This accounting basics quiz consists of around 10 items designed to test your knowledge of the theory of accounts and accounting fundamentals.
Set A – Accounting Background
True or False?
1. According to the Accounting Standards Council, accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature, about economic entities, that is intended to be useful in making economic decisions.
2. Luca Pacioli is the father of modern accounting.
3. A professional accountant is defined as an individual who holds a valid certificate issued by the Commission of Accountancy, whether they are in public practice, commerce and industry, academe, or government.
1. True – That is the exact definition of accounting according to the Accounting Standards Council.
2. True – Luca Pacioli was the first to publish a detailed material regarding double-entry bookkeeping.
3. False – It is not a Commission of Accountancy but instead Board of Accountancy.
Set B – Accounts and Balance Sheet
1. Which of the following accounts is increased by a credit?
a. Accounts receivable
b. Service income
d. Warranty expense
2. Which of the following accounts is increased by a debit?
a. Warranty payable
b. Allowance for doubtful accounts
d. Computer equipment
3. The elements of financial position include the following, except.
1. B. Service Income
The normal balance of revenue is in credit. When there is a new revenue recorded, service income is credited.
2. D. Computer Equipment
The normal balance of assets is in debit. When there is a new asset acquired, an asset account is debited.
3. D. Reserves
Set C – Accounting Basics Quiz
1. This principle requires a professional accountant to act in a manner consistent with good reputation of the profession and refrain from any conduct which might bring discredit to the profession.
2. The normative attitudes or ideas of the accounting profession as to what ought to represent a good accounting practice and which modify the application of accounting principles are ___________?
3. The following transactions were completed by Medina Company.
a. Collected cash from clients on January 2022 amounting to P5,000 for January 2022 sales.
b. Paid commissions to shoppers amounting to P200 last February 2022 for December 2021 sales.
c. Sold P500 groceries and P2,000 spoons last December 2021 and January 2022, respectively.
d. Handshaked a possible sale of groceries amounting to P100 to Clara Company on February 2022.
e. Sold on credit groceries amounting to P500 to Gina Company last March 2022.
How much is the total revenue for 2022?
4. Gem Company has the following reported balances on its March 31, 2022 records:
Accounts receivable 200,000
Inventory at store 100,000
Inventory on consignment to May 300,000
Company net of 25% margin of May Co.
Cash for retirement of bonds in 2014 400,000
Bank overdraft 500,000
How much should be reported as total current assets as of March 31, 2022?
1. Professional behavior
2. Accounting conventions
3. P2,500 – Other revenue items pertain to 2021 and not for 2022.
4. P700,000 – Fund to be used in 2014 is noncurrent asset while the bank overdraft is a current liability.
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