Victory Elijah Christian College

Fundamental of Accounting, Business and Management TWO (2)

FIRST PRELIMINARY Test

Name:__________________________________________________________Grade:

Identification: Directions: Read the following sentences carefully and write the
correct answer.
1. These are resources with future benefits that are within the control of the
company.
2. It is money owned by the company.
3. It is a general term that refers to the company’s right to collect or claim
payment.
4. It is a sale agreement may require a customer to pay the seller immediately
upon delivery of goods.
5. This is reports about the cost of unsold merchandise, an account of a trading
business contains merchandise held for resale.
6. It is a long term assets that are used in the operations of the company.
7. It is refer to future expenses that the company had paid for in advance. It is
placed in this account until the services or items are used and become
expenses.
8. These are obligations that the company is required to pay; it may be in cash,
goods, or services.
9. These are generally two kinds of Payables.
10. The opposite of right to collect is the obligation to pay.
11. It is normally referring to obligation to the supplies of inventories.
12. It is referring to an obligation evidenced by a promissory note.
13. It is long term assets similar to PPE, it will be used in the business for more
than one year.
14. It is referring to the unpaid expenses of the company as of cutoff date of
the statement of financial position.
15. It is costumer deposits of down payments are customer payments received
before the delivery of goods or services.

Modified True or False. Directions: Read each sentence carefully and

determine whether the statement is True or False.
1. The SFP provides readers with the information as to the company’s financial
position as of a specified date.
2. Asset=Liabilities + Owner’s Equity is the governing equation of the SFP.
3. Asset is an element of the SFP that has a normal balance of credit.
4. Debit means to increase an account.
5. T-accounts is a representation of the general ledger account used in
teaching accounting.
6. Consignment is an important issue in inventory accounting.
7. Long term liabilities refer to obligations with due dates that fall more than one
year from the date of the SFP.
8. Asset is net assets of the business it is composed of the owner’s investment,
and the accumulated.
9. Accounts payable refers to an obligation evidenced by promissory note.
10. Expenses are recorded only when purchased goods and services are used.
Directions: Give the meaning of the followings acronym.
1. COD- 2. AP- 3. SFP- 4. SCI- 5. SCF-
6. PPE- 7. NP- 8. PN- 9. SoCE- 10. AR-

Computation. Directions: Determining the balance of the net receivable using

accounts receivable.

Problem 1. Ronelle asked you to compute how much Grace owed the store.
Ronelle sells to Grace on credit. Grace pays every 16th and 30th of the month.
Grace’s listings are reproduced below.
Grace Arambulo
Balance P300.00
June 25 3 bottles of softdrinks (13.00)
June 27 1 bottle of zonrox (55.00)
June 30 Payment: 100.00
July 3 1 sachet of fabric conditioner
(50.00)
July 6 2 Big Sardines (30.00)
July 13 5 sachet of shampoo (7.00)
July 16 Payment: 100.00
July 18 2 kilo of rice (45.00 per kilo)
July 22 4 sachet of laundry soap (14.00)
July 27 1 small bar of bath soap (20.00)
July 30 Payment: 200.00
August 5 7 big piatos (16.00)
August 19 10 kilo of rice (45.00 per kilo)
August 26 3 bottles of cola (12.00)
August 30 Payment: 100.00
 Problem 2. Direction: Determining the balance of the merchandise
inventory account of Ronelle’s Store

Before Ronelle’s opened the store on January 3, 2018, he asked you to

help his account merchandise inside the store. The results of the count are
given below.

