The University of Mindanao

First Quarter Examination

Senior High School Department
Accounting 1S

I- Multiple Choice Theory: Choose the correct answer. ERASURES IS NOT ALLOWED.
1. It is defined as the systematic process of measuring and reporting relevant financial information about the activities of an
economic organization or unit.
a. Taxation b. Accounting c. Business law d. Auditing
2. It is the branch of accounting that involves partnering in management decision making, devising planning and performance
management systems, and providing expertise in financial reporting and control to assist management in the formulation
and implementation of an organization’s strategy.
a. Accounting education c. Accounting research
b. Tax accounting d. Management accounting
3. A group of CPAs that defines accounting as the art of recording, classifying, and summarizing in a significant manner and in
terms of money, transaction, and events, which are in part at least of a financial character, and interpreting the result
thereof.
a. American Institute of CPAs c. Philippine Institute of CPAs
c. ASEAN Institute of CPAs d. British Institute of CPAs
4. Accounting is a process because…
a. It is a series of actions that produce something or that lead to a particular result.
b. It is the occupation or function of serving.
c. It is a skill acquired by experience, study, or observation.
d. None of the above
5. The following are the four aspects of accounting. Which is not?
a. Recording b. Summarizing c. Interpreting d. Reading
6. Interpreting…
a. Represents the qualitative and quantitative financial information about the business transactions in a language
comprehensible to the users of financial statements.
b. Is writing down of business transactions chronologically in the books of account as they transpire.
c. Is sorting similar and related business transactions into the three categories of assets, liabilities, and owner’s equity.
d. None of the above
7. He is named as the “The Father of Accounting”
a. Luca Pacioli b. Leonardo Da Vinci c. Benedetto Cotrugli d. Julius Ceasar
8. A calculating instrument developed by the ancient Sumerians in 5,000 BCE using rows of beads.
a. Abacus b. Papyrus c. Clay tokens d. Clay tablets
9. The archaeologist who unearthed clay tablets considered to be among the oldest written tax accounting records.
a. Dr. Grunter Dreyer b. Luca Pacioli c. Julius Ceasar d. King Scorpion I
10. Tax services provided by accountants include the preparation of monthly value added tax, percentage tax, expanded
withholding tax returns, quarterly and annual tax returns, and any other taxes applicable to business.
a. Tax accounting b. Management Accounting c. Auditing d. Accounting research
11. The following are the internal users of financial statements except-
a. Management b. Government c. Employees d. Stockholders
12. Before extending credit, financial institutions use financial information to determine the capacity of the business
organization to pay its obligations and their interest at the appropriate time.
a. Creditors b. Government c. Employees d. Investors
13. Dr. Teng has a skin clinic and a spa. The skin clinic is considered as a separate entity distinct from the spa and the owner.
The statement is best described which of the following?
a. Going concern b. Entity concept c. Periodicity d. Objectivity
14. It is owned and managed by only one person
a. Partnership b. Corporation c. Sole proprietorship d. Cooperative
15. This refers to the assumption that the business enterprise will continue to operate indefinitely
a. Going concern b. Entity concept c. Periodicity d. Objectivity
16. Analysing, classifying, summarizing, and communicating all transactions involving the receipt and disposition of government
funds and property, and interpreting the results thereof.
a. Auditing b. Accounting research c. Accounting education d. Government accounting
17. Which of the following is a service business organization?
a. Bruno barbershop b. SM Hypermarket c. Ace hardware d. Land mark department store
18. According to International Accounting Standards 1, an assets are current when it is…
a. expected to be realized in, or is intended for sale or consumption in the entity’s normal operating cycle.
b. not held primarily for trading purposes.
c. expected to realized more than twelve months of the balance sheet date
d. cash or a cash equivalent unless it is restricted from being exchanged to settle a liability for at least twelve months after
the balance sheet date.
19. It is engaged in the production of items to be sold.
a. Service b. Trading c. Manufacturing d. Merchandising
20. A twelve-month period that starts on January 1 and ends on December 31.
a. Calendar year b. Fiscal year c. Seasonal d. None of the above
21. Collections of taxes
a. Government b. Management c. Employees d. Investors
 22. Under Section 3 of Republic Act 6938, a ____ is a duly registered association of persons, with a common bond of interest.
a. Corporation b. Partnership c. Sole proprietorship d. Cooperative
23. A form of business organization managed by a selected board of directors.
a. Corporation b. Partnership c. Sole proprietorship d. Cooperative
24. Jack Ty and Jill Alunan were classmates since elementary. They went to college together and recently passed the board
exams for certified public accountants. They decided to form T. Alunan Auditing Services. What type of business did they
form?
a. Corporation b. Partnership c. Sole proprietorship d. Cooperative
25. It states that all business transactions that will be entered in the accounting records must be duly supported by verifiable
evidence.
a. Historical cost b. Accrual principle c. Objectivity d. Consistency
26. It is an amount collectible from the customer to whom sales have been made or services have been rendered on accrual or
credit.
a. Accounts receivable b. Notes receivable c. interest receivable d. accrued income
27. Cash investment by the owner/s can-
a. increase assets and owner’s equity c. increase assets only
b. increase assets and liabilities d. increase owner’s equity only
28. Income minus operating expenses is-
a. Net income b. Capital c. Revenue d. Assets
29. Cash withdrawal of owner/s can-
a. increase asset and owner’s equity c. decrease assets only
b. decrease assets and owner’s equity d. increase owner’s equity only
30. A piece of lot or real estate owned by the enterprise on which a building can be constructed for business purposes.
a. Land b. Building c. Equipment d. Furniture and Fixtures
31. Which one of the following decisions is for the creditors/lenders?
a. Extending another credits to the enterprise c. Investing another shares of stock
b. whether to close or not the incurring loss department d. None of the above

