Quiz #2

• All are features of an effective accounting system except:

  1. Control
  2. Compatibility
  3. Comparability
  4. Flexibility
• First Financial Statement to be prepared:

  1. Balance Sheet
  2. Statement of Cash Flows
  3. Income Statement
  4. Statement of Owner's Equity
• The economic resources that a business owns and expects to be useful to the enterprise are called

  1. Assets
  2. Business Transactions
  3. Liabilities
  4. Owner's Equity
• Generally means the rights to properties

  1. Capital
  2. Equity
  3. Owner's Equity
  4. Creditors' Equity
• Have preferential rights on the assets of the business

  1. Customers
  2. Owners
  3. Management
  4. Creditors
• Evidence of a transaction that describes the essential facts of the transaction

  1. Source Documents
  2. Documents
  3. Internal Transactions
  4. External Transactions
• Supplementary type of a financial Statement

  1. Balance Sheet
  2. Statement of Owner's Equity
  3. Income Statement
  4. Notes to Financial Statements
• Purchase of Office Supplies on Account

  1. Increase in Asset & liability
  2. Decrease in Asset & liability
  3. Increase in one asset & decrease in another asset
  4. Increase in asset & Owner's equity
• Rendered services to a department store on account

  1. Increase in Asset & liability
  2. Decrease in Asset & liability
  3. Increase in one asset & decrease in another asset
  4. Increase in asset & Owner's equity
• Bought for cash an office equipment

  1. Increase in Asset & liability
  2. Decrease in Asset & liability
  3. Increase in one asset & decrease in another asset
  4. Increase in asset & Owner's equity
• Paid salaries for the month

  1. Increase in Asset & liability
  2. Decrease in Asset & liability
  3. Increase in asset & Owner's equity
  4. Decrease in asset & Owner's equity
• Recorded used office supplies for the month

  1. Increase in Asset & liability
  2. Decrease in Asset & liability
  3. Increase in asset & Owner's equity
  4. Decrease in asset & Owner's equity
• Returned unused defective office supplies bought on account.

  1. Increase in Asset & liability
  2. Decrease in Asset & liability
  3. Increase in asset & Owner's equity
  4. Decrease in asset & Owner's equity
• Received cash from a loan made to a lending institution.

  1. Increase in Asset & liability
  2. Decrease in Asset & liability
  3. Increase in asset & Owner's equity
  4. Decrease in asset & Owner's equity
• Your Time is famous for fashion wristwatches and leather goods. At the end of a recent year, total assets add up to P 19,050,000 and owner's equity was P 13,200,000.

  How much did Your Time owe creditors?

  1. Cannot be determined
  2. 13,200,000
  3. 19,050,000
  4. 5,850,000
• Your Time is famous for fashion wristwatches and leather goods. At the end of a recent year, total assets add up to P 19,050,000 and owner's equity was P 13,200,000.

  Your Time sold watches for P 25,000 to a department store on account

  1. Increase in both assets and liabilities P 25,000
  2. Increase in both assets and owner's equity P 25,000
  3. Increase in both liabilities and owner's equity P 25,000
  4. No effect on the accounting equation
• Your Time is famous for fashion wristwatches and leather goods. At the end of a recent year, total assets add up to P 19,050,000 and owner's equity was P 13,200,000.

  Paid expenses amounting to P 17,500

  1. Decrease both assets and owner's equity P 17,500
  2. Decreases assets and increases liabilities P 17,500
  3. Increase both assets and owner's equity P 17,500
  4. Increases assets and decreases liabilities P 17,500
• Your Time is famous for fashion wristwatches and leather goods. At the end of a recent year, total assets add up to P 19,050,000 and owner's equity was P 13,200,000.

  Considering the effects of the 2nd and 3rd transactions. What is Your Time's net income or loss

  2nd. Your Time sold watches for P 25,000 to a department store on account

  • Increase in both assets and owner's equity P 25,000

  3rd. Paid expenses amounting to P 17,500

  • Decrease both assets and owner's equity P 17,500

  1. Net loss P 17,500
  2. Net Income P 25,000
  3. Net Income P 7,500
  4. Cannot be determined from the given data
• Considering the effects of the 2nd and 3rd transactions. What is Your Time's total owner's equity

  2nd. Your Time sold watches for P 25,000 to a department store on account

  • Increase in both assets and owner's equity P 25,000

  3rd. Paid expenses amounting to P 17,500

  • Decrease both assets and owner's equity P 17,500

  1. 13,192,500
  2. 13,225,000
  3. 13,182,500
  4. 13,207,500