3rd NCR Cup Quiz Bee

1. [PARCORP] A, B, C, and D are partners with D being an industrial partner. Upon liquidation of the
partnership, the unpaid obligations are: 40,000 to partnership creditor Y, and 10,000 to partner B.
Which of the following is true?

a. Y can only collect from A, B, and C

b. Y can collect from D, the industrial partner

c. B is not liable anymore because the partnership is

d. None of the above

2. [PRAC1] The following information relate to Cash in Bank of Company X on December 31:

Balance per books P 165,000

Outstanding checks P 43,000

Deposits in transit P 99,000

DAIF checks P 32,000

Note collected by bank for Company X P 18,000

Assuming no other adjustments are necessary, what is the balance of Cash in Bank shown on the
bank statement?

a. P95,000

b. P207,000

c. P235,000

d. P123,000

3. [PRAC1] The following items relate to the cash items of Company X on December 31, 2014:

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 Cash in bank, one account having a negative balance of P 6,500 P 350,000

Cash on hand, including customers check of P50, 000 received on December 10, 2014 but
dated January 2, 2015 P 120,000

Petty Cash, including unreplenished vouchers of P2, 500 P10,000

T-bills, purchased on December 20, 2014 and maturing on February 20, 2015 P 35,000

T-bills, purchased on September 31, 2014 and maturing on January 15, 2015 P55, 000

Money market placement P60, 000

What amount should be reported as cash and cash equivalents on December 31, 2014

a. P529,000

b. P469,000

c. P584,000

d. P524,000

4. [PRAC1] The following items relate to Company X for the year 2014:

Accounts payable, including cost of goods held on consignment of P 150,000 P2, 000,000

Accrued taxes payable P320,000

Stock dividend payable P400,000

Customers deposit P50,000

As a guarantor, amount guaranteed by Company X P300,000

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 Bank overdraft P80,000

Accrued electric bill P120,000

Reserve for contingencies P500,000

How much is total liabilities?

a. P2,820,000

b. P2,720,000

c. P2,370,000

d. P2,420,000

5. [PRAC1] Company A purchased a depreciable asset on January 1, 2014 for P1,000,000, depreciated
on a straight-line basis and without residual value. Additional information as follows:

Useful life for accounting purposes 5 years

Useful life for tax purposes 4 years

Tax rate 30%

What amount should be recognized as deferred tax asset or liability on December 31, 2014

a. P15,000 asset

b. P15,000 liability

c. P35,000 asset

d. P35,000 liability

6. [OBLICON] A is obliged to giver B her necklace on her ring on January 30, 2015. If the ring is
destroyed due to the fault of A, which of the following is true?

a. A should replace the ring with another thing equally satisfactory

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 b. A should be liable for damages for the destruction of the ring

c. As obligation is converted to a simple obligation

d. A should deliver the necklace plus damages

7. [ PARCORP] According to law, a stockholder can exercise his/her appraisal right in the following
instances except:

a. In case any amendment to the articles of incorporation has the effect of changing or
restricting the rights of any stockholder or class of shares, or of authorizing preferences in
any respect superior to those of outstanding shares of any class, or of extending or
shortening the term of corporate existence

b. In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or
substantially all of the corporate property and assets as provided in the Code

c. In case of merger or consolidation

d. In case of changes in the composition of the board of directors or the corporations

management

8. [TOA] At a minimum, which of the following should be included as a line item in the statement of
financial position

a. Deferred tax liabilities and deferred tax assets

b. Accounts payable

c. Retained earnings

d. Each classification of cash (cash on hand, cash in bank, petty cash, etc.)

