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1. What is the correct order of the following events in the accounting process?
I.
II.
III.
II, I, III
d. II,III,I
2. The first step in the accounting cycle is to
a. Record transactions in a journal
b. Analyze transactions from source documents
c. Post journal entries to general ledger accounts
d. Adjust the general ledger accounts
3. Which of the following is not characteristic of proprietary theory that influences
accounting for partnerships?
a. Partners salaries are viewed as a distinguishing of income rather than component of net
income.
b. Partnership is not viewed as separate entity, distinct, taxable entity.
c. A partnership is characterized by limited liability.
d. Changes in ownership structure of a partnership result in the dissolution of the
partnership.
4. Which of the following statement is correct with respect to a limited partnership?
a. A limited partner may not be an unsecured creditor of the limited partnership.
b. A general may not also be limited partner at the same time.
c. A general partner may be a secured creditor of the limited partnership.
d. A limited partnership can be formed with limited liability for all partners.
5. On January 1, 2006, Atta and Boy agreed to form a partnership contributing their
respective assets and equities subject to adjustments. On that date, the following were
provided:
Atta
Bo
y
Cash
P
28,000
62,
Accounts
200,000
600,
receivable
000
Inventories
120,000
200,
000
Land
600,000
Building
Furniture and
fixtures
Intangible
assets
Accounts
payable
Other liabilities
Capital
50,000
2,000
180,000
200,000
620,000
500,
000
35,0
00
3,00
0
250,
000
350,
000
800,
000
P 592,000
600,000
Boy
P 750,000
700,000
c
.
d
.
592,000
600,000
756,
300
750,
000
6. When property other than cash is invested in a partnership, at what amount should the
non-cost property be credited to the contributing partners capital account?
a. Fair value at the date of contribution.
b. Contributing partners original cost.
c. Assessed valuation for property tax purposes.
d. Contributing partners tax basis.
7. May 1, 2006, Cobb and Mott formed a partnership and agreed to share profits and losses
in the ratio of 3:7 respectively. Cobb contributed a parcel of land that cost him
10,000.Moth contributed P 40,000 cash. The land was sold for P 18,000 on May 1,
2006,immediately after formation of the partnership. What amount should be recorded in
Cobbs capital account on formation of the partnership?
a P18,
. 17,0
000
b
.c 00
15,0
.d 00
10,0
. and
00 Carr formed a partnership and agreed to divide initial capital equally, even
8. Abel
though Abel contributed P100, 000 and Carr contributed P84, 000 in identifiable assets.
Under the bonus approach to adjust the capital accounts, Carrs unidentifiable asset
should be debited for
a. P46, 000
b. 16, 000
c. 8, 000
d. 0
9. Mary admits Jane as a partner in the business. Balance sheet accounts of Mary just before
the admission of Jane show: Cash, 26,000. Accounts receivable, 120,000, Merchandise
inventory, 180,000 and accounts payable, 62,000. It was agreed that for purposes of
establishing Marys interest, the following adjustments be made: 1. an allowance for
doubtful accounts of 3% of accounts receivable is to be established. 2. Merchandise
inventory is to be adjusted upward by 25,000 and 3 prepaid expenses of 3,600 and
accrued liabilities of 4,000 are to be recognized.
If Jane is to invest sufficient cost to obtain 2/5 interest in the partnership, how much would Jane
contribute to the new partnership?
a 176,
. 190,
000
b
.c 000
95,0
.d 00
113,
. partnership
980
10.If the
agreement does not specify how income is to be allocated, profit and loss
should be allocated
a. Equally
b. In proportion to weighted average of capital invested during the period.
c. Equitability so that partners are compensated for the time and efort
expended on behalf of the partnership.
d. In accordance with their capital contribution.
11.Which of the following is not a component of the formula used to distribute income?
a. Salary allocation to those partners working.
b. After all other allocation, the remainder divided according to the profit and loss
sharing ratio.
c. Interest on the average capital investments.
d.
