Quizzers - - - - - -

1-1
Identifying Business Transactions

Instruction: Under the “business entity concept” which of the following are considered as business transactions and
events. Place a “check mark” on the space provided:
__________ 1. salaries paid to employees.
__________ 2. gas & oil expense for delivery equipment.
__________ 3. tuition fees for children.
__________ 4. bought rices and fish for family consumption.
__________ 5. repair of a car owned by business.
__________ 6. a store building was razed by fire.
__________ 7. salaries paid to house helpers.
__________ 8. incurred inventory loss due to theft and robbery.
__________ 9. cash withdrawn from the business.
__________ 10. salaries paid to a company driver.

1-2
Identifying the Nature of Business Organization

Instruction: Enumerated below are the list of business organizations. Identify and classify each based on the nature of
business whether it is a Service Concern, Trading or Merchandising, Manufacturing, Agri-Business and Hybrid Business.

1. Hotel Industry __________________________ 11. Auto Repair Shop __________________________

2. Shopping Malls _________________________
3. Banana Plantation _______________________
4. Restaurants ____________________________
5. Schools _______________________________
6. Bag Factory ____________________________
7. Bookstore _____________________________
8. Cigarette Factory ________________________
9. Vegetable Stalls _________________________
10. Pineapple Plantation _____________________
12. Sari-Sari Store _____________________________
13. Key Duplicator _____________________________
14. Shipping Lines _____________________________
15. Bus Company _____________________________
16. Beauty Parlor ______________________________
17. Airline Business ____________________________
18. Gasoline Station ____________________________
19. Barber Shop _______________________________
20. Internet Cafe ______________________________
 1-3
Classifying Accounting Elements

Instruction: Classify the following account tittles as to Assets, Liabilities and Owner’s Equity (Income, Cost and
Expense). Use “check mark”.
ASSET LIABILITY OWNER’S
EQUITY
Sample (a) Rent Expense /
1. Cash In Bank
2. Barroga, Capital
3. Prepaid Expenses
4. Accounts Receivable
5. Accounts Payable
6. Unused Office Supplies
7. Taxes And Licenses
8. Uncollectible Accounts
9. Barroga, Drawing
10. Notes Payable
11. Repairs And Maintenance
12. Accrued Income
13. Petty Cash Fund
14. Insurance Expense
15. Purchases
16. Cash On Hand
17. Unearned Income
18. Accumulated Depreciation
19. Estimated Uncollectible Accounts
20. Sales
21. Merchandise Inventory, Beginning
22. Freight Out
23. Sales Returns And Allowances
24. Merchandise Inevntory, End
25. Freight In

1-4
Filling the blanks

Instruction: On the space provided, indicate the appropriate account title for the following:

1. ___________________ an account title to describe money either paper or in coins and money substitutes like checks,
postal money orders, bank drafts, etc.

2. ___________________ an account title for financial obligation of an enterprise that constitutes oral or verbal promise to
pay.
3. ___________________ are defined as short-term, highly liquid instruments that are readily convertible to cash and they
present insignificant risk of changes in value because of changes in interest rates.

4. ___________________ includes computers, typewriters, adding machines and the like that are used in the store.

5. ___________________ includes chairs, tables, counters, display cases and the like that are used in the store.

6. ___________________ account title for the income received from rendering of professional or non-professional service
to clients or customers.

7. ___________________ an account title for the cost of commodities or goods that are acquired by the business under
periodic inventory system.

8. ___________________ account title for the income received from selling of good or commodities to customers.

9. ___________________ an account title for the transportation expense incurred in buying goods or commodities.

10. __________________ an account title for the transportation expense incurred in selling the merchandise.

11. __________________ is a reduction from sales account due to early collection of a customer’s account or within the
discount period.

12. __________________ refers to the merchandise returned by a customer for not conforming with the specific order.

13. __________________ refers to the merchandise returned by a supplier due to not conforming with order.

14. __________________ the anticipated loss that the business may incur arising from worhtless account.

