WorksheetsParCor Finals Reviewer
Total questions: 48
Worksheet time: 24mins
Name
Class
Date
1.
What is the primary characteristic of share capital in a corporation?
a)
A) It represents the personal investments of the directors.
b)
B) It is the amount of money invested by the government in the corporation.
c)
C) It represents the money raised through the issuance of shares to stockholders.
d)
D) It represents a loan to the corporation from its creditors.
2.
Which of the following is true about the authorized share capital of a corporation?
a)
A) It is the capital needed of the corporation.
b)
B) It is the total value of shares that a corporation is authorized to issue as specified in its Articles of Incorporation.
c)
C) It is the same as the number of shares issued by the corporation.
d)
D) It is the same as the retained earnings of the corporation.
3.
When a corporation issues shares for a non-cash asset, how is the share capital recorded?
a)
A) The share capital is recorded at the par value of the shares issued.
b)
B) The share capital is recorded at the fair value of the non-cash asset.
c)
C) The share capital is recorded at the historical cost of the non-cash asset.
d)
D) The share capital is recorded at the book value of the non-cash asset.
4.
In the Philippines, which government agency is responsible for the registration of share capital in a corporation?
a)
A) Securities and Exchange Commission (SEC).
b)
B) Bureau of Internal Revenue (BIR).
c)
C) Department of Trade and Industry (DTI).
d)
D) Bangko Sentral ng Pilipinas (BSP).
5.
Which of the following would decrease a corporation’s share capital?
a)
A) Issuance of additional shares.
b)
B) Stock split.
c)
C) Redemption of shares.
d)
D) Payment of dividends in shares.
6.
What is the difference between par value and no-par value shares?
a)
A) Par value shares have a nominal value assigned by the corporation, while no-par value shares do not.
b)
B) Par value shares are issued at a premium, while no-par value shares are issued at par.
c)
C) No-par value shares can only be issued by government-owned corporations.
d)
D) There is no difference; both types are treated equally in accounting.
7.
When a corporation issues shares at a price above par value, the excess is recorded as:
a)
A) Share premium.
b)
B) Retained earnings.
c)
C) Ordinary Shares.
d)
D) Accumulated surplus.
8.
In the context of share capital, what is the purpose of a stock dividend?
a)
A) To increase the corporation’s share capital by issuing additional shares to existing shareholders.
b)
B) To provide cash dividends to stockholders.
c)
C) To reduce the par value of the shares.
d)
D) To issue shares at a premium
9.
XYZ Corporation issued 100,000 shares of ₱10 par value stock for ₱15 per share. What is the total amount of share capital?
a)
A) ₱1,000,000
b)
B) ₱1,500,000
c)
C) ₱1,500,000 + ₱500,000 premium
d)
D) ₱1,000,000 + ₱500,000 premium
10.
ABC Corporation issued 50,000 shares with a par value of ₱20 each. The shares were issued for ₱25 per share. What is the total amount credited to the Ordinary share and Share Premium?
a)
A) ₱1,000,000 for Ordinary share; ₱250,000 for SHARE PREMIUM
b)
B) ₱1,000,000 for Ordinary share; ₱500,000 for SHARE PREMIUM
c)
C) ₱1,250,000 for Ordinary share; ₱500,000 for SHARE PREMIUM
d)
D) ₱1,250,000 for Ordinary share; ₱0 for SHARE PREMIUM
11.
DEF Corporation issued 200,000 shares of ₱5 par value stock for ₱7 per share. What is the total amount of share capital and premium?
a)
A) ₱1,400,000 share capital and ₱400,000 premium
b)
B) ₱1,000,000 share capital and ₱200,000 premium
c)
C) ₱1,000,000 share capital and ₱400,000 premium
d)
D) ₱1,200,000 share capital and ₱800,000 premium
12.
GHI Corporation has 300,000 authorized shares with a par value of ₱50 each. The company issues 150,000 shares for ₱60 per share. What is the total amount credited to Ordinary share and Share Premium?
a)
A) ₱7,500,000 for Ordinary share; ₱1,500,000 for SHARE PREMIUM
b)
B) ₱7,500,000 for Ordinary share; ₱2,000,000 for SHARE PREMIUM
c)
C) ₱8,000,000 for Ordinary share; ₱500,000 for SHARE PREMIUM
d)
D) ₱7,500,000 for Ordinary share; ₱0 for SHARE PREMIUM
13.
What does retained earnings represent in a corporation?
a)
A) The total value of shares issued by the corporation.
b)
B) The profits that have been reinvested into the business rather than paid out as dividends.
c)
C) The capital invested by stockholders in the corporation.
d)
D) The amount of liabilities the corporation owes to creditors.
14.
How are retained earnings reported in the financial statements of a corporation?
a)
A) As a liability on the balance sheet.
b)
B) As an equity item on the balance sheet, under stockholders’ equity.
c)
C) As revenue on the income statement.
d)
D) As an expense on the income statement.
15.
