EASY

1. I. Financial accounting is the branch of accounting that focuses on general purpose financial
statements.
II. Management accounting involves the accumulation and communication of information for use by
external users.
III. Tax accounting involves the preparation of tax returns and rendering of tax advice.
IV. Cost accounting is the branch of accounting that deals with the examination of financial statements
and the expression of an opinion thereon.
A. I and II are true; III and IV are false
B. I and IV are true; II and III are false
C. I and III are true; II and IV are false
D. III is true; I, II and IV are false

BRANCHES OF ACCOUNTING

2. Product quality is only one of the possible bases upon which to build a business using what strategy?
A. Focus
B. Differentiation
C. Low-cost
D. All of the above

ENTREPRENEURSHIP

3. All of the following are advantages of partnership versus sole proprietorship, except:
A. Brings greater financial capability to the business.
B. Combines special skills, expertise and experience of the partners.
C. Creates mutual agency
D. Offers freedom and flexibility of action in decision-making

FORMS OF BUSINESS ORGANIZATIONS

4. All the organization that buy goods and services to use in the production of other products and services
that are sold, rented, or supplied to other.
A. Consumer markets
B. Business markets
C. Institutional markets
D. All of the above

APPLIED ECONOMICS
5. Suppose ABC Catering’s inventory account showed a balance of P100,000 before year-end adjustments.
The physical count of goods on hand totalled P97,000. To adjust the accounts, ABC would make this entry:
A. Inventory 3,000
Accounts Receivable 3,000

B. Cost of Goods Sold 3,000

Inventory 3,000

C. Inventory 3,000
Cost of Goods Sold 3,000

D. Accounts Payable 3,000

Inventory 3,000

6. The primary activities of the financial manager include:

A. Financial planning and analysis
B. Office management
C. Declaring dividends
D. All of the above

Business Finance

7. Entity A has a current ratio of 2:1 and total current liabilities of P 50,000. How much is Entity A’s working
capital?
A. P50,000
B. P100,000
C. P150,000
D. P200,000

MODERATE
1. A company has P1,922,000 balance per books, P311,000 deposit in transit, P253,000 outstanding checks,
P118,000 credit memo and P65,000 NSF check. What is the adjusted cash balance?
A. P1,585,000
B. P1,975,000
C. P1,787,000
D. P1,722,000

BANK RECONCILIATION

2. When an entrepreneur explores his/her skills, abilities, and interests as a means of identifying the kind
of business to enter, that process is known as the :
A. Serendipity approach
B. Inside-out approach
C. Rational approach
D. All of the above

ENTREPRENEURSHIP

3. The following information pertains to Entity A in 2018:

 Accounts receivable turnover = 8
 Accounts receivable, beg. = P130,000
 Accounts receivable, end =P120,000
How much is Entity’s A’s net credit sales in 2018?
A. P820,000
B. P980,000
C. P1,000,000
D. P1,200,000

4. This refer to the aggregate of assets held as investment by an organization or individual

A. Marketable Securities
B. Portfolio
C. Temporary Investment
D. None of the above

BUSINESS FINANCE

5. Entity A had total assets, liabilities, and equity of P160,000, P73,000 and P87,000, respectively, at the
beginning of the period. During the period, Entity A’s total liabilities increased to P84,000. Entity A
reported a profit of P52,000. How much is Entity A’s ending total assets?
A. P227,000
B. P220,000
 C. P223,000
D. P296,000

6. Management theories have evolved through times because of business concern on:
A. Improved productivity
B. Labor union movement
C. Government Intervention
D. Compliance of Labor laws

ORGANIZATION & MANAGEMENT

7. On December 1, Miller Company borrowed P300,000, at 8% annual interest, from Nomo Bank. Miller
has 60 days before the first payment is required. What is the adjusting entry that Miller would need to
make on December 31, the calendar year-end?
A. Debit Interest Payable, P2,000; credit Interest Expense, P2,000
B. Debit Interest Expense, P2,000; credit Interest Payable, P2,000
C. Debit Interest Expense, P4,000; credit Interest Payable, P4,000
D. Debit Interest Expense, P24,000; credit Interest Payable, P24,000

DIFFICULT
1. A credit sale of P750 is made on June 13, terms 2/10, n/30. A return of P50 is granted on June 16. The
amount received as payment in full on June 23 is:

A. P 700
B. P 686
C. P 685
D. P 650

2. The relationship between firms and new markets is:

A. New firms must establish new markets

B. New firms usually establish new markets
C. New firms seldom establish new markets
D. New firms never establish new market

Entrepreneurship

3. A VAT-registered business has total sales of P62,720 and total purchases of P25,088 both inclusive of
VAT. How much is the net VAT payable to the BIR?