9. [ECON] Insulin is basically an irreplaceable commodity for diabetics, no matter what the cost. The
diabetics demand curve for insulin would most probably be

a. Elastic

b. Inelastic

c. Perfectly elastic

d. Perfectly inelastic

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10. [ECON] Which of the following features will most likely cause a surplus to occur for a particular
product

a. Price ceiling

b. Price floor

c. Monopoly

d. Perfect market

11. [PRAC1] The following relate to inventory of Company A during the year:

Purchases P 650,000

Shipping costs to import P455,000

Shipping costs to export P 375,000

Inventory at year-end P 227,500

What amount of shipping costs will form part of inventory at year-end?

a. P 159, 250

b. P290,5000

c. P455,000

d. P830,000

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12. [PRAC1] On December 31, 2013, Company X had an equipment costing P10,000,000 and with an
accumulated depreciation of P5,000,000 (after recording depreciation expense for the year). This
equipment was bought on January 1, 2004 with a useful life of 20 years and no residual value. The
asset was found to be impaired, having a fair value less cost of disposal of P4,500,000 and value in
use of P4,000,000 on December 31, 2013. Company X appropriately recorded impairment on the
asset. On December 31, 2015, the recoverable amount of the equipment had risen to P5,500,000 so
the company decided to reverse the impairment. What amount of gain on reversal of impairment
should be recognized on December 31, 2015 (assuming depreciation was already recorded for the
year)?

a. P1,900,000

b. P400,000

c. P500,000

d. P0

13. [OBLICON] A of unsound mind, sold a parcel of land to B on July 31, 2010. The deed of sale was duly
acknowledge before a notary public. Six months after the sale, B realized the land was not suitable
as a place for his business. Also, on that date, A finished his psychiatric treatment and was declared
by medical professional to be of sound mind. Should a court action be filed today, which of the
following is correct?

a. As action for annulment, based on his insanity, would prosper

b. Bs action for annulment, based on As insanity, would prosper

c. Bs action for annulment, based on mistake as to the use of the land, would prosper

d. Neither A nor Bs action for annulment would prosper, no matter the basis

14. [PARCORP] Which of the following is a characteristic of partnership as a contract?

a. Preparatory

b. Gratuitous

c. Innominate

d. Formal

15. [PRAC1] The following account balances were reported by Company X during the year:

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 Copyright P30,000

Deposit with advertising agency to promote goodwill P27,000

Bond sinking fund P70,000

Excess cost over fair value of identifiable net assets of acquired subsidiary P390,000

Trademark P90,000

What amount should be reported as total intangible assets

a. P 120,000

b. P 147,000

c. P 510,000

d. P 537,000

16. [PARCORP] Which of the following is correct as regards to cash dividend?

a. Declared by the board by majority vote and need not be ratified by stockholders

b. Declared by the board by majority vote and ratified by stockholders by majority vote

c. Declared by the board by 2/3 vote and need not be ratified by stockholders

d. Declared by the board by 2/3 vote and ratified by stockholders by majority vote

17. [BUSINESS MATH] The following information relate to an investment being considered by Company
X:

Cost of machine P 1,200,000

Useful life 10 years

Incremental annual cash flows associated with the investment P450,000

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 Annual operating expenses associated with the investment P26,000

Salvage value at end of useful life P80,000

Assuming Company X will depreciate the machine using straight-line depreciation, compute the
accounting rate of return (simple rate of return) for the investment

a. 37.5%

b. 25.33%

c. 26%

d. 35.33%

18. [TOA] Impairment loss relating to a previously revalued asset should be recognized in

a. Profit or loss

b. Revaluation surplus relating to the revalued asset

c. An addition to accumulated depreciation

d. Any reserve in equity

19. [OBLICON] A source of obligation not arising from law

a. Contract

b. Negotiorum gestio

c. Solutio indebiti

d. Culpa aquilana

20. [TOA] Events that occur after the current year-end financial statement date but before the financial
statements are issued and provide additional evidence about conditions that existed at the financial
statement date affecting the realizability of accounts receivable should be

a. Disclosed only in the notes to the financial statements

b. Used to record an adjustment to bad debts expense for the year

c. Used to record an adjustment directly to retained earnings

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 d. Ignored

21. [BUSINESS MATH] The future value of P100 after 10 years, invested at 5% interest, compounded
monthly is

a. 162.9

b. 164.7

c. 150

d. 158.3

22. [ECON] X and Y are substitutes. The immediate impact on X of an increase in price of product Y is

