Purpose and Users of Financial Statements

The financial statements are the financial reports of the business entity in order to
provide information that is useful for the decision-making of its users.

The users of the financial statements include the following:

 Owners, investors and prospective investors

 Lenders and suppliers and prospective creditors
 Employees, customers
 Government agencies
 The general public

As different groups of users will use the financial statements, it should be useful and
understandable to someone who has a reasonable understanding of accounting and
business and who is willing to study and analyze the information presented.  The
financial statements must be relevant, reliable and comparable. Most of all, it must
follow the applicable Philippine Financial Reporting Standards.

The financial statements are prepared at least once a year and can be presented as
frequent as monthly or quarterly. A complete set of Financial Statements comprises the
following:

1. Income Statement or Statement of Financial Performance

2. Statement of Changes in Equity
3. Balance Sheet or Statement of Financial Position
4. Statement of Cash Flows
5. Notes to the Financial Statements
6. Income Statement
7. The Income Statement, also called Statement of Financial Performance, presents
the financial results of a business for a given period of time. The statement
presents the amount of revenue generated and expenses incurred by the
business during a reporting period, as well as the resulting net income or net
loss.

Revenues are increases in economic benefits during the accounting period in the
form of inflows or enhancements of assets or decreases of liabilities (or a
combination of both) from the delivery or production of goods, rendering of
 services, or other activities that constitute the entity’s ongoing major or central
operations.

Examples of revenues are as follows:

•    Sales
•    Professional fees earned
•    Service revenues
•    Interest revenue
•    Dividend revenue
•    Rent income
•    Subscription revenue

Expenses are decreases in economic benefits during the accounting period in the
form of outflows or using up of assets or incurrences of liabilities (or a
combination of both) from the delivery or production of goods, rendering of
services, or other activities that constitute the entity’s ongoing major or central
operations.

Examples of expenses are as follows:

•    Cost of sales
•    Depreciation expense
•    Salaries and wages
•    Utility costs
•    Insurance expense
•    Permits, taxes and licenses
•    Repair and maintenance
•    Representation expenses
•    Losses
8.
9.

10. Exercise 1:
11. Prepare the Income Statement based on the following information:
12. PACIOLI GENERAL SERVICES
Adjusted Trial Balance
As of January 31, 2021

Cod
Account Title Debit Credit
e
101 Cash P76,000
111 Accounts Receivable 22,000
 121 Supplies 7,000
151 Equipment 30,000
152 Accumulated Depreciation - Equipment  P500
201 Accounts Payable 10,500
301 Pacioli, Capital 100,000
311 Pacioli, Drawing 10,000
401 Service Revenue 50,000
601 Salaries 12,000
602 Depreciation 500
603 Supplies Expense 1,000
604 Utility Expense 2,500
TOTAL   P161,000  P161,000
Statement of Changes in Equity

The statement of changes in equity presents a reconciliation of the beginning and

ending balances in a company’s equity during a reporting period. The statement starts
with the beginning equity balance, and then adds or subtracts such items as profits,
capital investments or reductions, and dividend payments to arrive at the ending
balance.

Changes in equity over an accounting period include the following elements:

 Net income or loss during the accounting period

 Increase or decrease in capital
 Capital withdrawals or dividend payments to shareholders

Exercise 2:

Prepare the Statement of Changes in Equity of Pacioli General Services (Exercise 1).
Balance Sheet

A Balance Sheet, also referred to as Statement of Financial Position,  presents a

company’s financial position as of a given date. It shows the assets, liabilities and equity
of the business entity.

An asset is a resource controlled by the entity as a result of past events and from which
future economic benefits are expected to flow to the entity (IASB Framework). Examples
of assets include the following:
  Cash – includes coins, currencies, checks, bank deposits and other cash items
ready for use in the operations of the business.
 Accounts Receivable – amounts collectible from customers for goods provided
and services rendered on credit.
 Merchandise Inventory – unsold goods for sale to customers.
 Prepaid Expenses – expenses paid but not yet used.
 Investments – assets for the accretion of wealth through capital returns or
capital appreciation or for other benefits to the business.
 Property, Plant and Equipment – tangible assets used in the production or
supply of goods and services, or for business administration purposes.
 Intangible Assets – includes identifiable, non-monetary properties without
physical substance, like licenses, copyrights, patents, trademarks and others.

