ACCOUNTING QUIZ BEE QUESTIONS

EASY:

E1: The communicating process of accounting includes all of the following except:

a. Recording b. Classifying c. Summarizing d. Interpreting

Answer: D

E2: These users require information on risk and return on investment.

a. Investors b. employees c. Lenders d. Customers

Answer: A

E3: A chart of accounts is

a. A flowchart of all transactions

b. An accounting procedure manual
c. A journal
d. A list of all account titles in the general ledger

Answer: D

E4: Posting is the process of transferring information from:

a. Journal to the general ledger

b. General ledger to journal
c. Source document to the journal
d. Journal to the source document

Answer: A

E5: An adjusting entry in which a revenue is recognized before the related cash receipt occurs is called:

a. Deferral b. Nominal c. Accrual d. Special item

Answer: C

E6: A partner ends its life when

a. It changes its name

b. Unlimited liability exists
c. A new partner is admitted
d. The partnership incurred losses

Answer: C
E7: It is an accounting process of assigning peso amounts to the reportable transactions and events.

a. Measuring
b. Communicating
c. Identifying
d. Recording

Answer: A

E8: Which of the following has a normal credit balance?

a. Loans to partners
b. Partner’s Capital
c. Partner’s Drawing
d. Due from partner

Answer: B

E9: The beginning balance of unused supplies is P500. During the period, the total purchases of supplies
amounted to P2,000 initially recorded as asset. At the end of the period, the actual unused supplies are
P200. The supplies expense to be reported for the period is

a. 200
b. 500
c. 1800
d. 2300

Answer: D

E10: Mr. A, a sole-proprietor has the following:

Premises P55,000
Cash in Bank 6,500
Inventory 12,500
Creditors 5,000

What is the amount of capital?

a. 31,000
b. 35,000
c. 10,500
d. 69,000

Answer: D
AVERAGE:

A1. Which is not considered a book of original entry?

a. General Journal
b. General Ledger
c. Sales Journal
d. Purchases Journal

Answer: B

A2: The following two T-accounts illustrate a transaction

Bank

800

Advertising expense

800

Which of the following statements describes the information given in accounts?

a. Advertising paid amounted to $800

b. Advertising shows a decrease of $800
c. Bank shows an increase of $800
d. Bank deposits amounted to $800

Answer: A

A3: If there is agreement as to the distribution of profit but no stipulations to the distribution of loss,
any partnership loss shall be shared by partners:

a. Equally
b. Proportionate to his capital contribution
c. Based on profit ratio
d. None

Answer: C

A4: The double entry accounting system means

a. Each transaction is recorded with two journal entries

b. Each item is recorded in a journal entry and then in a general ledger account.
c. The dual effect of each transaction is recorded with a debit and credit.
 d. All of the above

Answer: C

A5: If an entity uses special journals, in which journal would the sale of merchandise for cash be
recorded?

a. Sales Journal
b. Cash receipts Journal
c. General Journal
d. Cash Disbursements Journal

Answer: B

A6: Which of the following is not a principal purpose of an unadjusted trial balance?

a. It proves that the debit and credits of equal amounts are in the ledger.
b. It is the basis for any adjustments to the account balances.
c. It supplies a listing of open accounts and their balances
d. It proves that debits and credits were properly entered in the ledger accounts.

Answer: D

A7: Timex Company reported petty cash fund which comprised the following:

Coins and currency 3,300

Paid Vouchers:
Transportation 600
Gasoline 400
Office Supplies 500
Postage Stamps 300
Due from employees 1,200 3,000
Manager’s check returned by bank marked “NSF” 1,000
Check drawn by the entity to the order of petty cash
Custodian 2,700
What is the correct amount of petty cash fund for statement presentation purposes?

a. 10,000
b. 7,000
c. 6,000
d. 9,000

Answer: C

A8: An asset was purchased for P1,000,000 with the down payment of P200,000 and bills accepted for
P800,000. What would be the effect on the total asset and total liabilities in the balance sheet?
 a. Assets increased by P800,000 and liabilities decreased by P800,000
b. Assets decreased by P800,000 and liabilities increased by P800000
c. Assets increased by P1,000,000 and liabilities increased by P800,000
d. Assets increased by P800,000 and liabilities increased by P800,000

Answer: D

A9: What is the valuation if a partner contributes a noncash property to the partnership?