a. Price will increase

b. Price will decrease

c. Quantity demanded will increase

d. Quantity demanded will decrease

23. [BUSINESS MATH] A total of P12,000 is invested in two funds paying 9% and 11% simple interest. If
interest for the first year is P1,180, how much of P12,000 is invested at 9%

a. P12,000

b. P7,000

c. P5,000

d. 0

24. [TOA] Reversing entries

a. Impact the statement of financial position and the income statement

b. Impact the statement of financial position only

c. Change amounts of reported in the financial statements of the preceding period

d. Impact the income statement only

25. [TOA] A stock split declaration affects which of the following

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 a. Total assets

b. Total equity

c. Retained earnings

d. None of the above

26. [PRAC1] The following account balances relate to company X

Accounts Payable, January 1 P 40,000

Accounts Payable, February 13, 2015 P 25,000

Inventory, January 1 P30,000

Inventory, February 13, 2015 P 55,000

January Sales, at selling price with gross profit of 35% on selling price P 200,000

Assuming all amounts in AP relate to the purchase of inventory for sale, and no other transactions
affected the accounts, how much cash was paid by Company X to its suppliers during the month of
January?

a. P 15,000

b. P 170,000

c. P155,000

d. 140,000

27. [ECON] On January, A received a monthly income of P 50,000 and spent P 40,000 thereof. Ceteris
paribus, what is As marginal propensity to save (MPS)?

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 a. 0.8

b. 0.2

c. 0.25

d. Cannot be determined

28. [PARCORP]A subscribed to 1,000 voting shares of X Corporation and paid 25% of the subscription.
During the stockholders meeting, can A vote using her subscribed shares?

a. Yes, As shares are not fully paid but not delinquent so it can be voted

b. No, because As shares are delinquent and cannot be voted

c. Yes, but only up to 250 shares, representing the percentage already paid

d. No, because the shares are not yet fully paid

29. [ECON] A technological breakthrough that results to improved worker productivity would most likely
result in a

a. Shift to the right in the supply curve

b. Shift to the left in the supply curve

c. Shift to the right in the demand curve

d. Shift to the left in the demand curve

30. [PARCORP] If a corporation does not formally organize and commence the transactions of its
business or the construction of its works, its corporate powers cease and the corporation shall be
deemed dissolved. What is the period given by law for this to take effect?

a. Within two (2) years from date of incorporation

b. Within five (5) years from date of incorporation

c. Within two (2) years from date of filing of the Articles and By-laws

d. Within five (5) years from date of filing of the Articles and By-laws

31. [OBLICON] An obligation is juridical necessity

a. To give, to do, or not to give

b. To give, to or not to do

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 c. To give, to do, not to give, or not to do

d. To give, or to do

32. [OBLICON] A, B and C borrowed 60,000 from X and Y, solidary creditors. On maturity date, X
demanded payment from the debtors. How much can X collect from A?

a. 10,000, representing As obligation to X

b. 20,000, representing As share in the obligation

c. 30,000, representing Xs share in the credit

d. 60,000, representing the whole obligation

33. [PARCORP] A,B, and C mutually agreed to exempt A from partnership profits and losses. Is the
agreement valid among the partners and against third persons?

a. Yes, because it was agreed on by all partners

b. Yes, as long as third persons are not prejudiced

c. No, exempting a partner from profits and losses is not a valid stipulation

d. Valid among partners but not against third persons

34. [OBLICON] Which of the following is not a requisite in order that an obligation be extinguished by
loss or destruction of the thing due

a. The thing is lost without fault of the debtor

b. The thing is lost before debtor incurs delay

c. The obligation is to deliver the debtors only wristwatch

d. The obligation is to deliver a brand new Honda Civic: colored orange wand with gold-
rimmed tires

35. [ECON] As a business owner, you have determined that the demand for your product is inelastic.
Based upon this assessment, you understand that

a. Increasing the price of your product will increase total revenue

b. Decreasing the price of your product will increase total revenue

c. Increasing the price of your product will have no effect on total revenue

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 d. Increasing the price of your product will tighten competition