12.The ABC partnership reports net income of P60, 000. If partners A, B, and C have income
ratio of 50%, 30%, and 20% respectively. What is the share of partner C from the net
income of the partnership, if he was given a capital ratio of 25%?
a 30,
.b 000
12,
. 18,
000
c
.D. 15,000
000
13.Which of the following will not comprise financial statements of a partnership business?
a. Statement of Financial Position
b. Statement of Changes in Owners Equity
c. Statement of Comprehensive Income
d. Statement of Cash Flow
14. Which of the following can be found in a Statement of Financial Position of a partnership
business but not in the sole proprietorship?
a. Owners equity
b. Accumulated Depreciation
c. Partners Equity
d. Accounts payable
15. The basic components of financial statements include all of the following, except
a. Statement of Retained Earnings
b. Statement of Changes in Equity
c. Cash Flow statement
d. Statement of recognized gains and losses
16.
a. Constant pesos
b. Nominal pesos
c. Fixed pesos
d. Flexible pesos
17. The following information is available from Domi Companys accounting records for
the current year:
Purchases
Purchase
discounts
Beginning
inventory
Ending
inventory
Freight out
5,300,
000
100,
000
1,600,
000
2,
150,00
400,
000
a.
b.
4,000,000
2,400,000
c. 1,600,000
d. 2,000,000
a. Plant assets
c. Long-term liabilities
b. Current assets
d. Current liabilities
23. Which of the following indicates a cash inflow from operating activities?
a. Payments to employees
b. Receipt from royalties, fees, commissions and other revenues
c. Receipts from sale of property and equipment
d. Receipts from investment by owners
24.
b
.c
.d
.
50.0
0%
56.
25
75.0
0%
27.In May 2006, Imelda, a partner of an accounting firm decided to withdraw when the
partners capital balances were: Mikee, P600, 000; Raul, P600, 000; and Imelda,
P400, 000. It was agreed that Imelda is to take the partnerships fully depreciated
computer with a secondhand value of P24, 000 that costs the partnership P36, 000.
If profits and losses are shared equally, what would be the capital balances of the
remaining partners after the retirement of Imelda?
Mikee
Raul
a P600,00
P600,
.b P592,00
000
P592,
. 0
000
c P612,00
P608,0
P608
d
P612,
.
0
000
28.Ranken purchases 50% of Larks capital interest in the K and L partnership for P22,
000. If the capital balances of Kim and Lark are P40, 000 and P30, 000 respectively.
Rankens capital balance following the purchase is
a P22,
.b 000
35,0
. 20,0
00
c
. 15,0
00
d
.
29.The00
following information pertains to ABC partnership of Amor,
Bing, and Cora: Amor, capital [20%]
Bing, capital
[30%]
200,000
Cora, capital
P200,000
[50%] 300,000
On this date, the partners agreed to admit Dolly to the partnership. Assuming Dolly
purchase 50% of the partners capital and pays P500, 000 to old partners, how
would this amount be distributed to them?
a P100,0
P150,0
P250,
.b 00
00
000
P130
P145
P225
. ,000
,000
,000
c P166,
P166,
P166,
. 667
667
666 dissolved and formed a corporation, one of the partner
30.When a partnership
business
rendered a services and in return the business gave him shares to compensate for
the rendered service, in this case, when shares are issued for services received, the
measure is equal to the
a. Fair value of such services
b. Par value of the share issued
c. Book value of the shares issued
d. Fair value of the shares issued
31.When a partner withdraws from a partnership taking assets that represent less than
his capital balance,
a. No bonus results
b. The remaining partner receives a bonus
c. The withdrawing partner receives a bonus
d. The remaining partners owe the withdrawing partner the diference.
32.The doctrine of marshaling of assets
a. Is applicable only if the partnership is insolvent
b. Allows partners to first contribute personal assets to unsatisfied partnership
creditors.
c. Is applicable if either the partnership is insolvent or individual
partners are insolvent.
d. Amount owed to personal creditors and to the partnership for debit capital
balances are shared proportionately from the personal assets of the partners.
33.The following is the priority sequence in which liquidation proceeds will be distributed
for a partnership.
