TEST I – Multiple Choice: Identify the correct answer among the given

choices. In your answer sheet, write the letter only.

1. A source document evidencing that orders have been placed by the

customer waiting to be served by the supplier
A. Purchase request B. Purchase order
C. Purchase invoice D. Purchase check
2. The source document evidencing that goods have been delivered by the
supplier to the customer-
A. Supplier’s sales invoice C. Customer’s sales invoice B. Vale slip
D. Customer’s delivery receipt
3. A source document issued by the supplier acknowledging that full payment
has been received from the customer-
A. Official receipt C. Delivery receipt
B. Purchase receipt D. Receiving report
4. Is a statement of the financial position of a business which states the assets,
liabilities, and owners' equity at a particular point in time.
A. Balance Sheet B. Income Statement C. Owner’s Equity D. Assets
5. A source document which accompanies a check when payment is made-
A. Check voucher C. Cash voucher
B. Purchase voucher D. All of the above
6. All of the following are examples of source documents, except-
A. Check B. Invoices C. Contract D. Journal
7. A source document which shows that the customer has already made partial
payment to the supplier through issuance of-
A. Check B. Voucher C. Official receipt D. Sales Invoice
8. Are things or properties that the business owns, example includes cash,
account receivable and prepaid expenses.
A. Assets B. Liabilities C. Owner’s Equity D. Revenue
9. It is the obligations of the company, payable in money, goods or services.
 A. Assets B. Liabilities C. Owner’s Equity D. Revenue
10. It is the claim of the owner of the business also known as the capital.
A. Assets B. Liabilities C. Owner’s Equity D. Revenue 11. ________ is
a record comprising the sales and other income recieved by the
business.
A. Assets B. Liabilities C. Owner’s Equity D. Revenue 12. The most
liquid form of asset that can be used anytime to purchase another
assets or pay liabilities.
A. Inventories B. Receivables C. Payable D. Cash
13. An example of asset that can be used in the business for a long period of
time.
Usually more than a year.
A. Inventories B. Computer C. Receivables D. Cash
14. A type of business that is purely engage in providing all types of service
activities such as medical or legal services.
A. Service Business C. Manufacturing business
B. Merchandising business D. Trading Business
15. A type of business that is engage in buying and selling of food products
such as Grocery/convenient stores.
A. Service Business C. Manufacturing business
B. Merchandising business D. Forex Trading Business
Activity 1 : Identifying and recording a business transaction using the
General Journal

Below is an example of business transactions of a service type business.

You are task to record the said transactions in the general journal by means of
journal entry applying the rules of debit and credit.

Depicted in figure 11 is the standard chart of accounts of Alpha Laundry

System.
 Figure 11 – Chart of Accounts

Let us begin!

Mr. Denver Ambrose is a retired public school teacher. He started his

laundry business in June 2018. He used all of his savings to start a “coin-
operated laundry” business. He named it Alpha Laundry Systems (ALS). The
following are business transactions for the month of June 2018, the first month of
business operation:

1. June 1, 2018 - Mr. A invested P 200,000 cash in his newly opened Alpha
Laundry System business.

Your Journal Entry:

GENERAL JOURNAL PAGE 1

POST.

DATE PARTICULARS REF. DEBIT CREDIT

1 June 1
2
To record the initial Capital investment
3 of Mr. A.
 2. June 2, 2018 - Mr. A hired his former classmate Doree Dy to be the laundry
operator of ALS for a fixed monthly salary of P10,000. The operator will be
paid every quencina.

3. On June 5, 2018 – Alpha Laundry Systems purchased laundry equipment for

cash, P150,000.

Your Journal Entry:

GENERAL JOURNAL PAGE 1

POST.
DATE PARTICULARS REF. DEBIT CREDIT
4 June 5
5
To record the acquisition of Laundry
6 equipment

4. On June 6, 2018 – Alpha Laundry Systems paid cash in advance for the 1
year insurance coverage of laundry equipment for the whole year amounting
to P6,000.
Monthly insurance expense will be recognized for each month end report.

