FRANCISCO P.

TOLENTINO NATIONAL HIGH SCHOOL

Tolentino West, Tagaytay City

MIDTERM – FABM 1
2ND SEM 2018 – 2019

NAME: ___________________________________ SCORE: ________________

Grade Level & Section: ______________________ DATE: _________________

Direction: Read the statement carefully. Choose and encircle the letter of the best answer.

1. The financial statement that reports the revenues and expenses for a period of time such as a year or a month is the
________________.
a. Balance Sheet b. Income Statement c. Statement of Cash Flows

2. The financial statement that reports the assets, liabilities, and stockholders' (owner's) equity at a specific date is the
_______________.
a. Balance Sheet b. Income Statement c. Statement of Cash Flows

3. Under the accrual basis of accounting, revenues are reported in the accounting period when the _____.
a. Cash Is Received b. Service Or Goods Have Been Delivered

4. Under the accrual basis of accounting, expenses are reported in the accounting period when the _________.
a. Cash Is Paid b. Expense Matches The Revenues Or Is Used Up
5. Revenues minus expenses equals __________.

6. Resources owned by a company (such as cash, accounts receivable, vehicles) are reported on the balance sheet and
are referred to as __________.
7. Assets are usually reported on the balance sheet at which amount?
a. Cost b. Current Market Value c. Expected Selling Price
8. Obligations (amounts owed) are reported on the balance sheet and are referred to as __________.
9. Liabilities often have the word __________ in their account title.
10. Unearned Revenues is what type of account?
a. Asset b. Liability c. Stockholders' (Owner's) Equity

11. Accounting entries involve a minimum of how many accounts?

a. One b. Two c. Three

12. The listing of all of the accounts available for use in a company's accounting system is known as the __________.
13. Assets minus liabilities equals __________.
14. Which term is associated with "left" or "left-side"?
a. Debit c. Credit

15. Which term is associated with "right" or "right-side"?

a. Debit c. Credit
16. When cash is received, the account Cash will be
a. Debited c. Credited

17. When a company pays a bill, the account Cash will be

a. Debited c. Credited
18. What will usually cause an asset account to increase?
a. Debit c. Credit
19. What will usually cause the liability account Accounts Payable to increase?
 a. Debit c. Credit
20. Entries to expenses such as Rent Expense are usually
a. Debits c. Credits
21. Entries to revenues accounts such as Service Revenues are usually
a. Debits c. Credits
22. The two main methods of bookkeeping and accounting are the cash method, and the __________ method.

23. __________-entry bookkeeping means that every transaction will affect two or more accounts.

24. A __________ amount will appear on the left side of a T-account.

a. Debit b. Credit

25. A listing of the balances in the accounts in order to determine whether debits are equal to credits is a __________
balance.

26. The listing of accounts that are available for posting transactions is the __________ of accounts.

27. When a check is written, a cash account should be __________.

a. Debited c. Credited
28. Liability accounts will normally have __________ balances.
a. Debit b. Credit
29. Revenue accounts will normally have __________ balances.
a. Debit b. Credit
30. The bookkeeping or accounting equation is Assets = Liabilities + Owner's __________.

31. The book of original entry is the definition of a __________.

32. When a sale is made on credit, the seller will debit the asset account Accounts __________.

33. Asset, __________, and stockholders' equity accounts are known as balance sheet accounts.

34. Large corporations should report revenues on their income statements when the __________.

a. Cash Is Received b. Revenues Are Earned

35. Accrued expenses are likely to pertain to transactions that have __________ been paid.
a. Already b. Not Yet
36. Deferred revenues likely involve cash amounts that have __________ been received.
a. Already b. Not Yet

37. A __________ entry typically removes an accrual-type adjusting entry that had been recorded in the preceding
accounting period.

38. Cash and Accounts Receivable are two examples of accounts that are reported on the classified balance sheet under
the heading __________ assets.

