Fundamentals of Accounting 1 and 2

March 30, 2018 | Author: CPALawyer012 | Category: Debits And Credits, Expense, Dividend, Preferred Stock, Balance Sheet


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De La Salle Araneta University!College of Business! Victoneta Avenue, Malabon City ! ! Fundamentals of Accounting 1 & 2 1 T-Gang Consulting of BSACC3A bought P 9,000 of furniture. Accumulated Depreciation had a balance of P 3,000 prior to the recording of this year’s depreciation. Depreciation Expense at the end of the year is P 2,000. What is the book value of the furniture at the end of the year? A P 4,000 C P 11,000 B P 6,000 D P 3,000 ! 2 Equities are legal and economic claims to the assets of a business. The owner’s claims on the business assets are also known as A Accounts Payable C Liabilities B Outsider Claims D Capital ! 3 A B ! The statement which presents the entity’s operations during a specific period of time is the Statement of Owner’s Equity C Income Statement Statement of Cash Flows D Balance Sheet 4 The purchase of office equipment on account will A increase an asset and increase owner’s equity increase a liability B increase one asset and decrease another asset decrease a liability C increase an asset and D increase an asset and ! 5 The performance of service for a customer or client and immediate receipt of cash will A increase one asset and decrease another asset C decrease an asset and decrease a liability B increase an asset and increase owner’s equity D increase an asset and increase a liability ! 6 The payment of an accounts payable will A decrease an asset and decrease owner’s equity decrease a liability B increase one asset and decrease another asset increase a liability ! C decrease an asset and D increase an asset and 7 A B C D A debit entry to the Cash account indicates the payment of an expense the borrowing of money from a bank the billing of a client for services, payment subsequent to invoicing the withdrawal of funds from the business by the owner 8 A B C D The trial balance is necessary in order to post to the ledger prepare the source documents record entries into the journal check the posting accuracy, that total debits equal total credits ! ! 9 If the Income Summary account has a P 4,000 credit balance before it is closed to the capital account, you know that A revenues exceeded expenses by P 2,000 Reviewer for 2015 Qualifying Examamination and a P 1.B C D the company had a net loss for the year of P 4. P 500 debit.200 debit to the Income Summary account D P 2. P 1. A P 600 credit entry C P 600 debit entry B P 400 debit entry D P 400 credit entry ! 16 Failing to post the transaction of purchasing P 600 of office supplies on account would have what effect on the trial balance? A debit total would equal the credit total B debit total would be P 600 greater than the credit total C debit total would be P 1.000 Reviewer for 2015 Qualifying Examamination .000 at the end of the accounting period. The amount and entry to close Income Summary to the Capital account would be A P 350 credit to the Income Summary account B P 350 debit to the Income Summary account C P 1.200 greater than the credit total D debit total would be P 600 less than the credit total ! 17 Arevalo Child Care Center paid P 9. The adjusting entry to reflect this must have been A debit Rent Expense and credit Prepaid Rent for P 3.000 10 A B C D The post closing trial balance is prepared as the next step in the accounting cycle after combining the trial balance and adjustment figures preparing the trial balance journalizing and posting the closing entries none of these ! ! 11 A debit column total greater than the credit column total under the Income Statement portion of the worksheet would mean A mistakes were made in the preparation of the adjusted trial balance B the company had a profitable year C the Income Summary account will have a credit balance after the nominal accounts are closed D the company had a loss this year ! 12 The following accounts were closed to the Income Summary account: Salary Expense.000 in the business the company had a profit for the year of P 4. no deductions. Utilities Expense.Withdrawals) ! ! 15 An asset account with a P 600 beginning balance.200 credit.000 ending balance.000 for three months of rent in advance. P 800 debit. Service Revenue. P 250 debit.000 B debit Rent Expense and credit Prepaid Rent for P 6.000 the owner invested an additional P 4.050 credit to the Income Summary account ! 