Merchandise Cost Total

4 bags of candy 50.00 per bag ?
10 sachets of coffee 7.00 per sachet ?
15 sachets of laundry 14.00 per sachet ?
powder
2 sacks of rice (50 kilos) 2,100 per sacks ?
14 cans of sardines 16.00 per can ?
12 chocolate bars 15.00 per bar ?
6 notebooks 26.00 per notebook ?
Merchandise Inventory as of December 31, 2017 ?
 Victory Elijah Christian College
Fundamental of Accounting, Business and Management TWO (2)
SECOND PRELIMINARY Test

Name:__________________________________________________________Grade:

Directions: Read the following questions carefully. Write the correct answer on
the space provided before each number.
____________ 1. It is generally used to describe revenue derived from selling of
goods.
____________ 2. It is account is generally used to describe revenue derived
rendering of services.
____________ 3. These are the two kinds if income.
____________ 4. It is an account used by companies that sells good instead of
services, this includes the purchase price of inventory, brokerage and shipment
cost to bring the goods to the premises of the company.
____________ 5. It is refer to all other expenses related to the operation of the
business. Other than cost of sales.
____________ 6. It is called net income is computed using only one step,
deducting total expenses from total revenues.
____________ 7.it is by the presentation of several subtotal until net income is
determined, more populary in business.
____________ 8. An account is increased by an entry on the side of its normal
balance.
____________ 9. These are from activities of the business.
____________ 10. These are two kinds of expenses.
____________ 11. These are income related to the primary operations of the
business.
____________ 12. These are income generated from primary operations of the
business.
____________ 13. In the other hand income derived from other activities of the
business.
____________ 14. There are the two ways of keeping records of inventory.
____________ 15. It is means that the inventory and cost of goods sold accounts
are ________?
____________ 16. It is means that the inventory account is updated only at end
of the year or end of the month.
____________ 17 this shipment cost is called___________.
____________ 18.it is equivalent to purchases + Freight in- purchase returns-
purchases discount.
____________ 19. These are the two formats for SCI, namely_________.
____________ 20. This the another term for Contra Sales account.
Directions: Read the following sentences carefully. Write TRUE if the statement is
true and if it is FALSE, underline the word or group of words that falsify the
statement. Don’t forget to write the correct answer on the blanks provided
before each number.

_____________ 1.Net Accruals is one of the fundamental concepts of financial

accounting.
_____________ 2. Expenses are related to other activities of the business.
_____________ 3. Gains are income generated to other the primary
operations of the business.
_____________ 4. Sales revenue account is generally used to describe
revenue derived from selling of goods.
_____________ 5. Home services is account is generally used to describe
revenue derived from rendering of services.
_____________ 6.periodically means that the inventory account is updated
only at end of the year or end of the month.
_____________ 7. Perpetual means that inventory and cost of goods sold
accounts are “perpetually”.
_____________ 8. Net sales=Gross sales-sales return and allowances- sales
discount.
_____________ 9. Good debt expenses is an operating expense related to
accounts receivable
_____________ 10. The multi-step SCI is more popularly used in business.

Computation

Problem 1

Rogelio preschool collected tuition fees of 2,500,000 and 2,300,000 for the
school years 2012-2013 and 2013-2104, respectively the school in April and
May. Determine the tuition Fee to e reported on SCI for the calendar year
2015.

School Year 2012- 2013 ?

Number of Months from January- ?
March
Number of Months in one School ?
Year
Tuition fee revenue for calendar ?
year 2013

School Year 2013-2014 ?

Number of Months from June- ?
December
Number of Months in one School ?
Year
Tuition fee revenue for calendar ?
year 2014
 Victory Elijah Christian College
Fundamental of Accounting, Business and Management TWO (2)
MIDTERM Test

Name:__________________________________________________________Grade:

Identification: Directions: Read the following sentences carefully and write the
correct answer.
1. These are resources with future benefits that are within the control of the
company.
2. It is money owned by the company.
3. It is a general term that refers to the company’s right to collect or claim
payment.
4. It is a sale agreement may require a customer to pay the seller
immediately upon delivery of goods.
5. This is reports about the cost of unsold merchandise, an account of a
trading business contains merchandise held for resale.
6. It is a long term assets that are used in the operations of the company.
7. It is referring to future expenses that the company had paid for in
advance. It is placed in this account until the services or items are used
and become expenses.
8. These are obligations that the company is required to pay; it may be in
cash, goods, or services.
9. These are generally two kinds of Payables.
10. The opposite of right to collect is the obligation to pay.
11. It is normally referring to obligation to the supplies of inventories.
12. It is referring to an obligation evidenced by a promissory note.
13. It is long term assets similar to PPE, it will be used in the business for
more than one year.
14. It is referring to the unpaid expenses of the company as of cutoff
date of the statement of financial position.
15. It is costumer deposits of down payments are customer payments
received before the delivery of goods or services.
16. It is generally used to describe revenue derived from selling of goods.
17. It is account is generally used to describe revenue derived from
rendering of services.
18. These are the two kinds of income.
19. It is an account used by the companies that sells good instead of
services, this includes the purchase price of inventory, brokerage and
shipment cost to bring the goods to the premises of the company.
20. It is referring to all other expenses related to the operation of the
business, other than cost of values.
21. It is called net, income is computed using only one step, deducting
total expenses from total revenues.
22. It is characterized by the presentation of several subtotals until net
income is determined, more popularly in business.
23. An account is increased by an entry on the side of its normal
balance.
24. These are two kinds of expenses.
25. These are from activities of the business.
 26. These are related to the primary operations of the business.
27. These are income generated from primary operation of the business.
28. In the other hand income derived from other activities of the
business.
29. There are the two ways of keeping records of inventory.
30. It is means that the inventory and cost of goods sold accounts
are___?
31. It is means that the inventory account is updated only at the end of
the year or end of the month.
32. This shipment cost is called__________.
33. It is equivalent to purchases+ Freight In –Purchase return- purchase
discount.
34. These are the two formats for SCI, namely __________,________,
35. This the another term for Contra-Sales account.

Modified True or False. Direction: Read the following sentences carefully. Write
the word TRUE for correct statements and if it is FALSE, Write your answer.

1. Accrual is one of the fundamental concepts of financial accounting.

2. Expenses are related to other activities of the business.
3. Gains are income generated from the primary operations of the business
4. Sales Revenue account is generally used to describe revenue derived
from selling of goods.
5. Home service is account is generally used to describe revenue derived
from rendering of services.
6. Periodically means that the inventory account is updated only at the end
of the year or end of the month.
7. Perpetual means that the inventory and cost of Goods sold accounts are
“perpetually”.
8. Net Sales=Gross Sales- Sales Return and Allowances- Sales Discount)
9. Good debt expense is an operating expense related to accounts
receivable.
10. The multi-step SCI is more popularly used in business.
Computations

Problem 1. Rogelio Pre-school collected tuition Fee of 2,500,000 and 2,300,00

for the school years 2012-2013 and 2013-2014, respectively. The school closed in
April and May. Determine the tuition Fee revenue to be reported on SCI for the
Calendar Year 2105.

School Year 2012-2013 ?

Number of months from January-March ?
Number of months in one School Year ?
Tuition Fee revenue for calendar 2013 ?

School year 2013-2014 ?

Number of Months from June- December ?
Number of months in one School Year ?
Tuition Fee revenue for calendar Year 2014 ?

Problem 2. Ronelle Morfe, owner of Masing Convience Store, sold 5 boxes of

notebooks to Ms. Grace Lopez on account at a price of 250 per box or 25.00
per notebook. Ronelle gave Ms. Lopez 3 weeks to pay the account. Moreover,
Juana told Ms. Lopez that she will deduct 3% discount if she pays within a week.
Ms Lopez returned one week later. She returned 4 notebooks and took
advantage of this discount. Determine the amount of sales, Sales Return, Sales
Discount and Net Sales from the transaction with Ms. Lopez.

Sales ?
Sales Return ?
Amount to be Paid ?
Sales Discount ?
Amount paid by Ms. Lopez ?
Problem 3 Directions: Determining the balance of the net receivable using
accounts receivable.

Ronelle asked you to compute how much Grace owed the store. Ronelle sells
to Grace on credit. Grace pays every 16th and 30th of the month. Grace’s
listings are reproduced below.

