Prelim Accounting1-1st Semester Sy 2018-2019

29 Questions | By Itess.valencia | Updated: Mar 21, 2022 | Attempts: 144

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Prelim Accounting1-1st Semester Sy 2018-2019 - Quiz

Questions and Answers

1.

If adjusting entries are recorded in the worksheet, there is no need for them to be journalized or posted
- A.
  
  True
- B.
  
  False
2.

Accrual accounting involves all of the following except
- A.
  
  Recording all revenues when cash was received
- B.
  
  Applying the matching rule
- C.
  
  Recognizing expense when incurred
- D.
  
  Adjusting the accounts
- E.
  
  All of the above
3.

Is it true that the trial balance totals should agree?
- A.
  
  No, there are sometimes good reasons why they differ
- B.
  
  Yes, except where the trial balance is extracted at the year end
- C.
  
  Yes, always
- D.
  
  No, because it is not a balance sheet
4.

The current portion of a long term debt should
- A.
  
  Be classsified as a long term liability
- B.
  
  Not be separated from the long term portion of debt
- C.
  
  Be paid immediately
- D.
  
  Be reclassified as a current liability
5.

A Debit:
- A.
  
  Increase an Asset Account
- B.
  
  Decrease an Asset Account
- C.
  
  Increase a Liability Account
- D.
  
  Increase Owner's Equity
6.

Under accrual accounting, revenue is recorded
- A.
  
  When the cash is collected, regardless of when the services are performed
- B.
  
  When the services are performed, regardless of when the cash is received
- C.
  
  Either when the cash is received or the sale is made
7.

Adjusting entries are:
- A.
  
  Prepared by the Manager
- B.
  
  Closing entries
- C.
  
  Prepared at the beginning of the accounting period to update all accounts.
- D.
  
  Prepared at the end of the accounting period to update certain accounts.
8.

Prepaid insurance is reported on the balance sheet as a(n):
- A.
  
  Expense
- B.
  
  Liability
- C.
  
  Asset
- D.
  
  Contra asset
9.

A liability that arises from an expense that has not yet been paid is a(n):
- A.
  
  Unearned expense
- B.
  
  Prepaid expense
- C.
  
  Accrued expense
- D.
  
  Accrued revenue
10.

The financial statements are prepared from the
- A.
  
  Adjustments
- B.
  
  Unadjusted trial balance
- C.
  
  Ledger
- D.
  
  Adjusted trial balance
11.

According to the revenue principle, revenue should be recorded
- A.
  
  Before it has been earned
- B.
  
  When the cash is received
- C.
  
  When it has been earned
- D.
  
  Whenever the company needs to record the revenue
12.

An expense that is paid in advance is a(n):
- A.
  
  Unearned expense
- B.
  
  Prepaid expense
- C.
  
  Liability
- D.
  
  Unearned asset
13.

Current assets include
- A.
  
  Cash and receivables
- B.
  
  Cash and payables
- C.
  
  Land and Building
- D.
  
  Retained earnings
14.

Which account is debited in the adjusting entry to record depreciation expense during the current period?
- A.
  
  Accumulated Depreciation
- B.
  
  Equipment
- C.
  
  Depreciation Expense
- D.
  
  Depreciation Payable
15.

Which of the following accurately describes the account type of the Accumulated Depreciation account?
- A.
  
  Contra-expense account
- B.
  
  Liability account
- C.
  
  Contra-asset account
- D.
  
  Expense account
16.

The Accounting Equation is: ASSETS = LIABILITIES + OWNER'S EQUITY OR ASSETS - LIABILITIES = OWNER'S EQUITY
- A.
  
  True
- B.
  
  False
17.

Which of the following is/are a purpose of adjusting entries?
- A.
  
  To update the accounts in the books
- B.
  
  To apply the matching principle
- C.
  
  To properly reflect the the correct net income
- D.
  
  To make the equation A=L+C more accurate
- E.
  
  All of the above
18.

Which one of the following categories of account is "credited" when it is increased?
- A.
  
  Revenue
- B.
  
  Purchases
- C.
  
  Asset
- D.
  
  Expenses
19.

Which one of the following categories of account is "debited" when it is increased?
- A.
  
  Revenue
- B.
  
  Assets
- C.
  
  Sources of fund
- D.
  
  Liability
20.

Which of the following accounts is what is known as a temporary or nominal account ?
- A.
  
  Asset
- B.
  
  Owner's Equity (Capital)
- C.
  
  Liability
- D.
  
  Revenue & Expenses
21.

A company using the accrual basis of accounting pays P15,000 for a television advertising campaign. Commercials will run evenly in December, January, and February. How much expense will be reported on an income statement prepared for the month of December?
- A.
  
  P0
- B.
  
  P5,000
- C.
  
  P10,000
- D.
  
  P15,000
22.

The book value of an asset that cost P20,000 and has accumulated depreciation of P6,000 is
- A.
  
  P20,000
- B.
  
  P 6,000
- C.
  
  P26,000
- D.
  
  P14,000
23.

A company has P800 beginning balance of Supplies (asset). At the end of the month, the Supplies on hand is P150. The adjusting entry for this company is:
- A.
  
  Debit supplies of P150 and a credit of P150 to Supplies Expense
- B.
  
  Debit supplies Expense of P150 and a credit of P150 to Supplies
- C.
  
  Debit supplies Expense of P650 and a credit of P650 to Supplies
- D.
  
  There is not enough information given to prepare the entry
24.

On November 1, Phillips Company paid six months’ insurance in advance totalling P9,000. An adjusted trial balance prepared on December 31 would include a balance in the Prepaid Insurance account of:
- A.
  
  P9000
- B.
  
  P6000
- C.
  
  P3000
- D.
  
  P0
25.

On November 1 of the current year, Prepaid Rent was debited P5,400 for three months of rent, paid in advance. The amount of the adjusting entry to debit Rent Expense and credit Prepaid Rent on December 31 is (2 months):
- A.
  
  P1800
- B.
  
  P3600
- C.
  
  P5400
- D.
  
  P0