Accounting 1

SET B.
Problem 1. The following trial balance for Tayco Talent Agency, a recording agency,
prepared as of June 30, 2017 does not balance.
Account Titles Debit Credit
Cash 50,400
Accounts Receivable 38,400
Unused Supplies 2,000
Unexpired Insurance 5,000
Equipment 25,000
Notes Payable 10,000
Accounts Payable 8,100
Tayco, Capital 58,500
Tayco, Drawing 2,000
Talent fees 123,000
Salary Expense 50,500
Rent Expense 7,500
Advertising 12,500
Utility 8,000
Transportation 6,850
Interest Expense 650 _________
Totals 208,800 199,000
In the process of verifying the accounts in the trial balance, the following errors are
discovered:
a. The cash balance was overstated by P2,500.

b. Equipment should be listed in the amount of P30,000.
c. A credit to P5,000 was not posted to Notes Payable.
d. A P1,500 purchased of supplies for cash was neither journalized or posted.
e. A debit to Utility for P1,000 was posted as P2,500.
f. Talent fees of P6,000 was omitted from the trial balance.
g. Salary expense of P4,000 was posted to Rent Expense.
h. A debit of P3,000 for the drawing account of Tayco was posted to the debit side of Tayco,
Capital.
i. Miscellaneous Income was overlooked in the ledger, P1,000.
j. A debit entry for Accounts Payable was posted to the credit side, P1,310.
k. Collected an account of customer for P5,400 but posted to the Accounts Receivable as
P4,500.
Required: Prepare a corrected Trial Balance.

Set B.
Note: LEAVE TWO SPACES AFTER EACH PROBLEM. PLEASE OBSERVE/MAINTAIN CLEANLINESS AND
ORDERLINESS.
Problem 1. On July 31, 2017, the business collected P36,000 from a tenant representing an advance
collection from building rental for one year period. Assume that the end of accounting period is
December 3, 2017.
Required:
1. Nature of Adjustments: _____________________________________________
2. Original and Adjusting Entries with supporting computations under Income Method.
Problem 2. On April 1, 2017, the business paid in advance on insurance premium covering the period
from April 1, 2017 to March 31, 2019 in the amount of P18,000. Assume that the end of accounting
period is December 31, 2017.
Required:
2. Original and Adjusting Entries with supporting computations under Asset Method.
Problem 3. On January 1, 2017, Computromix acquired a computer with an invoice price of P110,000
and incurred transportation cost and installation cost of P4,000 and P6,000, respectively. The
computer is intended for office use. It was estimated to have a useful life of five years and no
available scrap value. Assume that the end of the accounting period is December 31, 2017.
Required:
2. Original and Adjusting Entries with supporting computations.
Problem 4. Allowance for Bad Debts is increased to 5% of outstanding Accounts Receivable. The
amounts of Accounts Receivable in the Trial Balance is P135,000 and the Allowance for Bad Debts is
P4,500. Assume that the end of the accounting period is December 31, 2017.
Required:
2. Adjusting Entries with supporting computations.
Problem 5. The building is renting a space of building, it occupies P3,000 per month, payable every
fifth day of the month following. Assume that the end of the accounting period is December 31, 2017.
Required:
2. Adjusting Entry.
Problem 6. Estimated doubtful accounts percentage is 1.5% of gross sales, Sales, Return Sales and
Allowances, and Sales Discounts in the trial balance are P270,000., P18,000, and P12,000, respectively.
Assume that the end of the accounting period is March 31, 2017.
Required:
Problem 7. On June 1, 2017, Kings Court Pension House received in advanced a rent of P135,000
covering a period of 15 months. Assume that the end pf the accounting period is December 31,
2017.
Required:
2. Original and Adjusting Entries with supporting computations under Liabilities Method.
Problem 8. On August 31, 2017, Joe Marts Enterprises paid in advance on insurance premium for
P30,000 covering a period of 10 months. Assume that the end of the accounting period is December
31, 2017.
Required:
2. Original and Adjusting Entries with supporting computations under Expense Method.
Problem 9. The allowance for bad debts is increased by 3% of outstanding Accounts Receivable. The
amount of account receivable in the trial balance is P165,000 and the Allowance for bad debts is
P1,500. Assume that the end of the accounting period is June 30, 2017.
Required:
Problem 10. The estimated doubtful accounts percentage is 2% of net sales, sales, sales return and
allowances, and sales discounts in the trial balance are P180,000; P18,000 and P12,000, respectively.
Assume that the end of the accounting period is December 31, 2017.
Required:
Problem 11. On May 1, 2016, the business acquired a delivery car costing P240,000 with estimated life
of six years and a salvage value of P15,000. Assume that the end of the accounting period is
December 31.
Required:
2. Original Entry on May 1, 2016 and Adjusting Entry with supporting computations on December 31,
2016 and December 31, 2017.
Problem 12. The business received a P45,000, 15%, 120-day note from a customer for merchandise
sold dated November 16, 2017. Assume that the end of the accounting period is December 31, 2017.
Required:
2. Original and Adjusting Entries with supporting computations.
Problem 13. It is expected that only 95% of the outstanding accounts receivable, after adjustment,
will be collectible. The amount of the accounts receivable in the trial balance is P120,000 and the
allowance for doubtful accounts is P3,500. Assume that the end of accounting period is June 30,
2017.
Required:
Fundamentals of Accountancy, Business and Management 1 Chapter 11 Page 11
Problem: The following trial balance for Tayco Talent Agency, a modelling agency, prepared as of
July 31, 2016 does not balance:
Cash 43,000
Unused Supplies 1,084
Equipment 28,786
Accounts Payable 5,650
Tayco, Capital 31,500
Tayco, Drawing 2,000
Talent fees 145,280
Salary Expense 46,500
Rent Expense 6,000
Advertising 12,100
Utility 5,920
Transportation 8,400
Interest Expense 740 ______
Total 184, 930 184,930
In the process of verifying the amounts in the trial balance, the following errors were discovered:
a. The cash balance was understated by P2,000.

b. A debit to P5,000 was not posted to Notes Payable.
c. A debit to Utility for P1,500 was posted as P1,000.
d. Salary Expense of P3,000 was posted to Transportation.
e. A debit of P500 for the drawing account of Tayco was posted to the credit side of Tayco, Capital.
f. Interest expense was overlooked in the ledger, P740.
g. A debit entry for Accounts Receivable was posted to the credit side, P6,000.
Required: Prepare a corrected trial balance.