Your Journal Entry:

GENERAL JOURNAL PAGE 1

POST.
DATE PARTICULARS REF. DEBIT CREDIT
7 June 6
8
To record the prepaid Insurance for the
9 Laundry equipment

5. On June 7, 2018 – Alpha Laundry Systems bought supplies for laundry

amounting to P10,000. The supplies bought are laundry consumables such
detergent powder, soap bar and fabric softener. Monthly inventory will be
conducted to determine unused supplies and will be recognized for each
month end report.

Your Journal Entry:

GENERAL JOURNAL PAGE 1

POST.
DATE PARTICULARS REF. DEBIT CREDIT
10 June 7
11
To record the acquisition of laundry
12 consumables

6. On June 15, 2018 – Alpha Laundry Systems paid P4,750 cash for salary of
laundry operator.

Your Journal Entry:

GENERAL JOURNAL PAGE 1

POST.
DATE PARTICULARS REF. DEBIT CREDIT
13 June 15
14
To record the payment of Laundry
15 operator’s salary
7. On June 16, 2018 – Alpha Laundry Systems received P25,000 cash for
laundry services rendered to MZ. Hotel.

Your Journal Entry:

GENERAL JOURNAL PAGE 1

POST.
DATE PARTICULARS REF. DEBIT CREDIT
16 June 16
17
To record the payment received from MZ
18 Hotel.

8. On June 17, 2018 – Alpha Laundry Systems rendered service to Argon Hotel
amounting to P45,000. Argon promised to pay on June 20 of the same year.

Your Journal Entry:

GENERAL JOURNAL PAGE 1

POST.
DATE PARTICULARS REF. DEBIT CREDIT
19 June 17
20
To record the service rendered to Argon
21 Hotel

9. On June 18, 2018, Alpha Laundry Systems purchase office supplies from Ku
Enterprises amounting to P2,000 on account. ALS will pay it on June 25 of
the same year.

Your Journal Entry:

GENERAL JOURNAL PAGE 1

POST.
PARTICULARS
 22 June 18
23
To record the acquisition of Office
Supplies on account from Ku
24 Enterprises

10. On June 20, 2018, Alpha Laundry Systems collected payment of Argon
Hotel.

Your Journal Entry:

GENERAL JOURNAL PAGE 1

POST.
DATE PARTICULARS REF. DEBIT CREDIT
25 June 20
26
To record the full payment from Argon
27 Hotel

11. On June 25, 2018, Alpha Laundry Systems paid in full the amount owed to
Ku Enterprises.

Your Journal Entry:

GENERAL JOURNAL PAGE 1

POST.
DATE PARTICULARS REF. DEBIT CREDIT
28 June 25
29
To record the full payment of account to
30 Ku Enterprises

12. On June 27, 2018, Alpha Laundry Systems paid electric bill for the month
amounting to P1,000 in cash. The payment is charged to Utility expense
account.
Your Journal Entry:
GENERAL JOURNAL PAGE 1

POST.
DATE PARTICULARS REF. DEBIT CREDIT
31 June 27
32
To record the payment Electricity for the
33 month

13. On June 30, 2018, Alpha Laundry Systems paid a month’s transportation
expense amounting to P 1,300.

Your Journal Entry:

GENERAL JOURNAL PAGE 1

POST.
DATE PARTICULARS REF. DEBIT CREDIT
34 June 30
35
To record the payment of transportation
36 for the month.

14. On June 30, 2018, Alpha Laundry Systems paid P5,000 cash for salary of
laundry operator.

Your Journal Entry:

GENERAL JOURNAL PAGE 1

POST.
DATE PARTICULARS REF. DEBIT CREDIT
 37 June 30
38
To record the payment Laundry
39 operator’s salary.

15. On June 30, 2018, Alpha Laundry Systems paid P7,500 cash for the month’s
rent of laundry space.

Your Journal Entry:

GENERAL JOURNAL PAGE 1

POST.
DATE PARTICULARS REF. DEBIT CREDIT
40 June 30
41
To record the payment of rent for
42 Laundry space.

Completing the monthly General Journal record will give the owner of the
business a financial record of all business transactions that transpired during the
month. It will reflect the inflows and outflows of cash, provisions of services
which generate income.

The debit and credit columns should always be equal. Otherwise, the
record will affect overall accuracy of the entire financial record. The error should
be properly corrected before the next step in the recording process takes place.

