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INTERMEDIATE ACCOUNTING 1
FINAL GRADING EXAMINATION
1. It is a list of accounts and their balances.
a. Chart of accounts c. Ledger
b. Trial balance d. Journal
2. Which of the following statements is most likely to be correct?
a. Bad debts recovered account, if having an income tax benefit, is transferred to profit or loss
summary account.
b. A trial balance establishes the arithmetical accuracy of the accounting records.
c. A well maintained asset need not be depreciated.
d. Drawing of goods by the owner should be debited to profit or loss summary account.
3. Which of the following is not considered cash for financial reporting purposes?
a. Petty cash funds and change funds
b. Money orders, certified checks, and personal checks
c. Coin, currency, and available funds
d. Postdated checks and I.O.U.'s
4. Which of the following best qualifies as a "cash equivalent?"
a. A firm's investment in "held to maturity" government treasury bonds that mature in 5 years.
b. A firm's equity investment in an unconsolidated subsidiary of a privately held firm.
c. A firm's investment in 90-day government treasury bills.
d. All of these.
5. The bank on which a check is drawn is known as the:
a. drawer
b. drawee
c. payee
d. creditor
6. In preparing its May 31, 2004 bank reconciliation, Dogg Co. gathered the following information:
Balance per bank statement, 5/31/04 ₱27,000
Deposit in transit, 5/31/04 5,400
Outstanding checks, 5/31/04 4,900
Note collected by bank in May 1,250
The correct balance of cash at May 31, 2004 is
a. ₱32,400.
b. ₱26,250.
c. ₱27,500.
d. ₱28,750.
7. Which of the following increases the reported receivables in the financial statements?
a. offsetting a credit balance in an account receivable
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b. a credit balance in an account payable
c. adjustment to eliminate a debit balance in accounts payable
d. a credit balance in an allowance account
8. Clifton Co. determined that the net value of its accounts receivable at December 31, 20x1, based
on an aging of the receivables, was ₱325,000. Additional information is as follows:
Allowance for uncollectible accounts - 1/1/x1 30,000
Uncollectible accounts written off during 20x1 18,000
Uncollectible accounts recovered during 20x1 2,000
Accounts receivable at 12/31/x1 350,000
For 20x1, what would be Clifton's uncollectible accounts expense?
a. 5,000
b. 11,000
c. 15,000
d. 21,000
9. Short-term receivables including non-trade receivables that are currently collectible may not be
discounted to their present values because
a. their face values are normally immaterial.
b. they are so near their maturity dates that their values do not change.
c. present value computation is very complex.
d. the effect of discounting may be immaterial.
10. On January 1, 20x1, ABC Co. received a 3-year, noninterest bearing note of ₱133,100 in exchange
for land with carrying amount of ₱100,000. The note is due on December 31, 20x3. The effective
interest rate is 10%. How much is the carrying amount of the note on December 31, 20x2?
a. 133,100 c. 110,000
b. 121,000 d. 100,000
11. Which of the following statements is incorrect concerning the expected credit loss model of PFRS
9?
a. The expected credit loss model applies to all financial instruments within the scope of PFRS
9, debt and equity alike.
b. A credit loss may be recognized on the initial recognition of a debt instrument.
c. The measurement of loss allowance is the same in ‘Stages 2 and 3.’
d. Credit losses equal to “12-month expected credit losses” may be recognized on debt
instruments acquired that were issued by entities having a high credit rating.
12. A note that the maker fails to pay on the due date is referred to as
a. discounted note.
b. expected credit loss note.
c. dishonored note.
d. disappointed note.
13. Assume that a company records purchases net of discount. If the company bought merchandise
valued at ₱10,000 on credit terms of 3/15, net 30, the entry to record the payment for half of the
purchase within the discount period would include a debit to
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a. Accounts Payable for ₱4,850 and a credit to Cash for ₱4,850.
b. Accounts Payable for ₱5,000 and a credit to Cash for ₱5,000.
c. Accounts Payable for ₱4,850 and to Interest Expense for ₱150, and a credit to Cash for ₱5,000.
d. Accounts Payable for ₱5,000 and to Interest Revenue for ₱150 and to Cash for ₱5,000.
