UNIVERSITY OF CEBU – LAPU-LAPU and MANDAUE

COLLEGE OF BUSINESS AND ACCOUNTACY

1ST PRE-QUALIFYING EXAMINATION

ACCOUNTING 111
February 23, 2019

ANSWER SHEET
NAME______________________________________________ SCORE ____________

ROOM ASSIGNMENT______________ INSTRUCTOR________

THEORIES( 1 pt. Each)

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THEORIES

Write the letter of your answer in capital letters on the answer sheet provided. Only answers in
ink would bee credited. Strictly no erasures allowed.

1. The Conceptual Framework is intended to establish

a. Generally accepted accounting principles.

b. The meaning of “present fairly in accordance with GAAP”.
c. The objectives and concepts for use in developing standards of financial accounting and
reporting.
d. The hierarchy of sources of GAAP.

2. Which is an objective of financial reporting?

a. To provide information that is useful to assess the amount, timing, and uncertainty of
prospective cash receipts.
b. To provide information that is useful to management in making economic decisions.
c. To provide information that portrays financial and non financial transactions.
d. To provide information that excludes claims against the sources.

3. Which of the following statements not a purpose of the Conceptual Framework?

a. To provide definitions of key terms and concepts.
b. To provide specific guidelines for resolving situations not covered by existing accounting
standards.
c. To assist accountants in selecting among alternative accounting and reporting methods.
d. To assist the IASB in the standard setting process.

4. Presidential Decree 692 which was previously known as the “ Revised Accountancy Law” which
was re-enacted May 5, 1975 was repealed by the Republic Act No. 9298 is known as –
a. Philippine Accountancy Law of 2004
b. Revised Accountancy Law of 2004
c. PICPA Law 2004
d. Professional Accountancy Act of 2004

5. Are uniform sets of accounting rules, procedures, practices and standards that are followed in
preparing financial statements -
a. Accounting assumptions
b. Accounting fundamentals
c. Accounting theories
d. Generally accepted accounting principle

6. When a P300 waste basket with an estimated life of 1 year was charged to expense at the time of
purchase, this is an application of –
a. Matching principle
b. Cost principle
c. Objectivity principle
d. Consistency principle

7. Which of the following is not considered as account title?

a. Cash in bank
b. Accounts Receivable
c. Withdrawal
d. Accounts payable

8. It is an “asset – offset” account of Accounts Receivable

a. Estimated Uncollectible Accounts
b. Uncollectible Accounts
c. Doubtful Account
d. None of these
9. The Accounting Standards Council in its old Statement of Financial Accounting Standards No. 1
defines accounting as a “service activity”. Its function is to –
a. Provide quantitative information
b. Provide qualitative information
c. Provide economic data for reporting
d. Provide financial assistance to decision makers

10. The phase of accounting which involves sorting or grouping of similar transactions and events into
their respective kinds and classes –
a. Recording
b. Classifying
c. Summarizing
d. Interpreting

11. The books of account that shows similar accounts that are found in the chart of accounts of a
business entity –
a. Trial balance
b. Chart of accounts
c. General ledger
d. Balance sheet

12. Which of the following statement is false concerning trial balance?

a. Proves the mathematical accuracy of journalized transactions.
b. Will not balance if the correct journal entry is omitted in its entirety.
c. A correct journal entry is posted twice.
d. Proves that all transactions have been recorded.

13. Which of the following errors will cause a trial balance to be “out of balance”?
a. When the journal entry was not posted.
b. When journal entry is doubly posted.
c. When a debit entry in the journal was credited.
d. All of the above

14. Which of the following accounts is not closed

a. Nominal account
b. Temporary account
c. Income statement accounts
d. Real accounts

15. Which of the following account is included in post – closing trial balance?
a. Asset account
b. Income account
c. Expense account
d. Drawing account

16. Real and nominal accounts are the –

a. Balance sheet and income statement accounts
b. Only income statement accounts
c. Only balance sheet accounts
d. Income and expense account

17. In recording transactions

a. The word “debit” means increase and the word “credit” means decrease.
b. Assets, expenses, and drawing accounts are debited for increases.
c. Liabilities, revenue, and drawing accounts are debited for increases.
d. Assets, expenses, and capital accounts are debited for increases.
18. Which of the following statements regarding a trial balance is incorrect?
a. A trial balance is a test of the equality of the debit and credit balances in the ledger.
b. A trial balance is a list of all the open accounts in the ledger with their balances.
c. A trial balance proves that no errors of any kind have been made in the accounts during
the accounting period.
d. A trial balance helps to localize errors within an identifiable time period.

19. 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 a credit.
d. All of these describe the double entry system.

20. What is the objective of financial statements?

a. To provide information about the financial position, financial performance and changes
in financial position of an entity that is useful to a wide range of users in making economic
decision.
b. To prepare and present a statement of financial position, statement of comprehensive
income, statement of cash flows and statement of changes in equity.
c. To prepare and present relevant, reliable, comparable and understandable information
to investors and creditors.
d. To prepare and present financial statements in accordance with all applicable PFRS and
Interpretations.

21. Which of the following is the best description of faithful representation in relation to information
in financial statements?
a. Influence on the economic decision of the users
b. Inclusion of a degree of caution.
c. Freedom form material error
d. Comprehensibility to users

22. Generally accepted accounting principles

a. Are accounting principles based on law.
b. Derive their credibility and authority from the law.
c. Derive their authority from regulatory authority.
d. Derive their credibility and authority from recognition and acceptance by thee
accountancy profession.

23. Which is done first in the accounting process?

a. Financial statements are prepared
b. Adjusting entries are recorded
c. Nominal accounts are closed
d. A post closing trial balance

24. Costa that can be reasonably associated with specific revenue but not with specific products
should be
a. Charged to expense in the period incurred.
b. Allocated to specific products based on the best estimate of the product processing time.
c. Expensed in the period in which the related revenue is recognized.
d. Capitalized and then amortized over a reasonable period.

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

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