Activity 2 : Posting journal entries to the General Ledger using T - accounts.

In this activity, you are task to post journal entries in the general ledger.
The most convenient and fastest way of posting journal entries to the ledger is
by way of using “T” Account. A T- Account is divided into two sides. The left-
hand side is called the debit side and the right-hand side which is the credit
side. The left -hand or debit side shows the value received while the right-hand
side shows the value parted with.
This is called T account because it resembles capital letter “T.” an account title is
written above the T- account.

After performing the T-accounts, balances for each account under

Assets, Liabilities, Capital, Revenue/Income and Expenses, can now be
determined.

Depicted in figure 12 below is a T-account and its description:

ACCOUNT TITLE

Left-Hand Side Rigt-Hand Side

or Debit Side or Credit Side
is for is for
VALUE VALUE
RECEIVED PARTED WITH

Figure 12 : T - account

To strengthen your focus on the posting of journal entries to the general

ledger, it is suggested to create T – account and label them with account title
and group them according to Assets, Liabilities, Owner’s Equity, Revenue and
Expense. Given below are T – accounts for all ledger accounts group according
to the five major accounts.
 ASSETS LIABILITIES

OWNER’S EQUITY

REVENUE EXPENSES

Activity 3 : Transferring T - account balances to prepare Trial Balance (un-

adjusted TB ).
In this activity, you are task to create/prepare a trial balance for ALS. The period
covered is June 2018.

You are going to pick up ledger account balances starting from cash,
accounts receivable up to the last account in expense. Then, plot them in the
trial balance report (un-adjusted trial balance). Compute for the total debit and
credit balances. The debit amount should be equal to the credit.

Activity 4 : Record adjusting journal entries in the General Journal.

In this activity, you are task to identify accounts that needs to be adjusted.

1. Depreciation of Equipment. The laundry equipment, which was purchased

by
ALS on June 5, 2018 at P150,000 has an estimated useful life of 5 years with
a salvage value of P10,000. Compute for the monthly depreciation to be
charge as depreciation expense and will be deducted against the cost to get
the net book value of the laundry equipment.
a. Compute for the monthly depreciation using straight line method.

Your Adjusting Entry:

GENERAL JOURNAL PAGE 1

POST.
DATE PARTICULARS REF. DEBIT CREDIT
43 June 30
44
To recognize the depreciation expense
45 for the month of June.
2. Prepayments. The insurance paid for Laundry equipment is P6,000. An
expired portion of the insurance in the amount of P 500 is determined by
dividing the prepayments over 12 months (P6,000 / 12 months). The expired
portion will be charged to expense. This will reduce the value of prepaid
insurance balance.
a. Compute for the expired portion of the insurance.

To compute for the expired portion of the insurance:

Formula: Insurance Cost

Term of coverage = Expired insurance per month
(No. of Months)

Prepaid insurance P 6,000

Less: Expired portion (June) 500
Un-expired portion P 5,500

Note: The expired portion is charge to expense (insurance expense). The

unexpired portion will be reported as the new prepaid insurance account
balance for the next month.

Your Adjusting Entry:

GENERAL JOURNAL PAGE 1

POST.
DATE PARTICULARS REF. DEBIT CREDIT
46 June 30
47
To recognize the expired portion of the
48 prepaid insurance.

3. Deferred expenses for supplies inventory. At the end of the month, unused
supplies were recorded to be P3,000.
 Note: The used supplies is charge to expense (supplies expense). The
unused portion will be reported as the new supplies inventory balance for the
next month.

Your Adjusting Entry:

GENERAL JOURNAL PAGE 1

POST.
DATE PARTICULARS REF. DEBIT CREDIT
49 June 30
50
To recognize the used portion of the
51 Laundry supplies consumables

Formula to compute for the used supplies:

Supplies at cost P 10,000
Less: Unused supplies 3,000 Used supplies P 7,000

Activity 5 : Post adjusting journal entries in the General Ledger.

In this activity, you are task to post the adjusting entries written in the
general journal to the general ledger and update the debit, credit and
outstanding balances.
After doing so, you may proceed to the next activity.

Activity 6 : Prepare Adjusted Trial Balance.