II- Multiple Choice Problem: Choose the correct answer. ERASURES IS NOT ALLOWED.
For items no. 31 – 34
Below are accounts taken from the books of Luffy’s Ship Repair Services for the month of August.
Repairs Revenue P 200,000
Rent income 10,000
Salaries and Wages 35,000
Utilities Expense 14,000
Supplies Expense 11,000
Depreciation Expense 2,000
Miscellaneous Expense 3,000
32. What is the total Revenue?
a. P200,000 b. P210,000 c. P10,000 d. P245,000
33. What is the total income?
a. P200,000 b. P210,000 c. P10,000 d. P245,000
34. What is the total expenses?
a. P65,000 b. P245,000 c. P16,000 d. P49,000
35. What is the net income?
a. P45,000 b. P145,000 c. P100,000 d. P110,000
36. If the economic resources of a business amount to P3,000,000 and its residual interest amounts to P1,500,000, what is the
amount of its economic obligations?
a. P1,000,000 b. P1,500,000 c. P3,000,000 d. P4,500,000
37. If the owner’s equity is P125,000 which is 40% of the total assets, how much is the total liabilities of the business?
a. P187,500 b. P312,500 c. P125,000 d. P321,500
38. The economic resources of a business amount to P1,600,000 and its economic obligations amount to P788,000, what would
be its residual interest?
a. P2,388,000 b. P812,000 c. P788,000 d. P3,000,000
39. If the residual interest of a business amounts to P900,000 which is 40% of the total assets and 2/3 of the total economic
obligations, what are the amounts of the economic resources and economic obligations of the business?
a. Assets is P2,250,000 and Liabilities is P1,350,000 c. Assets is P1,350,000 and liabilities is P2,250,000
b. Assets is P2,250,000 and liabilities is P900,000 d. Answer is not determine
40. If the total owner’s equity is P560,000 which is 1/3 of the total assets, what would be the total liabilities of the business?
a. P1,680,000 b. P1,500,000 c. P2,000,000 d. P1,120,000
41. How much would be the economic resources of a business if its residual interest is 150% of its economic obligations of
P480,000?
a. P580,000 b. P720,000 c. P1,200,000 d. P1,220,000
For items no. 40 – 60
42. Purchased equipment, paying cash of P46,000
a. + cash, P46,000 b. – cash, P46,000 c. – equipment, P46,000d. Answer is not given
43. Bought supplies on credit, P1,900
a. – office supplies, P1,900 c. + accounts payable, P1,900
b. – cash, P1,900 d. + cash, P1,900
 44. Personal withdrawal of owner, P10,000
a. + cash, P10,000 b. – cash, P10,000 c. + capital, P10,000 d. + accounts payable, P10,000
45. Rendered services on account, P5,000
a. + accounts receivable, P5,000 c. – capital, P5,000
b. + cash, P5,000 d. – accounts payable, P5,000
46. Paid the supplies bought on credit, P30,000
a. – cash, P30,000 b. + accounts payable, P30,000 c. – capital, P30,000 d. No change in all elements
47. Received bill from water district amounting to P15,000
a. + cash, P15,000 b. – cash, P15,000 c. + capital, P15,000 d. + accounts payable, P15,000
48. Paid utilities for the month P6,700
a. + accounts payable, P6,700 c. – accounts payable, P6,700
b. – capital, P6,700 d. + capital, P6,700
49. Paid monthly rent, P2,000
a. – capital, P2,000 b. + cash, P2,000 c. + capital, P2,000 d. + accounts payable, P2,000
50. Sold office equipment, P11,000
a. – office equipment, P11,000 c. + office equipment, P11,000
b. No change in cash d. Answer is not given
51. Proceeds from bank loan, P100,000
a. + cash, P100,000 b. + Loan Payable, P100,000 c. – cash, P100,000 d. – capital, P100,000
52. Partial payment of P12,000 for the office equipment bought.
a. – cash, P12,000 b. – accounts payable, P12,000 c. – capital, P12,000 d. No change in cash
53. Returned P2,000 worth of defective furniture bought on account.
a. – cash, P2,000 b. + cash, P2,000 c. + furniture, P2,000 d. – accounts payable, P2,000
54. Paid manager’s salary, P30,000
a. – capital, P30,000 b. + cash, P30,000 c. – cash, P30,000 d. both a and c
55. Inventories withdrawal of 10,000
a. + inventories, P30,000 c. – inventories, P30,000
b. + cash, P30,000 d. + capital, P30,000
56. Received P8,000 note from customer
a. + capital, P8,000 b. + note receivable, P8,000 c. both a and b d. Answer is not given
57. Owner’s cash investment amounting P1,000,000
a. + capital, P1,000,000 c. – cash, P1,000,000
b. – capital, P1,000,000 d. answer is not given
58. Customer paid the note, P10,000
a. + notes payable, P10,000 c. – cash, P10,000
b. + capital, P10,000 d. + cash, P10,000
59. Called the equipment company to inform them that payment for the third installment will be delayed, P20,000
a. – notes payable, P20,000 c. – cash, P20,000
b. no change in cash d. answer is not given
60. Received cash for services rendered , P7,500
a. + cash, P7,500 b. + accounts receivable, P7,500 c. – capital, P7,500 d. answer is not given

/luzoncpa