13 A B The Statement of Financial Position is another name for the Statement of Owner’s Equity C Income Statement Statement of Cash Flows D Balance Sheet 14 A B C D The Balance Sheet reflects Assets + Liabilities = Owner’s Equity Beginning owner’s equity + Revenues = Expenses Revenues . would have the following amount recorded in it. Telephone Expense.Expenses .Expenses Assets = Liabilities + (Beginning Owner’s Equity + Revenues . The Prepaid Rent account had a remaining balance of P 3.000 C debit Prepaid Rent and credit Rent Expense for P 12. the following entries were made by Yap Company Purchases 17.920 B debit to Accounts Receivable for P 3. freight prepaid C FOB destination. balance in agreed ratio C bonus allowance to partners. freight prepaid D FOB shipping point.Supplier 1. except A interest allowance to partners.in 1. except purchase of treasury stock C declaration of bonus 24 A B Which of the following would not be considered a characteristic of a corporation? right of succession C unlimited liability separate legal entity D created by operation of law 25 A B C D Which of the following will not decrease retained earnings? declaration of scrip dividends declaration of property dividends declaration of liquidating dividends retirement of share capital at more than the original issue price ! ! ! ! appropriation of retained earnings for plant acquisition D A and B only 26 Earnings per share is A net income minus annual dividends on undeclared non-cumulative preference shares divided by the weighted average number of outstanding ordinary shares Reviewer for 2015 Qualifying Examamination .000 # Transportation . balance in agreed ratio B salary allowance to partners.900 # What are the shipping terms regarding this transaction? FOB destination.900 Accounts Payable .000 18 Regarding one purchase of merchandise. balance in agreed ratio D equally ! 22 A B In the absence of agreement.Supplier 17. freight collect ! A B ! 19 The collection of a P 4. freight collect FOB shipping point.920 D credit to Accounts Receivable for P 3.000 Accounts Payable .D debit Prepaid Rent and credit Cash for P 9. the share of each partner in the profits and losses shall be equally C according to average capital contribution according to original capital contribution D all of the above 23 A issue B The following will cause total retained earnings to decrease .000 account within the 2% discount period would result it A debit to Sales Discount for P 80 C credit to Cash for P 3.920 ! 20 Dissolution will arise A whenever a new partner is admitted through purchase of interest or through investment of cash or non-cash assets B upon termination of the definite term or particular undertaking specified in the agreement C in case of civil interdiction of any partner D all of the above ! 21 The following income and loss allocation method recognized the services rendered by the partners in terms of time and skill as well as the contribution made by each partner. 000 ! 33 From this list of account balances.000. P 30. Accounts Receivable. Capital.000 D P 3.000? A P 19. Ordinary Share Premium account will be credited on ! A B C D ! 30 A B C D ! June 1 Yes No Yes No October 1 No No Yes Yes The issuance of shares of ordinary share capital to shareholders decreases ordinary share capital authorized decreases ordinary share capital outstanding increases ordinary share capital outstanding increases ordinary share capital authorized 31 The accountant was not able to adjust the following: P 200 of service revenue was not accrued. On October 1. P 300 of unearned revenue had been earned. Accumulated Depreciation. P 30.500 B P 19.000. After recording and posting this transaction.000.B net income divided by weighted average number of outstanding ordinary shares C net income minus annual dividends on cumulative preference shares divided by the weighted average number of outstanding ordinary shares D B and C but not A ! 27 A B C D A capital deficiency is eliminated in any of the following ways except by contributing cash to the partnership by distributing it as additional loss to the other partners by declaring bankruptcy by contributing non-cash assets 28 A B C D When there is no bidder for delinquent subscription. the remaining 60% of the subscription price was collected.000 C P 45.000. but no entry was made. Prepaid Rent.250 C P 19.000. P 13. the subscribed shares will be issued in the name of the board of directors will be reverted back to unsubscribed shares will be issued in the name of the corporation will be issued to the delinquent subscriber ! ! 29 On June 1. Unearned Revenue.000.000 B P 7. What should be the amount of net income if the incorrect net income was P 19. the new debit and credit totals for the trial balance would be A P 11. Accounts Payable.410 D P 18.000 ! Reviewer for 2015 Qualifying Examamination .000 C P 9. calculate the total credit column for the post-closing trial balance: Cash. P 15.000 of office supplies on account was omitted from the original journal entries. P 1. A P 69.000.000.300 ! 32 A trial balance has debit and credit totals of P 7. Building. P 2. P 6. P 3. Diana Park.000 B P 50.000. and 40% of the subscription price was collected. Ren Mar Corporation authorized ordinary share capital which was sold on a subscription basis at a price in excess of par value. The purchase of P 4.000 D P 20. 000 D P 340. 2009? A P 585. Owner’s equity on December 31. accounts receivable.000 P 650. P 9. made no additional investments nor withdrawals.000 ! 