39. A supplier of goods or services is known as a __________.

a. Debtor b. Vendor
40. The personal assets of the owner of a company will not appear on the company's balance sheet because of which
principle/guideline?
a. Cost b. Economic Entity c. Monetary Unit
41. Which principle/guideline requires a company's balance sheet to report its land at the amount the company paid to
acquire the land, even if the land could be sold today at a significantly higher amount?
a. Cost b. Economic Entity c. Monetary Unit

42. Which principle/guideline allows a company to ignore the change in the purchasing power of the dollar over time?
a. Cost b. Economic Entity c. Monetary Unit

43. Which principle/guideline requires the company's financial statements to have footnotes containing information that
is important to users of the financial statements?
a. Conservatism b. Economic Entity c. Full Disclosure

44. Which principle/guideline justifies a company violating an accounting principle because the amounts are immaterial?
a. Conservatism b. Economic Entity c. Full Disclosure

45. Which principle/guideline is associated with the assumption that the company will continue on long enough to carry
out its objectives and commitments?
a. Economic Entity b. Going Concern c. Time Period

46. Accountants might recognize losses but not gains in certain situations. For example, the company might write-down
the cost of inventory, but will not write-up the cost of inventory. Which principle/guideline is associated with this
action?
a. Conservatism b. Materiality c. Monetary Unit

47. Which principle/guideline directs a company to show all the expenses related to its revenues of a specified period
even if the expenses were not paid in that period?

48. A large company purchases a $250 digital camera and expenses it immediately instead of recording it as an asset and
depreciating it over its useful life. This practice may be acceptable because of which principle/guideline?
a. Cost b. Matching c. Materiality

49. Accrual accounting is based on this principle/guideline.

a. Cost b. Full Disclosure c. Matching

50. The creative chief executive of a corporation who is personally responsible for numerous inventions and innovations
is not reported as an asset on the corporation's balance sheet. The accounting principle/guideline that prevents the
corporation for reporting this person as an asset is
a. Conservatism b. Cost c. Going Concerns

51. A debit may signify a(n):

a. Increase in an asset account b. Decrease in an asset account
c. increase in a liability account d. increase in the owner’s capital account

52. The type of account with a normal credit balance is:

a. An asset b. a drawing
c. a revenue d. an expense

53. A debit balance in which of the following accounts would indicate a likely error?
a. Accounts Receivable b. Cash
c. Commission earned d. Miscellaneous expense

54. The receipt of cash from customers in payment of their accounts would be recorded by:
a. A debit to cash and a credit to Accounts Receivable
b. A debit to accounts receivable and a credit to cash
 c. A debit to cash and a credit to Accounts Payable
d. A debit to accounts payable and a credit to cash

55. The form listing the titles and balances of the accounts in the ledger on a given date is the:
a. Income statement b. Balance sheet. c. Statement of owner’s equity d. Trial balance

56. If the supplies account, before adjustment on May 31, indicated a balance of Rs. 2250 and supplies on hand at
May 31, totaled Rs950 the adjusting entry would be:
a. Debit supplies, Rs. 950; credit: supplies Expense Rs 950
b. Debit supplies 1300 credit: supplies expense 1300
c. Debit supplies expense 950 credit: supplies 950
d. Debit supplies expense 1300 credit: supplies 1300

57. The balance in the unearned rent account for Jones Co. as of December 31 is 1200. If Jones Co. failed to record
the adjusting entry for Php. 600 of rent earned during December, the effect on the balance sheet and income statement
for December would be.
a. Assets understated Php.600 net income overstated Php. 600
b. Liabilities understated Php. 600 net income understated Php. 600
c. Liabilities overstated Php. 600 net income understated Php 600
d. Liabilities overstated Php. 600 net income overstated Php. 600

58. If the estimated amount of depreciation on equipment for a period is Php. 2000 the adjusting entry to record
depreciation would be
a. Debit depreciation expense. 2000, credit equipment Php. 2000
b. Debit equipment Php. 2000 credit depreciation expense Php. 2000
c. Debit depreciation expense Php. 2000 credit accumulated depreciation Php. 2000
d. Debit accumulated depreciation Php. 2000 credit Depreciation expense Php. 2000

59. If the equipment account has a balance of Php. 22500 and its accumulated depreciation account has a balance of
Php. 14000 the book value of the equipment would be:
a. Php. 36500 b. Php. 22500 c. Php. 14000 d. Php. 8500
Ans: D
60. Which of the following accounts would be classified as a current asset on the balance sheet?
a. Office equipment b. Land c. Accumulated Depreciation d. Accounts Receivable