President Elpidio Quirino High Schol

San Agustin East, Agoo, La Union

Name: ________________________ Score ______________________

Directions: Read carefully each item. Use a separate sheet for your answers, write only the
letter of the best answer for each item.
1. It is an estimation of revenue and expenses over a future period of time and usually monitored
and evaluated on a periodic basis. Which of the following describes the statement?
A. Budget B. Forecast
C. Plan D. All of the choices (2)
2. What do you call the process of using historical data as inputs to make informed estimates that
are predictive in determining the direction of future trends?
A. Budgeting B. Forecasting
C. Planning D. Organizing (1)
3. Which of the following formula represent the computation of Profit?
A. Revenue – Cost = Profit B. Income – Cost = Profit
C. Total Revenue – Total Expenses = Profit D. Income – Expenses = Profit
4. Name the term used to the cost incurred by the business in their effort to generate revenue.
A. Cost B. Expenses
C. Money D. Revenue
5. What do you call the money generated from the normal course of business?
A. Income B. Money
C. Profit D. Revenue
6. What do you call the easiest and simplest way of forecasting revenues and expenses?
A. Linear Regression B. Moving average
C. Straight line D. All of the choices
7. What do you call a revenue which derived from rendering service as a means of doing business?
A. Operating Revenue B. Sales Revenue
C. Service Revenue D. Gross Revenue
8. Among the given choices, what is a financial benefits realized only when revenue exceeded
expense?
A. Cost B. Deficit
C. Loss D. Profit
9. It is called a cost that does not change regardless with the decrease or decrease of goods and
services produced or sold. How will you classify this from the given option?
A. Fixed cost B. Operating Expenses
C. Variable cost D. Other expenses
10. How will you summarize the method of estimating a company’s future performance by starting
with low-level company data and working “up” to revenue?
A. Bottom-up forecasting B. Top-down forecasting
C. Moving Average D. Straight line
11. Classify among the choices given when Notes payable could NOT appear as a line on the
balance sheet in which classification.
A. Current assets B. Long-term liabilities
C. current liabilities D. long-term assets (9)
12. In a financial statement, cite the term that will allow you to determine the gross profit for
a retailer or manufacturer?
A. Balance sheet B. Income statement
C. Statement of cash flow D. Statement of shareholder’s equity
13. A corporation’s working capital is calculated using which amounts? Can you classify it
from the given choices?
A. Total assets and total liabilities B. Total assets and current liabilities
C. Current assets and current liabilities D. None of the choices
14. To discover the amount spent for capital expenditures will be reported in which section of the
statement of cash flow?
 A. Cash provided/ used in financing activities B. Cash provided/ used in operating
activities
C. Cash provided/ used in investing activities D. Supplemental information
15. An income statement show about a company over a period of time. How would you discover it?
A. Equity B. profitability
C. Liability D. reliability
16. What fact would you select that is NOT a standard financial statement?
A. Balance sheet B. Income Statement
C. Cash flow statement D. Shareholder sheet
17. How would you use a basic calculation used to analyze an income statement?
A. Assets minus liabilities B. Revenue plus sales
C. Income minus expenses D. Sales plus operating costs
18. Identify which of the following is a category or element of the balance sheet?
A. Expenses B. gain
C. liabilities D. losses
19. Analyze this statement. Which of the following is NOT a current asset?
A. Accounts receivable B. Prepaid insurance
C. land D. supplies
20. If a company has a total asset of ₱ 200,000.00 and with some total liabilities of ₱ 150,000.00.
How much is the owner’s equity? Analyze the problem which justify the correct answer.
A. ₱ 49,000.00 B. ₱ 50,000.00
C. ₱ 55,000.00 D. ₱ 150,000.00

II. Journalizing
Below are business transactions of a merchandising business to be recorded the said transactions in the
general journal. Answer the following questions below:
21. On April 1, PEQNHS purchases 10 Laptops at a cost of P30,000.00 each. PEQNHS has enough cash-on-
hand to pay immediately with cash. The following entry occurs.
A.
Date Account Debit Credit
April 1 Merchandising Inventory: Purchases P 300,000.00
Cash P 300,000.00
To record the purchases of 10
laptops
B.
Date Account Debit Credit
April 10 Cash P 30,000.00
Merchandising Inventory: Purchases P 30,000.00
To record the purchases of 10
laptops
C.
Date Account Debit Credit
April 11 Merchandising Inventory: Purchases P 40,000.00
Cash P 30,000.00
To record the purchases of 10
laptops

D. All of the above

22. On April 7, PEQNHS purchases 30 desktop computers on credit at a cost of P40,000 each. The credit
terms are n/15 with an invoice date of April 7. Evaluate the following entry occurs.
A
Date Account Debit Credit
April 7 Merchandise Inventory: Desktop P 1,200,000.00
Computers
Accounts Payable P 1,200,000.00
To record the purchases of 30 PC on
credit, n/15

B.
Date Account Debit Credit
 April 17 Merchandise Inventory: Desktop P 1,200,000.00
Computers
Accounts Receivable P 1,200,000.00
To record the purchases of 30 PC on
credit n/12

C
Date Account Debit Credit
April 7 Accounts Payable P 1,200,000.00
Merchandise Inventory:
Desktop Computers P 1,200,000.00
To record the purchases of 30 PC on
credit, n/15

D
Date Account Debit Credit
April 7 Merchandise Inventory: Desktop P 1,300,000.00
Computers
Accounts Payable P 1,300,000.00
To record the purchases of 30 PC on
credit, n/15

23. From the first transaction, which statement supports and explanation to our entry?
A. Merchandise Inventory-Packages decreases (debit), and Cash increases (credit) because
PEQNHS paid with cash.
B. Cash increases (debit), and Merchandise Inventory-Packages decreases (credit) because
thecompany paid with cash.
C. Merchandise Inventory-Packages increases (debit), and Cash decreases (credit) because
the company paid with cash.
D. All statements are true

24. Our next transaction, which statement supports our journal entry?
A. Merchandise Inventory is specific to desktop computers and is increased (debited) for the
value of the computers by P3,000 (P3,000 × 30). Since the computers were
purchased on credit by PEQNHS, Accounts Payable increases (credit)
B. Merchandise Inventory is specific to desktop computers and is increased (debited) for the
value of the computers by P30,000 (P30,000× 30). Since the computers were
purchased on credit by PEQNHS, Accounts Payable increases (credit)
C. All of the above d. None of the above