39 Resnel and Lana are combining their separate businesses to form a partnership. Owner’s equity changes by A + P 48.000 20.000 D P 210. P 240. If they have beginning capital balances of P 120.34 The Balance Sheet of Mallari Company shows that capital is P 540.080.P 45.000 by December 31.450.000 Merchandise Inventory 60.000 100. 2008 amounted to P 495.000.000 B .000 B + P 950.000 40.000 C P 1. How much are the total liabilities? A P 180. and P 45.000 ! 40 A B ! Using the information in item 39.000 30.000. During the same period.000 at fair value. land.000 that is equal to 1/3 of its total assets.000 cash down payment and the balance taken as a note payable. The amount of cash to be contributed by Resnel is A P 200.000 C P 424. How much did the total assets change? A + P 1.305.000 C P 100.450.000 D + P 500.000 C + P 36.000 in expenses. but increased to P 1.000 at cost and P 400.000 in owner’s withdrawals.000 B P 720.000 D .000 ! 38 Jason Gubatan joined a partnership by contributing the following: cash.000 C . and accounts payable.000 P 40.P 930. P 4.000 and P 118.000 in revenues. P 16.000 in owner investment.000 ! 35 The assets of Sydney Company amounted to P 810.000 ! 36 Angelica Company has P 60.620.000 B P 720.000 D P 1.000 B P 248. P 36.000 Accounts Payable 30.000 B P 300. 2009.000. and suffered an unprofitable year with a loss of P 48.000.000 Equipment 120.000 90.000 on December 31.000 100.000.000 D P 20.000 C P 360. liabilities increased by P 270.000 80.000 ! 37 Marnie Company purchased P 1. What will be the initial amount recorded in Gubatan’s capital account? A P 408. their capital balances will be Reviewer for 2015 Qualifying Examamination .000 of land with a P 500. ! ! Resnel Book Value Fair Market Value Book Value Lana Fair Market Value Accounts Receivable 40. The non-cash assets to be contributed and the liabilities to be assumed are as follows.000 D P 1.000 41 Kimberly and Jessica are partners who share profits equally and losses in a 2:1 ratio.000 C P 1. P 132.035.000 in liabilities paid off. 2008.000. What was the amount of the Owner’s Equity on December 31. P 20.080.P 3. Cash and non-cash assets are to be contributed for a total capital of P 600.000.000 P 50. the total assets of the partnership is P 630.000 The partners’ capital accounts are to be equal after all the contributions of assets and the assumption of liabilities.000 20.000 respectively. 000.000 152.000 respectively.000 in the settlement of his interest. September Reviewer for 2015 Qualifying Examamination . Under the bonus method. How much is the capital balance of Juan after the purchase? A P 140.000 B P 160. P 90.000 D P 320.000 ! 48 Kenneth.000 88.000 C P 200.000.000 ! 46 Using the information in item 45. withdrew P 200. The remaining partners have profit and loss ratio of 3:2. what is the capital balance of Christine immediately after the retirement of Christine? A P 140. They share profits and losses in the ratio of 30:40:30. and James are partners who share profits and losses in the ratio of 2:3:5.000 shares for legal services when the fair value was P 24 per share.000 B P 240.000 D P 24. the excess payment will be shared by the remaining partners as A P 48.000. During 2009.000 ! 47 A partner retired from a partnership and received an amount which exceeds his capital interest by P 40.000. P 120.000 B P 12.000 B P 180.000 D P 200.000 B P 1.000 credit.000. Patrcik.000.000 D P 1.000 120.000 and P 200.000 134. what is the total partnership capital immediately after the retirement if Christine? A P 280. What is the amount of cash available for distribution? A P 120.000 C P 560.160. Erika’s ending capital balance is A P 1. Christine decides to withdraw from the partnership. and assuming bonus method is used. If the bonus method is used.000 shares at P 22 per share.000 C P 180.000 B P 50. issued 1.400.000 ! 49 T-Gang Corporation was organized on January 1. and Braga are partners with capital balances of P 80. Juan buys Kenneth’s interest for P 120.000 and P 8.000 and P 24.800. Erika. Charisse Anne. and Katrina share profits and losses in the ratio of 2:3:5 respectively. Christine receives P 160. and James. Christine.000 credit. Hunger Games Corporation had the following transactions affecting the shareholders’ equity: January 10.000 during the year. Patrick.000 ! 43 Kenneth’s interest in the partnership is P 110. If they agreed to admit MC into the partnership.000 D P 100.000 42 Erika.000 D P 150.000 during the year.000 C P 200. Their capital accounts show the following balances: Kenneth. P 60.000.000 118.000 C P 160. Their partnership realized a profit of P 1. and P 160. with a beginning capital balance of P 1.000 and P 16.000 ! 44 JP and KY formed a partnership and have capital balances of P 100. 2009 with authorized capital of 100.000 respectively.A B C D ! Kimberly P 40.000 and P 32.000 B P 120. issued 25.000. P 30. P 20 par value.000 ordinary shares. how much will MC have to invest to have a 1/4 interest? A P 75.000 102.000 ! 45 Anne.000 debit after the sale of non-cash assets and the payment of liabilities.000 C P 36.000 Jessica P 30. March 25. The partners have decided to liquidate the partnership.000 C P 110.000 D P 130. 