A liability is a present obligation of the enterprise arising from past events, the
settlement of which is expected to result in an outflow from the enterprise of resources
embodying economic benefits (IASB Framework). Examples of liabilities include the
following

 Accounts Payable – obligations due to suppliers of goods and services

purchased on credit.
 Notes Payable - obligations due to suppliers of goods and services evidenced by
a promissory note.
 Loans Payable - obligations due to lenders as a result of borrowing of funds.
 Lease Payable – obligations due to lessors for property and equipment used for
business operations.
 Utilities Payable - obligations due to utility companies for services rendered.
 Accrued liabilities - obligations due to others for expenses already incurred but
not yet paid.
 Unearned Revenues - obligations due to customers for goods and services paid
but not yet delivered.

Equity is the residual interest in the assets of the entity after deducting all the liabilities
(IASB Framework). It represents the capital investments, net of the capital withdrawals of
the owner in the entity, and the net income or loss in the operation of the business.
Equity accounts include the following:

 Capital account –the equity investment of the owner (in a single proprietorship)
or for each partner (in a partnership), and the cumulative effect of the
withdrawals of capital and business net profits and losses.
  Drawing – the equity withdrawals of the owner or for each partner.
 Common Stock, Preferred Stock – the equity of the owners of a corporation
 Retained Earnings – the cumulative balance of the net income or losses of the
corporation, investments of the owners, less the distribution to the owners.

Exercise 3:

Prepare the Balance Sheet of Pacioli General Services (Exercise 1).

Statement of Cash Flows

The Statement of Cash Flows shows the cash receipts and cash payments from the
business activities of the enterprise during the period. The business activities are
classified into operating, investing and financing activities.

Activities of Business Organizations

Operating activities are the principal activities of the enterprise. They are the
transactions and events that enter into the determination of profit or loss. Operating
Activities include the following:

 Cash receipts from sales of goods and rendering of services.

 Cash receipts from interests, royalties, commissions, fess and other sources.
 Cash payments to suppliers of goods and services.
 Cash payments to employees for salaries and other employee expenses.
 Cash payments for operating expenses such as advertising, supplies, utilities, taxes, and
others.

Investing activities include the acquisition and disposal of non-current assets of the

business. Examples of investing activities are

 Cash payments in purchasing land, constructing a building, buying furniture and

equipment, acquiring intangible and other long-term assets.
 Cash receipts in selling property and equipment, intangible and other long-term assets.
 Cash payments in investing in equity and debt instruments of other companies.
 Cash receipts from selling investments in equity and debt instruments of other
companies.
Financing activities include equity transaction of the business and the owners, as well
as borrowing of funds from financial institutions. Examples are

 Investment and withdrawal of capital of the owners

 Cash proceeds from bank loans and repayment of the loans.

Exercise 4.

Prepare the Statement of Cash Flows of Pacioli General Services (Exercise 1).

Assignment. Financial Statements

PACIOLI GENERAL SERVICES

Adjusted Trial Balance

As of January 31, 2021

Cod
Account Title Debit Credit
e

101 Cash P76,000

111 Accounts Receivable 22,000

121 Supplies 7,000

151 Equipment 30,000

152 Accumulated Depreciation - Equipment  P500

201 Accounts Payable 8,000

 202 Accrued Expenses Payable   2,500

301 Pacioli, Capital 100,000

311 Pacioli, Drawing 10,000

401 Service Revenue 50,000

601 Salaries 12,000

602 Depreciation 500

603 Supplies Expense 1,000

604 Utility Expense 2,500

TOTAL   P161,000  P161,000

Based on the foregoing data, prepare and submit the following:

1. Income Statement
2. Statement of Changes in Equity
3. Balance Sheet
4. Statement of Cash Flows
5. Unearned revenue is a/an

6.
7. a.