Exercises
1. Assume that Antaran Trading has the following accounts, among others, in the trial balance as of
December 31, 2016, the end of its accounting period:
Notes Receivable 40,000

Allowance for Bad Debts 3,000
Prepaid Interest 4,500
Building 100,000
Machinery 75,000
Accumulated Depreciation — Machinery 7,500
Store Furniture 40,000
Office Equipment 30,000
Accumulated Depreciation — Office Equipment 8,000
Unearned Rent 12,000
Unearned Interest 6,000
Sales 120,000
Sales Returns and Allowances 6,000
Sales Discounts 4,000
Supplies Expense 3,000
Interest Expense 4,200
Additional Information:
1. The machinery was acquired on January 1, 2015 with an estimated life of ten years, no scrap
value.
2. The building was newly constructed on March 1, 2016 with an estimated life of twenty years, scrap
value of P10,000.
3. The estimated bad debts percentage is 3% of gross sales.
4. The estimated bad debts percentage is 2% of net sales.
5. Interest income balance is interest collected in advance for a 60-day note dated December 16,
2016.
6. Unearned Rent account was credited representing the 6-month rent received in advance from
tenant on September 1, 2016.
7. The allowance for bad debts is increased by 5% of outstanding accounts receivable.
8. The allowance for bad debts is increased to 10% of outstanding accounts receivable.
9. Per pre-adjusted trial balance, prepaid interest represents interest paid in advance on a 45-day,
10% note dated December 16, 2016.
10. Supplies expense account has a balance that represents the amount of supplies available foruse
during the period. The actual unused supplies as of December 31, 2016 is P1,000.
11. Merchandise available for sale during the period is 300,000. It is estimated that unsold
merchandise as of December 31, 2016, represents 20% of the merchandise available for sale.
12. In 2016, the business has a total merchandise available for sale of P200,000. As of December 31,
2012, cost of goods sold amounted to P130,000.
13. Monthly payroll amounted to P8,000. Three months employee’s salaries remain unpaid as of
December 31, 2016.
14. Per trial balance, Notes Receivable amount represents 60-day, 15% note dated December 16,
2016. No interest has been collected as of the end of the period.
15. As appeared in the pre-adjusted trial balance, Unearned Interest account represents interest
received in advance on a 90-da, 10% note dated.
16. The Unexpired Insurance account in the pre-adjusted trial balance is part of the total payment for
a one year fire insurance policy effective October 1, 2016.
17. December rental is still unpaid as of December 31, 2016, P5,000.
18. The business sub-rents a portion of the store for P2,500 a month. Rent for the months of November
and December remains uncollected as of December 31, 2016.
19. It is expected that only 92% of the outstanding accounts receivable, after adjustment, will be
collectible.
20. Outstanding notes payable balance in the trial balance is a 90-day, 10% note dated November
16, 2016.
21. Thirty thousand pesos of the said Store Furniture was part of the owner’s investment on January 1,
2016, and the rest were acquired only in June 1, 2016. Estimated useful life is five years.
22. Office equipment is depreciated annually at 10%. Date of acquisition was May 1, 2013, No
salvage value.
Required:
1. Nature of Adjustment (whether Accruals — Expense; Accruals — Income; Prepayments — Asset

Method; Prepayments — Expense Method; Precollections —Liability Method; Precollections —Income
Method; Depreciation of Fixed Assets; Uncollectible Accounts; or Unsold Merchandise)
2. Adjusting Entries with supporting computations (disregard the explanation)

A. Accrued Expense
Proforma Entry: ___________ Expense xx

___________ Payable xx
Sample problem: The business is renting a space of the building it occupies for P1,000 per month,
payable every first day of the month following. Assume that the end of accounting period of
accounting period is December 31.
Adjusting entry:
Dec. 31 _______________________________________________________________________________________
_______________________________________________________________________________________
B. Accrued Income
Proforma Entry: ___________ Receivable xx

___________ Income xx
Sample Problem: The business received a P25,000, 12% 90-day note from a customer dated
December 1, 2016. Assume that the end of accounting period is December 31, 2016.
Adjusting entry:
Dec. 31 _______________________________________________________________________________________
_______________________________________________________________________________________
Computation:
_______________________________________________________________________________________________
_______________________________________________________________________________________________
C. Prepayment
1. Expense Method
Original Proforma Entry: _________ Expense xx
Cash xx
Adjusting Proforma Entry: Prepaid _________ xx

_________ Expense xx
Computation:
Recorded Expense xx
Correct Expense xx
Expense – over –dec. – cr./Asset – under – inc. – dr. xx
Or Asset Portion xx
Sample Problem: In October 1, 2016, Joe Marts Enterprises paid in advance an insurance premium for
P12,000 covering a period of one year. Assume that the end of accounting period December 31,
2016.
Original entry:
2016
Oct. 1 _______________________________________________________________________________________
_______________________________________________________________________________________
Adjusting entry:
2016
Dec. 31 ________________________________________________________________________________________
________________________________________________________________________________________
Computation:
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
2. Asset Method
Original Proforma Entry: Prepaid ___________ xx

Cash xx
Adjusting Proforma Entry: ___________ Expense xx

Prepaid ___________ xx
Computation:
Recorded Asset xx
Correct Asset xx
Asset – over – dec. – cr./Expense –under – inc. – dr. xx
Or Expense Portion xx
Sample Problem: On September 1, 2016, the business paid an insurance premium covering the
period from September 1, 2016 to September 1, 2017 in the amount of P4,800. Assume that the
accounting period is December 16, 2016.
Original Entry:
2016
Dec. 1 ______________________________________________________________________________________
______________________________________________________________________________________
Adjusting entry:
2016
Dec. 31 ________________________________________________________________________________________
________________________________________________________________________________________
Computation:
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
D. Precollections
1. Income Method
Original Proforma Entry: Cash xx

_________ Income xx
Adjusting Proforma Entry: __________ Income xx

Unearned __________ xx
Computation:
Recorded Income xx
Correct Income xx
Income – over – dec. –dr./Liability – under – inc. – cr. xx
Or Liability Portion xx
Sample Problem:
2016
Oct. 1 __________________________________________________________________________________________
__________________________________________________________________________________________
Computation:
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
2. Liability Method
Original Proforma Entry: Cash xx

Unearned ___________ xx
Adjusting Proforma Entry: Unearned ____________ xx

____________ Income xx
Computation:
Recorded Liability xx
Corrected Liability xx
Liability – over - dec. – dr./Income – under – inc. – cr. xx
Or Liability Portion xx
Sample problem: On August 1, 2016, Kings Court Pension House received in advance a rent of
P60,000 covering a period of one year. Assume that the end of the accounting period in December
31, 2016.
Original Entry:
2016
Aug. 1 __________________________________________________________________________________________
___________________________________________________________________________________________
Adjusting Entry
2016
Dec. 31 ___________________________________________________________________________________
___________________________________________________________________________________
Computation:
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
E. Depreciation
Proforma Entry: Depreciation Expense – Foxed Assets xx

