is the name given for all the resources owned by the business?

a)

Assets

b)

Liabilities

c)

Capital

d)

All of the Above

20.

What is the name given to the account in which the owner withdraws money from the business?

a)

Assets

b)

Liability

c)

Drawings

d)

Capital

21.

A supplier's account to whom money is owed to for goods or services supplied is known as___________.

a)

Assets

b)

Accounts Receivable

c)

Accounts Payable

d)

Capital

22.

In a business transactions, Mrs. Leonor B. Castolo received cash, P10,000.00 from service rendered. What is the correct Journal Entry:

a)

Debit, Cash Credit, Capital

b)

Debit, Capital Credit, Cash

c)

Debit, Cash Credit, Income

d)

Debit, Income Credit, Cash

23.

In the Accounting Equation (A = L + OE {R-E}). If the total Liability is P250,000.00 and the Owner's Equity is P50,000.00 totaled with the Income and Expense. How much is the Total Asset?

a)

P200,000.00

b)

P300,000.00

c)

P250,000.00

d)

P300,000.00

24.

In transactions Affecting Changes in Accounting Values. The Beginning Total Assets is P750,000.00 and its total Liabilities is P450,000.00. Case 1: If the Total Asset increased by P150,000.00. How much is the Ending Total Assets?

a)

P1,350,000.00

b)

P1,200,000.00

c)

P750,000.00

d)

P900,000.00

25.

In transactions Affecting Changes in Accounting Values. The Beginning Total Assets is P750,000.00 and its total Liabilities is P450,000.00. Case 2: If the Total Asset increased to P850,000.00. How much is the Ending Total Assets?

a)

P850,000.00

b)

P1,200,000.00

c)

P750,000.00

d)

P2,050,000.00

26.

Double entry in accounting means there must be________ entries for every transaction?

a)

two

b)

Three

c)

six

d)

one

27.

A general Leger/T) has a ______ and _______ side.

a)

cash receipt and debtors

b)

debit and payments

c)

debit and credit

d)

creditors and debtors

28.

Assets increase on the ________ side?

a)

subsidiary

b)

T-account

c)

credit

d)

debit

29.

owners equity decreases on the _________ side?

a)

credit

b)

debit

c)

payments

d)

liability

30.

assets decreases on the _______ side?

a)

debit

b)

two

c)

credit

d)

sixth

31.

________ are debts of the business?

a)

assets

b)

liabilities

c)

owners equity

d)

vehicles

32.

trading stock is an/a ________?

a)

equity

b)

liabilities

c)

assets

d)

owners equity

33.

rates and taxes are an/a ________?

a)

profit

b)

income

c)

VAT

d)

Expense

34.

water and electricity is an/a __________?

a)

credit

b)

asset

c)

expense

d)