Which of the following transactions would decrease retained earnings in a corporation?
a)
A) Issuance of new shares of stock.
b)
B) Declaration of cash dividends to stockholders.
c)
C) Issuance of stock dividends.
d)
D) Sale of assets for a profit.
16.
Which of the following is true regarding the treatment of stock dividends in relation to retained earnings?
a)
A) Stock dividends are paid out of the retained earnings and reduce its balance.
b)
B) Stock dividends increase the balance of retained earnings.
c)
C) Stock dividends have no effect on the retained earnings balance.
d)
D) Stock dividends always increase the amount of share premium, not retained earnings.
17.
What is the effect of a net income on retained earnings?
a)
A) Net income increases retained earnings.
b)
B) Net income has no effect on retained earnings.
c)
C) Net income decreases retained earnings.
d)
D) Net income increases liabilities on the balance sheet.
18.
What happens to retained earnings if a corporation declares a cash dividend but does not yet pay it?
a)
A) Retained earnings increase.
b)
B) Retained earnings decrease, and a liability is created (dividends payable).
c)
C) Retained earnings are unaffected.
d)
D) A gain is recognized in the income statement.
19.
Which of the following would be included in the statement of changes in retained earnings?
a)
A) A list of shareholders.
b)
B) Net income or loss for the period.
c)
C) Payment of loans.
d)
D) New shares issued.
20.
In the Philippines, what is the legal restriction on the use of retained earnings?
a)
A) Retained earnings can only be used for paying dividends.
b)
B) Retained earnings cannot be used for repurchasing stock.
c)
C) Retained earnings must be set aside for taxes.
d)
D) Retained earnings cannot be used for distribution unless there is sufficient unappropriated retained earnings.
21.
When a corporation has a debit balance in retained earnings, this is commonly referred to as:
a)
A) Profit.
b)
B) Retained deficit.
c)
C) Payable.
d)
D) Share Premium.
22.
What is incorrect on how does a prior period adjustment (for an error in the financial statements) affect retained earnings?
a)
A) It increases retained earnings only if the error resulted in underreporting of income.
b)
B) It decreases retained earnings only if the error resulted in overreporting of income.
c)
C) It is adjusted against the current period’s net income.
d)
D) It is directly adjusted to the opening balance of retained earnings in the statement of changes in equity.
23.
ABC Corporation has a beginning balance of retained earnings of ₱500,000. During the year, the company earned a net income of ₱100,000 and declared a cash dividend of ₱30,000. What is the ending balance of retained earnings?
a)
A) ₱570,000
b)
B) ₱580,000
c)
C) ₱600,000
d)
D) ₱500,000
24.
XYZ Corporation had a beginning balance of ₱200,000 in retained earnings. During the year, it declared and paid a stock dividend with par value of ₱45,000 a fair value of ₱50,000. What will be the ending balance of retained earnings after the stock dividend? (Small Stock Dividends)
a)
A) ₱200,000
b)
B) ₱155,000
c)
C) ₱150,000
d)
D) ₱300,000
25.
DEF Corporation's retained earnings as of January 1 were ₱1,000,000. It earned a net income of ₱400,000 during the year, declared cash dividends of ₱100,000, and issued stock dividends of ₱50,000. What is the ending balance of retained earnings?
a)
A) ₱1,300,000
b)
B) ₱1,350,000
c)
C) ₱1,400,000
d)
D) ₱1,450,000
26.
GHI Corporation has a beginning retained earnings balance of ₱500,000. During the year, the company declared a cash dividend of ₱40,000 and issued stock dividends amounting to ₱60,000. At year-end, the company reported a net loss of ₱50,000. What is the ending balance of retained earnings?
a)
A) ₱410,000
b)
B) ₱500,000
c)
C) ₱510,000
d)
D) ₱350,000
27.
The retained earnings of JKL Corporation as of January 1 was ₱1,500,000. During the year, the company had a net income of ₱500,000, declared and paid cash dividends of ₱150,000, and declared a stock dividend worth ₱100,000. What is the ending balance of retained earnings?
a)
A) ₱1,850,000
b)
B) ₱1,750,000
c)
C) ₱1,500,000
d)
D) ₱1,650,000
28.
Which of the following is the primary purpose of financial statement analysis?
a)
A) To determine the profitability of a business
b)
B) To calculate tax liabilities
c)
C) To assess the financial health and performance of a corporation
d)
D) To ensure compliance with Philippine tax laws
29.
Which of the following ratios measures a company’s ability to pay its short-term obligations?
a)
A) Return on Equity (ROE)
b)
B) Debt-to-Equity Ratio
c)
C) Current Ratio
d)
D) Gross Profit Margin
30.
XYZ Corporation has net income of ₱500,000, average total assets of ₱4,000,000, and total liabilities of ₱1,000,000. What is the Return on Assets (ROA)?
a)
A) 12%
b)
B) 18%
c)
C) 15%
d)
D) 13%
31.
What does the debt-to-equity ratio measure?
a)
A) The company’s ability to pay its short-term obligations
b)
B) The proportion of debt used to finance the company’s assets relative to equity
c)
C) The profitability of the company
d)
D) The efficiency of the company's operations
32.
