Basic steps in the recording process include all of the following except:

a. Transfer the journal information immediately to the company annual report

b. Analyze each transaction for the effect on the accounting elements

c. Enter the transaction information in a journal

d. All of the choices are correct regarding the basic steps in the recording process

Which statement is true regarding debits and credits?

a. In the income statement, debits are used to increase account balances, whereas in the statement of financial position, credits are used to increase account balances

b. Before adjustments, debits will not equal credits in the trial balance

c. The rules for debit and credit and the normal balance of capital are the same as for liability

d. In the income statement, revenue is increased by a debit whereas in the statement of financial position, capital account is increased by a credit

Which of the following is not a possible combination of a journal entry?

a. Increase in asset and increase in liability

b. Decrease in equity and increase in liability

c. Decrease in liability and decrease in asset

d. Increase in asset and decrease in capital

A subsidiary ledger is

a. A listing of the components of account balances

b. A backup system to protect against record destruction

c. A listing of accounts before closing entries

d. A list of accounts of a subsidiary

Which statement regarding a trial balance is incorrect?

a. A trial balance is a test of the equality of the debit and credit balances in the ledger

b. A trial balance is a list of all the open accounts in the ledger with their balances

c. A trial balance proves that no errors of any kind have been made in the accounts during the accounting period

d. A trial balance helps to localize errors within an identifiable time period

Numerous errors may exist even though the trial balance columns agree. Which is not one of these errors?

a. A transaction is not journalized

b. Transposition error

c. A journal entry is posted twice

d. A transaction is recorded and posted at an incorrect amount

Who is the father of accounting and bookkeeping?

a. Saint Matthew, the Tax collector

b. Luca Pacioli

c. Leonardo da Vinci

d. Noe Quinanola

The definition of accounting underscores the following concepts, except

a. Accounting is considered a service activity

b. Accounting provides information that is financial in character

c. Accounting vouches the attainability of projection

d. Accounting provides information for decision making

The primary responsibility for the preparation of the financial statements is reposed in

a. Management of the entity

b. Internal auditor

c. External auditor

d. Controller

Which is included in a complete set of financial statements?

a. A statement of compliance with local legislation

b. A statement of changes in equity

c. Value added statement

d. Annual report

Which of the following is not a reason for sales discounts to be offered to the customers?

a. Improve the seller's liquidity by turning the accounts receivable into cash

b. Encourage earlier settlement of debts by the customers

c. Increase the amount to be paid by the customers

d. Reduce the level of bad debts

When the seller pays the common carrier the delivery cost and the terms of the sale is FOB Origin, the seller records the payment of the transportation costs by debiting?

a. Accounts Payable

b. Accounts Receivable

c. Sales

d. Freight-in

The cost of goods available for sale during the year depends on the amounts of

a. Beginning merchandise inventory and cost of goods sold

b. Beginning merchandise inventory and cost of goods purchased

c. Beginning merchandise inventory, cost of goods sold, and ending merchandise inventory

d. Beginning merchandise inventory, net purchases, and ending merchandise inventory

A special journal contained columns for cash, purchase discounts, and accounts payable. This journal is

a. A cash disbursements journal

b. A cash receipts journal

c. A purchases journal

d. A sales journal

Which of the following transactions affects the total value of liabilities of a firm

a. Goods purchased from suppliers by cash

b. Interest received from bank

c. Office equipment bought on credit

d. Goods sold to customers on credit

A statement of financial position lists down

a. The types and amounts of the revenues and expenses of a business

b. Only the information about what happened to equity during a time period

c. The types and amounts of assets, liabilities, and equity of a business as of a specified date

d. The inflows and outflows of cash during the period.

e. The assets and liabilities of a firm but not the owner's equity because it is presented already in the statement of changes in equity

Assets created by selling goods and services on credit are

a. Accounts payable

b. Accounts receivable

c. Liabilities

d. Expenses

e. Equity

How would the accounting equation of Sky Company be affected by the billing of a client for P10,000 of consulting work completed?

a. +P10,000 Accounts receivable, -P10,000 Accounts payable

b. +P10,000 Accounts receivable, +P10,000 Accounts payable

c. +P10,000 Accounts receivable, +P10,000 Cash

d. +P10,000 Accounts receivable, +P10,000 Revenue

e. +P10,000 Accounts receivable, -P10,000 Revenue

While in the process of posting from the journal to the ledger a company failed to post a P500 debit to the Office Supplies account. The effect of this error will be that:

a. The trial balance will not balance

b. The error will overstate the debits listed in the journal

c. The total debits in the trial balance will be larger than the total credits

d. The error will overstate the credits listed in the journal

The Post. Ref. column in the general journal is used to show that an account has been posted to the ledger when which of the following is placed in it?

a. Journal page number

b. Account number

c. Journal voucher number

d. Check mark

Umali Coffee Shop, in an effort to streamline its accounting system, has decided to utilize a Cash Receipts Journal in its operation. If the company is to record the cash sale of food for P18 which is the correct entry?

a. Cash Cr. P18, Food Revenue Dr. P18

b. Cash Dr. P18, Food Revenue Dr. P18

c. Cash Dr. P18, Food Revenue Cr. P18

d. Cash Cr. P18, Food Revenue Cr. P18

During the year, Sally's Pet Shop's inventory account balance decreased by P29,000. If the company's cost of goods sold for the year was P245,000, purchases must have been:

a. P187,000

b. P216,000

c. P274,000

d. Cannot be determined with the given data

Eli's Electronic Repair Shop started the year with total assets of P300,000 and total liabilities of P200,000. During the year, the business recorded P400,000 in electronic repair revenues, P300,000 in expenses, and Eli withdrew P50,000. Eli's Owner's Capital balance changed by what amount from the beginning of the year to the end of the year?

a. P100,000

b. P50,000

c. P200,000

d. P250,000

On June 1, 2020, Barcelona Inc. reported a cash balance of P11,000. During June, the Cash General Ledger shows that the firm made deposits of P3,000 and made disbursements totaling P9,000. What is the cash balance as of June 30, 2020?

a. P5,000 debit balance

b. P14,000 debit balance

c. P5,000 credit balance

d. P4,000 credit balance

Under the double entry system, what is the value of X if assets, current liabilities, noncurrent liabilities and capita are X, P40,000, P60,000, and P350,000, respectively?

a. P250,000

b. P350,000

c. P370,000

d. P450,000

Which of the following combinations of trial balance totals suggest the presence of either a transposition error or a number slide (transplacement)?

a. P65,470 debit and P68,170 credit

b. P33,220 debit and P35,420 credit

c. P25,670 debit and P26,670 credit

d. P14,517 debit and P15,477 credit