- 1. _________ is an account that decreases
owners equity by withdrawing assets by the owner.
A) Additional Investment
B) Withdrawals
C) Distributions of Income
D) Beginning Capital
- 2. The heading of the financial statements includes _______.
A) Name of Partners, Name of Statement, Date of Preparation
B) Name of Company, Name of Statement, Date of Preparation
C) Name of Owner, Name of Statement, Date
D) None of the above
- 3. Which is not a part of the Statement of Changes in Equity?
A) Increases to Equity
B) Page Header
C) Decreases to Equity
D) Heading
- 4. This statement is prepared prior to the preparation of statement of financial position to be able to obtain the ending balance of the capital to be used in the SFP.
A) Financial Statement
B) Balance Sheet
C) Cash Flow Statement
D) Statement of Changes in Equity
- 5. Which of the following will not depreciate?
A) Motorcycle
B) Building
C) Land
D) Van
- 6. Why is cash Flow Statement important?
A) All of them
B) It provides analysis of inflows and outflows from/to operating, investing and financing activities
C) It shows owners if their revenues are actually translated to cash
D) It provides the net change in cash balance of a company for a period
- 7. This method of CFP will show each major class of gross cash receipts and gross cash payments.
A) Indirect
B) Direct
C) Straight
D) Curve
- 8. Steve is about to start a printing business and is planning to have a beginning capital of P200,000.00. February 1, she invested P5,000.00 for her to use in the processing of documents for her upcoming business. In this scenario, How much is her initial investment?
A) P50,000.00
B) P150,000.00
C) P200,000.00
D) None of the above
- 9. This is an entity whose assets, liabilities, income and expenses are centered or owned by only one person.
A) Cooperative
B) sole Proprietorship
C) Partnership
D) Corporation
- 10. A business that is owned by two or more owners is called _______
A) Cooperative
B) Partnership
C) Corporation
D) Sole Proprietorship
- 11. Which of the following cannot be used to analyze financial statements?
A) Profitability ratio
B) None of them
C) Liquidity ratio
D) Solvency ratio
- 12. This is the excess of current assets over current liabilities.
A) Current ratio
B) Working Capital
C) Acid test ratio
D) Quick ratio
- 13. This is the availability of resources to meet short term cash requirements.
A) Solvency
B) Profitability
C) None of the above
D) Liquidity
- 14. Which of the following is not considered quick asset?
A) None of the above
B) Cash
C) Inventory
D) Accounts receivable
- 15. Which of the following is considered quick asset?
A) None of the above
B) Prepaid Asset
C) Trading Securities
D) Both A and B
- 16. This measures the frequency of accounts receivable converted into cash
A) Average collection period
B) None of the above
C) Accounts receivable turnover ratio
D) Both A and B
- 17. This is the entity's ability to meet long terms obligations as they become due.
A) Solvency
B) Liquidity
C) None of the above
D) Proitability
- 18. This compares the liabilities of the companies with its equity.
A) Both A and B
B) Debt to equity ratio
C) None of the above
D) Debt to total assets ratio
- 19. Is the quotient of the current assets divided by the current liabilities of the company?
A) None of the above
B) Acid test ratio
C) Current ratio
D) Working Capital ratio
- 20. This ratio measures the proportion between the net income after tax and the net sales of the company.
A) Both A and b
B) Profit margin ratio
C) None of the above
D) Gross profit ratio
- 21. This measures the capability 0f an entity to pay long term obligations as they fall due.
A) Debt to equity ratio
B) None of them
C) solvency ratio
D) Both A and B
- 22. This ratio measures the frequency of conversion of the companies accounts receivable to cash
A) None of the above
B) Accounts payable turnover ratio
C) Accounts receivable turnover ratio
D) Acid test ratio
- 23. This ratio measures the number of times the company was able to sell its entire inventory to customers during the year
A) Inventory turnover ratio
B) Average days in inventory
C) Number of days in operating cycle
D) None of the above
- 24. This is the proportion between the total liabilities of the company and its total total assets.
A) Times interest earned ratio
B) None of the above
C) Debt to equity ratio
D) Debt to total asset ratio
- 25. This is the proportion on the gross profit of the company with its net sales.
A) None of the above
B) Gross profit ratio
C) Both A and B
D) Profit margin ratio
- 26. How are owners of a partnership called?
A) Stockholders/Shareholders
B) None of the above
C) Partners
D) Proprietors
- 27. How are owners of a corporation called?
A) Proprietors
B) Stockholders/Shareholders
C) Partners
D) None of the above
- 28. Which of the following sequences arranges the complexity of business organizations, from simple
to complex?
