1.

Information System is a collection of people, procedures, software, hardware and data

which work together to provide information essential to running an organization.
2. Procedures are manuals and guidelines that instruct end users on how to use the
software and hardware.
3. System Software is a background software that helps a computer manage its internal
resources.
4. These are secondary storage flash drive, hard disk and optical disk except memory.
5. CPU controls and manipulates data to produce information.
6. Input Device translate data and programs that humans can understand into a form
the computer can process.
7. Data is the raw material for data processing.
8. Asset is the valuable resources owned by the entity.
9. Assets have a normal balance of debit.
10. Income have a normal balance of credit.
11. Equity have a normal balance of credit.
12. Expense have a normal balance of debit.
13. Liability have a normal balance of credit.
14. An example of an asset is the machinery owned by a firm.
15. Revenue from sale of goods in the normal course of business is reported as part of
earning in the period when: the sale is made.
16. Identify the incorrect statement: Assets + Liabilities = Equity
17. Which part of the accounting equation does a sale on account effects? Accounts
Receivable and Owners Capital
18. The income statement reports: results of operation for a specific period
19. In the accounting equation, an increase in asset can be associated with an increase
in liability.
20. The purchase of a service vehicle on account will increase asset and increase a
liability.
21. Inventories are: held for sale in the ordinary course of business, in the process of
production for such sale, in the form of materials or supplies to be consumed in the
production process or in the rendering of services.
22. Debits can increase assets and expenses and decrease liabilities, revenue and
owner’s capital.
23. Over a period of time, if the total asset increase by 270,000 and total liabilities
increase by 70,000 then owner’s equity will be increased by 200,000.
24. When a business entity receives payment before delivering the goods, the unearned
revenue account is credited.
25. A 󠅔 is a form of cash. True
26. The balance sheet reports: financial position on a specific date
27. Assume the Swatch sold watches to a department store on account for 50,000. How
would this transaction affect Swatch’s accounting equation? Increase both assets and
owner’s equity by 50,000.
28. An increase in asset with a corresponding increase in liabilities/equity. Source of
assets
29. One claim (liability/equity) increase and another claim decreases. Exchange of
Claims
30. Suppose your business has a cash of 50,000, receivables of 60,000 and PPE of
200,000/ The store owes 80,000 on account and has a 100,000 note payable. How
much is your equity? 130,000
31. The predecessor f modern accountants. Scribe
32. Amatino Manucci the inventor of double-entry bookkeeping.
33. Luca Pacioli father of modern accounting
34. Service is a type of business that sells people’s time.
35. Corporation is an artificial being created by the operation of law.
36. Small enterprise has an asset of 10,000,000 and 90 employees.
37. Financing Activities are methods that an organization uses to obtain financial
resources in financial marks and how it manages these resources.
38. Periodicity Concept is where an entity’s life can be subdivided into equal time periods
for reporting period purposes.
39. Ethics is concerned with right or wrong and how conduct should be judged to be
good or bad.
40. A professional accountant should comply with relevant laws and regulations and
should avoid any action that discredits the profession. Professional Behavior
41. Accounting Standards are authoritative statements of how particular types of
transaction and other events should be reflected in financial statement.
42. The objective of this report is to provide financial information to primary users for
their decision making. General Purpose Financial Statement
43. Lender, investor, creditor are primary users except employees.
44. Customers have an interest in information about the continuance of an enterprise,
especially when they have long-term involvement with, or are dependent on, the
enterprise.
45. Relevance is where financial information is capable of making a difference in the
decision made by users.
46. Neutrality. Free from bias
47. Verifiability helps assure that information represents faithfully the economic
phenomena purports to represents.
48. Classifying, characterizing and presenting information clearly and concisely makes it
understandable. Understandability
49. Financial statements are normally prepared on the assumption that an enterprise is
a going concern and will continue in operation for the foreseeable future. Going
concern
50. Assets are carried at the amount of cash equivalents that would have to be paid if
the same or an equivalent asset was acquired currently. Current cost
51. Recording business transaction in the journal. Journalizing
52. Journal book is the original book of entry
53. Posting is the process of transferring information from journal to ledger.
54. All transactions that affect the accounting equation is recorded. True
55. Trial balance is a listing of all accounts used by the organization in recording
transactions with their corresponding balances.
56. Adjusting entries is an increase/decrease in the initial amount recorded for a certain
account.
57. Closing entries all income and expense accounts are required to be closed at the end
of the reporting period.
58. Worksheet serves as the basis of the creation of the balance sheet and income
statement.
59. Accumulated depreciation is not a temporary account.
60. Income, withdrawal, income and expense summary are temporary account.
61. Adjusted trial balance prepared to assure that adjusting entries have been correctly
posted.
