1ST YEAR ELIMINATION ROUND - DAUNTLESS

It is the field of accounting that is primarily concerned with the recording and reporting of economic data and activities to stakeholders outside the business.

• Financial accounting

• Managerial or Management accounting

• Accounting research

• Cost accounting

Which of the following statements is correct?

• Under the accrual basis of accounting, income and expenses are reported in the income statement in the period in which cash is received or paid.

• The concept that expenses incurred in generating revenue should be matched against the revenue in determining profit or loss is called the cost concept.

• The concept of materiality prohibits the rounding-off of amounts when presenting financial reports.

• Most businesses use the accrual basis of accounting.

An error in which the entire number is mistakenly moved one or more spaces to the right or the left, such as writing ₱542.00 as ₱54.20 or ₱5,420.00, is called a

• slide error

• transposition error

• transplacement error

• moving error

The profit reported on the income statement is ₱90,000. However, adjusting entries have not been made at the end of the period for insurance expenses of ₱550 and accrued salaries of ₱750. The correct profit should have been

• ₱90,000

• ₱88,700

• ₱91,300

• ₱90,200

If the balance of the prepaid supplies account on January 1 is ₱2,500, supplies purchased during the year were ₱10,000 (debited to an asset account), and the supplies on hand at December 31 were ₱1,800, the amount for the appropriate adjusting entry at December 31 is

• ₱10,700 debit to prepaid supplies

• ₱1,800 credit to supplies expense

• ₱1,800 debit to prepaid supplies

• ₱10,700 debit to supplies expense

If the effect of the debit portion of an adjusting entry is to increase the balance of an expense account, which of the following describes the effect of the credit portion of the entry?

• Decreases the balance of a contra asset account

• Increases the balance of an asset account

• Decreases the balance of an asset account

• Increases the balance of an expense account

If the effect of the credit portion of an adjusting entry is to increase the balance of a liability account, which of the following describes the effect of the debit portion of the entry?

• Increases the balance of a contra asset account

• Increases the balance of an asset account

• Decreases the balance of an asset account

• Increases the balance of an expense account

The balance in the prepaid rent account before adjustment at the end of the year is ₱12,000, which represents three month’s rent paid on December 1. The adjusting entry required on December 31 is:

• debit Prepaid Rent, ₱4,000; credit Rent Expense, ₱4,000

• debit Rent Expense, ₱4,000; credit Prepaid Rent, ₱4,000

• debit Prepaid Rent, ₱8,000; credit Rent Expense, ₱8,000

• debit Rent Expense, ₱8,000; credit Prepaid Rent, ₱8,000

The difference between the fixed asset account and the related accumulated depreciation account is called the:

• book value or carrying amount of the asset

• fair value of the asset

• current cost of the asset

• contra account balance of the asset

The profit reported on the income statement is ₱50,000. However, adjusting entries have not been made at the end of the period for supplies expense of ₱500 and accrued salaries of ₱1,300. Profit, as corrected, is:

• ₱48,200

• ₱48,700

• ₱50,500

• ₱51,800