8. Liability

9.
10. b.

11. Equity

12.
13. c.

14. Asset

15.
16. d.

17. Revenue
18. Feedback
19. Your answer is correct.
20. The correct answer is:

21. Liability
22. Question 2

23. Correct
24. Mark 1.00 out of 1.00
25. Flag question

26. Question text

27. The following are examples of service businesses except

28.
29. a.

30. Cagayan River Hotel and Resorts

31.
32. b.

33. Philippine Airlines

34.
35. c.

36. Spendmore Supermarket

37.
38. d.

39. Azina Water Refilling Station

40. Feedback
41. Your answer is correct.
42. The correct answer is:

43. Spendmore Supermarket

44. Question 3

45. Correct
46. Mark 1.00 out of 1.00

47. Flag question

48. Question text

49. Which is not a basic characteristic of a business?
50.
51. a.

52. A regular activity

53.
54. b.

55. Social marketing

56.
57. c.

58. Involves commercial activities

59.
60. d.

61. Conducted for profit

62. Feedback
63. Your answer is correct.
64. The correct answer is:

65. Social marketing

66. Question 4

67. Correct
68. Mark 1.00 out of 1.00

69. Flag question

70. Question text

71. The balance sheet reports
72. Select one:

73.
74. a.

75. The profits earned by the business entity

76.
77. b.
78. The financial position of the business entity as of a given date

79.
80. c.

81. The sources and uses of cash

82.
83. d.

84. The cost of sold merchandise inventory

85. Feedback
86. Your answer is correct.
87. The correct answer is: The financial position of the business entity
as of a given date

88. Question 5

89. Correct
90. Mark 1.00 out of 1.00

91. Flag question

92. Question text

93. A statement that shows the listings of assets, liabilities and equity of an entity
94. Select one:
95.
96. a.

97. Income statement

98.
99. b.

100. Statement of cash flows

101.
102. c.

103. Notes to the financial statements

104.
105. d.

106. Balance sheet

107. Feedback
108. Your answer is correct.
109. The correct answer is: Balance sheet

110.Question 6

111.Correct
112.Mark 1.00 out of 1.00

113. Flag question

114. Question text

115. A prepaid expense is a/an

116.
117. a.

118. Equity

119.
120. b.

121. Revenue

122.
123. c.

124. Asset

125.
126. d.

127. Expense
128. Feedback
129. Your answer is correct.
130. The correct answer is:

131. Asset
132.Question 7

133.Correct
134.Mark 1.00 out of 1.00

135. Flag question

136. Question text

137. Gross profit is calculated as
138. Select one:

139.
140. a.

141. Net sales less merchandise inventory purchased

142.
143. b.

144. Net sales less goods available for sale

145.
146. c.

147. Gross sales less sales returns and discounts less merchandise inventory at
the end of the period

148.
149. d.

150. Net sales less cost of goods sold

151. Feedback
152. Your answer is correct.
153. The correct answer is: Net sales less cost of goods sold

154.Question 8

155.Correct
156.Mark 1.00 out of 1.00
157. Flag question

158. Question text

159. Under the accrual basis of accounting, transactions and effects are
recorded when

160.
161. a.

162. Expenses are incurred and revenues are collected in cash

163.
164. b.

165. Expenses are paid and revenues are earned

166.
167. c.

168. Expenses are incurred but not paid and revenues are earned but not yet
collected

169.
170. d.

171. Expenses are incurred and revenues are earned

172. Feedback
173. Your answer is correct.
174. The correct answer is:

175. Expenses are incurred and revenues are earned

176.Question 9

177.Incorrect
178.Mark 0.00 out of 1.00

179. Flag question

180. Question text
181. Which of the following would appear in an income statement?
182. Select one:

183.
184. a.

185. Expenses that are paid

186.
187. b.

188. Expenses not yet paid

189.
190. c.

191. Expenses whether paid or not

192.
193. d.

