Mid-Term Exam in Accounting

Test I. Multiple Choice

1. In accounting, the resources of a business organization are called
a. Proprietorship b. creditors equity c. assets d. owners equity
2. The purchase on accounting will
a. Increase an asset and decrease another asset
b. Increase an asset and increase proprietorship
c. Decrease an asset and decrease a liability
d. Increase an asset and increase a liability
3. The payments of business debits will
a. Increase a liability c. increase an asset
b. Decrease liability d. increase proprietorship
4. Investment of additional cash in the business by the owner will
a. Decrease an asset and decrease a liability
b. Increase an asset and increase owners equity
c. Increase an asset and increase a liability
d. Decrease an asset and increase another asset
5. The receipt of cash from customer for service rendered will
a. Increase an asset and increase proprietorship
b. Increase an asset and increase a liability
c. Increase liability and decrease another liability
d. Decrease an asset and decrease a liability
6. If a liability has increased by exactly the current assets have increased, the owners equity will
have
a. Remained the same c. become zero
b. Increased d. decreased
7. The payment of cash to the supplier of service previously accounted for as purchase on account will
a. Increase in asset and decreased in another asset
b. Increased in asset, increase proprietorship
c. Decrease in asset, decrease proprietorship
d. Decrease in asset, decrease in liability
8. The receipt of cash on account from customer will
a. Increase in asset, decrease another asset
b. Increase in asset, decrease in liability
c. Increase in asset, increase in proprietorship
d. Increase a liability, increase asset
9. A financial statement which has a dateline similar to For the Month Ended September 30, 20xx is
the
a. Income statement c. statement of accounts receivable
b. Balance sheet d. statement of asset
10. Lacson Company collected Php 850 of its Php 5,000 Accounts receivable. How is the balanced sheet
affected?
a. There is no change in asset, liability, or owners equity
b. Cash increased by Php 850 and owners equity increase by Php 850 because revenue are
received
c. Accounts receivable decrease by Php 850 and owners equity decrease by Php 850
d. None of the above
 11. Andrea Si, in opening Si Law Office, invested cash of Php 20,000.
a. Debit cash, credit law office c. Credit cash, debit liability
b. Debit cash, credit capital d. Debit cash, credit liability
12. Purchased in cash office supplies with Php 5,000.00
a. Debit cash, credit office supplies c. Debit office supplies, credit cash
b. Debit cash, credit proprietorship d. Debit cash, credit account payable
13. Purchased on account office equipment costing Php 20,000.00
a. Debit cash, credit proprietorship c. Debit office equipment, credit cash
b. Debit office equipment, credit accounts payable d. Debit cash, credit account payable
14. Received cash of Php 2,800 from clients for legal service rendered
a. Debit cash, credit Si, Capital c. Debit cash, credit accounts receivable
b. Debit cash, credit legal fee d. Debit cash, credit accounts payable
15. Paid Php 1,500 for wages of clerk
a. Debit cash, credit Si, Capital c. Debit Salaries and wages, credit cash
b. Debit cash, credit salaries and wages d. Debit Salaries and wages, credit Si Capital
16. Withdraw Php 1,000 for personal use
a. Debit cash, credit Si, Personal c. Debit Si, Personal, credit cash
b. Debit cash, credit Si, Personal d. Debit Si, Capital, credit cash
17. Rendered legal service to clients on credit Php 5,000
a. Debit cash, credit Si, Capital c. Debit Si, Capital, credit cash
b. Debit accounts receivable d. Debit Si, Personal, credit cash
18. Paid the utility bill, Php 1,000.00
a. Debit cash, credit Si, Capital c. Debit accounts receivable, credit cash
b. Debit cash, credit Accounts Receivable d. Debit utilities expense, credit cash
19. Paid Php 15,000.00 for rent of office space for six months
a. Debit cash, credit account payable c. Debit Prepaid Rent, credit Si, Capital
b. Debit Prepaid Rent, credit cash d. Debit Prepaid Rent, credit Rent Expense
20. Purchased office furniture and equipment costing Php 30,000 paying cash of Php 6,000 and issuing
notes for the balance.
a. Debit office furniture and equipment, credit cash and credit notes payable
b. Debit office furniture and equipment, credit cash
c. Debit office furniture and equipment and credit notes payable
d. Debit cash, office furniture and equipment and credit notes payable
Test II. Classify each of the following accounts are either asset, a liability, an equity, a revenue, or an expense
and indicate debit or credit for increase and decrease. The first one has been done for you

Classification Increase Decrease

1. Supplies Expense Expense____ _______ _______
2. Supplies ____________ _______ _______
3. Food Inventory ____________ _______ _______
4. Share Capital ____________ _______ _______
5. Store Rent ____________ _______ _______
6. Mortgage Notes payable ____________ _______ _______
7. Building ____________ _______ _______
8. Rent Revenue ____________ _______ _______
9. Interest Expense ____________ _______ _______
10. Accounts Payable ____________ _______ _______
11. Expired Insurance ____________ _______ _______
12. Food Sales ____________ _______ _______
 13. Salaries and Wages ____________ _______ _______
14. Cash ____________ _______ _______
15. Cost of Food Sales ____________ _______ _______
16. Notes Payable ____________ _______ _______
17. Additional Paid in Capital ____________ _______ _______
18. Prepaid Insurance ____________ _______ _______
19. G. Capital ____________ _______ _______
20. G. Personal ____________ _______ _______

END
GODBLESS

Prepared by:
EVA B. SUBERE