AMADOR-BELLO HIGH SCHOOL 7.

Which of the following is an element of a balance

Gangao, Baleno, Masbate sheet?
A. Equity C. Assets
B. Liability D. All of the above
DIAGNOSTIC TEST
FUNDAMENTAL OF ACCOUNTING BUSINESS & 8. Which of these is the correct accounting equa-
MANAGEMENT 1 tion?
A. Assets = Liabilities + Equity
Name:_____________________________________________
B. Assets = Equity – Liability
Grade/Section:__________________Date:____________ C. Equity = Liabilities + Assets
D. Equity = Assets - Liabilities
DIRECTION: Choose the letter that corresponds to the
correct answer. Circle the letter that corresponds to 9. Which of the following ways are done by account-
your answer: ing departments as ways of monitoring the money of
the firm?
1. Which of the following correctly defines account- A. By dealing with payroll and taxes
ing? B. By analyzing transaction patterns\
A. It is a process involving one business function C. By recording transactions
only to oversee tax collection entities. D. All of the above
B. It is a systematic recording of financial tran-
saction. 10. The development of accounting is closely related
C. It is incomprehensive process of recording busi- to the following; except:
ness transaction. A. Business acquisition
D. It is a process of analyzing only transactions to B. Taxation
over sight business agencies. C. Trading activities of temples
D. Early auditing systems
2. Which of the following is not one of the designa-
tions of an accountant? 11. In this form of business organization, an individual
A. Certified Management Accountant owns and manages the business and he/she is re-
B. Certified private accountant sponsible for all the business and he/she is responsi-
C. Certified public accountant ble for all the business transactions.
D. Certified General Accountant A. Corporation C. Cooperative
B. Sole Proprietorship D. Partnership
3. Which of the following is the components of ac-
counting? 12. What is the title of the owner of a sole proprietor-
A. Analyzing C. Summarizing ship form of business organization?
B. Reporting D. All of the above A. Partner C. Sole Proprietor
B. Shareholder D. None of the above
4. Which of the following handles basic accounting
functions of a business? 15. What is the total number of owners of a sole pro-
A. Financial planning C. Organizing prietorship form of business
B. Accounting D. Financial analysis A. 1 C. 3
B. 2 D. More than three
5. What kind of reports provide the information cap-
tured by the accounting system? 16. Which of the following can be one of the com-
A. Financial Statements C. Income Statement mon funds that a partner can contribute in a part-
B. Balance Sheet D. Portfolio nership form of business?
A. Services C. Money
6. These are the elements of an income statement, B. Property D. All of the above
EXCEPT:
A. Expenses C. Assets 17. How does the owner of a sole proprietorship pay
B. Net Income/ Losses D. Revenue its taxes?
A. The owner pays taxes on income from the busi-
ness as part of his or her personal income tax
payments.

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 B. The owner pays the taxes as a business entity 24. What is the type of business according to activi-
C. The owner pays its personal tax for the business ties that produce nonphysical outputs in the form of
Itself. a service?
D. None of the above A. Manufacturing business
B. Merchandising business
18. The following are advantages of partnership; ex- C. Service business
cept one. D. None of the above
A. A partnership is generally easier to form,
manage, and run. 25. What is the type of business according to
B. Partners can share the responsibility of the activities that purchase goods that are ready for
sale and then sell them to customers?
running of the business. This will allow them to
A. Manufacturing business
make the most of their abilities.
B. Merchandising business
C. The more partners, the more money they can
C. Service business
put into the business which will allow better
D. None of the above
flexibility and more potential for growth.
D. As an owner, one of the partners can even 26. In this type of business, the business provides dif-
pass ferent types of labor services to the general public?
a business down to his or he heirs. A. Manufacturing business
B. Merchandising business
19. Why is capital considered as an advantage of C. Service business
partnerships? D. None of the above
A. They can raise substantial amounts by selling
shares or issuing bonds. 27. The following are advantages of a service busi-
B. The more partners there are, the more money ness; except one ________________.
they can put into the business, which will allow A. You are an expert
D. Increased Sales
better flexibility and more potential for growth.
C. No inventory
C. They can acquire more capital by attracting D. None of the above
investors.
D. All of the above 28. The following are disadvantages of a service
business except one.
20. Which of the following is considered as a legal A. Demand cutback C. Intangibles
entity? B. Expense D. Difficult valuation
A. Partnership C. Cooperative
29. The following are advantages of a merchandis-
B. Sole proprietorship D. All of the above ing business, except one.
A. Bringing them in C. Increased sales
21. How do corporations raise additional capital B. None of these are thesis D. Job satisfaction
A. Additional capital can be raised easily through
stock Markets. 30. The following are advantages of a service busi-
ness, except one.
B. Issuing bonds
A. Demands on staff
C. Applying for loan B. Expectation- once is not enough
D. All of the above C. Expense
D. Reliance on raw materials
22. What is the type of business according to activi-
ties that produces physical goods?
A. General ledger C. General journal
B. Expense Account D. Balance sheet

23. Once journal entries are recorded, they can be

posted to:
A. Service business
C. Manufacturing business
C. Merchandising business
D. None of the above Parents’ signature ________________________________

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