Review 3

1.
If furniture is overvalued by P 1,000 in the trial d) Account Title

balance, ________. e) None of the choices
a) The total debit balance is the same as the total
credit balance in the trial balance.
b) None of the choices 4. Which of the following elements does not actually
c) The value of assets on the credit side of the relate to financial position?
trial balance should be reduced. a) Amount owed to creditors
d) Total debit balance is less than the total credit b) Net interest in the company of the owners
balance in the trial balance. c) Increases in equity other than investments
e) Total debit balance is greater than total credit d) Resources of the company
balance in the trial balance. e) None of the choices
2. If accounts payable is undervalued by P 3,000 in 5. Which of the following accounts is commonly

the trial balance, _______. classified as current?
a) Total debit balance is less than the total credit a) Accumulated Depreciation
balance in the trial balance. b) Mortgage Payable
b) The value of liability on the credit side of the c) Intangible Assets
trial balance should be reduced. d) Equity
c) Total debit balance is greater than total credit e) None of the choices
balance in the trial balance.
d) The total debit balance is the same as the total
credit balance in the trial balance. 6. Which of the following elements properly relate to
e) None of the choices financial performance?
a) Either Income or Expense
b) Income
3. Complete the statement: ________ shows the c) Both Expense and Income
changes in the balance and the ending balance of d) Expense
elements of financial statements. e) None of the choices
a) T- Account
b) Accounting Equation
c) Double- Entry System 7. Which of these steps is executed during the
accounting period?
a) Reversing entries preparation b) Account titles and explanation column
b) Preparation of worksheet c) Debit amount column
c) Journalizing and posting adjusting entries d) Pre-referencing column
d) Analyzing transactions e) None of these because all of these are parts of
e) None of the choices a journal
8. Which of these steps is executed at the end of the 11. Analyze the set of statements:
accounting period?
a) Both preparation of financial statements, and I –The balance seen in the accounting equation is
journalizing and posting of daily entries observed in most cases of business transactions.
b) Either preparation of financial statements or II – A decrease in asset is not a debit.
journalizing and posting of daily entries
c) Preparation of financial statements III – Analyzing business transactions is done
d) Journalizing and posting of daily entries during the period.
e) None of the choices
Given these statements, we can say that:
9. Which of the following properly depicts the points a) Most of the statements are false.
considered in analyzing a business transaction? b) Most of the statements are true.
a) Identify the incorrect side to reflect the effect of c) All of these statements are true.
transaction to indicated accounts d) All of these statements are false.
b) Ascertain the effect of the indicated accounts to e) None of the choices
the transaction
c) Indicate the accounts not affected by the 12. Analyze the set of statements:
transaction
d) Two of these properly depict the points I – The normal balance of an account, regardless
considered in analyzing a business transaction of its classification, is not the side where increases
e) Identify the transaction based on document are not recorded.
presented
II – Notes payable is usually a current asset.
10. Which of the following is not a part of a III – An increase in income is not a credit.
journal?
a) Date Column Given these statements, we can say that:
a) Only statement II is true.
b) Most of the statements are true.
c) All statements are not true. 15. Tom Jones is the owner and operator of
d) Only statement III is false. Jones Enterprise, a motivational consulting
e) Statement II is false. business. At the end of its accounting period,
December 31, 2019, Jones Enterprise has assets
13. Tom Jones is the owner and operator of of P760,000 and liabilities of P240,000.
Jones Enterprise, a motivational consulting
business. At the end of its accounting period, Tom Jones, capital, as of December 31, 2020,
December 31, 2019, Jones Enterprise has assets assuming that assets decreased by P60,000 and
of P760,000 and liabilities of P240,000. liabilities increased by P21,600 during 2020?
a) P478,400
b) P438,400
Tom Jones, capital, as of December 31, 2019?
c) P520,400
a) P250,000 d) P568,400
b) P520,000
c) P560,000
d) P960,000 16. Tom Jones is the owner and operator of
14. Tom Jones is the owner and operator of
business. At the end of its accounting period,
business. At the end of its accounting period, December 31, 2019, Jones Enterprise has assets
December 31, 2019, Jones Enterprise has assets of P760,000 and liabilities of P240,000
of P760,000 and liabilities of P240,000
Tom Jones, capital, as of December 31, 2020,
Tom Jones, capital, as of December 31, 2020, assuming that assets increased by P100,000 and
assuming that assets increased by P120,000 and liabilities decreased to P38,400 during 2020?
liabilities increased by P72,000 during 2020?
a) P438,400
a) P520,000
b) P821,600
b) P568,000
c) P658,400
c) P586,000
d) P539,600
d) P880,000
17. Indicate the effect of transaction. Choose a) Increase asset and decrease another asset
the letter that corresponds to the effect. b) Increase asset and increase liability
c) Decrease assets and decrease owner’s equity
Elizabeth Salvador Freight Services during July d) Increase assets and increase Owner’s equity
2020:
"Cash received from delivery services" 20. Indicate the effect of the transaction.
a) Increase asset and decrease another asset Choose the letter that corresponds to the effect.
b) Increase asset and increase liability
c) Decrease assets and decrease owner’s equity Elizabeth Salvador Freight Services during July
d) Increase assets and increase Owner’s equity
2020:
18. It is a decrease in economic benefit during "Paid advertising expense"

the acctg period related to a decrease in asset or a) Increase asset and decrease another asset
an increase in liability that results in decrease in b) Increase asset and increase liability
c) Decrease assets and decrease owner’s equity
equity other than distribution to owners.
d) Increase assets and increase Owner’s equity
a) Liability
b) Asset
c) Income
d) Expense
19. Indicate the effect of the transaction.

Choose the letter that corresponds to the effect.
Elizabeth Salvador Freight Services during July

2020:
"Received cash from the additional investment of

the owners"

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1.

If furniture is overvalued by P 1,000 in the trial d) Account Title

2. If accounts payable is undervalued by P 3,000 in 5. Which of the following accounts is commonly

18. It is a decrease in economic benefit during "Paid advertising expense"

19. Indicate the effect of the transaction.

Elizabeth Salvador Freight Services during July

"Received cash from the additional investment of

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