MA Cup

Easy Question 1 FINANCIAL ACCOUNTING

Adem Inc., maintains a mark-up of 60% based on cost. The company's selling and administrative
expenses average 30% of sales. Annual sales were P1,440,000. How much should Adem Inc. record as
its operating profit for the year?
ANSWER 108,000

Easy Question 2 MANAGEMENT ACCOUNTING

An organization structure is effective if it enables individuals to contribute to the objectives of the
enterprise. This is known as ______________.
A. Scalar principle
B. Principle of unity of objectives
C. Principle of functional definition
D. None of the above

Easy Question 3 MANAGEMENT ACCOUNTING

During 2019, Cute Company purchased P960,000 of inventory. The cost of goods for 2019 was
P900,000, and the ending inventory at December 31, 2019 was P180,000. What is the inventory
turnover for 2019?

ANSWER 6

Easy Question 4 MANAGEMENT ACCOUNTING

RJB's average cost per unit is the same at all levels of volume. Which of the following is true?
A. RJB must have only variable costs.
B. RJB must have only fixed costs.
C. RJB must have some fixed costs and some variable costs.
D. RJB's cost structure cannot be determined from this information.

Easy Question 5 FINANCE

Which of the following is true in relation to law of diminishing marginal utility?

A. Marginal utility will decline as a consumer acquires additional units of a specific product.
B. Total utility will decline as a consumer acquires additional units of a specific product.
C. Declining utilities causes the demand curve to slope upward.
D. Margin is excess of cost over sales.

Average Question 1 MANAGEMENT ACCOUNTING

The following data are related to ABC stock:
Required return on ABC common 15%
Beta coefficient 1.5
Risk-free rate 9%
The required market return is ________.
ANSWER 13.0%

Average Question 2 MANAGEMENT ACCOUNTING

Which one of the following terms best describes the rate of output which qualified workers can achieve
as an average over the working day or shift, without over-exertion, provided they adhere to the
specified method of working and are well motivated in their work?
A. Standard time C. Standard hours
B. Standard performance D. Standard unit
Average Question 3 FINANCIAL ACCOUNTING
Tall Company quarries marble at two locations and sells it to be used in construction of buildings. The
Company provides for a depletion rate of 5%. The quarry is leased on a year-to-year basis with the
Company paying a royalty of Php0.05 per ton of marble quarried. Other data relevant to the
requirements are:

Estimated total reserves, tons Php60,000,000

Tons quarried through December 31, 2014 4,000,000
Tons quarried, 2014 1,600,000
Sales, 2014 1,200,000

How much would be the depletion for 2014 for financial reporting purposes?

ANSWER P-0-

Average Question 4 FINANCIAL ACCOUNTING

The following information is shown in the accounting records of Rey Company:

January 1 December 31
Cash 186,000 -
Accounts receivable 201,000 273,000
Merchandise Inventory 258,000 234,000
Accounts payable 159,000 144,000
The total sales and cost of goods sold for 2018 were 2,394,000 and 1,749,000, respectively. All sales and
purchases were made on credit. Various operating expenses of 321,000 were paid in cash. Assume that
there were no other pertinent transactions.
What is the cash balance on December 31,2018 of Rey company?

ANSWER 768,000

Average Question 5 FINANCIAL ACCOUNTING

BB Inc. decided to extend its reporting period from a year (12-month period) to a 15-month period. Which
of the following is(are) not required under PAS in case of change in reporting period?

I. BB Inc. should disclose the reason for using a longer period than a period of 12 months
II. BB Inc. should change the reporting period only if other similar entities in the geographical area in
which it generally operates have done so in the current year; otherwise its financial statements would not
be comparable to others
III. BB Inc. should disclose that comparative amounts used in the financial statements are not
entirely comparable

A. I and II
B. II and III
C. III only
D. II only

Difficult Question 1 FINANCIAL ACCOUNTING

SASIMA Co. purchased equipment on January 2, 2008 for P50,000. The equipment had an
estimated 5-year service life. SASIMA’s policy for 5-year assets is to use the 200% double-declining
balance depreciation method for the first two years of the asset’s life and then switch to the straight-
line depreciation method. In its December 31,2010 balance sheet, what amount should SASIMA
report as accumulated depreciation for equipment?
ANSWER 38,000
Difficult Question 2 FINANCIAL ACCOUNTING
The inventory on hand on December 31, 2006 of LEISA CORP. is valued at a cost of P300,000. The
following items were not included in the inventory:
a. Purchased goods in transit shipped FOB Destination, with price of P30,000 which included freight
charge of P5,000.
b. Goods held on consignment by LEISA CORP. at a sales price of P10,000, excluding a 20%
commission on the sales price. Freight paid by LEISA CORP. was P1,000.
c. Goods sold in transit FOB Destination with invoice price of P49,000 which included freight charge
of P4,000 to deliver the goods.
d. Purchased goods in transit FOB Shipping Point with invoice price of P60,000. Freight costs amount
to P6,000.
Goods out on consignment with sales price of P30,000. Shipping costs amounts to P3,000.
What is the correct inventory on December 31, 2006 assuming LEISA’s selling price is 150% of costs?
ANSWER 419,000

DIFFICULT Question 3 Partnership

The Flat and Iron partnership agreement provides for Flat to receive a 20% bonus on profits before the
bonus. Remaining profits and losses are divided between Flat and Iron in the ratio of 2:3, respectively.
Which partner has a greater advantage when the partnership has a profit or when it has a loss?

Profit Loss
a. Flat Iron
b. Flat Flat
c. Iron Flat
d. Iron Iron

DIFFICULT Question 4 Corporation

On December 1, year 1, shares of authorized common stock were issued on a subscription basis at a price
in excess of par value. A total of 20% of the subscription price of each share was collected as a down
payment on December 1, year 1, with the remaining 80% of the subscription price of each share due in
year 2. Collectability was reasonably assured. At December 31, year 1, the stockholders’ equity section of
the balance sheet would report additional paid-in capital for the excess of the subscription price over the
par value of the shares of common stock subscribed and

a. Common stock issued for 20% of the par value of the shares of common stock subscribed.
b. Common stock issued for the par value of the shares of common stock subscribed.
c. Common stock subscribed for 80% of the par value of the shares of common stock subscribed.
d. Common stock subscribed for the par value of the shares of common stock subscribed.

Difficult Question 5 MANAGEMENT ACCOUNTING

SoarHigh Company follows an aggressive financing policy in its working capital management while
AimHigh Corporation follows a conservative financing policy. Which one of the following statements is
correct?
A. SoarHigh has a low current ratio while AimHigh has a high current ratio.
B. SoarHigh has less liquidity risk while AimHigh has more liquidity risk.
C. SoarHigh finances short-term assets with long term debt while AimHigh finances short-term assets with
short-term debt.
D. SoarHigh has low ratio of short-term debt to total debt while AimHigh has a high ratio of short-term
debt to total debt