51.At the beginning of the current year, Alto Company declared 1 for 5 reverse share
split, when the market value of the share was P100. Prior to the split, Alto had
100,000 shares of P10 par value issued and outstanding. After the split, what is the
par value of the share?
a. 10
c. 50
b. 20
d. 2
52.In case shares are issued for outstanding liabilities, what is the measure for recording?
a. Book value of the shares issued
b. Amount of liabilities set of
c. Fair value of the shares issued
d. Par value of the shares issued
53.The Lucky Company was authorized to issue P400,000 ordinary shares divided into
4,000 shares with a par value of 100 per share.
Using the Journal entry method, what is the entry on that date?
a. Memo entry only
b. Unissued Ordinary shares
400,000
Authorized Ordinary Shares
400,000
c. Subscription Ordinary Shares
400,000 Authorized Ordinary
Shares
400,000
d. No entry even a memorandum
54.Subscription receivable and other receivables from sale of shares which are not
collectible shall be presented as
a. Other asset
b. Deduction from the related subscribed share capital in the
shareholders equity section
c. Current asset
d. Long-term investment
55.Loss on retirement of treasury shares shall be debited to
a. Retained Earnings
b. Share premium from treasury shares and then to retained earnings
c. Share premium from treasury shares, share premium from original issuances
and then to retained earnings
d. Share premium from original issuances, share premium from treasury
shares and then retained earnings.
56.Korina Company was organized on January 1, 2010 with 100,000 shares authorized of
P100 par value. On January 5, Korina issued 75,000 shares at P140 per share and on
December 31, Korina purchased 5,000 shares at P110 per share. Korina used the par
value method of recording the purchased of treasury shares. What is the balance of
the share premium from treasury shares on December 31, 2010?
a. 200,000
c. 50,000
b. 150,000
d.
0
57.The total cost of treasury shall be reported as
a. Deduction from shareholders equity
b. Asset
c. Deduction from retained earnings
d. Deduction from share premium
58.What is the efect of a thing donated to the corporation?
a. Increase the asset and decrease the equity
b. Increase the asset and stockholders equity
c. Decrease the asset and stockholders equity
d. Decrease the asset and increase stockholders equity
59.On December 1 of the current year, Line Company received a donation of 2,000
shares with P50 par value from a shareholder. On that date, the share market value
was P350. The shares were originally issued for P250 per share.
What is the decrease in shareholders equity as a result of
the donation? a. 700,000
c. 200,000
b. 500,000
d.
0
60.It is contributions, including shares of the corporation, received from shareholders
should be recorded at the fair market value of the items received, with the credit
going to share premium. This is called
a. Contributed capital
c. Donated capital
b. Legal capital
d. Given capital
61.This represent the cumulative balance of periodic net income or loss, dividend
distributions, prior period errors, changes in accounting policy and other capital
adjustments.
a. Retained Earnings c. Investment
b. Net Income
d. Income Summry
62.On July 31 of the current year, Sun Company purchased 500,000 shares of Star Company.
On December 31,
Sun distributed 250,000 shares of Star as a dividend to Suns shareholders. This is an
example
a. Property dividend
b. Investment dividend
c. Liquidating dividend
d. Stock dividend
63.The issuer should charge retained earnings for the market value of shares issued in a
a. 1 for 5 stock dividend
b. 1 for 8 stock dividend
c. 4 for 1 stock split
d. 2 for 1 stock split
64.On November 1, 2010, Grande Company declared a property dividend of equipment
payable on March 1, 2011. The carrying amount of the equipment is P3,000,000 and
the fair value is P 2,500,000 on November 1, 2010.
However, the fair value less cost to distribute the equipment is P2,200,000 on
December 31, 2010 on March 1,2011.
What is the dividend payable on December
31,2010? a. 2,500,000 c. 3,000,000
b. 2,200,000
d.