Grace Aramburo
Balance P300.00
June 25 7bottles of softdrinks (13.00)
June 27 5 bottle of zonrox (55.00)
June 30 Payment: 100.00
July 3 8 sachet of fabric conditioner (50.00)

July 6 5 Big Sardines (30.00)

July 13 9 sachet of shampoo (7.00)
July 16 Payment: 100.00
July 18 3 kilo of rice (45.00 per kilo)
July 22 4 sachet of laundry soap (14.00)
July 27 7 small bar of bath soap (20.00)
July 30 Payment: 200.00
August 5 7 big piatos (16.00)
August 19 7 kilo of rice (45.00 per kilo)
August 26 3 bottles of cola (12.00)
August 30 Payment: 100.00

Problem 4. Direction: Determining the balance of the merchandise inventory

account of Ronelle’s Store

Before Ronelle’s opened the store on January 3, 2018, he asked you to help his
account merchandise inside the store. The results of the count are given below.

Merchandise Cost Total

4 bags of candy 40.00 per bag ?
10 sachets of coffee 9.00 per sachet ?
15 sachets of laundry 15.00 per sachet ?
powder
2 sacks of rice (50 kilos) 3,100 per sacks ?
14 cans of sardines 13.00 per can ?
12 chocolate bars 12.00 per bar ?
6 notebooks 25.00 per notebook ?
Merchandise Inventory as of December 31, 2017 ?
 Victory Elijah Christian College
Fundamental of Accounting, Business and Management TWO (2)
THIRD PRELIMINARY Test

Name:__________________________________________________________Grade:

Identification: Directions: Read the following sentences carefully and write the
correct answer.
1. It is a business owned by two or more owners.
2. It is the simplest form of a business organization, it is only one owner refereed
to as sole proprietor.
3. It is owned by stockholders that could number to thousands.
4. This is the half of the stockholders equity, this account reports the
undistributed.
5. It is the amount of distributions given or will be given to the corporation in
exchange for its common stocks.
6. It is reflects the par value of the issued common shares, it is the minimum
price by which corporations can issue stocks to stockholders.
7. It is based on the profit and loss sharing agreement stipulated in the
partnership contract.
8. It is the most complex form of business.
9. It is owners will mean accountant will be faced with the voluminous and
unending job of openings, transferring and closing capital accounts.
10. These are the three basic forms of business organizations namely_______.

Give the meaning of the following acronym and write the role of each in
business organization.
1) SEC- 2) SFP- 3) SCE- 4) PARTNERSHIP- 5) SHAREHOLDER-
6) PSE- 7) SoCE- 8) SOLE 9) CORPORATION- 10) ADDITIONAL
PROPRIETORSH PAID-IN-
IP- CAPITAL-

Modified True or False: Directions: Read the following sentences carefully. Write
TRUE if the statement is true and if it is FALSE, WRITE the word or group of words
that falsify the statement. Don’t forget to write the correct answer.

1. The SoCE is dated “as of the year ended”.

2. There are two equity accounts reported on the SoCE of a sole proprietorship,
namely owner, capital, and owner drawings.
3. The number of capital accounts presented in a SoCE of partnership is equal
to the number of partners.
4. The drawings account is used for sole proprietorship, partnership and
corporation.
5. The partnership net income is allocated to each partner’s capital using the
profit and loss sharing agreement stated in the contact of partnership.
6. Paid in capital is the amount of contributions given to the corporation in
exchange for the shares of stock.
7. An equity accounts have normal credit balances.
8. The capital stock accounts reports the proceeds from the issuance of the
study.
9. The SoCE of corporation presents the reconciliation from the beginning to the
ending balances of all equity accounts.
10. Dividends distributed by corporation by corporation are credited against
retained earnings.

Computations.

