Quiz Detail

Q1 . The Accounting Equation is: ASSETS = LIABILITIES + OWNER'S EQUITY OR ASSETS - LIABILITIES = OWNER'S EQUITY

A True

B False

Q2 . If adjusting entries are recorded in the worksheet, there is no need for them to be journalized or posted

A True

B False

Q3 . An expense that is paid in advance is a(n):

A Unearned expense

B Prepaid expense

C Liability

D Unearned asset

Q4 . 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

Q5 . A Debit:

A Increase an Asset Account

B Decrease an Asset Account

C Increase an Liability Account

D Increase owner's equity

Q6 . 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

Q7 . 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

Q8 . Current assets include

A Cash and receivables

B Cash and payables

C Land and Building

D Retained earnings

Q9 . Adjusting entries are:

A Not needed under the accrual basis of accounting

B Prepared at the option of the accountant

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.

Q10 . The financial statements are prepared from the

A Adjustments

B Unadjusted trial balance

C Ledger

D Adjusted trial balance

Q11 . Which one of the following categories of account is "debited" when it is increased?

A Revenue

B Purchases

C Sources of fund

D Liability

Q12 . Prepaid insurance is reported on the balance sheet as a(n):

A Expense

B Liability

C Asset

D Contra asset

Q13 . 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

Q14 . 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

Q15 . 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

Q16 . 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

Q17 . 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

Q18 . 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

Q19 . On August 1 of the current year, Atty. Jamie Simmons received P5,400 for legal services to be performed evenly throughout the next six months. An adjusted trial balance prepared on December 31 of the current year will show a credit balance in Unearned Revenue in the amount of:

A P0

B P900

C P4500

D P5400

Q20 . 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

Q21 . The book value of a plant asset is the

A Accumulated depreciation less the cost of the asset

B Cost of the asset

C Balance in the accumulated depreciation account

D Cost of the asset less the accumulated depreciation

Q22 . 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

Q23 . Which one of the following categories of account is "credited" when it is increased?

A Revenue

B Purchases

C Asset

D Expenses

Q24 . 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

Q25 . 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

Q26 . 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