BASIC ACCOUNTING CUP-easy

You are a business owner. Your business needed additional capital so you obtained a loan from a bank. the bank made you sign a contract promising to repay the loan after a year. Which of the following accounts is increased?

• Accounts payable

• Notes payable

• Accounts receivable

• Notes receivable

Which of the following is not a correct variation of the basic accounting equation?

• Assets = Liabilities + Equity

• Assets - Liabilities = Equity

• Assets - Equity = Liabilities

• Assets + Liabilities = Equity

Which of the following is an essential aspect in the definition of a liability?

• a present right over the economic benefits that the economic resource may produce

• potential of the economic resource to produce economic benefits for the entity

• a present obligation that may arise from a future event

• potential of the present obligation to cause a transfer of an economic resource from the entity

You acquired a cellphone through a monthly installment plan. According to your contact, you are required to return the cellphone to the supplier if you miss out two installment payments. upon signing the contract, the supplier gave you the cellphone. Which of the following statements is true?

• The cellphone becomes your asset only after you have fully paid the installment price.

• The cellphone is already your asset because you control the benefits from it. Legal ownership is not a necessary criterion when determining the existence of an asset.

• the cellphone is the supplier's asset until you have fully paid the installment price.

• All statements are true.

Which of the following statements is correct regarding financial accounting?

• Financial accounting is mainly intended to provide financial information tailored to the needs of the entity's management.

• information processed in financial accounting is no used in the other branches of accounting.

• Financial accounting is the branch of accounting that deals with the inspection of an entity's financial statements for the purpose of expressing an opinion thereon.

• Compared to the other branches of accounting, financial accounting necessarily needs to conform to the Philippine Financial Reporting Standards (PFRSs) for it to be able to produce useful information.

On March 1, Vicente purchased merchandise with an invoice price of P270,000 and 2/10, n/30 terms. On March 3, Troy paid P10,000 transportation cost on the purchased goods. On March 10, Vicente paid for the merchandise. What was Vicente's total cost of the purchased merchandise?

• P270,000

• P274,200

• P274,600

• P280,000

1. Gabriela uses the perpetual inventory system. Gabriela purchased merchandise with an invoice price of P80,000 terms 2/10, n/30. If Gabriela returned merchandise with an invoice price of P20,000 to the supplier, what should the journal entry to record the return include

• Debit to Inventory P20,000

• Debit to Inventory P19,600

• Credit to Inventory P20,000

• Credit to Inventory P10,000

Carl purchased P50,000 merchandise from Sartre with terms of 3/10, n/30. How much discount is Carl entitled to take if it paid within the allowed discount period of 10 days?

• P500

• P1,000

• P1,500

• P3,000

A physical count of inventory is usually taken

• At the end of the fiscal year

• At the peak of busy season

• At the start of the fiscal year

• In the middle of the fiscal year

Which of the following is not a component of the operating cycle?

• Collection of cash from merchandise sales

• Ordering of merchandise

• Purchase of merchandise

• Sale of merchandise