Problem 1 Compute for Net Income

Rogelio Lopez Convience’s Store
Mr. Lopez is the owner of the Lopez Convience Store. The store was established on
January 3, 2016. Mr. Lopez deposited 20,000 to a bank account in the name of Lopez
Convience Store. He made three more deposits of 3,500 each during the year from her
personal account. The store generated net income of 45,570 in 2016. Mr. Lopez regularly
withdraws 2,000 per month from the store’s bank account for her personal expenses.
Determine the 2016 year ended balance of the Mr. Lopez Drawings account.
Rogelio Lopez, Capital January 3, 2016
Add
Owner’s contribution ?
Net income ?
Less
Drawings ?
Rogelio Lopez Capital (year ended) ?

Problem 2
The partnership was established in 2105. The partners Ron, Rog and Grace have
January 4, 2015 outstanding capital balances of 30,600, 44,500 and 49,725 respectively. Ron
contributed 17,000 during 2015. Rog and Grace also contributed 20,000 each in 2015. The
2015 year end balances of each partner’s. Drawings accounts are follows, Ron 13,000, Rog
16,000 and Grace 18,000.
The partnership repoted 2015 net income of 85750. According to the partnership
agreement the partnership’s profit sharing ratio is 50%, 40%, 50% For Ron, Rog ,Grace.
Prepare the 2015 SoCE of DEF Partnership.
DEF Partnership
Statement of Changes in Equity
For the year ended December 31, 2016
Ron Capital Rog Capital Grace
Capital Total
Balance, January 4, 2015 ? ? ? ?
Add:
Partner’s Contributions ? ? ? ?
Net income ? ? ? ?
Less:
? ? ? ?
Drawings:
Balance, December 31, 2015 ? ? ?
?

IV. Directions: In 5-10 sentences, answer the following questions in a

scholarly manner.
1. What is the difference between Partnership and Corporation?
2. Give some brief explanations to the following words.
a. Paid in Capital
b. Retained Earning
c. Capital Stock
d. Additional Paid-in Capital
 Victory Elijah Christian College
Fundamental of Accounting, Business and Management TWO (2)
FINAL Test

Name:__________________________________________________________Grade:

Identification: Directions: Read the following sentences carefully and write the
correct answer.
1. These are related to main revenue producing activities of the business.
2. These transactions related to acquisition and disposal of long term assets
such as property, plant, and equipment intangible assets are classified as
____________.
3. This transaction with equity owners and creditors are reported as __________.
4. This reported in this section represents the cash, components of the events
that enter into the determination of the net income in the SCI.
5. It is an important asset in business.
6. This is from operations suggests that there is excess cash that can be used to
purchase long term assets, pay debts or distribute to owners.
7. It is cash flows from investing activities of the business.
8. These are the three major activities of the business.
9. It is the financial statement that explains the net change in cash for the year.
10. It is presenting the cash flows from operating activities shows summarized
cash transactions.
11. It is a business owned by two or more owners.
12. It is the simplest form of a business organization, it is only one owner refereed
to as sole proprietor.
13. It is owned by stockholders that could number to thousands.
14. This is the half of the stockholders equity, this account reports the
undistributed.
15. It is the amount of distributions given or will be given to the corporation in
exchange for its common stocks.
16. It is reflects the par value of the issued common shares, it is the minimum
price by which corporations can issue stocks to stockholders.
17. It is based on the profit and loss sharing agreement stipulated in the
partnership contract.
18. It is the most complex form of business.
19. It is owners will mean accountant will be faced with the voluminous and
unending job of openings, transferring and closing capital accounts.
20. These are the three basic forms of business organizations namely_______.

II. Give the meaning of the following acronym and write the role of each in
business organization.
SEC- SOLE PROPRIETORSHIP-
PSE- PARTNERSHIP-
SFP- CORPORATION-
SoCE- SHAREHOLDER-
SCE- ADDITIONAL PAID-IN-CAPITAL-
III. Directions: Read the following sentences carefully. Write TRUE if the
statement is true and if it is FALSE, WRITE the word or group of words that falsify
the statement. Don’t forget to write the correct answer.

