1.

Give the correct sequence of the following accounting procedures

1. Financial Statements
2. Reversing Entries
3. Pencil-Footing
4. Journal Entries
5. Closing Entries
6. Adjustments
7. Post-Closing Trial Balance
8. Adjusted Trial Balance
9. Unadjusted Trial Balance

A. 4,3,9,6,8,1,5,7,2
B. 4,3,9,6,8,2,7,5,1
C. 4,3,9,6,7,1,8,5,2
D. 4,3,9,6,8,5,1,2,7

2. In which section of the statement of financial position should cash that is

restricted for the settlement of a liability due 18 months after the reporting
period be presented?
A. Currents assets
B. Equity
C. Noncurrent liabilities
D. Noncurrent assets

3. What is the objective of financial statements?

A. To provide information about the financial position, financial
performance and changes in financial position of an entity that is
useful to a wide range of users in making economic decisions.
B. To prepare and present a statement of financial position, statement of
comprehensive income statement of cash flows and statement of changes
in equity.
C. To prepare and present relevant, reliable, comparable and understandable
information to investors and creditors
D. To prepare and present financial statements in accordance with all
applicable PFRS and interpretations
 4. A complete set of financial statements includes the following components,
except
A. Statement of financial position, statement of comprehensive income, and
statement of cash flows.
B. Statement of changes in equity
C. Notes, comprising a summary of significant accounting policies and other
explanatory information
D. Reports and statements such as environmental reports and value
added statements

5. Pabebe Company revealed the following information for 2016:

Accounts receivable on January 1 P 550,000

Credit sales 4,650 000

Sales returns 100 000

Collection from customers 2 150 000

Accounts written off 50 000

Estimated future sales return at year end 68 000

Estimated uncollectible accounts receivable 112 000

at year end per aging

On December 31, 2016, what is the balance of accounts receivable before allowance for
doubtful accounts and allowance for sales returns? 2,900,000

6. Marcand Pingris started a partnership. Marc contributed a building that he purchased 10

years ago for P100,000. The accumulated depreciation on the building on the date of
formation of the partnership is P25,000 and the fair value is P110,000. For what amount will
Marc’s capital account be credited on the books of the partnership?
a. P100,000
b. P110,000
c. P75,000
d. P25,000
Answer: B. 110,000

*Fair Value
7. On August 31, 2018, Berna paid P114 000 for one year rental covering the period
September 1, 2018 to August 31 2018. The payment was originally recorded as an expense
account. After the adjustment, how much is the prepaid rent on December 31, 2018?
____________

Answer: P76 000

114 0 x 4/12 = 38 000
8.Nancy invested P600,000 for a 30% interest in a partnership in which the other partners
have capital totaling P1,000,000 before admitting Nancy. After distribution of the bonus, what
is Nancy’s capital balance?
a. P480,000 c. P720,000
b. P600,000 d. P300,000

Answer: A. P480,000
(P1,000,000 + 600,000 = 1,600,000 * 30% = P480,000)

9.Under the financial capital maintenance concept, a profit is earned when I.

The financial amount of the net assets at the end of the period exceeds the
financial amount of the net asset at the beginning of the period, after excluding
any distributions to and contributions from owners during the period. II. The
physical productive capacity of the entity (funds needed to achieve that capacity)
at the end of the period exceeds the physical productive capacity at the beginning
of the period, after excluding any distributions to and contributions from owners
during the period.

a. Both I and II c. I only

b. Neither I nor II d. II only

10.The trial balance of Zambales Company reflected the following liability
account balances on December 31, 2016:

Accounts payable 5,000,000

Bonds payable, due December 30, 2017 10,000,000

Premium on bonds payable 500,000

Deferred tax liability 2,500,000

Dividends payable 4,500,000

Income tax payable 1,500,000

Note payable – bank 4,000,000

The bank note payable matures on June 30, 2017.

On March 1, 2017, the entire balance of the bank payable was refinanced
on a long-term basis. Zambales’s financial statements were issued on March 31,
2017.

In its December 31, 2016 statement of financial position, Zambales

Company should report current liabilities at

a. 21,500,000

b. 24,000,000

c. 25,500,000

d. 28,000,000