Fundamentals of ABM 1

70pts.

Test I. Annabelle established a service business to be known as Annabelle Photography on July 1, 2015. During the first
month, the following transactions occurred:
July 1: Anna transferred cash of 300,000 from her personal bank account to an account to be used for her business.
She also invested camera worth 45,000 lens worth 25,000 computer worth 28,000 photo papers and ink worth 14,000
and her personal debts evidenced by a note which would be assumed by the business amounting to 12,000
July 4: paid 6 months advance rent to ABC commercial complex 30,000
July 6: received a statement of account from ABS for advertising 5,500
July 8: bought photo enhancing and editing equipment from Mirzi outlet for 40,000, Arnina paid 30% down payment
and the balance on account
July 12: Hired office assistant with a monthly salary of 6,000. The office assistant officially started on July 16, 2014
July 13: photography services rendered totaled 180,000. Terms: 25% cash and the balance settled on account
July 14: purchased office sofa set from Renzo designs for 30,000 on account
July 15: paid various operating expenses during the month. Meeting potential clients 4,000 electricity 23,000
telephone expense 6,000 repairs expense 2,500.
July 18: photography services rendered totaled 180,000 of which 25% was settled with an interest bearing note and
the balance on account
July 20: received photography advances from a couple for a prenuptial coverage to be rendered next month: 60,000
July 22: Collected 90% of the outstanding receivable from july 13 transaction
July 24: paid in full the statement of account received last July 6
July 26: paid 80% of the outstanding obligation to Mirzi Outlet and for the remaining balance, she issued an interest
bearing note.
July 28: Paid half of the outstanding obligation to Renzo Designs
July 31: Paid Salary of the office assistant for 16 days 3,097

Prepare a General Journal, Ledger and Trial Balance for 50 points. 1 point shall be deducted for every mistake.

Test II.
1. Partnership has unlimited commercial life. True or False
2. A trading or merchandising business is engaged in selling services to customers for a fee. True or False
3. Market vendors are engaged in trading business. True or False
4. _____ is an economic unit that sells goods and services with the prime objective of generating profit
5. _____ assumes that only transactions that can be expressed in terms of money are recorded
6. ______ means that financial statements should be prepared at equal time intervals.
7. ______ is a 12 year period which may or may not end on December 31. Ex: school.
8. _________ is the principle which allows an accountant to violate another accounting principle if an amount is
insignificant.
9.
10. What is the accrual method in accounting?
11. -20 illustrate the accounting cycle.
Business Finance
Answer the following. You may use the space at the back of this paper for computations. Show your solution. Answer
without solutions will not be given credit. Take into account the score bearing of each questions to maximize your time.
Total of 60 pts.
1. What do you mean by C.I.? 2pts
2. What type of financial institution is metrobank? 1pt
3. What type of financial institution is Advance? 1pt
4. What is the role of a co-maker? 5pts
5. What is the purpose of the life insurance taken for the client obtaining a loan? 3pts
6. If you invest today amounting to 3,000 in an account that pays 24% interest compounded quarterly, how much
will be in your account after 2 years? 10pts.
7. Using the simple interest method, find the monthly payments on a 6,000 installment loan if the money is borrowed
for 16 months at an annual interest rate of 16%. 5pts
8. Discuss the component of an annual report. 10pts
9. What is a window dressing technique? 3pts
10. What is financial leverage? 2pts
11. Book values v. Market values when it comes to asset and liabilities. 6pts
12. Who is the branch manager of Metrobank Gapan? 2pts
13. Who is the acting branch manager of advance credit corp Cabanatuan? 1pts
14. What is the formula in computing the operating cash flow? 5pts
15. __________ shows the relationship of a firms cash and other current assets to its current liabilities. 1pt
16. __________ is calculated by dividing current asset by current liability. 1pt
17. ___________ is typically the least liquid of a firms current assets. 2pts