1. The SoCE is dated “as of the year ended”.

2. There are two equity accounts reported on the SoCE of a sole proprietorship,
namely owner, capital, and owner drawings.
3. The number of capital accounts presented in a SoCE of partnership is equal
to the number of partners.
4. The drawings account is used for sole proprietorship, partnership and
corporation.
5. The partnership net income is allocated to each partner’s capital using the
profit and loss sharing agreement stated in the contact of partnership.
6. Paid in capital is the amount of contributions given to the corporation in
exchange for the shares of stock.
7. An equity accounts have normal credit balances.
8. The capital stock accounts reports the proceeds from the issuance of the
study.
9. The SoCE of corporation presents the reconciliation from the beginning to
the ending balances of all equity accounts.
10. Dividends distributed by corporation by corporation are credited against
retained earnings.
11. The Statement of cash flows shows the amount of cash received and used
in the business organized according to operating, investing, and financing
activities.
12. Cash payment for the bank loans are reported under cash flows from
operating activities.
13. If the company has no accounts receivable balance at the beginning
and at the end of the year, then net sales reported in the statement of
Comprehensive Income will most likely be equal to the cash received from
customers reported in the Statement of Cash Flows.
14. Payments for acquisition of merchandise inventory are reported as
investing activities.
15. Statement of Cash Flows explains the observed difference in the cash
balance from the beginning to the end of the period.
16. Business activities are classified into operating, investing, and funding,
activities in the Statement of Cash Flows.
17. Salary and utility payments are reported as operating activities.
18. Non-cash expenses such as depreciation and amortization are deducted
from net income to arrive at the cash flows from operating activities.
19. A negative cash flow from investing activities is a bad indicator of the
company’s ability to generate cash.
20. The bottom line of the statement of Cash Flows is equivalent to the cash
balance presented on the Statement of Financial Position.
 Problem 1 Compute for Net Income
Rogelio Lopez Convience’s Store
Mr. Lopez is the owner of the Lopez Convience Store. The store was
established on January 3, 2016. Mr. Lopez deposited 40,000 to a bank account
in the name of Lopez Convience Store. He made three more deposits of 5,500
each during the year from her personal account. The store generated net
income of 46,620 in 2016. Mr. Lopez regularly withdraws 3,000 per month from
the store’s bank account for her personal expenses.
Determine the 2016 year ended balance of the Mr. Lopez Drawings
account.
Rogelio Lopez, Capital January 3, 2016
Add
Owner’s contribution ?
Net income ?
Less
Drawings ?
Rogelio Lopez Capital (year ended) ?

Problem 2
The partnership was established in 2105. The partners Ron, Rog and Grace
have January 4, 2015 outstanding capital balances of 17,600, 53,500 and
78,725 respectively. Ron contributed 17,000 during 2015. Rog and Grace also
contributed 20,000 each in 2015. The 2015 year end balances of each
partner’s. Drawings accounts are follows, Ron 15,000, Rog 18,000 and Grace
20,000.
The partnership reported 2015 net income of 85750. According to the
partnership agreement the partnership’s profit sharing ratio is 50%, 40%, 50% For
Ron, Rog ,Grace.
Prepare the 2015 SoCE of DEF Partnership.
DEF Partnership
Statement of Changes in Equity
For the year ended December 31, 2016
Ron Capital Rog Capital
Grace Capital Total
Balance, January 4, 2015 ? ? ? ?
Add:
Partner’s Contributions ? ? ? ?
Net income ? ? ? ?
Less:
? ? ? ?
Drawings:

Balance, December 31, 2015 ? ? ?

?
 Modified Matching Type: From the line items in the box, prepare a pro-
forma statement of cash flows. Classify the line items as to operating, investing,
and financing activities.

Cash received from customers Salaries paid

Interest paid Utilities paid
Cash drawings of owners Payments for acquisition of equipment
Cash contributions from owners Depreciation
Payments to suppliers Amortization
Principal payments for bank loans Cash received from sale of land

Operating

Investing

Financing