Accounting 2 Quiz

Multiple chose Theory (encircle the letter that corresponds to your answer)
1. It is the residual interest in the assets of the enterprise after deducting all its
liabilities as expressed in the equation, Owners Equity = Assets + Liabilities
a. Assets
c. Owners Equity
b. Liabilities
d. Profit
2. Indirect labor, indirect materials, depreciation of factory equipment, and the
like are known as
a. Direct materials
c. Factory overhead
b. Prime costs
d. Supplies
3. It is the structure of financing for the assets of the enterprise. It indicates how
much is borrowed capital and how much is equity capital.
a. Capacity for adaptation
c. Financial structure
b. Liquidity
d. Solvency
4. The sum total of manufacturing costs and work-in-process beginning is
a. Cost of goods manufactured.
c. Total cost placed in process
b. Total manufacturing costs
d. Raw materials used
5. The following are reported in the statement of Financial position, except
a. Cost of sales
b. Liabilities
b. Assets
d. Owners equity
6. An assumption which divides the life of the business into periodsa. Time period assumption
c. Accounting entity
assumption
b. Continuity assumption
d. Accrual basis assumption
7. To carry the value of an asset in its historical cost is an application of
a. Accounting entity
c. Accounting period
b. Going concern
d. Monetary unit
8. All of the following are nominal accounts, except
a. Revenue
c. Profit and loss
b. Expenses
d. Owners equity
9. These costs are incurred to transform raw materials into its finished products.
a. Manufacturing costs
c. Conversion Costs
b. Prime Costs
d. Direct Labor
10.An assumption which separates the owner from the business
a. Going concern assumption
c. Accrual basis assumption
b. Accounting entity assumption
d. Continuity assumption
Multiple choice Problem (encircle the letter that corresponds to your answer and
show your supporting computation)

1. On July 28, 2015, V Ruben Realty Co., received a cash of P36,000

representing advance collection from the tenant of the building it owns which
covers the period from Sept. 30, 2015 to Sept. 30, 2016. The annual
accounting period ends on December 31, 2015.
Assuming that Income method was used in recording pre-collection, the
Income Statement will recognize Rental Income for the year ended
December 31, 2015 of:
a) P28,000

b) P21,000

c) P15,000

d) P24,000

2. The following data were taken from the records of R. Cahayag Co.:
Purchases
P1,330,000
Freight-out
15,000
Purchase discounts
8,000
Purchase returns and allowances
5,000
Inventories:
Jan. 1
980,000
Dec. 31
750,000
How much is the cost of merchandise sold for the period?
a) P1,547,000
b) P 1,635,000
c) P1,650,000
d) P1,730,000
(No. 2 and 3) E. Gevera Company bought a brand new printing equipment at a
cost of P1,000,000 on September 30, 2015. The estimated economic life is 10
years with a scrap value of 10% of its acquisition cost.
3. How much is the annual depreciation of the machine?
a) P122,000
b) 90,000
c) P124,000

d) P125,000

4. How much is the book value of the machine as of December 31, 2015?
a) P955,000
b) P962,000
c) P975,000
d) P977,500
5. Ammabelle Pacana has insured its building and a truck under the following
insurance coverage and premium payments:
Property Insured
Date Coverage
Annual Premium
Payment
Building
Sept. 30, 2015 to Sept. 30, 2016
P 48,000
Truck
Sept. 1, 2015 to Sept. 1, 2016
18,000
The annual accounting period ends on December 31, 2015.
Assuming that asset method was used in recording pre-payment for the
building, Prepaid Insurance account should be recorded in the Statement of
Financial Position as of Dec. 31, 2015 in the amount of:
a) P15,000
b) P21,000
c) P28,000
d) P24,000

Problem:
The following data were taken for the books of Corona Manufacturing as of
December 31, 2014:
Inventories January 1
Raw Materials
Work-in-process
Finished Goods
Inventories December 31
Raw Materials
Work-in-process
Finished Goods
Purchases Raw Materials
Purchase Discounts
Direct Labor
Indirect Labor
Factory Supervisors Salary
Machinery Repairs
Factory Light and Water
Depreciation - Machinery
Factory Supplies Expense

P60,000
50,000
40,000
P30,000
40,000
50,000
650,000
15,000
265,000
90,000
125,000
20,000
15,000
40,000
20,000

Required: Prepare the statement of cost of goods manufactured.