Accumulated Depreciation –Fixed Assets xx
Computation: Annual Depreciation = (Cost – Salvage Value)/Estimated life (in yrs.)
OR
Annual depreciation = (Cost – Salvage Value) x Depreciation rate per year
Less than 1 year depreciation = Annual depreciation x # of mos./12
Sample problems:
1. On July 31, 2016, the business acquired a Delivery car costing P75,000 with an estimated life of five
years. Assume that the end of the accounting period is December 31, 2016.
Original entry:
2016
July 31 ___________________________________________________________________________________________
__________________________________________________________________________________________________
Adjusting entry:
2016
Dec. 31 __________________________________________________________________________________________
__________________________________________________________________________________________
Computation:
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
2. On January 1, 2016, Computromix acquired a computer with an invoice price of P47,000 and
transportation cost and installation cost of P1,000 and P2,000, respectively. The computer is intended
for office use. It was estimated to have a useful life of five years and a salvage value of P5,000.
Original entry:
2016
Jan. 1 ___________________________________________________________________________________________
___________________________________________________________________________________________
Adjusting entry:
2016
Dec. 31 __________________________________________________________________________________________
___________________________________________________________________________________________
Computation:
__________________________________________________________________________________________________
__________________________________________________________________________________________________
F. Doubtful Accounts/bad Debts/Uncollectible Accounts
Proforma Entry: Doubtful Accounts Expense/Bad debts expense xx

Allowance for doubtful accounts/Allowance for bad debts xx
Computation:
1. If based on gross sales (Sales x Predetermined percentage)
2. If based on net sales (Sales – Sales returns, allowances and discounts) x predetermined percentage
3. If based on accounts receivable – increased by Accounts Receivable x predetermined

percentage
4. If based on accounts receivable - increased to Accounts Receivable x predetermined

percentage – Allowance for bad debts
5. If anyone from above formula is not applicable

Accounts Receivable
Less: Net Realizable Value
Allowance for Bad Debts, end
Less: Allowance for Bad Debts, beg.
Bad debts Expense
Sample problems:
1. The allowance for bad debts is increased by 5% of outstanding accounts receivable. The amount
of accounts receivable in the trial balance is P75,000 and the allowance for bad debts is P2,000.
Adjusting entry:
2016
Dec. 31 __________________________________________________________________________________________
___________________________________________________________________________________________
Computation:
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
2. The estimated bad debts percentage is 3% of net sales, sales, sales returns and allowances, and
sales discounts in the trial balance are P130,000; P8,000 and P7,000, respectively.
Adjusting entry:
2016
Dec. 31 __________________________________________________________________________________________
___________________________________________________________________________________________
Computation:
__________________________________________________________________________________________________
3. It is expected that only 90% of the outstanding accounts receivable after adjustment, will be
collectible. (Use the accounts receivable and allowance for bad debts of no.1 if necessary).
Adjusting entry:
2016
Dec. 31 __________________________________________________________________________________________
___________________________________________________________________________________________
Computation:
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
4. Estimated bad debts percentage is 1% of gross sales. (Use the sales, sales returns and allowances,
and sales discounts of no. 2 if necessary).
Adjusting entry:
2016
Dec. 31 __________________________________________________________________________________________
___________________________________________________________________________________________
Computation:
__________________________________________________________________________________________________
5. Allowance for bad debts is increased to 7% of outstanding accounts receivable. (Use accounts
receivable and allowance of bad debts in no. 1 if necessary).
Adjusting entry:
2012
Dec. 31 _________________________________________________________________________________________
__________________________________________________________________________________________
Computation:
_________________________________________________________________________________________________
G. Ending Inventory
Proforma Entry: Merchandise inventory, end xx

Income and expense summary/Income summary xx
Computation: 1. Merchandise available for sale – Cost of goods sold
2. Unsold portion of merchandise inventory

SET A
1. Due to the difficulty in getting the information about the account balance of a particular customer or
creditor, another book of final entry are to be maintained. They are called ______________________________.
2. Inventories – these are assets which are

1) __________________________ in the ordinary course of business;
2) in the ___________________________ for such sale; or
3) in the form of _________________________________ to be consumed in the production process or in the
rendering of services.
3. The International Accounting Standards defines property, land and equipment as “tangible assets which are
held by an enterprise ______________________________, _________________________________,
________________________________, or __________________________________, and are expected to be used during
__________________________________________.
4. ______________________________. An account title for a financial obligation of an enterprise that constitutes an

oral or verbal promise to pay.
5. Business enterprise should keep financial records, called __________________________________,

______________________________________, or simply _________________________, where the business transactions
are recorded, classified, and summarized.
6. The source document used to authorize entries in the general journal is called _____________________________.
7. _____________________________. These are financial long-term obligations of an enterprise which are due and
payable for more than a year.
8. __________________________________. This is a temporary account created at the end of the accounting

period where income and expense accounts are temporarily closed.
9. _________________________________. The account title used for the stationery, envelopes, clips, fasteners, etc.
used in the office. Another term for this is __________________________________.
10. The two sets of books that are used by the business are also called _____________________________________
and _____________________________________.
11. _____________________________________. The account title used for the telephone, light and water bills. Also
included are gasoline, lubricants and oil.
12. _____________________________________. Ownership and financial instruments evidencing an obligation of

another entity.
13. ______________________________. Cost paid by a franchise for the right to use the brand, design, technology,
and/or other privileges belonging to another party called the franchisor.
14. A business needs to use a ______________________________ side by side with the special journals since not all
transactions can be entered in the special journals.
15. The Accounting Standards Council states that “all other assets not classified as current should be classified
as ________________________________.
16. ______________________________________. This is an account title for an income collected or received in

advance and is not yet considered “earned”.
17. _____________________. This is the center of the owner’s concern because they may increase or decrease at
any time as a result of business operation. In the normal course of operation, owner’s equity will be increased
by ____________________________ and decreased by _________________________.
18. The book of final entry is called __________________________ which is also of two kinds: the
_____________________________________ and the __________________________________. This is called the book of
final entry because it is in this book were transaction that were recorded in the journal are transferred for
________________________________.
19. _____________________________________. The account title used amount incurred in repairing and servicing
the buildings, machineries, vehicles, equipment, etc. , which are owned by the business.
20. ________________________________. The account title used for the employer’s share on SSS contribution.
21. ________________________________. Claims from borrowers as a result of lending money.
22. The journal is subdivided into specialized books of original entries. They are as follows:
________________________________________________________________________________________________________
________________________________________________________________________________________________________
________________________________________________________________________________________________________
________________________________________________________________________________________________________
23. The term income encompasses both _______________________________________.
24. CURRENT LIABILITIES – are financial obligations of the enterprise which are:
1. Expected to be settled in the _________________________________________.
2. Sue to be settled _____________________________ from the balance sheet date, and
3. To be settled through ___________________________________.
25. ____________________________________________________________________ contains owner’s contribution to the

business, increase by incomere from operation and decrease by the owner’s withdrawals, losses and expenses.
26. The _______________________ is a chronological (day-to-day) record of business transactions.
27. _________________________. The account title used for income received by the business arising from an
amount of money borrowed by a customer and is usually covered by a promissory note. This is typical in a
lending institution.
28. _________________________. Right to collect income that is already earned but not yet collected.
29. ______________________________________________________________________. Consideration received by an

agent or broker for performing task on behalf of the principal.
30. ___________________________ of the numerous transactions is facilitated with the use of the ledger accounts.
31. ___________________________. The account title for amount collectible from employees for allowing them to
make cash advances which are deductible against their salaries or wages.
32. ___________________, includes typewriters, calculators, adding machines, computer, steel filing cabinets and
the like. If these are used in the office, the account title is ___________________________ and of in the store,
_____________________________.
Problem 1: As of the end of the year, the balance sheet of the business, Mend-n-Use Shop, shows total liabilities
of P800,000 and capital balance of P1,100,000. During the year, total assets decreased by P200,000 and total
liabilities increased by P100,000. The proprietor, Elmer Pastor, also had additional investments of P150,000 and
total drawings for personal use of P50,000.
Required: Based on the above, show your detailed computation for the following:
a. Total assets as of the end of the year.
b. Total asset as of the beginning of the year.
c. Total liabilities as of the beginning of the year.
d. Capital balance as of the beginning of the year.
e. Net Income (Loss) during the year.
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
SET A
Name: _____________________________________________________________ Date: ____________________________
Class Schedule: ____________________________________________________ Strands & Grade: _________________
Points Earned ______________________
Passed _________ Class Topnotcher No.: _________
Failed __________ Over-all Topnotcher No.: _______

1. The fundamental accounting equation is ________________________________________________________.
2. _________________________ is another ingredient of relevance. Financial information must be available on time

so that it will be relevant.
3. _________________________________. Under this basis, the amount of net profit or loss is determined by
deducting the total expenses incurred during the period from the total income earned for the same time
frame.
4. The _________________________ comes from the original investment that the owner or owners contributed
toward the formation and operations of the business enterprise. It increases as a result of
___________________________, and the __________________________ by the business enterprise. It decreases as a
result of __________________________ or ____________________________, and the _________________________________
by the business.
5. The four important qualities or characteristics that makes financial information useful in the decision-making
process are: (1) __________________________, (2) __________________________, (3) _________________________,a nd
(4) ____________________________.
6. The equities of the creditors are called __________________________ and the equity of the owner is called
_____________________________________ or __________________________________.
7. Because of the monetary concept, the peso values already recorded in the books of accounts are
________________________________ to take into consideration the changes in price levels.
8. The ending equity is computed as follows:

____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
9. Abuse in the use of prudence, known as ___________________________, will results to bias reporting and
conflicts with the qualitative characteristics of reliability and comparability.
10. Financial information is a ________________________________ of the situation if it is not biased.
11. The general rule is that financial information should be gathered or provided to the data-users only if the
______________________ to be derived from it exceed the ____________________ of collecting and providing such
information.
12. Equities may be subdivided into two principal types: the __________________________ and the
____________________________.
13. The need for __________________________ calls for the need to divide the life of the business into reporting
periods.
14. Financial information possesses the quality of ___________________________ when its knowledge can make a
difference in whatever decisions the data-users will make.
15. The materiality of an item of information depends on its ______________________________, its

_____________________________, the _________________________ with which it can be estimated, and also
__________________________ the business enterprise is.
16. Otherwise known as ______________________________, _______________________________ is practiced only

during situations of uncertainly or doubt.
17. To be ____________________________ is to use the same procedures, systems, and methods from one period to
another. However, a change to a _____________________________ is allowed if the result of the change is
disclosed in the financial statements.
18. The monetary concept prevents the ___________________________ of the peso values that are reported in the
financial statements.
19. Some of the guides that an accountant may use in his attempt to report financial data that possess the
qualitative characteristics: 1) _______________________, 2) _________________________, 3) ________________________
of the information.
20. An item of information is deemed ___________________________ if it is important enough to have an effect on

the data-user’s decision-making process.
21. The system of accounting commonly in use today is known as __________________________. It is logical and
integrated system based upon the original hypothesis: ________________________________ equals
________________________________________________________.
22. _______________________________ of the reported financial information exists if this could be used as a basis
for forecasting what may happen in the future.
23. It is assumed that the business transactions (activities and events) can be objectively
_________________________________________________.
24. One of the essential qualities of useful information is that it should be ______________________________ by the
data users.
25. _____________________________ exists if the reported information could be used to assess the outcome of past
activities and transactions.
26. _______________________ is sold to exist if, assuming there are several independent accountants who will
repeat a method, and they will obtain basically the same results.
27. _______________________ in the application of the accounting methods will contribute to the comparability
of the financial information.
28. Under matching concept, it is assumed that the result of business operations could be measured if there is a
________________________________________________ within a reporting period.
29. _______________________ exists when the recognition and measurement of the reported financial are not
intended to favour only a certain choses group of decision-makers and data-users.
30. Suppliers study carefully the financial statements of their _________________________ in order to properly plan
their product deliveries, and for them to review their own financing needs, product designs, plant expansion
plans and other marketing strategies.
31. _____________________________________. This group needs to know how stable and profitable its employer is.
32. The other external data-users — _______________________________________________________________________

____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
— need financial data related to the operations of a business for varied reasons.
33. The person who puts up the investments in the single proprietorship is commonly referred to as the
____________________________, or simply the ______________________ or _______________________.
34. A group of persons, called ________________________, wanting to form a new corporation, must file an
application for a corporate charter with the Securities and Exchange Commission. When this application is
approved, the corporation becomes an ________________________ who exists a _______________________ that is
separate and distinct from its stockholders.
35. It is commonly known that a business enterprise cannot hope to accomplish anything else and continue to
exist, unless it meets the two basic test of survival — ___________________________________.
36. A ______________________________________, whether governmental or private is established not for profit but
to render services and meet the needs of the members of the community. These said needs may be directly or
indirectly related to _____________________, _____________________________________, ______________________,
________________________________________, and _________________________________________.
37. A business enterprise that cannot meet its obligations as they fall due is said to be _____________________.
38. A service enterprise recognizes income in the form of ________________________________________________

_______________________________________________________________________________________________________.
39. A manufacturer has _____________________________ where he produces ________________________ out of
___________________________________ by applying _____________________ and other
_____________________________________.
40. The authoritative body of accountancy formulated standard principles, assumptions, and procedures that
are called ______________________________________________________________________________________________.
41. For the protection of the general public, the _____________________________________________________________

_____________________________ also has the authority to promulgate accounting policies related to financial
reporting.
42. Unless otherwise stated or implied, the primary financial statements are prepared in accordance with two
basic accounting assumptions: _________________________________ and ________________________________. The
___________________________________ would be useful basis for certain business decisions if the financial
information they provide is recognized and measured according to these two basic accounting assumptions.
43. The assumption that the operating life of the business may be divided into time-periods is known as the
_________________________________ or ________________________________.
44. A _______________________________ needs information that will help in assessing the safety of his investment,
or the risk involved in his lending exposure. He must know whether the _____________________________ loaned
out, plus the corresponding _________________________ that would accrue on such loan, can be collected from
the borrower as they become due. He must also be aware of what other _________________________________ he
has just in case the borrower becomes _______________________.
45. The _________________________ study the financial statements of the employer before they make demands
related to salary increases, present and past employment benefits and other privileges that are due to the
union members.
46. Data-users would benefit ______________________________ from the continuous existence of the business they
deal with.
47. From an account’s point of view, a business enterprise is looked upon as an entity that is separate and
distinct from that of the owner. Therefore, the personal and family affairs and transactions of the business’
owner are not included in determining the net profit, resources and obligations of his business enterprise. This
assumption is known as the _____________________________________.
48. ____________________________ exists if the accountant did not use the measurement method properly or if
the reported information is consistently too high or too low in order to intentionally favour certain interest
groups.
49. It is customary to place ____________________________ ahead of __________________________ in the

accounting equation because creditors have _____________________________________ to the assets.
50. Because timely financial information is needed to become the basis for decisions and actions of the
decision-makers, financial statements should be prepared periodically, _______________________________.
51. All business transactions, regardless to their complexity can be stated on their effect on the
_____________________________________ of the accounting equation.
52. To be useful to the decision-makers, the reported financial information should be _________________________.
53. The recording and reporting of the business transactions are based on the assumption that for every
___________________________, there is an equal ________________________.
54. Transactions that do not involve cash are assigned to _______________________________.
55. The __________________________________ is the fundamental equation upon which all double-entry
accounting is based.
56. The other side monetary concept is the assumption that peso values assigned to the accounting elements
are not materially affected by ____________________________.
57. Financial information is considered reliable if it is __________________________, _______________________, and if

it represents that which it is intends to represents (___________________________________________).
58. The elements may be expressed as:
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
59. In accounting, property is called ___________________________ and ownership rights in property are known as
_____________________________.
60. The quality of __________________________ allows the data-users to assess the similarities and differences
either for the same enterprise over different time periods or among different enterprise for the same period of
time.
61. The relationship between the Assets and Equities may be stated as follows:
____________________________________________________________________________________________________________
62. Information is comprehended only by a few could even _____________________________ the data-users.
63. The ____________________________ of gathering and providing the information should be compared and
associated with the __________________________ to be derived from it.
64. Under matching concept, there should be a simultaneous ________________________________________ and

the ________________________________________ that are directly and indirectly contributory to the earning of such
income.
65. The use of monetary concept allows for a more __________________________________ and
________________________________ of the reported data.
66. A partnership has the advantage of being able to gather a ________________________________________, both
in the form of _____________________________________, as compared with that of a single proprietorship.
67. One very important advantage of a corporation form of business enterprise over that of a partnership is
_________________________________ the stockholders investment shares to another investor.
68. The financing activities of the enterprise , such as:

____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
69. A common objective of all businesses is the desire to make income. The income that a business makes is
also called _______________________, ________________________, __________________________, or
____________________________.
70. Being and staying __________________________ must also be an objective of a business enterprise.
71. ________________________________________. This type of business provides various forms of services, not
tangible products to its customers or clients. Some examples of entities that render services are:
____________________________________________________________________________________________________________
___________________________________________________________________________________________________________.
72. Unlike a trader or merchandiser, a _____________________________ also called a ________________________,

________________________ or ________________________, is in the normal business of producing the products that
he sells.
73. ______________________________________. It refers to a doctrine, which is the basis of all other rules,
procedures, and methods used in the accounting practice.
74. The _______________________________________________________________ issued by the ASC are used as guides

in the preparation, presentation and analysis or the financial statements of various business enterprises.
75. Presently, the ASC is actively revising the Philippine accounting principles and standards, which are called
_________________________________________________________, so that they could closely follow those
promulgated by IASB.
76. _________________________________________. This concept assumes that the business and its owner are
separate and distinct entities. Because of this assumptions, _____________________________________ of the
activities, _________________________________________ of the business enterprise would result.
77. Aside from the investors, ___________________________________ provide the short-term and long-term financial
needs of the borrower.
78. It has been observed that ______________________________ make their major family plans and decisions
based on the stability and continuity of the operations of their employer.
79. Although certain information may be solicited by the data-user directly from the business enterprise, most of
them get needed information from the published financial statements or from the files of the
_____________________________________________________.
80. Frequently in a single proprietorship, the owner also acts as the ___________________________.
81. From a _______________________________, a proprietorship is not considered separate from its partners.
Consequently, the partners are __________________________________ for the unsettled debts in case of a
partnership _________________________.
82. A business that has its ownership capitalization divided into hundreds or thousands of transferable
___________________________________ is called a corporation.
83. The advantages of a corporation over a single proprietorship or a partnership are:

____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
84. Usually, organizations may be grouped into two – the ____________________________ and the
__________________________________.
85. Some examples of non-profit or non-business organizations are: ___________________________,

_______________________________, _____________________________, ___________________________________,
__________________________________, _________________________________, _____________________________________,
_______________________________- and other service-oriented groups.
86. Some of the secondary objectives of a business enterprise are:

____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
and more.
87. ______________________________________. This type of business entity is in the “buy and sell” business.
88. ______________________________________ are important ideas which accountants assume in recording

business transactions.
89. __________________________________________________________________. These principles are used uniformly by

accountants in measuring, recording, and reporting financial activities of an entity.
90. The primary authoritative source of accounting principles and standards in the US is the
___________________________________________________________________________.
91. When a business enterprise measures its net profit or loss for a certain period of time, it is taken for granted
that the ____________________________________________ is used, unless otherwise indicated in the financial
statements.
92. The ____________________________ wants to know how the business enterprise is contributing to the needs of
the community and to the economy as the whole.
93. The ____________________________ of the enterprise, most especially the ____________________________ are
interested to know whether their supplier is capable of continuously supplying their needs for raw materials,
spare parts, services and even technological information.
94. There are three common forms of business enterprises depending on who provides the resources and
abilities that are needed in their normal operations. A business enterprise may be organized as a
________________________________, a ______________________________, or a __________________________________
depending on how its capital requirements are generated.
95. A partnership form of business has two or more owners called ___________________________.
96. The corporation must have _____________________________ owners or investors called

_____________________________________________.
SET A
Name: _____________________________________________________________ Date: ____________________________
Points Earned ______________________

A.
1. _____________________________________. Consideration paid by a franchise for being allowed to use a brand,

patent, formula, or any exclusive right that belongs to another entity called franchisor.
2. _____________________________________. Cost of transporting the purchased goods to the business site.
3. _______________________________ has the effect of increasing the business enterprise’s assets, decreasing its
liabilities or both. It also causes the owners’ equity to ___________________.
4. __________________________________. A list of account titles are prepared beforehand to guide bookkeeper

and accountant of what specific titles are to be used in describing the exchange of values in a transaction.
5. ______________________________. The account title used for income earned on buildings, space, and other
properties owned and rented out by a customer as main line of its activity.
6. Liabilities are classified only in two, namely:

1. _____________________________________
2. _____________________________________
7. The main objective of the ______________________________________________________ is to create a semblance

of uniformity in the accounting practices among the different nations of the world.
8. The ordinary operating activities of the business enterprise, as in:

____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
9. _________________________________. Cost of sending e-mail, telegrams, letters and other forms of

communication, such as telephone and texting expenses.
10. ________________________________________________________. The account title used for the excess if the selling
price of a property is greater than the cost of the said property.
11. _________________________________. Obligations of the business to lenders as a result of borrowing money.
12. ________________________________________. The account title used for any amount paid as expense which is
not significant enough to warrant a particular classification.
13. _________________________. In general, this represents revenue derived from sale of merchandise.
14. ________________________________________. Includes chairs, tables, counters, display cases and the like. If
these are used in the office, the account title is _____________________________________________ and if these are
used in the store, the account title is ___________________________________.
15. _______________________________ do not own and/or manage and control of business activities.
16. Tax Services deals with the accountant’s preparation of the ______________________________,
___________________________________. He represents the client in ________________________________________
conducted by the Bureau of Internal Revenue (BIR).
17. ________________________________________. Accounting facilitates the preparation of governmental

reportorial requirement and ensures compliance of reporting on time. The accounting records and supporting
documents serves as proofs of real transactions as contained in the financial accounting reports.
18. _________________________________. Amount paid to the government for allowing the business enterprise to
operate.
19. ________________________________________________________. Consideration received by the owner of a

brand, patent, formula, secret, or any other exclusive right for allowing another entity to use his intangible asset.
20. _________________________________________. Obligations by a seller contractor deliver goods or render

services to the customers who have paid in advance.
21. ____________________________________. The account title used for the employer’s share on pag-ibig
contribution.
22. _________________________________________. This is the amount of business earns by selling goods and/or
services to its customers.
23. Trucks, jeeps, vans, automobiles and other kinds of motor vehicles bear the account title as
______________________________________ and if some vehicles are used exclusively for delivering goods. The
account title is __________________________________.
24. The use of equal time-periods for reporting purposes is helpful so that the reported information would have
the qualities of _______________________________ and ______________________________.
25. A business enterprise that has sufficient cash to pay its debts as they mature is said to be __________________.
26. _______________________________________. Consideration paid by a principal for the performance of tasks

assigned to an agent.
27. The term expenses is usually used in connection with the ________________________________ or
_______________________________ that directly or indirectly related to the normal activities of the business
enterprise.
28. Usually, the settlement of loans payable requires the payment of _______________________________.
29. Business transactions are analysed from the __________________________________.
30. _________________________________. In general, this is the account title used for all types of income derived
from rendering services. Sometimes, the account title used is _______________________________________.
31. _________________________________. This is an asset-offset or a contra asset account. This is called as valuation
account which is shown as deduction from the property, plant and equipment or cost of fixed asset except
______________________.
32. The most widely used financial reporting tools are the primary financial statements – the
_________________________ and the ___________________________.
33. ___________________________________________. Consideration paid by a borrower for using the money of a

lender.
34. __________________________________ have the effect of decreasing the business’ assets increasing its liabilities
or both. As a result, these cause the equity of the owner to _______________________.
35. The term income is usually used in connection with activities and events that result to the
________________________________ and/or __________________________________.
36. Don’t forget this. Always __________________________________________________ when making analysis.
37. _________________________________. The account title generally used by professionals for income earned
from the practice of their profession or may be specified as ____________________________________ for
accountants, _______________________________________ for lawyers, ___________________________________ for
dentists, _____________________________________ for doctors, etc.
38. The assets that are classified as Property, Plant and Equipment or Fixed Assets are called
____________________________________ and are subject for ____________________________ except land.
39. Accounting practice is guided by distinctive

_________________________________________________________________ to come up with reliable general-purpose
financial reports.
40. Although accounting is frequently associated with _______________________________, it enters almost all
aspects of everyone’s ______________________________.
41. Aside from making profit, another important objective of business enterprises is to make sure that they have
immediate access to a ____________________________________ that is needed to settle their business obligations
within a reasonable period of time.
42. _______________________________ are accounting practices that practitioners accept because of their long
existence and use. A good example of this is the use of the _____________________________ or the
________________________________. Accountants have long observed this practice based on the idea that in
every business transaction, a __________________________ has a corresponding _________________________.
43. When the cash is within the premise of the business, the account title is __________________________ and
_____________________________ if deposited in the bank.
44. _____________________________________________. Refers to the amount due to and payable by the enterprise
to the Social Security System.
45. _________________________________. The account title used for the allocated expired portion of the cost of
property, plant, and equipment or fixed assets for the current period.
46. As an art, accountants apply _______________________________, ___________________________ guided by