194. Cash payments for expenses

195. Feedback
196. Your answer is incorrect.
197. The correct answer is: Expenses whether paid or not

198.Question 10

199.Correct
200.Mark 1.00 out of 1.00

201. Flag question

202. Question text

203. The Accumulated Depreciation – Delivery Equipment is reported in the

204.
205. a.

206. Income Statement as part of the Operating Expenses

207.
208. b.

209. Balance Sheet as Addition to the Delivery Equipment account

210.
211. c.

212. Balance Sheet as Deduction from the Delivery Equipment account

213.
214. d.

215. Trial Balance only

216. Feedback
217. Your answer is correct.
218. The correct answer is:

219. Balance Sheet as Deduction from the Delivery Equipment account

220.Question 11

221.Incorrect
222.Mark 0.00 out of 1.00

223. Flag question

224. Question text

225. All of the following are cash flows in the financing activities of a business,
except
226. Select one:

227.
228. a.

229. Cash withdrawals by owners

230.
231. b.

232. Cash investment by owners

233.
234. c.

235. Cash payment to suppliers

236.
237. d.

238. Cash proceeds and payments to bank borrowings

239. Feedback
240. Your answer is incorrect.
241. The correct answer is: Cash payment to suppliers

242.Question 12

243.Correct
244.Mark 1.00 out of 1.00

245. Flag question

246. Question text

247. A journal entry records the effects of a transaction or an event expressed
in terms of debit and credit. Which of the following is not a correct journal entry?
248. Select one:

249.
250. a.

251. An entry with one debit and two or more credits

252.
253. b.

254. An entry with one debit and one credit

255.
256. c.

257. An entry with one or more debits only

258.
259. d.
260. An entry with two or more debits and one credit
261. Feedback
262. Your answer is correct.
263. The correct answer is: An entry with one or more debits
only

264.Question 13

265.Correct
266.Mark 1.00 out of 1.00

267. Flag question

268. Question text

269. The Statement of Financial Position is another term for the
270. Select one:

271.
272. a.

273. Balance sheet

274.
275. b.

276. Income statement

277.
278. c.

279. Statement of cash flows

280.
281. d.

282. Statement of changes in equity

283. Feedback
284. Your answer is correct.
285. The correct answer is: Balance sheet

286.Question 14
287.Correct
288.Mark 1.00 out of 1.00

289. Flag question

290. Question text

291. Which may not be a function of a bookkeeper?

292.
293. a.

294. Post adjusting entries

295.
296. b.

297. Finalize financial statements

298.
299. c.

300. Prepare unadjusted trial balance

301.
302. d.

303. Record transactions

304. Feedback
305. Your answer is correct.
306. The correct answer is:

307. Finalize financial statements

308.Question 15

309.Incorrect
310.Mark 0.00 out of 1.00

311. Flag question

312. Question text
313. Which of the following would appear in a balance sheet?
314. Select one:

315.
316. a.

317. Cash balance at the end of the period

318.
319. b.

320. Cash balance at the beginning of a period

321.
322. c.

323. Cash payments during the period

324.
325. d.

326. Cash receipts during the period

327. Feedback
328. Your answer is incorrect.
329. The correct answer is: Cash balance at the end of the
period

330.Question 16

331.Correct
332.Mark 1.00 out of 1.00

333. Flag question

334. Question text

335. reve
336. Select one:

337.
338. a.
339. Cash withdrawals by the business owner

340.
341. b.

342. Cash payment to acquire furniture and fixtures

343.
344. c.

345. Cash payment to acquire equipment

346.
347. d.

348. Cash payment for construction of building

349. Feedback
350. Your answer is correct.
351. The correct answer is: Cash withdrawals by the business
owner

352.Question 17

353.Incorrect
354.Mark 0.00 out of 1.00

355. Flag question

356. Question text

357. Which of the following would appear in an income statement?
358. Select one:

359.
360. a.

361. Cash receipts from revenues

362.
363. b.

364. Revenues that are not yet collected

365.
366. c.

367. Revenues that are collected

368.
369. d.