000 was declared. As a result of the stock dividend.000 C P 634.000 D P 75. par value is P 50 per share and market value is P 80 per share. Red Corporation has issued 3. 20. what is the dividend per share on both classes of share capital? A P 10 and P 10 C P 15 and P 2. P 10 for Yellow B P 100 for Red. 2.000 B P 60.000 D P 36.000 ordinary shares outstanding.50 B P 8 and P 11 D none of the given Reviewer for 2015 Qualifying Examamination .000 B P 54. 2015.000 B P 10.000 ! 54 Red Corporation and Yellow Corporation have Preference Share Capital outstanding.000 D P 704. par value P 120.000 and P 90. What is the dividend per share for the Preference Share Capital for the two corporations? A P 5 for Red.30. issued 5.000 D P 164. what amount should be reported as Premium on Ordinary Shares? A P 84.000 C P 90.000 D none of the given ! 57 Using the information in item 56. 2015: Ordinary Share Capital.000 shares outstanding.000 C P 100.000 shares of 5% Preference Share Capital.000 B P 24.000 ! 52 Using the information in item 51. How much is the balance of the Ordinary Share Capital account as of September 30? A P 700. Yellow Corporation has issued 5. How much dividends were paid on both classes of share capital? A P 48.000 ! 53 On April 8. a total cash dividend of P 200.000 shares of 10% Preference Share Capital.000 shares of P 2 par value ordinary share that were both issued and outstanding. par value P 100.000 shares for an equipment when the value was P 26 per share. how much dividends will be received by preference shareholders? A P 200. On December 31. Rafael Corporation had 20. Rafael Corporation declared and issued 25% ordinary share capital dividend.000 and P 132. The carrying value of each share of stock is P 20 at the time of declaration of the dividend.200 C P 2. 6% Preference Share Capital. P12 for Yellow C P 5 for Red.000 shares of P 8 non-cumulative preference shares outstanding and 12.000 ! 51 John Paul Corporation has the following classes of share capital outstanding as of December 31. P 120 for Yellow ! 55 Kuya Kosa Corporation has 400 shares of 6% preference share capital outstanding.000 D P 34.000 B P 620.000 B P 188.000 shares outstanding.400 B P 12 D P 1.000 were declared.920 ! 56 Tindahaneta Corporation has 6.000 and P 120. Prior to this date. The amount of cash dividends for the year on this share capital would be A P 1. 2009. No dividends were paid on preference shares for 2013 and 2014. P 100 par value.000 C P 12. cash dividends of P 180. At the end of the year.000 ! 50 Using the information in item 49. How much dividends would be received by ordinary shareholders? A P0 C P 176.000 C P 50. how much will be debited to Retained Earnings? A P 40. P 20 par value. P 120 for Yellow D P 5 for Red. cumulative. During 2015. 2015! Valix. Conanan Educational Supply. 2015 with authorized capital of 100. 2015? A P 702. 2013! Valix. 2013! ! ! Reviewer for 2015 Qualifying Examamination . Valix. Intermediate Accounting Vol.. Made Easy Books. The partners have decided to dissolve and liquidate the partnership.! 58 Philip Vargas Corporation was organized on January 1. December 2.000 shares at 12 per share. Empleo.000. What is the amount of shareholders’ equity as of December 31. Millennium Books.000 treasury shares at P 13 per share.333 B P52. Valix.000 D P 708. C is personally insolvent.000.000 ! 60 Kris and Mark are partners who share profits and losses 70:30. 2. Practical Accounting 1. Advance Accounting 1. 2. Inc. Valix. Under the circumtances. Profit for the year amounted to P 300. Theory of Accounts Vol 1. Financial Accounting Vol.000. Philip Vargas Corporation had the following transactions affecting shareholders’ equity: January 7. purchased 6. Peralta.000 C P23. What is the peso amount of bonus recognized in Frank's capital account at the date of admission? A P70. Practical Accounting 1 Vol 2.500 D P17.000.000 B P 720. Valix. and P40.000 ! 59 A.000. Valix. 2015 ! Valix.000 D receive P6. issued 40. Millennium Books. B and C have capital balances of P80. 1.000 in the partnership for a 25 percent equity interest and the bonus method is applied. Conanan Educational Supply. 2014! Dayag. 2014! Robles. Inc. Valix. Empleo. 2014 ! Robles. Frank invest P120. 40% to B and 20% to C. 2015! Valix. respectively.. Conanan Educational Supply. Conanan Educational Supply. A and B are personally solvent. Conanan Educational Supply. Intermediate Accounting Vol. respectively at the date they admit Frank into the partneship. A and B will each A receive P10. Theory of Accounts Vol 1. 2015! Uberita. Peralta. 2014 ! Valix. Practical Accounting 1 Vol 1. Conanan Educational Supply.000 and P260.000 C P 640.500 ! Reference: ! Valix.000 shares of P 10 par value ordinary share capital.000 C receive P8.000 B receive P 9. 1.000. Profits are allocated 40% to A. P80. ReSA Review School. Financial Accounting Vol. After paying all creditors the amount available to distribution is P20. They have capital account balances of P170.
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