ABC Corporation has total liabilities of ₱2,000,000 and total stockholders’ equity of ₱3,500,000. What is the debt-to-equity ratio?
a)
A) 0.58
b)
B) 0.57
c)
C) 1.57
d)
D) 1.29
33.
If a company’s earnings per share (EPS) is ₱10 and its stock price is ₱120, what is the Price-to-Earnings (P/E) ratio?
a)
A) 8
b)
B) 10
c)
C) 12
d)
D) 14
34.
LMN Corporation has sales of ₱6,000,000, cost of goods sold (COGS) of ₱3,000,000, and operating expenses of ₱1,500,000. What is the operating income?
a)
A) ₱1,500,000
b)
B) ₱2,000,000
c)
C) ₱2,500,000
d)
D) ₱3,000,000
35.
XYZ Corporation has a gross profit of ₱1,500,000 and net sales of ₱5,000,000. What is the Gross Profit Margin (GPM)?
a)
A) 20%
b)
B) 30%
c)
C) 40%
d)
D) 50%
36.
What does the inventory turnover ratio measure?
a)
A) The time it takes for a company to sell its inventory
b)
B) The proportion of inventory relative to total assets
c)
C) The rate of return on inventory
d)
D) The company's ability to pay its creditors
37.
Which of the following is a liquidity ratio used in financial statement analysis?
a)
A) Return on Equity (ROE)
b)
B) Quick Ratio
c)
C) Return on Assets (ROA)
d)
D) Earnings per Share (EPS)
38.
An example of a liquidity ratio is _______
a)
debt-to-equity ratio
b)
current ratio
c)
return on equity
d)
gross profit margin
39.
A firm has a lower asset turnover ratio than the industry average, which implies?
a)
A. the firm has a lower P/E ratio than other firms in the industry.
b)
B. the firm is less likely to avoid insolvency in the short run than other firms in the industry.
c)
C. the firm is less profitable than other firms in the industry.
d)
D. the firm is utilizing assets less efficiently than other firms in the industry.
e)
E. the firm has lower spending on new fixed assets than other firms in the industry.
40.
It measures the ability of the business to generate profit in relation to sales, investments, assets, equities, or ordinary shares outstanding.
a)
Profitability Ratio
b)
Solvency Ratio
c)
Quick Ratio
d)
Sales Ratio
41.
Given Net Sales is 120,000 and gross profit is 30,000, the gross profit ratio is?
a)
20%
b)
25%
c)
30%
d)
35%
42.
Sales to customers who use bank credit cards such as MasterCard and Visa are usually recorded by a:
a)
A. debit to Sales, debit to Credit Payable Expense, and a credit to Cash
b)
B. debit to Cash and a credit to Sales
c)
C. debit to Cash, credit to Credit Card Expense, and a credit to Sales
d)
D. debit to Sales, debit to Credit Card Expense, and a credit to Cash
43.
A company using the periodic inventory system has the following account balances: Merchandise Inventory at the beginning of the year, P4,000; Transportation-In, P450; Purchases, P12,000; Purchases Returns and Allowances, P2,300; Purchases Discounts, P220. The cost of merchandise purchased is equal to
a)
a. P13,930
b)
b. 9,930
c)
c. 9,489
d)
d. 14520
44.
Merchandise is ordered on November 12; the merchandise is shipped by the seller and the invoice is prepared, dated, and mailed by the seller on November 15; the merchandise is received by the buyer on November 17; the entry is made in the buyer's accounts on November 18. The credit period begins with what date?
a)
a. November 12
b)
b. November 15
c)
c. November 17
d)
d. November 18
45.
If the seller is to pay the transportation costs of delivering merchandise, the delivery terms are stated as
a)
a.FOB shipping point
b)
b.FOB destination
c)
c.FOB n/30
d)
d.FOB seller
46.
The collection of a ₱ 750 account within the 5 percent discount period will result in a?
a)
debit to Sales Discounts for ₱ 37.50
b)
credit to Sales Discounts for ₱ 37.50
c)
debit to Sales Discounts for ₱ 750
d)
credit to Sales Discounts for ₱ 750
47.
Which of the following best describes the Perpetual Inventory System?
1. It is used by merchandising firms selling a limited number of products of relatively high value, e.g. appliances, equipment, jewelry, and the likes.
2. It is normally used by a merchandising firm selling innumerable products, e.g., stocks in trade of trading stores, groceries, small department stores and etc.
3. It is a method of inventory management that records real-time transactions of received or sold stock through the use of technology – generally considered a more efficient method.
4. It is time-consuming and can produce stale numbers that are less useful to management.
a)
1 and 2
b)
2 and 3
c)
1 and 3
d)
3 and 4
48.
It is the sum of the total manufacturing costs plus the beginning work in process less the ending work in process.
a)
Cost of goods manufactured
b)
Cost of goods sold
c)
Cost of goods merchandised
d)
Cost of goods sales
100 %