income

35.
The financial statement that reports the revenues and expenses for a period of time such as a year or a month is the:
a)
Balance Sheet
b)
Income Statement
c)
Statement of Cash Flows
d)
None of These
36.
The financial statement that reports the assets, liabilities, and stockholders' (owner's) equity at a specific date is the:
a)
Balance Sheet
b)
Income Statement
c)
Statement of Cash Flows
d)
Cash Statement
37.
Under the accrual basis of accounting, revenues are reported in the accounting period when the:
a)
Cash is Received
b)
Service or Goods Have Been Delivered
c)
End of the Month Has Arrived
d)
Customer Pays
38.
Resources owned by a company (such as cash, accounts receivable, vehicles) are reported on the balance sheet and are referred to as __________.
a)
Assets
b)
Liabilities
c)
Owner Equity
d)
Equity
39.
The listing of all of the accounts available for use in a company's accounting system is known as the __________.
a)
Chart of Accounts
b)
Journal
c)
Ledger
d)
Credit Ledger
40.
Which term is associated with "left" or "left-side"?
a)
Debit
b)
Credit
c)
Plus
d)
Minus
41.
Which term is associated with "right" or "right-side"?
a)
Debit
b)
Credit
c)
Plus
d)
Minus
42.
The owner withdraws business assets for personal use.
a)
Assets (I)
b)
Liabilities (D)
c)
Equity (D) 
43.
The company receives cash from a bank loan 
a)
Assets (I)
b)
Liabilities (D)
c)
Equity (D)
44.
The company purchases land by paying half in cash and signing a note payable for the other half..What is the effect on accounting equation?
a)
Inc. in Assets (Land), Dec.In Assets (Cash)  I  Inc. in Liability (NP)
b)
Inc. in Assets (Land), Dec.In Assets (Cash)  I  Inc. in Liability (NP)
c)
Inc. in Assets (Land)  I  Inc. in Liability (NP)
45.
In what accounting element can we classify INVENTORIES?
a)
Asset
b)
Liabilities
c)
Equity
46.
If the total liabilities is P 15, 000 and the total assets is P 23,000, what is the total equity using the accounting equation?
a)
P 8,001
b)
P 8,000
c)
P 8,000.01
47.
The owner invests personal cash in the business. What is the effect on accounting equation?
a)
Inc. in Assets  I  Inc. in Equity
b)
Inc. in Liabilities  I  Inc. in Assets
c)
Dec. in Assets  I  Inc. in Equity
48.
The company repays the bank that had lent money to the company. What is the effect on accounting equation?
a)
Inc. in Assets  I  Dec. in Equity
b)
Dec. in Assets  I  Dec. in Liabilities
c)
Dec. in Liabilities  I  Dec. in Liabilities
49.
The company purchases a significant amount of supplies on credit. What is the effect on accounting equation?
a)
Inc. in Assets  I  Dec. in Equity
b)
Inc. in Assets  Inc. in Liabilities
c)
Dec. in Assets  I  Inc. in Liabilities
50.

Assets = P410,000 ; Capital = P139,232. How much is the Liability?

a)

P 549, 232

b)

P 277, 068

c)

P 270, 768

d)

P 594, 232

51.

Capital = P192,345 ; Liabilities = P88,765. How much is the Total Assets?

a)

P 103, 580

b)

P 281, 101

c)

P 130, 580

d)

P 281, 110

52.

Assets = P1,567,769 ; Liabilities = 26% of Assets. How much is the Capital?

a)

P 1,160,149.60

b)

P 1,160,149.06

c)

P 1,610,149.60

d)

P 1,161,149.60

53.

Assets = P1,567,769 ; Liabilities = 26% of Assets. How much is the Liability?

a)

P 407,619.94

b)

P 470,691.94

c)

P 1,610,149.60

d)

P 1,161,149.60

54.

Capital = P678,987 ; Liabilities = 36% of Assets. How much is the Liability?

a)

P 1,060,917.19

b)

P 1,060,971.19

c)

P 381,903.19

d)

P 381,930.19

55.

Capital = P678,987 ; Liabilities = 36% of Assets. How much is the Assets?

a)

P 1,060,917.19

b)

P 1,060,971.19

c)

P 381,903.19

d)

P 381,930.19

56.

Liabilities = P67,843 ; Capital = 72% of Assets. How much is the Assets?

a)

P 174,435.43

b)

P 174,453.43

c)

P 242,296.34

d)

P 242,296.43

57.

Liabilities = P67,843 ; Capital = 72% of Assets. How much is the Capital?

a)

P 174,435.43

b)

P 174,453.43

c)

P 242,296.34

d)

P 242,296.43

58.

Increase of this account will decrease Owner's Equity

a)

Asset Account

b)

Expense Account

c)

Liability Account

d)

Income Account

59.

If there is a PhP 500,000-worth of assets and PhP 200,000 worth of liabilities, then there is PhP 300,000 worth of owner's equity.

a)

True

b)

False

60.

An increase in liabilities could be explained by a decrease in owner's equity.

a)

True

b)

False

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