1. Which of the following relationships cannot be derived from the accounting equation?

a.
Assets minus liabilities equals owners equity
b.
Equity plus liabilities equals assets
c.
Assets minus equity equals liabilities
d.
Assets plus liabilities equals equity
2. Owners equity was understated and liabilities were overstated. Which of the following
errors could have been the cause?
a.
Making the adjustment entry for depreciation expense twice
b.
Failure to record interest accrued on a note payable
c.
Failure to make the adjusting entry to record revenue which had been earned
but not yet billed to customers
d.
Failure to record the earned portion of rent received in advance
3. The first step in the accounting cycle is
a.
Record transactions in the journal
b.
Analyze transactions from source documents
c.
Post journal entries to general ledger accounts
d.
Adjust the general ledger accounts
4. Transactions are recorded in the journal in
a.
Alphabetical order
b.
Financial statement order
c.
Numerical order
d.
Chronological order
5. The normal balance of an account is on the
a.
Debit side of the account
b.
Credit side of the account
c.
Side represented by increases in the account balance
d.
Side represented by decreases in the account balance
6. In the
a.
b.
c.
d.

accounting equation, an increase in asset can be associated with

An increase in liability
A decrease in owners equity
A decrease in liability
An increase in another asset

7. A computer equipment costing P64,800 with an expected useful life of three years
and no salvage value was purchased on July 1 for the current year. The accounting
period of the company ends November 30. Depreciation expense for the year is
9,000
8. The weekly salary of each employee is P1,200. The company has 5 employees who
are paid every Friday for a five-day workweek. December 31, 2012, falls on a
Wednesday so the employees will not be paid until Friday, January 2, 2013. Accrued
salaries at year-end is 3,600
9. The company pays its 12 months office rental on August 1, 2012 charging rent
expense for P75,000. Rent expense for the year assuming accounting year ends
November 1, 2012 is 18,750
10.At April 1, 2012, the beginning of its accounting period, the company has P1,050
office supplies. During the year, it purchased P3,480. At year end, P1,860 of its office
supplies were still on hand. Supplies expense for the period is
2,670