8. The wear and tear due to frequent use of the asset and passage of time is an example of * a. physical depreciation b. functional depreciation c. accumulated depreciation d. depreciation expense 9. The anticipated loss that the business may incur arising from doubtful account is known as * a. uncollectible account b. realization loss c. estimated uncollectible accounts d. depreciation 10. The difference between Accounts Receivable and the related Estimated Uncollectible Accounts is known as * a. net book value b. net realizable value c. net gain d. net of allowance method 11. When an Accumulated Depreciation account is overstated because of an overstatement in depreciation expense by same amount, how will the balance sheet be affected by this error (Asset/ Liability/ Owner's Equity)?* a. understated no effect overstated b. overstated no effect understated c. understated no effect understated d. overstated no effect overstated 12. A Machine costing P350,000 was purchased on account with a given term. If upon payment, a 20% discount was availed, the credit entry will include * a. cash of P280,000 and machine of P70,000 b. cash of P280,000 and purchase discount of P70,000 c. accounts payable of P280,000 and machine of P70,000 d. machine of P280,000 and purchase discount of P70,000 13. Mr. John Wick has reported profit of P60,000 at the end of the year but before the following omissions were discovered: 1) Unpaid salaries of P5,000 was not booked-up; 2) Depreciation was not recorded, P4,000; 3) Expired portion of rental paid in advance in the amount of P2,000 was not taken up. Incorporating the would be adjustment on the above omission, how much is the corrected profit? * a. P49,000 b. P53,000 C. P57,000 d. P71,00014. If advanced collection for services to be rendered in the later date of P2,500 was erroneously recorded at P250, the adjusting entry required to the book of Walter Co. would require a credit to * a. Unearned Service Income of P2,250 b. Service income of P 2,250 c. Accrued Service Income of P2,250 d. answer not given 15. Of the P5,300 Supplies Inventory of Mccoy Enterprises, P1,250 cost of supplies were on hand. If Asset Account was debited upon purchase, the adjusting entry would be * a. Debit Supplies Used, P1,250 Credit Supplies Inventory, P1,250 b. Debit Supplies Used, P4,050 Credit Supplies Inventory, P4,050 c. Debit Supplies Inventory, P1,250 Credit Supplies Used, P1,250 d. Debit Supplies Inventory, P4,050 Credit Supplies Used, P4,050 16. Assuming that expense account was debited upon purchase (item#24), the adjusting entry would be * a. Debit Supplies Inventory, P4,050 Credit Supplies Used, P4,050 b. Debit Supplies Inventory, P1,250 Credit Supplies Used, P1,250 c. Debit Supplies Used, P4,050 Credit Supplies Inventory, P4,050 d. Debit Supplies Used, P1,250 Credit Supplies Inventory, P1,250 17. MC Chicken was engaged in building rental business in Golabits City. On August 28, 2021, she received P144,000 for a 3-year advance rental payment to commence on September 1, 2021. If Unearned Rental Income account was credited upon receipt of cash, the adjusting entry on Dec. 31, 2021 would be * a. Debit Unearned Rental Income, P16,000 Credit Rental Income, P16,000 b. Debit Unearned Rental Income, P128,000 Credit Rental Income, P128,000 c. Debit Rental Income, P16,000 Credit Unearned Rental Income, P16,000 d. Debit Rental Income, P128,000 Credit Unearned Rental Income, P128,000 18. Assuming that Rental Income account was credited upon receipt of cash (item#23), the adjusting entry on Dec. 31, 20A would be * a. Debit Rental Income, P16,000 Credit Unearned Rental Income, P16,000 b. Debit Rental Income, P128,000 Credit Unearned Rental Income, P128,000 c. Debit Unearned Rental Income, P128,000 Credit Rental Income, P128,000 d. Debit Unearned Rental Income, P16,000 Credit Rental Income, P16,000 19. If salaries of daily paid employees of NCCC for the period from Dec 27, 2020 to Jan, 5, 2021 at P337 per day were unpaid as of Dec 31, 2021 cut-off date, the adjusting entry would require a credit to * a. Accrued Salaries Expense, P1,685 b. Accrued Salaries Expense, P3,370 c. Salaries Expense, P1,685 d. Salaries Expense, P3,370Multiple Choice. Select the letter of the correct answer. 1. An accrued expense adjustments would require a * a. debit to liability and credit to expense b. debit to expense and credit to liability c. debit to asset and credit to liability d. debit to expense and credit to owner's equity 2. An accrued income adjustment would require a * a. debit to liability and credit to expense b. debit to asset and credit to income c. debit to income and credit to liability d. debit to income and credit asset 3. Under expense method of recording prepayment, the account credited is always * a. accounts receivable b. expense account c. cash d. accounts payable 4. Which of the following is reported in a Balance Sheet? * a. estimated uncollectible account b. provision for depreciation C. expired portion of prepayment d. earned portion of pre-collected income 5. If no adjusting entry is prepared on prepayment of expense using the nominal approach, expense account will* a. be understated b. be overstated c. not affected d. none of the above 6. If no adjusting entry is prepared on pre-collection of income using the real approach, the income account will * a. not be affected b. be overstated c. be understated d. none of these 7. Which of the following is not needed in computing depreciation under straight-line method? * a. cost of the asset b. estimated life of the asset c. scrap value of the asset d. book value of the asset