MADDELA MARVELOUS GRACE CHRISTIAN SCHOOL INC.

National Hi-way, Buenavista, Maddela, Quirino

Email add: [email protected]
CP #: +63 906-186-0907

Fundamentals of Accountancy, Business Management 1

Grade-12
Name: ______________________________ Date: ______
True or False. Write “TRUE” if the statement is correct and “FALSE” if incorrect (1pt each).
______ 1. Financial Statement is the end product of accounting process.
______ 2. To debit an asset is to decrease the balance of its account, while to credit is to
decrease its balance.
______ 3. Accounting is considered the language of business because it is used as a medium of
communication understandable in the business world.
______ 4. In recording transactions, it must be supported by a source document.
______ 5. Journal is a book of final entry.
______6. Fiscal year is an accounting period that starts from January 1 and ends December 31.
______ 7. Simple Journal entry is one that may have two or more debits and credits item in one
entry.
______ 8. Unadjusted trial balance is the 5th step in the accounting cycle.
______ 9. Journalizing and Posting is under the recording phase of accounting.
______ 10. Corporation is owned and provided by two or more persons
who agreed to divide profits between or among themselves?
_____ 11. The purpose of trial balance is to test the equality between total
debits and total credits.
_____ 12. Trial balance guarantees that the records are accurate even if
the total debits and total credits are equal.
_____ 13. Accrued income is considered as an asset.
_____ 14. Capital is synonymous to Owners Equity.
_____ 15. Business transactions are analyzed from the point of view of the business rather that
the owner.
Multiple Choices. Encircle the letter of the correct answer (1pt each).
16. Nature of business that is engaged in buying goods or any form of finished products and
sells these at profits.
a. Merchandising c. Manufacturing
b. Sole Proprietorship d. Service business
17. The simplest form of business organization wherein capital is provided only by a single
person.
a. Service business c. Sole Proprietorship
b. Partnership d. Corporation
18. It represents the residual interest in the assets of the business after deducting its liabilities.
a. Liability c. Owners Equity
b. Income d. Expense
19. A credit may signify a decrease in-.
a. Income c. Owners Equity
b. Expense d. Liability
20. Which of the following accounts will increase when debited-.
a. Income or revenue c. Owners Equity
b. Accounts payable d. Drawing
21. The phase of accounting which involves the sorting or grouping of similar transactions and
events into their respective kinds and classes.
a. Recording c. Summarizing
b. Classifying d. Interpreting
22. Payment of supplies in cash may result to-.
a. Increase in cash c. No effect in cash
b. Decrease in supplies d. Decrease in cash
23. The basic accounting principles that assumes a business is separate and distinct from the
owner.
a. Going concern assumption c. Periodicity concept
b. Accrual basis of accounting d. Accounting entity concept
24. Collection from customer’s account may result-.
a. Credit to cash c. Debit to cash
b. Debit to receivable d. No effect on receivable
25. Assumptions that business entity will continue to operate indefinitely or at least for
another twelve months.
a. Going concern assumptions c. Periodicity concept
b. Accrual basis of accounting d. Accounting entity concept
26. The financial statement that reports the revenue and expenses and shows the “result of
operations” of the business for a given period of time.
a. Balance sheet c. Cash flow statement
b. Income statement d. Financial statement
27. Act of recording transactions in the journal-.
a. Recording c. Double entry system
b. Journalizing d. Book of accounts
28. An entry containing one debit and one credit.
a. Recording c. Simple journal entry
b. Journalizing d. Compound journal entry
29. List of account titles to be used-.
a. Book of accounts c. Portfolio
b. Chart of accounts d. Journal
30. Posting is the process of-.
a. Transferring entries from the journal to the ledger
b. Transferring entries from the journal to the ledger
c. Recording to journal
d. None of the above
31. Liability account has a normal balance of-.
a. Debit c. Asset
b. Credit d. Capital
32. Which of the following is included in putting a heading for a trial balance?
a. Name of the business or proprietor
b. Title of the report
c. Period covered by the report
d. All of the above
33. The double line drawn after the total of trial balance is called-.
a. Double entry system c. Double rule
b. Double file d. None of the above
34. Which is not an accounting element?
a. Asset c. Expense
b. Capital d. Cost
35. Exception of depreciable assets which are not subject to depreciation-.
a. Land c. Machineries
b. Building d. Equipment
Identification: Determine the normal balance of each account.
_______36. Accounts receivable _______46. Cash
_______37. Salaries expense _______47. Valencia, drawing
_______38. Inventories _______48. Sales income
_______39. Interest payable _______49. Building
_______40. Unused supplies _______50. Accrued expense
_______41. Land _______51. Notes payable
_______42. Notes receivable _______52. Mortgage payable
_______43. Service income _______53. Valencia, capital
_______44. Utilities expense _______54. Accounts payable
_______45. Salaries and wages _______ 55. Marketable securities
Identify the two account titles for the given transactions (1pt each). The following were the
transactions of Ms. Elizabeth Pasion during the month of June 2018.
Made cash investment to the business
3 Rendered service on account
5 Borrowed money from a bank with a note issued
8 Received cash for service rendered
10 Withdrew cash from the business for personal use
16 Collected the account on number 3

Prepared by:

Jerome M. Alcantara
Teacher