a. Agreed value of the property

b. Acquisition Cost of the Property
c. Actual amount of the property
d. Fair Value of the property

Answer: A

A10: Fixed assets are double the current assets and half the capital. The current assets are P3,000,000
and investments are P4,000,000. Then the current liabilities recorded in balance sheet will be

a. 2,000,000
b. 1,000,000
c. 3,000,000
d. 4,000,000

Answer: B

DIFFICULT:

D1: On September 1, 2015, Pine Company issued a note payable to National Bank in the amount of
P1,800,000, bearing interest at 12% and payable in three equal annual principal payments of P600,000.
On this date, the bank prime rate was 11%. The first interest and principal payment was made on
September 1, 2016.

On December 31, 2016, what should be reported as accrued interest payable?

a. 44,000
b. 48,000
c. 66,000
d. 72,000

Answer: B

D2: An adjusting entry to accrue wages incurred but not yet paid is an example of:

a. Aligning recorded costs with appropriate accounting periods.

b. Aligning recorded revenue with appropriate accounting periods.
 c. Reflecting unrecorded expenses incurred during an accounting period.
d. Reflecting unrecorded revenue incurred during an accounting period.

Answer: C

D3: The bank charges of P750 were erroneously recorded as debit cash in bank for P750 and credit to
interest income for P750. This will result to:

a. Understatement of operating expense by P750.00

b. Overstatement of operating expense by P750.00
c. Understatement of cash by P750.00
d. Understatement of income by P750.00

Answer: A

D4: Generally, revenue from sale of goods shall be recognized at a point when

a. Management decides it is appropriate to do so.

b. The product is available for sale to the ultimate consumer
c. The entire amount receivable has been collected from the customer and there remains no
further warranty liability
d. The entity has transferred to the buyer the significant risks and rewards of ownership of the
goods.

Answer: D

D5: Which is false concerning the rules of debit and credit?

a. The left side of an account is always the debit side and the right side is always the credit side.
b. The word debit means to increase and the word credit means to decrease.
c. Increases in assets and expense are debit entries and increases in liabilities, equity and revenue
are credit entries.
d. The normal balance of any account appears on the side for recording increases.

Answer: B

D6: Cab and Jo are considering forming a partnership whereby profits will be allocated through the use
of salaries and bonuses. Bonuses will be 10% of net income after total salaries and bonuses. Cab will
receive a salary of P30,000 and a bonus. Jo has the option of receiving a salary of P40,000 and a 10%
bonus or simply receiving a salary of P52,000. Both partners will receive the same amount of bonus.
Determine the level of net income that would be necessary so that Jo would be indifferent to the profit
sharing option selected;

a. 240,000
b. 300,000
c. 94,000
 d. 334,000

Answer: D

D7: Wishful Company purchased a machine for P600,000 on January 2, 2013. The machine has an
estimated useful life of 5 years and a salvage value of P60,000. Depreciation was computed by the 150%
declining balance method.

How much should be the accumulated depreciation balance at December 31, 2013?

a. P108,000
b. P180,000
c. P120,000
d. P150,000

Answer: B

D8: Which of the following least resembles a typical adjusting entry?

a. Debit an asset and credit a revenue

b. Debit an expense and credit liability
c. Debit revenue and credit liability
d. Debit an asset and credit a liability

Answer: D

D9: The closing entries

a. Must debit or credit one income statement account and one statement of balanced sheet
account
b. Are posted to the appropriate general ledger accounts
c. Include closing the dividends account to income summary
d. All of the above

Answer: B

D10: Which of the following is not 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 equity

Answer: D

CLINCHER
C1: This document is an evidence of ownership interest in a profit corporation.

a. Stock certificate
b. Bonds certificate
c. Deed of Sale
d. Treasury Certificate

Answer: A

C2: Which of the following is an asset account?

a. Partner’s Capital
b. Partner’s Drawing
c. Prepaid Expense
d. Unearned Income

Answer: C

C3: The credit balance in the income summary account represents

a. Net income
b. Net loss
c. Liability
d. Capital

Answer: A

C4: The account “income summary” Is a

a. Nominal account
b. Real account
c. Capital Account
d. Mixed Account

Answer: A

C5: The accounting equation “assets=liabilities + capital” is

a. Fund theory
b. Entity theory
c. Proprietary theory
d. Residual equity theory

Answer: B