please help me with these questions. I have answered these on my own but please answer for
Question:
please help me with these questions. I have answered these on my own but please answer for the purpose of verifying my answers
I.TRUE OR FALSE.UnderlineTrue if the statement is correct and False if wrong. (15 points)
1. A decrease in a liability is recorded by a debit.
TrueFalse
2. A credit entry to an expenses account will increase it.
TrueFalse
3. A trial balance may balance but may not be correct.
TrueFalse
4. A decrease in owner's equity is recorded with a credit.
TrueFalse
5. An increase in an asset is recorded by a debit.
TrueFalse
6. An increase in revenue is recorded with a credit.
TrueFalse
7. Normally, income accounts have debit balances.
TrueFalse
8. A basic storage unit for accounting data is the account.
TrueFalse
9. Entering transactions into the journal is called posting.
TrueFalse
10. The normal balance of any account refers to the side of the account- debited or credit-where decreases are recorded.
TrueFalse
11. When a withdrawal is made, the owner's Withdrawal account is debited and cash is credited.
TrueFalse
12. When payment is received for services not yet rendered, no entry is recorded until that service has been rendered.
TrueFalse
13. A journal may include debits to more than one account and credits to more than one account, but the total of the debits must always equal the total of the credits.
TrueFalse
14. The accounting cycle begins with the recording of the transactions and ends with the preparation of the financial statement.
TrueFalse
15. Every business transaction affects a minimum of two accounts.
TrueFalse
II.MULTIPLE CHOICE.Choose the best answer. Encircle the letter of your choice. (25 points)
1. The primary function of an account in the accounting system is to
a. accumulated accounting information.
b. identify the type of organization.
c. store accounting transaction until they are classified.
d. determine at what point a transaction should be recorded.
2. When an entity pays for goods or services before actual receipt, the payment should be recorded as a decrease in cash and an increase in
a. an owner's equity account.
b. an expense.
c. an asset.
d. an liability.
3. What function do general ledgers serve in the accounting process?
a. reporting.
b. recording.
c. classifying.
d. summarizing.
4. The first step in the accounting cycle is to
a. post journal entries to general ledger accounts.
b. analyse transaction from source documents
c. adjust the general ledger accounts.
d. recorded transactions in a journal.
5. A person who wants to determine the balance of a particular account should refer to the
a. book of original entry.
b. source documents.
c. chart of accounts.
d. ledger.
6. Which of the following does not directly or indirectly affect the owner's capital account?
a. earning of revenues.
b. incurring of expenses.
c. withdrawals by the owner.
d. paying an accounts payable.
7. A withdrawal will directly or indirectly reduce which of the following accounts?
a.Owner's equity.
b.Owner's Withdrawal.
c.Revenues.
d.Accounts Payable.
8. When a customer buys services on credit, the contract is regarded as complete when
a.The bill is presented.
b.The services are rendered.
c.The cash payment is received.
d.The date specified in the contract is at hand.
e.increase total assets and decrease owner's equity.
9. A chart of accounts is a/an
a.journal.
b.Flowchart of all transactions.
c.Accounting procedure manual.
d.List of names of all account titles.
10. A sale of merchandise on credit represents an exchange of goods for a promise of future payment. This is promise is
a.An increase in accounts payable.
b.An assets.
c.A liability.
d.A revenue.
11. A journal entry that contain more than two account is called
a.An adjusting entry.
b.An erroneous journal entry.
c.A compound entry.
d.A posted entry.
12. Which of the following has the primary responsibility for the preparation and reliability of information in the financial statements?
a.External auditor.
b.Management.
c.Internal audit staff.
d.Internal management accountant
13. When a payment is made to a supplier for goods previously purchased on account, the debit is to
a.An expense account.
b.An asset account.
c.A liability account.
d.A capital account.
14.Payment of insurance premium in advance gives rise to
a.Accrued income.
b.Accrued expenses.
c.An unearned income.
d.Prepaid expense.
15. What function do accounting journals serve in the accounting process?
a.Recording.
b.Reporting.
c.Classifying.
d.Summarizing.
16. A simple journal entry
a.Is a memorandum entry.
b.Consist of one debit and two credit.
c.Consist of one debit and one credit.
d.Consist of two debit and two credit.
17. When cash is debited, a typical credit is to
a. expenses.
b. withdrawals.
c. accounts payable.
d. accounts receivable.
18. Office supplies are expensed
a. when they are paid for.
b. when they are purchased.
c. at no time, since they are assets.
d.when they are consumed or used up.
19. The withdrawal account of a sole proprietorship is debited when
a. an expense is paid.
b. a liability is paid.
c. the owner invests cash.
d. the owner withdraws cash.
III.Rules of Debit andCredit(15points)
The account type determines how increases or decreases in it are recorded. Determine whether the word debit and credit is appropriate for each statement.
1.Asset accounts normally have ______________balances. An increase in asset is recorded a __________while a decrease in assets is recorded as a_____________.
2.Liability accounts normally have _______ balances. An increase in liability is recorded by a __________ and a decrease is entered as a _____________.
3.The owner's capital account normally has a __________ balance. These account increase on the ___________side and decrease on the ______side.
4.Income accounts normally have _________balances. These accounts increase on the__________side and decrease on the ________side.
5.Expense accounts normally have _________balances. These accounts increase on the ________ side and decrease on the _________ side.
IV.JournalEntries.(45points)
Leonila Generales won a concession to rent out bicycle in the Quezon Circle during the summer. During the month of April, Generales completed the following transaction for her bicycle rental business:
Apr. 2Began business by placing P120, 000 in a business checking account.
3Purchased supplies on account for P1, 500.
