1)When a business receives cash, it is always recorded an an increase in cash and a decrease to an Expense;

True

False

2) Business transactions are expressed in terms of money.

True

False

3)The Owner's Withdrawal account is listed with the other expenses of a business,

False

True

4)The liability created when supplies are bought on account is called Accounts Payable.

False

True

5)A withdrawal by the owner is recorded as a deduction from assets and an increase in expenses.

False

True

6)Capital represents the owner's investment, or equity, in a business,

False

True

7)Every transaction is recorded in terms of increases and/ or decreases in two or more accounts.

True

False

8)Both sides of the fundamental accounting equation must always be equal.

False

True

9)An owner can invest cash or other assets of value in the business.

False

True

10)Equipment is listed as an asset because it is used in a relatively long period of time,

False

True

11)Accounts receivable is considered as asset.

False

True

12)In the fundamental accounting equation, assets are added to liabilities.

True

False

13)The first step in analyzing a transaction is to determine what accounts are involved.

False

True

14)Assets are things of value owned by a business entity.

False

True

15) Liabilities represent amounts owed to creditors.

True

False

16) Which of the following is true?

A)A debit will decrease an expense account.

B)A debit will increase a liability account.

C)A credit will increase a revenue account.

D)A credit will increase an asset account.

17) Which of the following accounts is increased by a credit?

A)Advertising expense

B)Withdrawals

C)Accounts Receivable

D)Sales

18) Which of the following account has a normal debit balance?

A)Consulting Revenues

B)Notes Payable

C)Accounts Payable

D)Advertising Expense

19) What are the increases in resources that a firm earns by providing goods and services to its customers?

a)Liabilities

B)Assets

C)Income

d)Expenses

20)A T-account consists pf how many parts?

A)Two

B)One

c)Three

D)Four

21) Which of the following is true?

A)The debit is on the right side of an expense account.

b)The debit in on the right side of an asset account.

C)The credit is on the left side of a liability account.

D)The debit in on the left side of an asset account.

22)If assets increase by P100,000.00 and liabilities decrease by P30,000, owner's equity must

A)increase by P130,000.00.

B)decrease by P130,000.00.

C)decrease by P70,000.00.

D)remain unchanged.

23). If assets total P700,000.00 and liabilities total P400,000.00, how much are the net assets?

A)P700,000.00

B)P300,000.00

C)P400,000.00

D)P1,100,000.00

24)In applying the rules of debits and credits, which of the following statements is correct?

a)Liability, revenue, and capital accounts are debited for increases.

B)The word "debit" means to increase, and the word "credit" means to decrease.

C)Assets, expenses, and withdrawals are debited for increases.

D)Assets, Expenses, and Capital accounts are debited for increases.

25) Suppose a debtor repays his debt of P50,000.00 by transferring the money into the bank account of the business. The effect of the transaction to the accounting would be:

A)Assets and liabilities remain unchanged.

b)Both assets and liabilities decrease by P50,000.00.

C)Both assets and liabilities increase by P50,000.00.

D)Only assets decrease by P50,000.00.

26) Which of the following statement is correct under the double-entry system?

A)The change in asset must be compensated by a change in liability.

B)An increase in asset must be compensated by a decrease in asset.

C)Asset amount must be equal to the liability amount.

D)The change in a debit-side entry must be compensated by a change in credit-side entry.

27) Which of the following transactions affect the total value of the liabilities of a firm?

a)interest received from bank

B)goods sold to customers on credit

C)goods purchased from suppliers on cash

D)office equipment bought on credit

28)Which of the following is not an example of additional capital?

A)A sole proprietor transfers P1,000.00 from his own bank account to the entity's account.

B)A sole proprietor uses his own building as an office without receiving any rent.

C)A sole proprietor purchases a car through the bank account of the entity.

D)A sole proprietor brings a second-hand computer from his home to the office.

29) The entity purchases P10,000.00 fixtures for entity use, on credit. Which of the following will be affected? ( you can choose more than 1 answerss)

A)Capital

B)Liabilities

C)Assets

30) On April 1, 2021, Jerome Marquez sets up a firm and brings in office equipment of P50,000.00 and inventory of P30,000.00 to the business. Jerome Marquez puts P80,000.00 into the firms cash box and P100,000.00 into the firm's bank account. Meanwhile, the firm lends P50,000.00 cash to SJ Associate and borrows P200,000.00 from the bank to acquire a piece of premises. What is the amount of the firms capital account on April 1, 2021?

A)P460,000.00

B)P510,000.00

C)P210,000.00

D)P260,000.00

31) Which of the following is not an example of non-current assets?

a)A second-hand computer used in the office.

B)A van that is purchased through installments the total amounts of which is not fully settled.

C)P40,000.00 cash.

D)A building bought by the entity.

32) Which of the following is correct if the sole proprietor of an entity borrows P30,000.00 in the name of the entity and deposits it into the entity's bank account?

A)The liabilities of the entity decreases.

B)The assets of the entity increases.

C)The drawings of the entity increase.

D)The capital of the entity increases.

33). Which of the following statements are correct?(you can choose more than 1 answers)

A)Assets = Capital + Liabilities

B)The total amounts of assets can be greater than the sum of the liabilities and capital.

C)The total amounts of liabilities can be greater than the total amounts of capital.

34) Under the double entry system, what is the value of X if assets, current liabilities, non-current liabilities, and Capital are X, P40,000.00, P60,000.00, and P350,000.00, respectively?

a)P350,000.00

B)P370,000.00

c)P250,000.00

D)P450,000.00

35). Which of the following accounting equations are correct?

a)Assets - Liabilities = Capital + Revenue + Expenses

B)Non-current Assets + Current Assets = Non-current Liabilities - Current Liabilities + Capital

C)Capital + Non-current Liabilities = Non-current assets + Working capital

36) Which of the following statements regarding the double entry system is incorrect?(you can choose more than 1 answer)

A)A decrease in non-current asset means a credit entry in asset accounts.

B)A decrease in liability means a debit entry in liabilities account.

C)An increase in asset means a credit entry in asset account.

D)An increase in drawings means a debit entry in capital accounts.