 In this activity, you are task to update the balance of all ledger accounts
and transfer the balance to form a new adjusted trial balance. Still, the total debit
and credit balances must be equal, if not you need to go back and review all
entries and their corresponding amount to avoid errors and accuracy issues.

Activity 7 : Prepare Income Statement.

In this activity, you are task to segregate nominal accounts from

permanent accounts. Only nominal accounts will be reflected in the income
statement. Determine the debit and credit balances and deduct all expenses
from revenue accounts in order to arrive at net income/loss.

How much is net income or loss of Alpha Laundry System?

The net income or loss can be determined upon finalization of income

statements. Net income indicates that the business is profitable.

Activity 8 : Prepare Balance Sheet.

In this activity, you are task to segregate permanent accounts from

nominal accounts. Only permanent accounts will be reflected in the balance
sheet. Determine the debit and credit balances and compute for the total assets,
total liabilities and total owner’s equity. The net income generated from the
income statement must be added to the capital to generate total owner’s equity.
If the business incur net loss, it will be deducted.

How much is the assets of the business? The assets of the business can
be computed by adding up all assets accounts and deduct contra asset account.
assets are used to generate income for the business.
 As prescribed in the accouting equation, total assets must be equal to
total liabilities and owner’s equity. Depicted in figure 13 below is the basic
accounting equation.
Activity 9 : Interpret financial statements (balance sheet, income statement,
cash

flow projection and summary of sales and cash receipts.

Accounts Formula Answer

Profitability Measure the ability of the company to generate income from the use of
ratios its assets and invested capital as well as control its cost

Operating Operating Income 40,616.67

income ratio 58%
Net Sales P70,000
Return on Net Income
asset (ROA) 16.63%
Ave. Assets
Return on Net Income
equity (ROE) 20.31%
Ave. Equity
Financial Refers to the company’s capacity to pay their short- and long-term
obligations as they become due.
Health Ratios
Total Debt Total ___0___
Debt ratio Assets 242,950 0.%

Total Equity Total 200,000

Equity ratio 82.32%
Assets 242,950

Debt to equity ___0___

Total Debt 0.%
200,000
ratio Equity
Measure the company’s ability to pay debts that are coming due (short
Liquidity term debt).

Current Assets
Current ratio
Current Liabilities
Quick Assets
Quick ratio
Current Liabilities
Below are some enrichments questions that need your computations and
interpretations of balance sheet and income statement accounts of Alpha
Laundry System for the month of June 2018.
1. Operating income ratio : Operating Income __________ = ____%
Net Sales
Interpretation:_______________________________________________.

2. Return on asset (ROA) : Net Income __________ = _______% Ave.

Assets
Interpretation:_______________________________________________.

3. Return on equity (ROE) : Net Income __________ = _______% Ave.

Equity
Interpretation:_______________________________________________

4. Equity ratio : Total Equity __________ = _______%

Total Assets
Interpretation:______________________________________________.
Answer the following fill in blank questions:
1. ___________ is an employee of the company in charge to maintain
bookkeeping records of the business.
2. ___________ Is considered the book of original entry.
3. ___________ Is considered the book of final entry.
4. ____________ Is a financial statement that reports the financial position
of
the business.
5. ____________ Is a financial statement that reports net income or net
loss of
the business.
6. ____________ Is an entry necessary to update ledger accounts from
unadjusted trial balance to adjusted trial balance.
7. _____________ Is a report summarizing the ledger accounts with
updated balances in debit and credit columns.
 8. _____________ Is a statement that reports the cash inflow and cash
outflow of the business.
9. _____________ Is a type of sales report that presents cash collection
only.
10. _____________ Is a record that report cash inflow of the business.
GIN Janitorial and General Services, Inc., a company engaged in
providing janitorial services to different business establishments in the city. The
following financial data reveals the income and expenses records during the last
quarter of 2018:

Revenue / Service Income:

Service rendered – on account (Deluxe Hotel) P95,000
Service rendered – Cash (Maxandria Hotel) 45,000
Service rendered – on account (Pearlmont Inn) 25,000
Service rendered – Cash (Mallberry Suites) 105,000
Service rendered – Cash (VIP Hotel Inn) 65,000
Service rendered – on account (Sogo Hotel) 55,000
Service rendered – on account (Dynasty Court 75,000
Hotel)
Service rendered – on account (Grand City Hotel) 60,000
-------------------
TOTAL P525,000