62. This part of general journal is only filled up when the journal entry is transferred and
checked against the ledger. Posting reference
63. Sales journal is a special journal where only sales on account are recorded.
64. T-account is used to represent a ledger account and is a simple tool used to
understand the effects of one or more economic transactions.
65. Cash, Accounts receivable and expenses have a normal balance of debit while income
have a normal balance of credit.
66. Source documents are the evidence of economic transaction that support that
verifiability of accounting records.
67. Account is the basic summary device of accounting.
68. A 800 revenue is accidentally posted as debit. The trial balance column will differ by
1,600.
69. Prepaid expense will not affect the owner’s equity.
70. When the company receives cash from the payment of customers. What account is to
be debited? Cash
71. Prepaid expense is an example of permanent account.
72. Equipment, accrued expense and land are permanent account except salaries
expense.
73. Purchase supplies worth 5,000. Debit to supplies 5,000 credit to cash 5,000
74. Invested 500,000 into the business name: debit to cash 500,000 and credit to capital
500,000
75. Place an order for new machinery worth 10,000: no journal entry
76. Hired 3 employees with a monthly salary of 30,000: no journal entry
77. Buy equipment using personal money for the sue of the business worth 1,000: debit
to equipment 1,000 and credit to capital 1,000
78. Received utilities bill for the month of September: debit to utilities expense ad credit
to utilities payable
79. Pay the rent for the next 3 months’ worth 30,000: debit to prepaid rent 30,000 and
credit to cash 30,000
80. Paid the electricity bill previously billed: debit to utilities payable and credit to cash
81. Received 10,000 from customer for the service previously billed: debit to cash 10,000
and credit to accounts receivable 10,000
82. Adjusting entries use to update the accounting records at year-end
83. The purpose of adjusting entries is to correct overstatement and understatement.
84. Bad debts expense is a portion of the receivable that is estimate to be uncollectible.
85. Allowance for doubtful accounts have a credit balance
86. Accrued expense have a normal credit balance.
87. Deferred revenue is considered a liability.
88. An adjusting entry affects one permanent and one temporary account.
89. An adjusting entries always at least affect one permanent and one temporary
account. True
90. Prepaid expenses are those paid but not yet incurred.
91. Accrued income are those earned but not yet received.
92. Accrued expense are those incurred but not yet paid.
93. Deferred income is received but not yet earned.
94. Reversing entries is done for consistency of recording income and expense.
95. Accrued expense, accrued income and prepaid expense (expense method) are
reversed except the prepaid expense (asset method)
96. Accrued expense, accrued income and unearned income (revenue method) are
reversed except unearned income (liability method)
97. Income statement is a statement that show the results of operations for a given
period of time.
98. A statement that shows the ending capital balance of the owner’s equity as of a given
period of time is the statement of changes in equity.
99. Balance sheet is the statement that shows the financial condition of the business as
of a given date.
100. Statement of cash flow is the statement that shows the resources and uses of
cash for a given period of time.
101. Depreciation expense is the decrease in the value of a fixed asset due to the
ordinary wear and tear (due to use or passage of time) which is charged to expense.
102. What is the adjusting entries if the company have an outstanding accounts
receivable of 10,000 and they estimated that 5% of that amount is uncollectible: debit
to bad debts expense 500 and credit to allowance for bad debts expense 500
103. What is the adjusting entries if the company have an outstanding accounts
receivables of 10,000 and they write-off the 5% of the outstanding balance: debit to
bad debts expense 500 and credit to account receivables 500
104. On June 30, the cost of the newly purchased equipment of the company is
50,000 salvage value that have a useful life of 5.5 years. What is the depreciable
amount and the depreciation for the year? 550,000 and 50,000
105. What is the journal entry for depreciation if the company purchased an
equipment on June 1 with a 120,000 depreciation per year: debit to depreciation
expense 70,000 and credit to accumulated depreciation 70,000
106. What is the adjusting entry on year end if you have a notes receivable of
100,000 with 12% p.a. interest dated June 1? No adjusting entries are recorded for
this yet: debit to interest receivable 7,000 and credit to interest revenue 7,000
107. Received your utilities bill for the month of September worth 10,000: debit to
utilities expense 10,000 and credit to utilities payable 10,000
108. Received 30,000 from a customer at the beginning of the year for the service to
be provided in the span of 3 years. What is the adjusting entries at the year-end if the
liability method is used: debit to unearned service revenue 10,000 and credit to
service revenue 10,000
109. Using recorded the purchase of office supplies using the expense method worth
10,000. At the year-end, only 3,000 is left from the supplies: debit to supplies 3,000
and credit to supplies expense 3,000
110. What is the effect if no adjusting entries are made for prepaid expense using
expense method: equity is under