4Purchased ten bicycles for P 25, 000, paying P12, 000 down and agreed to pay the balance in thirty days.
5Paid P 29, 000 in cash for a furnished container to store the bicycles and use for otheroperations.
6Received P 4,700 in cash for rentals during the first week of operation.
8Paid P 4, 000 in cash for shipping and installation costs (considered an addition to the cost of the container) to place the container at the park entrance.
9Hired a part- time assistant to help on weekends.
10Paid a maintenance person P 750 to clean the grounds.
13Received P 5, 000 in cash for rentals during the second week of operation.
16Paid the assistant P 480 for a weekend's work.
17Paid for the supplies purchased on april 3.
18Paid a P 550 repair bill on bicycles.
20Received P 5, 500 in cash for rentals during the third week of operation.
22Paid the assistant P 480 for a weekend's work.
23Billed a company P 1,100 for bicycle rentals for employees' outing.
25Paid the P 3, 000 fees for April to the Park Administration for the right to the bicycle concession.
27Received P 4, 100 in cash for rentals during the week.
29Paid the assistant P 480 for a weekend's work.
30Transferred P 5, 000 to personal checking account.
Required. Journalizetheabovetransactions.
Write true if the statement is true and write false if the statement is false and correct the underlined word that make it incorrect.
Owner's equityis the excess of an entity's capital over its liabilities.
Accounts that appear on the left side of the accounting equation usually havecreditbalances.
A cash acquisition of a laptop computer will causetotal assets todecrease.
Liabilitiesare resources controlled by the enterprise as a result of past events and from which future economic benefits are expected to flow to the enterprise.
When withdrawal is made, the owner's withdrawal account isdebitedand cash is credited.
Acquisition of office supplies for future use are classified asexpenses.
Every business transaction affects a minimum oftwo accounts.
Ajournal entrymay include debits to more than one account and credits to more than account, but the total of the debits must always equal to the total of the credits.
When the owner makes an investment, the owner's capital isdebited.
Entering transaction into the journal is calledposting.
Anincreasein an asset is recorded by a debit.
When payment is received for services not yet rendered,assetis recognized to record the payment received.
The normal balance of any account refers to the side of the account-debit or credit- wheredecreasesare recorded.
Apartnershipcannot have more than one owner.
Income is increases in economic benefits during the accounting period thatdecreasesequity which may have resulted from the sale of goods or rendering of services by the business.
_____
The acquisition of an asset for cash
a.Increases assets and liabilities
b.Increases assets and owner's equity
c.Decreases assets and increases liabilities
d.Leaves total assets unchanged
_______
2.
Which of the following is an asset of a firm?
a.The capital of the firm
b.Computer equipment owned by the firm
c.An overdrawn balance of the firm's bank account
d.Money owed by the firm to one of its suppliers in respect of goods purchased on credit
_______
3.
Which is false concerning the rules of debit and credit
a.The normal balance of any account appears on the side for recording purposes
b.The word "debit" means to increase and the word credit means to decrease
c.The left side of an account is always the debit side and the right side is always the credit side.
d.Increases in assets and expenses are debit entries, and increase the liabilities, equity and revenue are credit entries.
_______
4.
Revenue should be recorded when
a.They are earned
b.A contract is signed
c.Work has begun on a job
d.Cash received from the customer
_______
5.
Which of the following is correct
a.Assets+Capital= Liabilities
b.Liabilities-Capital= Assets
c.Capital =Assets+ Liabilities
d.Capital=Assets-Liabilites
_______
6.
Amounts owed by a business are referred to as
a.Assets
b.Capital
c.Liabilities
d.Expenses
_______
7.
A business received P6,000 cash from charge customer to apply on account. The effect of the transaction is
a.An increase in an asset and a decrease in a liability
b.An increase in an asset and a decrease in an asset
c.An increase in an asset and a decrease in a capital
d.An increase in an asset and a increase in a liability
_______
8.
The components of the financial position equation are
a.Assets, income and owner's equity
b.Assets, liabilities and owner's equity
c.Income, expenses and profit
d.Investments, withdrawal and profit
_______
9.
Decrease in asset may
a.Decrease another asset
b.Decrease liabilities
c.Increase liabilities
d.Increase capital
_______
10.
Expenses can be defined
a.Increase in owner's equity
b.Decrease in owner's equity
c.Inflows of assets from delivering or producing goods or rendering services
d.Decreases in economic benefits in the form of outflows or depletions of assets or incurrence of liabilities that result in decrease in equity
_______
11.
A revenue
a.Leaves total assets unchanged
b.Increases assets and liabilities
c.Increases assets and owner's equity
d.Increases assets and decreases owner's equity
_______
12.
Acquisition of an asset on credit
a.Leaves total assets unchanged
b.Increases assets and liabilities
c.Increases assets and owner's equity
d.Decreases assets and decreases owner's equity
_______
13.
All of the following affect the owner's equity account except
a.Withdrawal by the owner
b.Additional investments
c.Payment of a liability
d.Original investments
_______
14.
A credit entry decreases the balance of
a.Owner's equity
b.Liabilities
c.Income
d.Assets
_______
15.
When an entity pays employees for their services, the effect is an increase in
a.Assets
b.Income
c.Liabilities
d.Expenses
Problem III (10 Points)
In each of the following situations, determine the amount of the missing element of performance.
___________________1. A small accountancy firm has income of P325,000 and expenses of P237,000.
___________________2. An advertising agency has expenses of P163,000 and profit of P42,000.
___________________3. A computer-training outfit has expenses of P153,000 and loss of P27,500.
___________________4. A medical practitioner has income of P737,000 and profit of P168,000.
___________________5. An environment consultant has income of P362,000 and loss of P20,000.
Expert Answer:
