1. What is the correct order of the following events in the accounting process?

I. Financial statements are prepared

II. Adjusting entries are recorded
III. Nominal accounts are closed

a. I, II, III
b. II, I, III
c. III, II, I
d. II, III, I

2. To meet the objective of providing information about financial position, financial performance
and cash flows of an entity, financial statements should provide information about all of the
following, except

a. Assets, liabilities, and equity

b. Income and expenses, including gains and losses
c. Contributions by and distributions to owners in their capacity as owners
d. Nature of the entity’s business activities

3. Identification: In liquidation, the sale of the non-cash assets is called______

4. Identification: On May 1, 2019, Cobb and Mott formed a partnership and agreed to share profits
and losses in the ratio of 3:7 respectively.

Cobb contributed a parcel of land that cost him P10,000. Mott contributed P40,000 cash. The
land was sold for P18,000 on May 1, 2019, immediately after the formation of the partnership.

What amount should be recorded in Cobb’s capital account on formation of the partnership?

5. If the partnership agreement does not specify how income is to be allocated, profit and loss
should be allocated

a. Equally
b. In proportion to weighted average of capital invested during the period
c. Equitably so that partners are compensated for the time and effort expanded on behalf
of the partnership
d. In accordance with their capital contribution
6. Identification: The following information is available from Domi Company’s accounting records
for the current year:

Purchases 5,300,000
Purchase discounts 100,000
Beginning inventory 1,600,000
Ending inventory 2,150,000
Freight out 400,000

What is the cost of goods sold for the current year?

7. This is a stock that has been issued by the corporation as fully paid and later reacquired but not
retired.

a. Watered share
b. Treasury share
c. Participating preference share
d. Subscribed ordinary share

8. The following adjusting entries are not reversed at the beginning of the new accounting period?

a. Accrued expenses
b. Accrued revenue
c. Prepaid expense recorded under the asset method
d. Unearned revenue recorded under the revenue method

9. The accounts in the ledger of CD Co. contain the following balances at year end: Accounts
receivable, P30,240; Cash, P50,985; Equipment, P172,760; Gas and oil expense, P2,650;
Insurance Expense, P1,830; Notes payable, P64,575; Prepaid insurance, P6,880; Repairs
Expense, P3,360; Service Revenue, P37,130; CD drawing, P2,450; CD, capital (beg), P156,290;
Salaries expense P15,490; Salaries payable, P2,850. Assuming no error committed during the
fiscal period, the balance of Accounts payable is

a. 20,900
b. 23,800
c. 25,800
d. 31,500
10. Identification: What is the entry to record issuance of share after all cash have been received
from a share subscription following the journal entry method?