_____________________________ in the efficient ______________________________.
47. You need information first before you can _________________________________.
48. A study of accounting is important because an __________________________________ will lead you to make
the _____________________________________.
49. Certified Public Accountants (CPAs) and other accounting professionals know that people who use their
services, especially decision makers using financial statements expect them to be highly
_______________________________________.
50. ___________________________ — writing down of business transactions chronologically in the books of

accounts as they transpire. This accounting function is employed to ensure that all business transactions are
recorded in a ________________________________ in property ________________________________.
51. The ____________________________________ was found as early as 2000 B.C. in the cities of Babylonia, Greece,
Egypt and in 3500 B.C. in Assyria. It consisted then of ______________________________ imposed by the kings and
collected from the people by their tax collectors and
______________________________________________________________ required by the pharaoh when the pyramids
were being constructed in Egypt.
52. When accountants offer their professional services to clients for a fee like other professionals (e.g. lawyers,
doctors and engineer) do, they are said to be in ________________________________. An accountant who
engages in this field of accounting is _________________________________ of a client company.
53. _______________________________ are generally used by the management for planning and controlling
purposes.
54. ______________________________________ refer to all assets that are expected to be realized, sold and
consumed within the enterprises normal operating cycle.
55. The bond is a contract between the ______________________ and the _______________________ specifying the
_________________________________ and the ________________________ to be charged.
56. _______________________________ arise from those ordinary activities that are directly related to the normal
operations of the business enterprise, such as the selling of goods and products or rendering of services to
customers.
57. _______________________________ must be aware of the signs that may indicate that a particular customer is
having a certain financial difficulties, if the business operations of that customer would continue, and if there is
enough margin of safety in case the business of the customers would suddenly be interrupted.
58. The ____________________________ as a regulator, needs to know if the activities of the enterprise – both
operational and non-operational – are within the scope of the authorized business’ objectives and other legal
limits.
59. A business that is owned by one person is called a __________________________________, a

__________________________________ or just plainly, a ___________________________________.
60. The investing activities of the enterprise, such as:

______________________________________________________________________________________
______________________________________________________________________________________
61. A business enterprise that purchases ready-to-use materials from wholesalers or manufacturers, and then
sells the same to the other processors or manufacturers without changing the form of the materials bought and
sold is also classified as a ____________________________________________.
62. Assets are classified only in two, namely:
1. ________________________________________
2. ________________________________________
63. _________________________________________. This is composed of both employer and employees’ share of SSS
Contribution.
64. _________________________________________. The account title used for the amount paid by the business
permits, licenses and other government dues except for income tax paid which is not allowed as deduction for
income tax purposes.
65. ________________________________________. This mainly focuses on the proper custody of government funds
and their purposes.
66. As ____________________________________, he is responsible for the formation of competitive accountants and

consultants.
67. _____________________________________ is the interval of time from the date of acquisition of merchandise
inventory; sell the inventory to customers and the ultimate collection of cash from sale.
68. ____________________________________. An account title for stationary and other supplies purchased for us
but are left on hand and are still unused. The account title should be specified as to
________________________________________ if intended for the office, _____________________________________ if
intended for the store, etc.
69. __________________________________. Same as Accounts Payable in nature but only the obligation is
evidenced by a promissory note. The enterprise is the one who issued the note.
70. ________________________________. Are the amount used in the process of earning the revenue.
71. ________________________________. Include drills, punches, hammer and saw.
72. ________________________________. The account title used to describe money, either in paper or in coins and
money substitutes like check, postal money orders, bank drafts and treasury warrants.
73. _____________________________________. The account title used for amounts collectible arising from services
rendered to a customer or client on credit or sale of goods to customers on account. This constitutes on
_______________________________ to pay by a customer or a client.
74. ______________________________. An account title for a finished construction owned by the business where
operations and transactions took place.
75. ___________________________________. Refers to the amount due to and payable by the enterprise to the
Bureau of Internal Revenue for tax withheld from employees’ salaries.
76. __________________________________________________________. Cost to produce and sell the goods.
77. ____________________________________________. Used in designing or forging out particular product.
78. As its name suggests, the primary objective of organizations that fall under the
_________________________________ is to make profit, and these organizations are usually referred to as
______________________________. The main activities of the business enterprise are focused in meeting its primary
objective of ________________________________. _______________________________________________ are also
undertaken to meet the same main objective.
79. A ___________________________________________ exists when a person or group of persons makes an

investment or contributes its resources in order to sell products or render services to others for the ultimate
purpose of making profit.
80. _______________________________________________________________________. These are developed based on

experience, research and careful study. They become generally accepted by agreement among accounting
practitioners.
81. ________________________________. This is an asset offset or a contra-asset account. It provides for possible
losses from uncollectible accounts. Though this is not actually an asset, it is classified as such because it is shown
as a deduction from the Accounts Receivable which is a Current Asset account. Another term for this is
__________________________________ or ____________________________________.
82. ________________________________. Refers to the amount due to and payable by the enterprise to the Home
Development Mutual Fund.
83. ____________________________________. The account title used for the employer’s share on medical care
contribution.
84. Accountants ________________________________ of business and convert them into

____________________________________________ then draw certain economic meanings from them.
85. On the other hand, some people dispute such an idea because accounting is not an
_____________________________________. In fact, the accounting constantly adjusts to
_______________________________________________ to adopt in the rapidly changing business trends and situations
globally.
86. __________________________________ - preparing the financial statements from the transactions recorded in
the books of account designed to meet the information needs of its users. This involves presenting the classified
data in a manner which is ___________________________________ to the end-users of accounting information. This
process leads to the preparation of the (a) _______________________________, (b)
_______________________________, and (c) _______________________________________________________________.
87. A _________________________________ is one who lends money or sells services or goods to be collected in the
future.
88. The CPA makes a __________________________________ of a certain business problem and

________________________________________________ that are needed as a solution.
89. The data in the financial statements of the investee hep both the _____________________________________ in
assessing the profitability of the business enterprise and in determining whether to expect satisfactory return of
their investment.
90. _____________________________________. This is a promissory note that is received by the business from the
customer arising from rendering of services, sale of merchandise, etc.
91. ____________________________________. The account title used for income earned by the business which is not
the main line of its activity and could not be clearly classified.
92. A ____________________________ with a long-range involvement with a supplier makes business plans and
decisions that are coordinated with his supplier’s plans and decisions.
93. The formation of a partnership requires some form of a ________________________________________ between

the partners.
94. Upon the formation of a business enterprise, an individual or a group of individuals, known as
_________________________, __________________________, ___________________________________, or
______________________________ commits its resources and/or abilities in the hope that its investment will increase
in value and that the goal of making profit will be attained.
95. ___________________________________ area those that have first importance, which define broadly the
actions that will best accomplish the objectives of accounting.
96. ___________________________________. The account title used for money placed and set aside for pretty or
small expenses. This exists when the business used ____________________________________ of keeping cash.
97. ____________________________________________________. This is composed of both employer and employees’

