Republic of the Philippines

Department of Education
Region V
DIVISION OF CAMARINES SUR
PILI NATIONAL HIGH SCHOOL
La Paz Subd., Pawili, Pili, , Camarines Sur

ACCOUNTANCY AND BUSINESS ADMINISTRATION (ABM) 1

FINAL EXAM
I. Multiple choice
1. Which of the following is period cost that is not directly related to revenue earned?
a. Cost of sales c. Both of the choices
b. Operating expenses d. None of the choices
2. Which of the following is the income representing the difference between the sales and cost of
sales?
a. Gross profit c. Net operating income
b. Operating income d. Net income before tax
3. Which of the following is reported as part of the operating expenses?
a. Cost of sales c. Freight-out
b. Freight-in d. Sales allowance
4. Which of the following is reported as selling expense?
a. Sales discount c. Sales allowance
b. Sales return d. Freight-out
5. Which of the following is nit recorded in the books of accounts?
a. Cash discount c. Purchase discount
b. Sales discount d. Volume discount
6. Which of the following accounts is used in merchandising business but not in servicing?
a. Depreciation expense c. Sales returns & allowances
b. Allowance for bad debts d. Purchase discount
7. Which of the following is equal to gross profit plus cost of sale?
a. Beginning inventory c. Ending inventory
b. Goods available for sale d. Sale
8. Which of the following is equal to cost of sale plus ending inventory?
a. Beginning inventory c. Gross profit
b. Goods available for sale d. Sale
9. Which of the following is being adjusted by a purchase discount?
a. Purchases c. Sales
b. Accounts receivable d. All of the choices
10. Which of the following will increase the gross profit of the merchandising business?
a. Increase in purchase discount c. Decrease in freight out
b. Increase in freight in d. Decrease in purchase return
11. N is selling at list price of P 80,000; 5; 1/30; n/60. To record the sales, the debit would be
a. Cash P76,000
b. Accounts receivable P80,000
c. Accounts receivable P75,240
d. Accounts receivable P76,000
12. M purchased on account, P 150,000. Inspection of merchandise revealed that P 20,000 worth of
merchandise are defective. M received a credit memo from supplier for P 20,000 damage. The
journal entry in the books of M to record the credit memo is
a. Cash 20,000
Accounts payable 20,000
b. Accounts payable 20,000
 Purchase returns 20,000
c. Accounts payable 20,000
Cash 20,000
d. Accounts payable 20,000
Purchase allowances 20,000
13. The cost of sale is P 250,000. Total purchases amounted to P 300,000 which increased the total
goods available for sale to P 310,000. The ending inventory is
a. P 10,000 c. P50,000
b. P 70,000 d. P60,000
14. The gross profit is P100,000; goods available for sale, P1,100,000; beginning inventory,
P100,000; purchases P1,000,000 and sales, P1,000,000. The ending inventory is
a. P 300,000 c. P100,000
b. P 200,000 d. None
15. The pre-collection is P600. This is applicable for a six-month rental period ending January 31,
200B. The balance sheet to be prepared is dated December 31, 200A. If the pre-collection was
recorded under the income method, the liability to be recorded would be
a. P500 c. P550
b. P 50 d. P100
16. The total sales was P 1,000,000 of which sales on cash basis amounted to P400,000. The policy
of the business is to provide 1%of credit sales as bad debts expense. The bad debts expense is?
a. P 10,000 c. P 6,000
b. P 4,000 d. None
Questions nos. 17 and 18 are based on the following information:

At the start of the period, the accounts payable balance was P 75,000 and the unused supplies
has a balance of P 5,000. Total purchases on account amounted to P 180,000 during the period
including the supplies purchase of P 15,000. At the end of the year, the unused supplies purchase
and the accounts payable balance is P 45,000.
17. The supplies expense for the period is
a. P 4,500 c. P15,500
b. P 15,000 d. P20,000
18. The payment of accounts payable during the period is
a. P 75,000 c. P 210,000
b. P 180,000 d. P 215,000
19. The business received a 90-day promissory note of P 20,000, carrying an interest of 12% per year.
The promissory note is dated May 1, 200A and the balance sheet date of the business is June 30,
200A. The accrued expense is
a. P 200 c. P 800
b. P 400 d. P 1,600
20. The total sales was P 1,000,000 of which sales on cash basis amounted to P 400,000. The policy
of the business is to provide 1% of credit sales as bad debts expense. The bad debts expense is
a. P 10,000 c. P6,000
b. P 4,000 d. None