36. [PRAC1] Company A failed to record salaries expense of P100,000 for the period ending December
31, 2014 and erroneously treated supplies on hand on December 31, 2015 of P50,000 as supplies
expense. Which of the following would most likely be an effect of these errors?

a. 2015 net income understated by P150,000; December 31, 2015 retained earnings
understated by P50,000

b. 2014 net income understated by P100,000; December 31, 2014 retained earnings
understated by P100,000

c. 2014 net income overstated by P50,000; 2015 net income understated by P50,000

d. 2015 net income understated by P50,000; December 31, 2015 retained earnings
understated by P50,000

37. [PRAC1] A cash generating unit with the following carrying amounts is to be impaired

Land P 2,000,000

Building P 1,500,000

Trademark P 1,000,000

Goodwill P 500,000

If the recoverable amount of the CGU is P3,600,000, what is the amount of impairment to be
allocated to the building?

a. P400,000

b. P200,000

c. P420,000

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 d. P300,000

38. [OBLICON] A, a bus driver, through negligence injured passenger A and pedestrian B. Which of the
following is not correct?

a. A may proceed against Z for Culpa Criminal

b. B may proceed against Z for Culpa Criminal

c. A may proceed against Zs employer for Culpa Contractual

d. B may proceed against Zs employer for Culpa Contractual

39. [PRAC1] The following relate to a bond issuance of Corporation A on January 1, 2013

Face Value: P500,000

Term: 5 years

Coupon rate (annual); 8%

Effective rate (annual): 7%

Interest Payment Dates: June 30 and December 31

What is the amount of interest expense to be recognized during 2014?

a. 18,035

b. 20,000

c. 36,136

d. 40,000

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40. [BUSINESS MATH] Using the profitability index method, what is the most desirable investment
proposal from the following:

X Y Z

PV of net cash flow P 212,000 P 171, 800 P 185,200

Cost of investment P 200,000 P 160,000 P 180,000

NPV P 12,000 P 11,800 P 5,200

a. X

b. Y

c. Z

d. All have the same profitability index

41. [PRAC1] Company B exchanged its old truck (with a carrying value of P25,000 and a fair value of
P45,000) for a new truck (with a carrying value of P90,000). In addition, Company B paid P55,000
cash to complete the exchange. The exchange transaction is deemed to have commercial substance.
What gain/loss should be recognized by company B in this exchange?

a. P 10,000 gain

b. P 10,000 loss

c. P 20,000 gain

d. No gain/loss should be recognized

42. [OBLICON] The obligation I will pay you my debt when I get to Baguio is

a. Valid

b. Void

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 c. Voidable

d. Unenforceable

43. [TOA] What quality of information is capable of making difference in decisions made by users of
financial information

a. Reliability

b. Faithful representation

c. Comparability

d. Relevance

44. [PRAC1] Company A bought a machine of January 1, 20X1 for P350,000 with an estimated useful life
of 6 years and a residual value of P50,000. The machine is estimated to produce 300,000 units of
output throughout its life. During 20X2, Company A produced 60,000 units of output and recognized
depreciation expense of P77,778 on the machine. What method is used by Company A in
depreciating the machine?

a. Straight line

b. Sum of the years digits

c. Double-declining rate

d. Units of output

45. [PARCORP] A distribution of a corporation of shares held by it in another corporation is a

a. Sale of capital asset

b. Sale of treasury stock

c. Cash dividend

d. Property dividend

46. [TOA] Properties held to earn rentals or for capital appreciation

a. Leasehold property

b. Owner-occupied property

c. Investment property

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 d. Construction contracts

47. [TOA] Valuation of inventories requires the determination of the following except

A. The costs to be included in inventory

B. The physical goods to be included in inventory

C. The cost of goods held on consignment from other entities

D. The cost flow assumption to be used

48. [TOA] IFRS 9 requires an entity to classify financial assets based on all of the following except

a. The entitys business model for managing financial assets

b. Whether the financial asset is a debt or equity instrument

c. The contractual cash flow characteristics of the financial asset

d. None of the above, all are considered in classifying financial assets based on IFRS 9

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