share of Pag-ibig contributions.
98. A chart of accounts is a list of __________________________________________________________________________

with their corresponding _____________________________________ which are needed by the business in its day-to-
day transactions.
99. _____________________________. The amount of the interest earned on Notes Receivable which is not yet
collected. (If the note is interest bearing)
100. ________________________________. An account title for the site where the building used as office or store or
factory is constructed.
101. ________________________________________________. This is composed of both employer and employees’

share of medical care contributions.
102. ________________________________________________. The account title used for the compensation given to
employees of a business. It may be specified as
___________________________________________________________________________, etc.
103. ____________________________ include income from activities or events that do not form part of the ordinary
operations of the business.
104. __________________________________. Account title for expenses that are paid in advance but are not yet
incurred or have not yet expired such as ______________________________,
________________________________________, _______________________________, _____________________________, etc.
105. ___________________________. These are expenses incurred by the enterprise but are not yet paid. These
normally occur when the accounting period ended such as _________________________________________________,
etc.
106. ____________________________. These usually occur in a corporate form of business organization.
107. ____________________________. The account title used for the anticipated loss that the business may incur
arising from uncollectible accounts for the current period. Another term for this is
____________________________________ or ________________________________________________.
108. ___________________________________. This is the income account used by a professional who renders
continuous service to a client and gets paid by the client at a fixed fee per period.
109. A ________________________________________________ buys ready-to-use products, such as appliances,

vehicles, household items, toys clothing apparels, supplies, ready-to-eat food, cosmetics, toiletries, and other
accessories. It then sells these products to end-consumers at higher prices.
110. Current asset accounts are normally arranged according to ______________________________ or

________________________________ or _______________________________ to cash in the Balance Sheet.
111. _______________________________. Some nature with that of Notes Payable (short-term) but only, this requires
payment for more than one year.
112. _______________________________. The account title used for the amount paid or incurred for use of
property, usually premises.
113. ____________________________________. Goods or products that are acquired by merchandising business for
the primary purpose of reselling them to customers at higher prices.
114. In a business endeavour, success is possible when _______________________________________________________

are used efficiently at the least possible cost.
SET A
Name: _____________________________________________________________ Date: ____________________________
Points Earned ______________________

1. Due to the difficulty in getting

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SET B.

Account Titles Debit Credit

a. The cash balance was overstated by P2,500.

Required: Prepare a corrected Trial Balance.

Account Titles Debit Credit

a. The cash balance was understated by P2,000.

Required: Prepare a corrected trial balance.

Account Titles Debit Credit

Notes Receivable 40,000

3. The estimated bad debts percentage is 3% of gross sales.

4. The estimated bad debts percentage is 2% of net sales.

7. The allowance for bad debts is increased by 5% of outstanding accounts receivable.

17. December rental is still unpaid as of December 31, 2016, P5,000.

1. Nature of Adjustment (whether Accruals — Expense; Accruals — Income; Prepayments — Asset

2. Adjusting Entries with supporting computations (disregard the explanation)

Proforma Entry: ___________ Expense xx

Proforma Entry: ___________ Receivable xx

Adjusting Proforma Entry: Prepaid _________ xx

Original Proforma Entry: Prepaid ___________ xx

Adjusting Proforma Entry: ___________ Expense xx

Original Proforma Entry: Cash xx

Adjusting Proforma Entry: __________ Income xx

Original Proforma Entry: Cash xx

Adjusting Proforma Entry: Unearned ____________ xx

Proforma Entry: Depreciation Expense – Foxed Assets xx

Computation: Annual Depreciation = (Cost – Salvage Value)/Estimated life (in yrs.)

Annual depreciation = (Cost – Salvage Value) x Depreciation rate per year

Less than 1 year depreciation = Annual depreciation x # of mos./12

F. Doubtful Accounts/bad Debts/Uncollectible Accounts

Proforma Entry: Doubtful Accounts Expense/Bad debts expense xx

3. If based on accounts receivable – increased by Accounts Receivable x predetermined

4. If based on accounts receivable - increased to Accounts Receivable x predetermined

5. If anyone from above formula is not applicable

Proforma Entry: Merchandise inventory, end xx

Computation: 1. Merchandise available for sale – Cost of goods sold

2. Unsold portion of merchandise inventory

2. Inventories – these are assets which are

4. ______________________________. An account title for a financial obligation of an enterprise that constitutes an

5. Business enterprise should keep financial records, called __________________________________,

8. __________________________________. This is a temporary account created at the end of the accounting

12. _____________________________________. Ownership and financial instruments evidencing an obligation of

16. ______________________________________. This is an account title for an income collected or received in

21. ________________________________. Claims from borrowers as a result of lending money.

23. The term income encompasses both _______________________________________.

25. ____________________________________________________________________ contains owner’s contribution to the

26. The _______________________ is a chronological (day-to-day) record of business transactions.

29. ______________________________________________________________________. Consideration received by an

a. Total assets as of the end of the year.

b. Total asset as of the beginning of the year.

c. Total liabilities as of the beginning of the year.

d. Capital balance as of the beginning of the year.

e. Net Income (Loss) during the year.

Name: _____________________________________________________________ Date: ____________________________

Class Schedule: ____________________________________________________ Strands & Grade: _________________

Points Earned ______________________

Passed _________ Class Topnotcher No.: _________

Failed __________ Over-all Topnotcher No.: _______

2. _________________________ is another ingredient of relevance. Financial information must be available on time

8. The ending equity is computed as follows:

10. Financial information is a ________________________________ of the situation if it is not biased.

15. The materiality of an item of information depends on its ______________________________, its

16. Otherwise known as ______________________________, _______________________________ is practiced only

20. An item of information is deemed ___________________________ if it is important enough to have an effect on

32. The other external data-users — _______________________________________________________________________

Name: _________________________________ Date:

Class Schedule: ____________________________________ Strands & Grade: _

Passed _ Class Topnotcher No.: _

Failed ____ Over-all Topnotcher No.: _

16. Otherwise known as , _ is practiced only

49. It is customary to place __ ahead of in the

57. Financial information is considered reliable if it is ____, _, and if

72. Unlike a trader or merchandiser, a _____ also called a ,

Name: _________________________________ Date:

Class Schedule: ____________________________________ Strands & Grade: _

Passed _ Class Topnotcher No.: _

Failed ____ Over-all Topnotcher No.: _

46. As an art, accountants apply _____, _ guided by

Name: _________________________________ Date:

Class Schedule: ____________________________________ Strands & Grade: _

Passed _ Class Topnotcher No.: _

Failed ____ Over-all Topnotcher No.: _