Salaries and Wages of employees:

Janitor’s Salary – Total P 155,000
Management staff salary-Total 45,000
General Manager’s salary – total 90,000
-------------------
TOTAL P 290,000

Operating and administrative

expenses:
 Utilities expenses P 15,000
Rent expense 15,000
Repairs and Maintenance 7,500
Transportation and communications 4,500
Depreciation expense 10,000
-------------------
TOTAL P 52,000
The owner of the business wants to know the operations of the business.
You are tasked to compute for the following:
1. How much is the total service income collected in cash
2. How much is the total service income still collectible
3. How much is the total expenses
4. How much is the net income of GIN Janitorial and General
Services, Inc.,
1. Measure the ability of the company to generate income from the use of its
assets and invested capital as well as control its cost.
a. Solvency ratio c. Profitability ratio
b. Liquidity ratio d. Acid-test ratio

2. The following are financial records of ABC Corporation:

• Revenues – 20,000
• Rent expense – 3,000
• Salaries expense – 4,000
• Utilities expense – 2,000
How much is the total expenses?
a. P9,000 b. P10,000 c. P 18,000 d. P1,000

3. How much is the net income?

a. P9,000 b. P10,000 c. P 18,000 d. P1,000

4. All of the following is an income statement accounts, except _________.

a. Rent expense c. Accounts receivable
b. Service fees d. Insurance expense
5. All of the following is a balance sheet accounts, except __________.
a. Cash c. Depreciation expense
b. Equipment d. Accumulated depreciation

6. One of the accounts title below is used in making an adjusting entry

_________.
a. Liability c. Asset
b. Prepayments d. Capital

7. A financial statement that reports the Asset, Liability and Owner’s equity
of the business is called ________.
a. Income statement c. General journal
b. Balance sheet d. General ledger

8. A financial statement that reports the Sales or Income received, Expenses

and
the Net income of the business is called ________.
a. Income statement c. General journal
b. Balance sheet d. General ledger

9. Is a book used to record journal entries called the book of original entry is
called _______.
a. Income statement c. General journal
b. Balance sheet d. General ledger

10. Is a book used to record account balances called the book of final entry is
called _______.
a. Income statement c. General journal
b. Balance sheet d. General ledger
 Mr. Izatsuki Hamida, the bookkeeper of Honda Massage and Spa
Services reported the following data for the month of January to March 2018:

Water expenses ---------------------- P 4,000

Soap expense ---------------------- 7,500
Massage oil expenses ---------------------- 15,000
Light & power expenses ---------------------- 12,000
Rent of the Massage parlor---------------------- 24,000
Salary of staff (4 massage worker)-------- 72,000 Income
received from massage service-------- 120,000
Telephone expenses ------------------------ 7,500

How much is the net profit or net loss?

Additional Activities

ACTIVITY 1
Generate an overall report of your business transactions.
1. Journal Entries
2. T- accounts
3. Trial Balance
4. Income Statement
5. Balance Sheet
Quarter Challenge 2

1. Which of the following is the process or activities by which a company adds

value to an article, including production, marketing, and the provision of after-
sales service?
A. 4Ms of production C. Value Chain
B. Supply Chain D. Business Model
2. Benjie is engaged in buying and selling shoes in his neighborhood. He gets
his stocks from a local shoes dealer. Suppose each pair costs 1, 200.00 and
Benjie add 50% mark-up. How much is the mark-up price?
A. 500.00 C. 700.00
B. 600.00 D. 800.00

3. Assuming no returns outwards or carriage inwards, the cost of goods sold will
be equal to:
A. Sales less gross profit
B. Opening stock plus purchases plus closing stock
C. Closing stock less purchases plus opening stock
D. Purchases plus closing stock less opening stock

4. Which section of a business plan is generally first but written last?

A. Business description and vision
B. Appendices
C. Executive summary
D. Description of market

5. Is the process of evaluating risks, performance, financial health, and future

prospects of a business by subjecting financial statement data to
computational and analytical techniques with the objective of making
economic decisions Horizontal analysis.