0
65.With regards to No. 64, what is the measurement of the equipment on
December 31, 2010? a. 2,500,000
c. 3,000,000
b. 2,200,000
d. 2,000,000
66.The following information pertains to Mega Company:
a. A current liability
c. an addition to share capital outstanding
b. A reduction in total shareholders equity d. A note to FS
b. Overapplied by P40,000
c. Underapplied by P20,000
d. Underapplied by P40,000
78.Worley Co. has underapplied overhead of P45,000 for the year. Before
disposition of underapplied overhead, selected year-end balances form Worleys
accounting records were
Sales
P 1,200,000
Cost of Goods Sold
720,000
Direct materials
36,
inventory
000
Work in process
54,
inventorygoods
000
Finished
90,
inventory
000
Under Worleys cost accounting system, over or under applied overhead is assigned to
appropriate inventories and cost of goods sold based on year-end balances. In its year-end
income statement, Worley should report cost of goods sold of
a. 765,000
c. 684,000
b. 757,500
d. 682,500
79.How much is the total manufacturing cost of a product that consume P500,000 of raw
materials, 50% of raw materials equivalent to direct labor and a manufacturing cost of
P250,000?
a. P750,000
c. P1,000,000
b. P 500,000
d. P 250,000
80.Under a job order cost system, the peso amount of the general ledger entry
involved in the transfer of inventory from work in process to finished goods is the
sum of costs charged to all jobs
a. Completed during the period
b. Completed and sold during the period
c. In process during the period
d. Started in process during the period.
81.What is the diference of the worksheet of a Manufacturing Company from that of
other forms of business organization?
a. It has a purchases account
b. It omits the depreciation and accumulated depreciation account of the company
c. Includes a pair of columns for cost of goods manufactured.
d. It omits the nominal accounts
82.The analysis for financial statement is important for all of the company, there are
many bases that can be used for comparison of this analysis, which one is not being
use?
a. Intercompany basis
b. Intracompany basis
c. Industry averages
d. Ratio analysis
83. Provides a rough approximation of the average time that it takes to collect receivables
a. Average age of receivables
b. Inventory turnover
c. Accounts receivable
d. None of the above
84.This is a technique for evaluating a series of financial statement data over a period of
time.
a. Horizontal analysis
b. Vertical analysis
c. Intercompany analysis
d. Ratio analysis
85.Assume Company A has a profit of P2,000,000 with net sales of P25,000,000 and
Company B has a profit of P1,800,000 on net sales of P9,000,000. Company A and
Company B have profit-to-net-sales ratios of 8% and 20% respectively. If the two
company works of the same industry, which of the following is true?
30.0
d. 2.5
91.The following data are from the financial statements of FAILA, Inc.:
Dec. 31, 2010
Jan. 1, 2010
Total Assets
P 180,000
P140,000
Total Equity
144,000
112,000
Total Preference Equity
30,000
30,000 Preference
Dividend Declared 2,400
Profit
20,000
Interest Expense
5,750
Calculate the ratio on return on Total Assets:
a.15.10%
b. 14.50%
c. 18.9%
92.Based on # 91, what is return on ordinary equity?
a.17.96%
b. 13.56%
c. 14.57%
d. 16.09%
d. 12.5%
93.Cozy is analyzing the earnings performance of the Baliwag Star Transport Corporation. She has
gathered the following data from Baliwag Stars financial statements and from a report of the
closing market prices of shares:
Profit for 2010
Preference dividends declared during 2010
Ordinary dividends declared Dec. 31, 2010
P 743,000
60,000
Jan. 1, 2010
1,100 shares
Dec. 31,2010
1,300 shares
Market price per ordinary share on December 31,2010
P15
What is the Basic earnings per ordinary share?
a. .57
b. .45
c. .89
d. .75
P900,0
00 35%
100,0
00
2,048,0
00
4,352,0
00
What is the companys Times interest earned ratio?
a.15.25
c. 14.85
b.12.67
d. 18.90
97.Using the data in # 96, what is Corpuz debt ratio?
a.23&
b. 32%
c. 45%
d. 12%
d. 75%
99. Measures how readily a company can meet interest payments with profit earned
from operations
a.times interest earned ratio
c. equity to total assets ratio
b.debt to total assets ratio
d. none of these
100. Shows the percentage of he companys assets financed by debt
a.equity to total assets ratio
c. times interest earned ratio
b. debt to total assets ratio
d. none of these