Easy (Basic Acc)

What is the proper adjusting entry at June 30, the end of the fiscal year, based on a prepaid
insurance account balance before adjustment, P15,500, and unexpired amounts per analysis of
policies, P4,500?
a. debit Insurance Expense, P15,500; credit Prepaid Insurance, P15,500
b. debit Prepaid Insurance, P11,500; credit Insurance Expense, P11,500
c. debit Insurance Expense, P11,000; credit Prepaid Insurance, P11,000
d. debit Insurance Expense, P4,500; credit Prepaid Insurance, P4,500
A business pays weekly salaries of P20,000 on Friday for a five-day week ending on that day.
The adjusting entry necessary at the end of the fiscal period ending on Thursday is
a. debit Salaries Payable, P16,000; credit Cash, P16,000
b. debit Drawing, P16,000; credit Cash, P16,000
c. debit Salary Expense, P16,000; credit Dividends, P16,000
d. debit Salary Expense, P16,000; credit Salaries Payable, P16,000
The balance in the prepaid rent account before adjustment at the end of the year is P15,000,
which represents three months' rent paid on December 1. The adjusting entry required on
December 31 is
a. debit Prepaid Rent, P10,000; credit Rent Expense, P5,000
b. debit Rent Expense, P10,000; credit Prepaid Rent, P5,000
c. debit Rent Expense, P5,000; credit Prepaid Rent, P5,000
d. debit Prepaid Rent, P5,000; credit Rent Expense, P5,000

Equipment with a cost of P160,000 has an estimated residual value of P10,000 and an
estimated life of 5 years or 12,000 hours. It is to be depreciated by the straight-line method.
What is the amount of depreciation for the first full year, during which the equipment was used
3,300 hours?
a. 30,000
b. 32,500
c. 40.000
d. 34.000
After totaling all of the columns in the work sheet, the Balance Sheet show debits of P35,678
and the credits of P39,901. This indicates that
a. The amounts are out of balance and need to be corrected
b. neither net income or loss can be calculated because that is found on the income
statement
c. the company recorded a net loss of P4,223
d. the company recorded a net income of P4,223
A company purchases a one-year insurance policy on June 1 for P840. The adjusting entry on
December 31 is
 a. debit Insurance Expense, P490, and credit Prepaid Insurance, P490.
b. debit Insurance Expense, P280 and credit Prepaid Insurance, P280
c. debit Prepaid Insurance, P720, and credit Cash, P720
d. debit Insurance Expense, P350 and credit Prepaid Insurance, P350
Average

At the start of the year, a store had a liabilities of P35,000 and owner’s equity of 150,000. Total revenues
and expenses for the year are P50,000 and 15,000. The owner also withdrew P11,000 for personal use.
How much is the firm’s total assets at the end of the year?

a. 209,000
b. 185,000
c. 174,000
d. 55,000

Solution: 185K + 50K – 15K – 11K = 209K

A P15, 000 debit on Office Supplies was entered in the account as credit. How much will the column in
the trial balance totals differ?

a. 0
b. 30,000
c. 15,000
d. 45,000

The A/R account has a beginning balance of 150,000. If total credit postings during the period amounts
to 350,000 and the ending balance is computed at 75,000, how much is the debit postings during the
period?

a. 275,000
b. 425,000
c. 500,000
d. 200,000

If equipment costing P93, 000 is bought by paying P30, 000 as down payment and the remainder in 30
days, how much will be the increase in the owner’s equity?

a. 93,000
b. 30,000
c. 63,000
d. 0

The A/R Account has and ending balance of 45,000. If total debit postings during the period amounts to
P150, 000 and total credit postings amount to P195, 000, how much is the beginning balance of the said
account?

a. 105,000
b. 90,000
c. 240,000
 d. 285,000

Difficult