15. __________________ represents the allocated portion of property and equipment over the number of years.

16. __________________ an account title for cash that is received but services has to be rendered yet.

17. __________________ any amount paid as expense which is not significant enough to warrant a particular
classification.

18. __________________ a financial obligation of the enterprise which requires a fixed or tangible property to be pledged
as a collateral to ensure payment.

19. __________________ these include goodwill, patents, copyrights, licenses, franchises, trademarks, brand names,
secret processes, etc.

20. __________________ the account title for light and water bills.

1-5

Multiple Choice Type

1. The accounting assumption that gives the business a continuous life of existence -
 A. Stable Monetary Unit C. Going-concern
B. Periodicity D. Accrual

2. It is an accounting assumption that because of the continuity of business operation, its life is divided into equal periods
wherein results of operation and financial condition of the business can be reported periodically -
A. Time-period C. Monetary convention
B. Continuity D. Accounting entity

3. The business is considered as an entity that is separate and distinct from the owner -
A. Accounting entity C. Separate entity
B. Business entity D. all of these

4. Which of the following items is not an underlying assumption in financial accounting?

A. Going-concern C. Matching
B. Accounting entity D. Time-period

5. A person who borrows money from a bank to start with a business and treats his borrowings as a capital rather than a
liability is under what concept?
A. Business entity concept C. Time-period concept
B. Going concern concept D. Proprietary Theory

6. Which of the following assumptions that requires distinction between business transactions and personal affairs of the
owners?
A. Accounting entity C. Time-period
B. Continuity D. Going-concern

7. The accounting period will begin on the first day of any month of the year except January and ends on the last day of
the month completing the one year period -
A. Calendar C. Natural business year
B. Fiscal D. none of the above

8. A statement that shows the “financial condition” of the business as of a particular date -
A. Balance Sheet C. Statement of Changes in Owner’s Equity
B. Profit and Loss Statement D. Statement of Cash Flows

9. A statement that shows the “results of operations” of the business for a given period of time -
A. Balance Sheet C. Statement of Changes in Owner’s Equity
B. Profit and Loss Statement D. Statement of Cash Flows

10. It represents the residual interest in the assets of the business after deducting its liabilities -
A. Capital ` C. Owner’s Equity
B. Net Worth D. all of the above

11. It is the shortest accounting period wherein financial statements are reported to various users -
A. Semi-annually C. Quarterly
B. Annually D. Monthly

12. What represents the claim of the creditor over the assets of the business?
A. Liability C. Assets
B. Owner’s Equity D. all of the above

13. Accounting is the bridge of communication between the owner of the business and various users through -
A. Financial statements C. Balance Sheet
B. Income statement D. Statement of Owner’s Equity

14. A company that is engaged in both selling of merchandise and offering services to customers is called -
A. Service company C. Agricultural company
B. Merchandising D. Hybrid company

15. Which of the following account titles that fits the description of income earned but not yet received?
A. Accrued expense C. Unearned income
B. Unearned expense D. Accrued income
16. It is an asset-offset account of accounts receivable.
A. Estimated uncollectible account C. Doubtful account
B. Uncollectible accounts D. Worthless account

17. The assets that are classified as “Property and Equipment’ are subject to depreciation except -
A. Building C. Furniture
B. Equipment D. Land

18. The powers of the corporation are vested by a governing body called maximum number of years that a corporation
may exist -
A. 25 years C. 100 years
B. 50 years D. no limit

19. The powers of the corporation are vested by a governing body called -
A. Board of Directors C. Board of Jurors
B. Board of Corporation D. President

20. The legal process used to form a corporate entity or company.

A. Corporation C. Incorporation
B. Security and Exchange Commission D. Bureau of Internal Revenue

Exercises and Problems - - - - - -

1-6

Determination of Unknown Accounting Values

CASE 1 CASE 2 CASE 3

Assets P150,000 P250,000 ________

Liabilities ________ 100,000 120,000

Owner’s Equity P60,000 P ? P300,000