370. Revenue whether collected or not

371. Feedback
372. Your answer is incorrect.
373. The correct answer is: Revenue whether collected or not

374.Question 18

375.Incorrect
376.Mark 0.00 out of 1.00

377. Flag question

378. Question text

379. Which of the following statements is correct?
380. Select one:

381.
382. a.

383. The accounting equation can also be expressed as Assets – Liabilities =

Owner’s Equity.

384.
385. b.

386. Revenue and Expenses increase capital.

387.
388. c.

389. Source documents are prepared after analyzing the business transactions.

390.
391. d.
392. The bottom line of an Income Statement shows that the business always
have profit.
393. Feedback
394. Your answer is incorrect.
395. The correct answer is: The accounting equation can also
be expressed as Assets – Liabilities = Owner’s Equity.

396.Question 19

397.Correct
398.Mark 1.00 out of 1.00

399. Flag question

400. Question text

401. It is called the books of original entry
402. Select one:

403.
404. a.

405. General Ledger

406.
407. b.

408. General Journal

409.
410. c.

411. Trial Balance

412.
413. d.

414. Chart of Accounts

415. Feedback
416. Your answer is correct.
417. The correct answer is: General Journal

418.Question 20
419.Correct
420.Mark 1.00 out of 1.00

421. Flag question

422. Question text

423. In the accounting process, which step follows journalizing?
424. Select one:

425.
426. a.

427. Documentation

428.
429. b.

430. Preparation of trial balance

431.
432. c.

433. Posting to the ledger

434.
435. d.

436. Preparation of financial statements

437. Feedback
438. Your answer is correct.
439. The correct answer is: Posting to the ledger

440. Which of the following financial statements discloses the economic

resources of the organization and the claims against those resources?
441. Select one:

442.
443. a.

444. Income statement

445.
446. b.

447. Statement of changes in equity

448.
449. c.

450. Statement of cash flows

451.
452. d.

453. Balance sheet

454. Feedback
455. Your answer is incorrect.
456. The correct answer is: Balance sheet

457.Question 2

458.Correct
459.Mark 1.00 out of 1.00

460. Flag question

461. Question text

462. All of the following are cash flows in the financing activities of a business,
except
463. Select one:

464.
465. a.

466. Cash investment by owners

467.
468. b.

469. Cash proceeds and payments to bank borrowings

470.
471. c.
472. Cash withdrawals by owners

473.
474. d.

475. Cash payment to suppliers

476. Feedback
477. Your answer is correct.
478. The correct answer is: Cash payment to suppliers

479.Question 3

480.Correct
481.Mark 1.00 out of 1.00

482. Flag question

483. Question text

484. Which may not be a function of a bookkeeper?

485.
486. a.

487. Record purchase invoices

488.
489. b.

490. Record cash receipts and payments

491.
492. c.

493. Record employee attendances

494.
495. d.

496. Record sales invoices

497. Feedback
498. Your answer is correct.
499. The correct answer is:
500. Record employee attendances
501.Question 4

502.Correct
503.Mark 1.00 out of 1.00

504. Flag question

505. Question text

506. Which of the following is an operating cash flow?
507. Select one:

508.
509. a.

510. Withdrawals of cash by owners

511.
512. b.

513. Payments to suppliers

514.
515. c.

516. Payments to banks for loan borrowings

517.
518. d.

519. Payment for purchased equipment

520. Feedback
521. Your answer is correct.
522. The correct answer is: Payments to suppliers

523.Question 5

524.Correct
525.Mark 1.00 out of 1.00
526. Flag question

527. Question text

528. The obligations of an enterprise to non-owners
529. Select one:

530.
531. a.

532. Expenses

533.
534. b.

535. Assets

536.
537. c.

538. Revenues

539.
540. d.
541. Liabilities

542. Feedback
543. Your answer is correct.
544. The correct answer is: Liabilities

545.Question 6

546.Correct
547.Mark 1.00 out of 1.00

548. Flag question

549. Question text
550. A statement that shows the listings of assets, liabilities and equity of an
entity
551. Select one:

552.
553. a.

