Easy Round

Practical Accounting 1
1. The accountant of Review Company made the following adjusting entry on December 31,
2012.
Prepaid Rent
Rent Expense
If annual
was
a. Debit
b. Debit
c. Debit
d. Debit

P1,800

P1,800

rent is paid in advance every October 1, the original transaction entry made
Prepaid Rent and credit Cash, P1,800.
Rent Expense and credit Cash, P1,800.
Rent Expense and credit Cash, P2,400.
Rent Expense and credit Cash, P7,200.

MAS
2. Which of the following measures of performance encourages continued expansion by an
investment center so long as it is able to earn a return in excess of the minimum
required return on average operating assets?
A)
return on investment
B)

transfer pricing

C)

the contribution approach

D)

residual income

Taxation
3. The following data are presented to you by the administrator of the Estate of Mr. X:
Gross sales . . . . . . . . . . . . . . . . . . . .
Cost of sales . . . . . . . . . . . . . . . . . . .
Business expenses . . . . . . . . . . . . . . . . .
Distribution of years income to the heirs. . . . .

P 500,000
200,000
50,000
30,000

How much is the taxable income using optional standard deduction?

a. P280,000
c. P200,000
b. P250,000
d. None of the choices

Literature
4. Theodore Geisel is a famous American writer who was famous on his childrens books
that were often characterized by imaginative characters. He is well known as
a. Hans Cristian Andersen

b. Aesop

c. Dr. Seuss

d. Lewis Caroll

Biology
5. A change of the DNA in an organism that results in a new trait is known as a?
a. Mutation

b. Genetic Engineering

c. Regeneration

d. Reproduction

Theory of Accounts
6. Under PAS 23, borrowing costs incurred in constructing a qualifying asset should be
capitalized when they are incurred
a.

Before the construction period

b.

During the construction period

c.

After the construction period

d.

During and after the construction period

Current Events
7. According to World Health Organization, whats the worlds fastest-spreading tropical
disease?
A: Rabies
C: Dengue
B: HIV/AIDS
D: Amoebiais

Average Round
Practical Accounting 2
1. Hartwell Company distributes the service department overhead costs to producing
departments and the following information for the month of January is presented as
follows:

Overhead costs incurred

Maintenance

Utilities

P18,700

P 9,000

Services provided to:

Maintenance department

10%

Utilities department

20%

Producing department A

40%

30%

Producing department B

40%

60%

The company distributes service department costs based on the reciprocal method,
what would be the formula to determine the total maintenance costs?
A. M = P18,700 + .10U

C. M = P18,700 + .30U + .40A + .40B

B. M = P9,000 + .20U

D. M = P27,700 + .40A + .40B

Religion
2. All the following animals were mentioned in the Bible, except ?
a.dog

b. cat

c. chicken

d. lion

Auditing Theory
3. Recto is a CPA and a senior auditor for Nam & Partners, CPAs. Nam is conducting an
external audit of Nacks Inc. The audit is taking longer than expected as supporting
documents are not made available to the audit team in a timely manner, and Recto
has found errors when testing the internal controls, which were known to
management but not disclosed to the auditors prior to the test. How would this
situation affect the auditors risk assessments?
a.
The assessed level of control risk should be decreased.
b.
The assessed level of audit risk should be decreased.
c.
The assessed level of inherent risk and control risk should be increased.
d.
The assessed level of detection risk should be increased.

Auditing Problem
4. Troop Co. frequently borrows from the bank to maintain sufficient operating cash.
The following loans were at a 12% interest rate, with interest payable at maturity.
Troop repaid each loan on its scheduled maturity date.
Date of
Note
Payable

Maturity
Date

Amount

11/1/10

P10,000

10/31/11

1 year

2/1/11

30,000

7/31/11

6
months

5/1/11

16,000

1/31/12

9
months

Term

Troop records interest expense when the loans are repaid. Accordingly, an interest
expense of P3,000 was recorded in 2011. If no correction is made, by what amount
would 2011 interest expense be understated?
a. P1,080
c. P1,280
b. P1,240
d. P1,440

Idiomatic Expression
5. When someone says it costs an arm and a leg, it is?
a. very dangerous

b. very frustrating

c. very interesting

d. very expensive

Food
6. Which vegetable was originally color purple during the 16 th century?
a. carrot
c. raddish

b. turnip
d. pumpkin

Business Law
7. M issued a promissory note to payable to the order of P. P indorsed it specially to A.
Without the knowledge of A, X took the note and forged As signature and then delivered it
to B, who specially indorsed it to C, C to D, D to E, and E to H, a holder in due course.
Against whom can H demand payment of the note?
a. M and P because their signatures are genuine and had not been forged
b. A because he is negligent in keeping the promissory note
c. Against all parties because H is a holder in due course
d. B, C, D and E because their signatures appear after the forgery

Difficult
MAS
1. The following information was extracted from the May Cash Budget of Hair Stars, a
groom pad for men and women:
Budget of Hair Stars, a groom
pad for men and women:
Excess of cash available over
disbursements

800

Cash balance, May 1

10,100

Total cash disbursement for May

32,500

The business can only borrow money in round figures of P1,000 amounts. If the business
is required to maintain a minimum cash balance of P10,000, how much money should be
borrowed in May?

2. What is the name of the First winner of the Apprentice Asia?

Practical Accounting 1
3. The information below pertains to Jelo Company for 2012.
Profit for the year
8% convertible bonds issued at par (P1,000 per bond).
Each bond is convertible into 40 ordinary shares

P1,200,000

2,000,000

6% convertible, cumulative preference shares, P100

par value. Each share is convertible into 3 ordinary
shares.

3,000,000

Ordinary shares, P10 par value

6,000,000

Share options (granted in aprior year) to purchase

50,000 ordinary shares at P20 per share
Tax rate
Average market price of ordinary shares

500,000
40%
P25 per share

There were no changes during 2012 in the number of ordinary shares, preference
shares, or convertible bonds outstanding. There is no treasury share.
Compute diluted earnings per share for 2012.

Practical Accounting 2
4. Lake Power Sports sells jet skis and other powered recreational equipment. Customers
pay 1/3 of the sales price of a jet ski when they initially purchase the ski, and then pay
another 1/3 each year for the next two years. Because Lake has little information about
collectibility of these receivables, they use the installment method for revenue
recognition. In 2010 Lake began operations and sold jet skis with a total price of
P900,000 that cost Lake P450,000. Lake collected P300,000 in 2010, P300,000 in 2011,
and P300,000 in 2012 associated with those sales. In 2011 Lake sold jet skis with a total
price of P1,500,000 that cost Lake P900,000. Lake collected P500,000 in 2011, P400,000
in 2012, and P400,000 in 2013 associated with those sales. In 2013 Lake also

repossessed P200,000 of jet skis that were sold in 2011. Those jet skis had a fair value of
P75,000 at the time they were repossessed.
In 2012, Lake would recognize realized gross profit of:

Taxation
5. The accounting period of Corporation A is .fiscal year ending on October 31. For the year
2010, Corporation A filed its annual tax return on March 15, 2011. The last day for BIR to
assess is on:
a. February 16, 2014
c. March 15, 2014
b. March 14, 2014
d. April 16, 2014

Space
6. The most recognized model of how the universe begun is known as the?

Algebra
7. The ratio of two numbers is 5 is to 1. The sum is 18. What are the two numbers?