Documents

Rookie Cup Level 1 with Answers.docx

Description
fdfd
Categories
Published
of 13
All materials on our website are shared by users. If you have any questions about copyright issues, please report us to resolve them. We are always happy to assist you.
Related Documents
Share
Transcript
  EASY ROUND E1. Why are adjusting entries necessary? a.To record revenues and expenses b. To make debits equal credits c. To close nominal accounts at year-end d. To correct erroneous balances in accounts E2. The work sheet of Fleur Company shows Interest Expense of P9,000 and Interest Payable of P9,000 in the Adjustments columns. What will be the ultimate disposition of these items on the work sheet? a. Interest Expense will appear as a debit of P9,000 and Interest Payable as credit in the Balance Sheet columns. b. Interest Expense will appear as a debit of P9,000 and Interest Payable as credit in the Income Statement columns. c. Interest Expense will appear as a debit of P9,000 in the Balance Sheet columns and Interest Payable as credit in the Income Statement columns. d. Interest Expense will appear as a debit of P9,000 in the Income Statement columns and Interest Payable as credit in the Balance Sheet columns. E3. When a corporation sells merchandise and the terms are FOB shipping point and pays the shipping costs, the seller would record the transportation costs with the following entry: a. b. Debit Cash, credit Accounts Receivable Debit Accounts Receivable, credit Sales c. Debit Accounts Receivable, credit Cash  d. Debit Merchandise Inventory, credit Accounts Payable E4. The use of a Purchase Discounts account implies that the recorded cost of a purchased inventory item is its a. invoice price. b. invoice price plus any purchase discount lost. c. invoice price less the purchase discount taken. d. invoice price less the purchase discount allowable whether taken or not. E5. The sales discount is based on a. Invoice price plus transportation costs b. Invoice price less discount c. Invoice price plus transportation costs less returns  and allowances d. Invoice price less returns and allowances E6. When using the periodic inventory system, which of the following generally would not  be separately accounted for in the computation of cost of goods sold? a. Trade discounts applicable to purchases during the period b. Cash (purchase) discounts taken during the period c. Purchase returns and allowances of merchandise during the period d. Cost of transportation-in for merchandise purchased during the period E7. Umbridge Company purchased equipment on November 1, 2013, by giving its supplier a 12-month, 9 percent note with a face value of P48,000. The December 31, 2013, adjusting entry is a. debit Interest Expense and credit Cash, P720. b. debit Interest Expense and credit Interest Payable, P720. c. debit Interest Expense and credit Interest Payable, P1,080. d. debit Interest Expense and credit Interest Payable, P4,320. E8. Pettigrew Company received P9,600 on April 1, 2013 for one year's rent in advance and recorded the transaction with a credit to a nominal account. The December 31, 2013 adjusting entry is a.   debit Rent Income and credit Unearned Rent, P2,400. b.   debit Rent Income and credit Unearned Rent, P7,200. c.   debit Unearned Rent and credit Rent Income, P2,400. d.   debit Unearned Rent and credit Rent Income, P7,200. E9. A 3-year insurance policy was purchased on October 1 for P6,000, and prepaid insurance was debited. Assuming a the entity adopts a calendar year with December 31 as the year-end, what is the reversing entry at the beginning of the next period? a. None is required. b. Prepaid insurance Prepaid insurance # P5,500 P5,500 c. Prepaid insurance Insurance expense # P500 P500 d. Insurance expense Prepaid insurance P500 P500   # E10. Slughorn Company rented a portion of its warehouse for 5-years at an annual rental of P15,000, beginning on March 1. The tenant paid 1 year’s rent in advance, which Slughorn recorded as a credit to unearned rental income. Slughorn reports on a calendar-year basis. The adjusting entry on December 31, of the first year should be a. No entry. b. Unearned rental income Rental income # P2,500 P2,500 c. Rental income Unearned rental income # P2,500 P2,500 d. Unearned rental income Rental income # P12,500 P12,500 AVERAGE ROUND A1. If the accountant fails to make an adjusting entry for the earned portion of the rent collected in advance, the effect of this failure to make an adjusting entry is a.   Overstated assets and understated liabilities b.   Overstated expenses and understated income c.   Overstated income and understated assets d.   Overstated liabilities and understated income A2. The failure to record a purchase of merchandise on account even though the goods are properly included in the physical inventory results in a. an overstatement of assets and net income. b. an understatement of assets and net income. c. an understatement of cost of goods sold and liabilities and an overstatement of assets. d. an understatement of liabilities and an overstatement of owners' equity      A3. Statement 1 : The amounts of the balance sheet columns of the worksheet will usually be the same as the amounts appearing in the formal balance sheet. Statement 2:  The account form of the balance sheet shows assets, liabilities and owner’s equity in a vertical sequence. Statement 3 : The excess of expenses over revenues is called a profit Statement 4 : The balance of the Unearned Revenues account will appear in the Income Statement, credit column of the worksheet. a.   True, False, False, True b.   False, False, True, True c.   True, True, True, False  d.   True, False, False, False    A4. Statement 1 : When using a perpetual inventory system, freight charges on goods purchased are debited to Freight-In. Statement 2 : If both purchases and ending inventory are overstated by the same amount, net income is not affected. Statement 3:  Cash discounts are called purchase discounts from the buyer’s viewpoint and sales discount from the seller’s v iewpoint. a.   False; False; False b.   False; False; True c.   False; True; True d.   True; True; True The following accounts and their balance are among those in the trial balance of Hagrid Corporation on December 31, 2013: Sales P2,000,000 Inventory, January 1 365,000 Purchases 1,555,000 Purchases return and allowances 15,000 Salaries 120,000 Delivery expense 22,000
We Need Your Support
Thank you for visiting our website and your interest in our free products and services. We are nonprofit website to share and download documents. To the running of this website, we need your help to support us.

Thanks to everyone for your continued support.

No, Thanks