554. Notes to the financial statements

555.
556. b.

557. Statement of cash flows

558.
559. c.

560. Income statement

561.
562. d.

563. Balance sheet

564. Feedback
565. Your answer is correct.
566. The correct answer is: Balance sheet

567.Question 7

568.Correct
569.Mark 1.00 out of 1.00

570. Flag question

571. Question text

572. All of the following are sources of cash from operating activities, except
573. Select one:

574.
575. a.
576. Cash receipts from rendering services

577.
578. b.

579. Cash proceeds from bank borrowings

580.
581. c.

582. Cash collection from customers

583.
584. d.

585. Cash receipts from sale of goods

586. Feedback
587. Your answer is correct.
588. The correct answer is: Cash proceeds from bank
borrowings

589.Question 8

590.Correct
591.Mark 1.00 out of 1.00

592. Flag question

593. Question text

594. All of the following are uses of cash in investing activities, except
595. Select one:

596.
597. a.

598. Cash payment to acquire furniture and fixtures

599.
600. b.

601. Cash payment for construction of building

602.
603. c.

604. Cash payment to acquire equipment

605.
606. d.

607. Cash withdrawals by the business owner

608. Feedback
609. Your answer is correct.
610. The correct answer is: Cash withdrawals by the business
owner

611.Question 9

612.Correct
613.Mark 1.00 out of 1.00

614. Flag question

615. Question text

616. Failure to record the adjusting entry for the expired portion of prepaid
expenses will

617.
618. a.

619. Understate assets and net income

620.
621. b.

622. Overstate assets and net income

623.
624. c.

625. Understate equity and overstate liability

626.
627. d.
628. Overstate equity and understate liability
629. Feedback
630. Your answer is correct.
631. The correct answer is:

632. Overstate assets and net income

633.Question 10

634.Correct
635.Mark 1.00 out of 1.00

636. Flag question

637. Question text

638. What is the normal order of accounts in the trial balance?
639. Select one:

640.
641. a.

642. Assets, liabilities, capital

643.
644. b.

645. Assets, liabilities, capital, revenues and expenses

646.
647. c.

648. Assets, liabilities, revenues and expenses

649.
650. d.

651. Assets, capital, revenues, expenses and liabilities

652. Feedback
653. Your answer is correct.
654. The correct answer is: Assets, liabilities, capital, revenues
and expenses

655.Question 11
656.Correct
657.Mark 1.00 out of 1.00

658. Flag question

659. Question text

660. The allowance for uncollectible accounts has a normal credit balance and
is presented in the

661.
662. a.

663. Balance Sheet as deduction from Accounts Payable

664.
665. b.

666. Balance Sheet as addition to Accounts Receivable

667.
668. c.

669. Income Statement as part of the Operating Expenses

670.
671. d.

672. Balance Sheet as deduction from Accounts Receivable

673. Feedback
674. Your answer is correct.
675. The correct answer is:

676. Balance Sheet as deduction from Accounts Receivable

677.Question 12

678.Correct
679.Mark 1.00 out of 1.00

680. Flag question

681. Question text
682. Which of the following correctly describes revenues?
683. Select one:

684.
685. a.

686. Properties or resources owned by the business

687.
688. b.

689. Amount charged to the capital as cost of rendering services to a client

690.
691. c.

692. Increase in owner’s equity due to rendering service to a client

693.
694. d.

695. Economic claims of the owners to a business

696. Feedback
697. Your answer is correct.
698. The correct answer is: Increase in owner’s equity due to
rendering service to a client

699.Question 13

700.Correct
701.Mark 1.00 out of 1.00

702. Flag question

703. Question text

704. Posting is the process of
705. Select one:

706.
707. a.
708. Transferring entries from the general journal to the general ledger

709.
710. b.

711. Reconciling entries from the general ledger to the general journal

712.
713. c.

714. Transferring entries from the general ledger to the general journal

715.
716. d.

