BASIC ACCOUNTING 8. .

Which of the following highlights the correct order

of the stages in the accounting cycle?
1. Accounting cycle does not include:
a. Journalizing, final accounts, posting to the ledger and
a. Recording trial balance
b. Decision making b. Journalizing, posting to the ledger, trial balance and
c. Classification final accounts
d. Interpreting c. Posting to the ledger, trial balance, final accounts and
journalizing
2. Which financial statement displays the revenues and d. Posting to the ledger, journalizing, final accounts and
expenses of a company for a period of time? trial balance

a. Income statement 9. Generally accepted accounting principles are the basic

b. Balance sheet assumptions, concepts, and guidelines for preparing
c. Cash flow statement financial statements.
d. Stockholder’s equity
a. True
3. Which of these is not included as a separate item in b. False
the basic accounting equation?
10. Understanding generally accepted accounting
a. Assets principles is not necessary to use and interpret financial
b. Revenues statements.
c. Liabilities
d. Stockholder’s equity a. True
b. False
4. The accrual basis of accounting records revenues
when they are:

a. Collected
b. Earned
c. Contracted
d. Rapidly available for use

5. The account format that displays debits, credits,

balances, and headings.

a. General journal
b. General ledger
c. T-account
d. Income statement

6.Asset accounts have what type of balance?

a. Debit
b. Credit
c. Accounts payable
d. All of the above

7 . Which of the following would not be included on a

balance sheet?

a. Accounts receivable.
b. Accounts payable.
c. Sales.
d. Cash.
INCOME TAXATION c. Property tax and income tax.
d. Business tax
1. The point at which tax is levied is also called :
8. Statement I : Taxation is the rule ; exemption is the
a. Impact of taxation exception.
b. Situs of taxation Statement II: Tazation may be used to implement the
c. Incidence of taxation police pwer of the state.\
d. Assessment a. I is true
b. II is true
2. Which of the following inappropriately describes the c. I and II are true
nature of taxation? d. I and II are not true

a. Inherent in sovereignty 9. Which is mandatorily observed in implementing

b. Essentially a legislative function police power?
c. Subject to inherent and constitutional limitation a. Public interest.
d. Generally for public purpose b. Just Compensations
c. Both a and b
3. Which is CORRECT? d. All of these

a. Tax condonation is a general pardon granted by the 10. Licensing of business or profession is an exercise of
government. a. Police power
b. The BIR has five deputy commissioners. b. Taxation
c. The government can still collect tax in disregard of a c. Eminent domain
constitutional limitation because taxes are the lifeblood d. All of these
of the government.
d. The President of the Philippines can change tariff or
imposts without necessity of calling Congress to pass a
law for that purpose.

4. Which is not an object of taxation ?

a. Persons
b. Business
c. Transactions
d. Public properties

5. The power to enforce proportional contribution from

the people for the support of the government is

a. Taxation
b. Police power
c. Eminent domain
d. Exploitation

6. Which is not a public purpose?

a. Public education
b. National defense
c. Transportation
d. None of the above

7. The Constitutional exemption of non-stock , non-

profit educational institutions refers to

a. Real property tax

b. Income tax