A) Sole Proprietorship, Partnership, Corporation
B) Corporation, Sole proprietorship, Partnership
C) Sole Proprietorship, Corporation,
D) Partnership, Sole Proprietorship, Corporation
- 29. Which of the following sequences arranges the complexity of business organizations, from difficult
to the
easiest?
A) Partnership, Sole Proprietorship, Corporation
B) Sole Proprietorship, Partnership, Corporation
C) Sole Proprietorship, Corporation, Partnership
D) Corporation, Partnership, Sole Proprietorship
- 30. Which of the following is the most appropriate business organization for an entity named
“Segismundo,
Gomez, Valencia, & Co., CPA’s”?
A) Partnership
B) Corporation
C) None of the above
D) Sole Proprietorship
- 31. Which of the following are subjected to strict regulations?
A) Corporation
B) Cooperative
C) Sole
D) Partnership
- 32. Which of the following is an advantage of a partnership as compared to a sole proprietorship?
A) More sources of expertise
B) Concentration of management
C) Unlimited liability
D) Concentration of management
- 33. Generally, how long is the life of a corporation?
A) 50 years, not subject to renewal
B) As long as the life of the oldest shareholder
C) 50 years, subject to renewal
D) As long as the life of the youngest shareholder
- 34. The elements of the financial statements includes are _____.
A) assets, equity, liabilities, and income
B) assets, expenses, liabilities, income and equity
C) assets and expenses only
D) assets, liabilities, income and expenses
- 35. The following are examples of current Assets except
A) Accounts receivable
B) Prepaid expenses
C) Accounts receivables
D) Accounts
- 36. The following are terms used synonymously with equity except
A) Net worth
B) Revenue
C) Capital
D) Net Assets
- 37. Information of the financial performance is provided by
A) Statement of profit and loss
B) Statement of changes in owners
C) Statement of financial position
D) Cash flow statement
- 38. These are easily convertible into cash within the normal operating cycle of the business.
A) Non-current Assets
B) Current liabilities
C) Equity
D) Current assets
- 39. Having the Current assets of 1,500,000 from 2023 and became 1,530,000 in 2024, with a liabilities of 750,000 and 800,000 of the same year. How much will be the company's working capital for 2023?
A) 2%
B) 750,000
C) 1.9%
D) 730,000
- 40. Having the Current assets of 1,500,000 from 2023 and became 1,530,000 in 2024, with a liabilities of 750,000 and 800,000 of the same year. How much will be the company's working capital for 2024?
A) 2%
B) 1.9%
C) 750,000
D) 730,000
- 41. Having the Current assets of 1,500,000 from 2023 and became 1,530,000 in 2024, with a liabilities of 750,000 and 800,000 of the same year. What will be the company's current ratio for 2023?
A) 2%
B) 3%
C) 1.9%
D) 2.9%
- 42. Compute the acid test ratio of the AYZ company using the following data:
Quick assets= 850,000
sales= 500,000
current liabilities= 530,000
Accounts receivables= 450,000
A) 1.8
B) 320,000
C) 1.7
D) 1.6
- 43. Compute for the accounts receivable turnover ratio of the company with the following data:
Net sales=350,000
Total assets=450,000
expenses=230,000
accounts receivable=125,000
A) 1.9
B) 1.5
C) 3.6
D) 2.8
- 44. What is the company's Current ratio if it has the following data:
Current assets= 1,410,000
Current liabilities= 450,000
Net Sales=1,510,000
Total expenses= 500,00
A) 3.13
B) 3.02
C) 4.3
D) 3
- 45. What would be the Average collection period of the company if the Accounts receivable turnover is 17.57?
A) 21
B) 20
C) 21.91
D) 20.77
- 46. Compute for the Average days in Inventory of XY company
No. of days= 365
Inventory turnover ratio=3.38
collecting period= 7.91
days in inventory= 143.36
A) 46.14
B) 2.55
C) 107.99
D) .43
- 47. Cost of Goods sold=950,000
Inventory=620,000
Accounts Receivable Turnover ratio=15
No. of days=365
Compute for the Inventory turnover ratio.
A) 1,698.6
B) 1.53
C) .65
D) 2,602.7
- 48. Collecting period= 20.19
days in Inventory= 143.26
Total liabilities= 16,000
Total assets= 23,000
Determine the No. of days in operating cycle.
A) .141
B) .696
C) 163.45
D) 7,000
- 49. If we divide the total liabilities to total owners equity we get the ________.
A) Debt to Equity Ratio
B) Debt to Total assets ratio
C) Gross profit ratio
D) Times Interest Earned ratio
- 50. The Gross Margin Ratio is equals to Net income after tax divided by _______.
A) Owners Equity
B) Operating Expenses
C) Net sales
D) Total Assets
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