717. Reconciling entries from the general journal to the general ledger
718. Feedback
719. Your answer is correct.
720. The correct answer is: Transferring entries from the
general journal to the general ledger

721.Question 14

722.Correct
723.Mark 1.00 out of 1.00

724. Flag question

725. Question text

726. The bookkeeper is

727.
728. a.

729. the process of recording, classifying and summarizing business

transactions for the proper determination of correct tax declarations and
payments.

730.
731. b.
732. the artist of recording, classifying, and summarizing in a significant manner
and in terms of money, transactions and events which are, in part at least of
financial character, and interpreting the results thereof.

733.
734. c.

735. the recording of financial transactions and is part of the process of

accounting in business.

736.
737. d.

738. the person who keeps and maintains the books of accounts of the
business organization, and is responsible for recording the transactions of the
business.
739. Feedback
740. Your answer is correct.
741. The correct answer is:

742. the person who keeps and maintains the books of accounts of the
business organization, and is responsible for recording the transactions of the
business.
743.Question 15

744.Correct
745.Mark 1.00 out of 1.00

746. Flag question

747. Question text

748. The following are examples of manufacturing businesses, except

749.
750. a.

751. Sony Philippines

752.
753. b.
754. Red Ribbon Bakeshop

755.
756. c.

757. Toyota Motors, Inc.

758.
759. d.

760. Rolex Watch Repair Shop

761. Feedback
762. Your answer is correct.
763. The correct answer is:

764. Rolex Watch Repair Shop

765.Question 16

766.Correct
767.Mark 1.00 out of 1.00

768. Flag question

769. Question text

770. An asset has been acquired for P250,000. It is estimated to have a useful
life of 8 years, and is being depreciated at P29,375 per year. How much is its
estimated scrap value?

771.
772. a.

773. P43,750

774.
775. b.

776. P28,750

777.
778. c.

779. P15,000
780.
781. d.

782. P0
783. Feedback
784. Your answer is correct.
785. The correct answer is:

786. P15,000
787.Question 17

788.Correct
789.Mark 1.00 out of 1.00

790. Flag question

791. Question text

792. The adjusted trial balance shows

793.
794. a.

795. Accounts and amounts which have been adjusted only

796.
797. b.

798. Assets, liabilities and equity accounts only

799.
800. c.

801. Revenues and expenses accounts only

802.
803. d.

804. Accounts and amounts for the preparation of financial statements

805. Feedback
806. Your answer is correct.
807. The correct answer is:
808. Accounts and amounts for the preparation of financial statements
809.Question 18

810.Correct
811.Mark 1.00 out of 1.00

812. Flag question

813. Question text

814. Which is not a classification of business activities in the Statement of Cash
Flows?
815. Select one:

816.
817. a.

818. Administrative Activities

819.
820. b.

821. Operating Activities

822.
823. c.

824. Financing Activities

825.
826. d.

827. Investing Activities

828. Feedback
829. Your answer is correct.
830. The correct answer is: Administrative Activities

831.Question 19

832.Correct
833.Mark 1.00 out of 1.00
834. Flag question

835. Question text

836. Which of the following is true about debits and credits?
837. Select one:

838.
839. a.

840. Increases in owner’s equity and decreases in liabilities are always credited.

841.
842. b.

843. Decreases in assets and increases in liabilities are always credited.

844.
845. c.

846. Decreases in owner’s equity and drawing are always debited.

847.
848. d.

849. Increases in assets and liabilities are always debited.

850. Feedback
851. Your answer is correct.
852. The correct answer is: Decreases in assets and increases in
liabilities are always credited.

853.Question 20

854.Correct
855.Mark 1.00 out of 1.00

856. Flag question

857. Question text
858. A claim from a customer for services rendered is an account reported as
859. Select one:

860.
861. a.

862. Service revenue in the income statement

863.
864. b.

865. Account receivable in the balance sheet

866.
867. c.

868. Accounts payable in the balance sheet

869.
870. d.

871. Service revenue in the statement of cash flows

872. Feedback
873. Your answer is correct.
874. The correct answer is: Account receivable in the balance
sheet