A. Horizontal analysis C. Ratio analysis

B. Vertical analysis D. Financial statement
analysis

6. Statement I- Manpower in production operation refers to the workers involved

in the production of goods.
Statement II- Machine refers to the raw materials needed in the production of
a product.
A. Statement I is true. C. Both statements are true.
B. Statement II is true. D. Both statements are false

7. Costs incurred through payment of utilities such as electricity and water –

A. Revenue C. Free
B. Mark-up D. Operating Expenses

8. Gross profit less expenses is known as:

A. Total drawings C.Net turnover
B. Cost of goods sold D. Net profit

9. What is typical timeframe that a business plan addresses?

A. One year
 B. the anticipated life of the business
C. At least three to five years
D. At least five years

10. Is a technique for evaluating a series of financial statement data over a

period of time with the purpose of determining the increase or decrease that
has taken place. Also called trend analysis.
A. Horizontal analysis C. Ratio analysis
B. Vertical analysis D. Financial statement analysis

11. Which of the following is a replica of a product as it will be manufactured,

which may include such details as color, graphics, packaging and
instructions?
A. Prototype C. Supplies
B. Materials D. Outputs

12. Which of the following is a system of organizations, people, activities,

information, and resources involved in moving a product or service from
supplier to customer?
A. Business Model C. Supply chain
B. Suppliers D. Value Chain

13. The selling price of an item or merchandise is computed by adding cost per
unit and __________?
A. Revenue C. Discount
B. Mark Up D. Number of Items

14. It is a tool that allows managers to make educated estimates on revenue

and costs of the business in order to cope up with uncertainties of the future
–
A. Estimating C. Forecasting
B. Guessing D. Benchmarking

15. Net turnover can be calculated as:

A. Sales plus returns inwards
B. Gross profit plus cost of goods sold
C. Sales less returns outwards
D. Purchases plus opening stock less returns outwards

16. Which of the following would not appear in the profit and loss account?
A. Drawings C. Cash expenses.
B. Carriage outwards. D. Rent received

17. What is the biggest mistake you can make when preparing a business plan?
 A. Not telling a compelling story
B. Forgetting the executive summary
C. Failing to include at least one appendix
D. Misrepresenting facts
E. Failing to have a clear vision of the business

18. This section will discuss information about your business, your goals and
the customers you plan to serve.
A. Executive summary C. Marketing plan
B. Company description D. Financial projection

19. ________ is a technique that expresses each financial statement item as a

percentage of a base amount. Also called common-size analysis.
A. Horizontal analysis C. Ratio analysis
B. Vertical analysis D. Financial statement analysis

20. Which of the following best describes recruitment?

A. tools to produce goods or to generate services
B. process by which a business seeks to hire the right person for a
vacancy
C. marketing copy that explains what a product is and why it's worth
purchasing
D. rationale of how an organization creates, delivers, and captures value
in economic, social, cultural or other contexts

21. Which of the following is a set of procedures and instructions?

A. Value chain C. Manpower
B. Supply chain D. Methods

22. Claire is a fish vendor selling at the local public market. He gets his fish from
a supplier at 100.00 pesos per kilo and sells it at160.00 45 per kilo to his
customers. How much mark-up did Claire add to his selling price?
A. 40.00 C. 60.00
B. 50.00 D. 70.00

23. Refers to the amount added to the cost of a product to determine the selling
price –
A. Revenue C. Mark Up
B. Cost D. Mark Down

24. The correct double-entry to transfer commission received for the year to the
profit and loss account is:
 The correct double-entry to transfer commission received for the year to the
profit and loss account is:
Debit Credit
A Trading Commission received
B Commission received Profit and loss
C Profit and loss Commission received
D Commission received Trading

25. What is an entrepreneur?

A. Someone who invests time and money to start a business.
B. Someone who makes a lot of money.
C. Someone who takes a risk to make a profit.
D. Both A & C.