A. P1,882
B. P4,032
C. P4,516
D. P5,224

INCOME AND BUSINESS TAXATION

4. A social responsiveness in which a company anticipates responsibility for a problem before it occurs
and does more than society expects to address the problem.

A. Standardization
B. Reengineering
C. Job Rotation
D. Proactive Strategy

ORGANIZATION AND MANAGEMENT

5. Given the following adjusted trial balance:

Debit Credit
Cash P1,356
Accounts receivable 2,098
 Inventory 3,124
Prepaid rent 86
Property, plant & equipment 300
Accumulated depreciation 52
Accounts payable 82
Unearned revenue 122
Owner’s Drawings 206
Owner’s Capital 6,816
Service revenue 268
Interest revenue 56
Salary expense 160
Travel expense 66
Total P7,396 P7,396
After closing entries have been posted, the balance in Owners capital will be:

a. P6,512
b. P6,880
c. P6,708
d. P 6,914

6. Tailoring products and marketing programs to the needs and wants of specific individuals and local
customers segments, it includes local marketing and individual marketing.

A. Product development
B. Macromarketing
C. Advertising
D. Micromarketing

PRINCIPLES OF MARKETING

7. The following transactions were made by Michiko Store who uses special journals during the period:

SALES
Date Particulars Terms Amount
10/10 Nick 40% on account P150,000
10/15 PJ Cash P300,000
10/27 John On account P450,000
PURCHASES
Date Particulars Terms Amount
10/5 Drake Mfg. Cash P100,000
 10/12 Harvey suppliers On Account P200,000
10/24 Lennon Sales 60% on account P300,000

How much is the total cash receipts journal?

a. P450,000
b. P510,000
c. P300,000
d. P390,000

CLINCHER
1. Which of the following statements regarding partnership is incorrect?
A. Changes in the relationship of the partners may dissolve the partnership.
 B. The contributions of the partners to business are owned by the partnership.
C. A partnership has a separate legal identity.
D. A partnership is said to have an unlimited life because its legal life of 50 years can be renewed
for an indefinite number of renewals.

2. In capital budgeting, term of bond which has great sensitivity to interest rates is

A. Long-term bonds
B. Short-term bonds
C. Internal term bonds
D. External term bonds

Business Finance

3. In this phase of the accounting process, accounting information is disseminated to interested parties.
A. Recording
B. Communicating
C. Identifying
D. Disseminating

INTRODUCTION TO ACCOUNTING

4. In the process of completing a worksheet, you determine that the Income Statement debit column
total P83,000, while the Income Statement credit column total P65,000. To enter the net income (or net
loss) for the period into the worksheet would require an entry to

A. Adjustments debit column and the Adjustments credit column.

B. The Unadjusted Trial Balance debit column and the Adjustments credit column.
C. The Balance Sheet debit column and the Income Statement credit column.
D. The Income Statement debit column and Balance sheet credit column.

5. This is a technique used when a large number of decisions need to be made.

A. Fish Bone Analysis

B. Diagram
C. Pareto Analysis
D. All of the above

Applied Economics
6. You put up a business. You formulated a vision/mission statement outlining the ultimate goal of your
business and the core values you want to cultivate within your business organization to help you achieve
the goal. You then make a detailed list of short-term goals to help you measure your progress toward the
achievement of the ultimate goal, and specific do’s and don’ts needed to implement the core values. In
this regard, you are performing which of the following management functions
A. Organizing
B. Directing
C. Planning
D. Dreaming

INTRODUCTION TO ACCOUNTING

7. The transformation from “market place” to “market space” is being caused by the:

A. Development of the World Wide Web

B. “Green” market opportunities
C. Downsizing in large organizations
D. Industrial revolution

ENTREPRENEURSHIP

8. You purchased a computer for P50,000 cash. You expect to use the computer over the next 5 years.
After using the computer for two years, what will be the balance of the “Computer Equipment” and
“Accumulated depreciation-Computer Equipment” accounts?
Computer equipment Accumulated depreciation –Equipment
A. P50,000 P20,000
B. P50,000 P30,000
C. P30,000 P20,000
D. P0 P20,000

9. Situations in which firm limits expenditures on capital is classified as:

A. Optimal rationing
B. Capital rationing
C. Marginal rationing
D. Transactional rationing

BUSINESS FINANCE

10. The bottom figure in the statement of cash flows should tally with
A. The bottom figure of the statement of comprehensive income.
B. The bottom figure of the statement of changes in equity.
C. The balance of cash and cash equivalents in the statement of financial position.
D. The change in cash and cash equivalents in the statement of financial position.