26. This section of your business plan will show that you know the ins and outs
of the industry and the specific market you are planning to enter.
A. Executive summary
B. Marketing plan
C. Competitive analysis
D. Market analysis

27. Your rival in the industry is called?

A. Competitor
B. Suppliers
C. Lending firms
D. Board of directors

28. Expresses the relationship among selected items of financial statement

data. The relationship is expressed in terms of a percentage, a rate, or a
simple proportion.
A. Horizontal analysis C. Ratio analysis
B. Vertical analysis D. Financial statement analysis

29. Statement I- A product description is the marketing copy that explains what
a product is and why it's worth purchasing.
Statement II- Educational qualifications and experience is one of the criteria
in considering manpower.
A. Statement I is false. C. Both statements are true.
B. Statement II is false. D. Both statements are false.
30. Statement I- Value chain is the process or activities by which a company
adds value to an article, including production, marketing, and the provision
of after-sales service.
Statement II- A supply chain is a system of organizations, people, activities,
information, and resources involved in moving a product or service from
supplier to customer.
A. Both statements are true. C. Statement I is false.
B. Both statements are false. D. none of the above.

31. Merchandise or goods purchased are referred to as –

A. Costs C. Expenses
B. Purchases D. Loss

32. Refers to goods and merchandise at the end of operation of business or

accounting period.
A. Merchandise Inventory, end C. Expenses B.
Freight-in D. Merchandise Inventory, beg.

33. Gross profit is the

A. Amount of money you get for profit lab. B.
Amount of money collected from selling
products C. Amount of money your product
costs to produce
D. Has nothing to do with money

34. Net profit is the:

A. Amount of money you get for profit lab.
B. Amount of money collected from selling products.
C. Amount of money your product costs to produce.
D. Has nothing to do with money

35. The diagram showing your workers in the organization with their job
responsibilities is called?
A. Organizational perspective
B. Organizational layout
C. Organizational chart
D. Organizational diagram

36. Promotional activity is found in which section of your business plan?

A. Management section
B. Financial section
C. Marketing section
D. Company description section
37. Measure the ability of the company to generate income from the use of its
assets and invested capital as well as control its cost.
A. Solvency ratio C. Profitability ratio
B. Liquidity ratio D. Acid-test ratio

38. Statement I-. Output represents the final products from the production
process and distributed to the customers.
Statement II- The 4Ms in the production operation are the materials,
manpower, machine and money.
A. Both statements are true. C. Statement I is false.
B. Both statements are false. D. Statement II is false.

39. Which of the following is the marketing copy that explains what a product is
and why it's worth purchasing?
A. Production method C. Business model
B. Product description D. Prototyping

40. Mang Antolin sells bottled water in nearby public bus terminal, every day he
can sell 30 pieces of bottled water at 20 pesos each. How much is his daily
revenue?
A.900.00 C. 800.00 B.
700.00 D. 600.00

41. Measure the ability of the company to generate income from the use of its
assets and invested capital as well as control its cost.
A. Solvency ratio C. Profitability ratio
B. Liquidity ratio d. Acid-test ratio

42. The following are financial records of ABC C

• Revenues – 20,000
• Rent expense – 3,000
• Salaries expense – 4,000
• Utilities expense – 2,000
How much is the total expenses?
A. P9,000 B. P10,000 C. P 18,000 D. P1,000

43. How much is the net income?

A. P9,000 B. P10,000 C. P 18,000 D. P1,000
44. All of the following is an income statement accounts, except.
A. Rent expense C. Accounts receivable
B. Service fees D. Insurance expense

45. All of the following are balance sheet accounts, except.

A. Cash C. Depreciation expense
B. Equipment D. Accumulated depreciation

46. One of the account titles below is used in making an adjusting entry.
A. Liability C.
Asset B. Prepayments
D. Capital

47. A financial statement that reports the Asset, Liability and Owner’s equity
of the business.
A. Income statement C. General journal
B. Balance sheet D. General ledger

48. A financial statement that reports the Sales or Income received, Expenses
and the Net income of the business.
A. Income statement C. General journal
B. Balance sheet D. General ledger

49. Is a book used to record journal entries called the book of original entry.
A. Income statement C. General journal
B. Balance sheet D. General ledger

50. Is a book used to record account balances called the book of final entry.
A. Income statement C. General journal
B. Balance sheet D. General ledger