14. Ami Retailers purchased merchandise with a list price of ₱100,000, subject to a trade discount of
20 percent and credit terms of 2/10, n/30. At what amount should Ami record the cost of this
merchandise if the gross method is used?
a. 100,000 b. 80,000 c. 98,000 d. 78,400
Use the following information for the next two questions:
Campbell's Clothing Store sells jeans. During January 2002, its inventory records for one brand of
designer jeans were as follows:
Beginning Inventory .................... 10 pairs @ ₱ 20 = ₱200
January 6 Purchase ..................... 4 pairs @ 25 = 100
January 10 Sale ........................ 5 pairs
January 15 Purchase .................... 7 pairs @ 30 = 210
January 20 Sale ........................ 10 pairs
January 25 Purchase .................... 4 pairs @ 30 = 120
15. How much is the cost of goods sold using periodic FIFO?
a. 330 b. 300 c. 430 d. 250
16. How much is the cost of goods sold using the weighted average cost method applied in a periodic
inventory system?
a. 378 b. 358 c. 265 d. 236
17. The following information is available for Hudson Company:
Disbursements for purchases ........................... ₱290,000
Increase in trade accounts payable .................... 25,000
Decrease in merchandise inventory ..................... 10,000
Cost of goods sold was
a. 325,000 b. 305,000 c. 275,000 d. 255,000
18. An entity’s assets include the following. Which is not a debt security?
a. Convertible bonds
b. Commercial paper
c. Loans receivable
d. All of these are debt securities.
19. Walsh, Inc. began business on January 1, 2002, and at December 31, 2002, Walsh had the following
investment portfolios of equity securities:
FVPL FVOCI
Aggregate cost ₱150,000 ₱225,000
Aggregate fair value 120,000 185,000
None of the declines is judged to be other than temporary. Unrealized losses at December 31, 2002,
should be recorded with corresponding charges against
INTERMEDIATE ACCOUNTING 1
FINAL GRADING EXAMINATION
1. It is a list of accounts and their balances.
a. Chart of accounts c. Ledger
b. Trial balance d. Journal
2. Which of the following statements is most likely to be correct?
a. Bad debts recovered account, if having an income tax benefit, is transferred to profit or loss
summary account.
b. A trial balance establishes the arithmetical accuracy of the accounting records.
c. A well maintained asset need not be depreciated.
d. Drawing of goods by the owner should be debited to profit or loss summary account.
3. Which of the following is not considered cash for financial reporting purposes?
a. Petty cash funds and change funds
b. Money orders, certified checks, and personal checks
c. Coin, currency, and available funds
d. Postdated checks and I.O.U.'s
4. Which of the following best qualifies as a "cash equivalent?"
a. A firm's investment in "held to maturity" government treasury bonds that mature in 5 years.
b. A firm's equity investment in an unconsolidated subsidiary of a privately held firm.
c. A firm's investment in 90-day government treasury bills.
d. All of these.
5. The bank on which a check is drawn is known as the:
a. drawer
b. drawee
c. payee
d. creditor
6. In preparing its May 31, 2004 bank reconciliation, Dogg Co. gathered the following information:
Balance per bank statement, 5/31/04 ₱27,000
Deposit in transit, 5/31/04 5,400
Outstanding checks, 5/31/04 4,900
Note collected by bank in May 1,250
The correct balance of cash at May 31, 2004 is
a. ₱32,400.
b. ₱26,250.
c. ₱27,500.
d. ₱28,750.
7. Which of the following increases the reported receivables in the financial statements?
a. offsetting a credit balance in an account receivable
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b. a credit balance in an account payable
c. adjustment to eliminate a debit balance in accounts payable
d. a credit balance in an allowance account
8. Clifton Co. determined that the net value of its accounts receivable at December 31, 20x1, based
on an aging of the receivables, was ₱325,000. Additional information is as follows:
Allowance for uncollectible accounts - 1/1/x1 30,000
Uncollectible accounts written off during 20x1 18,000
Uncollectible accounts recovered during 20x1 2,000
Accounts receivable at 12/31/x1 350,000
For 20x1, what would be Clifton's uncollectible accounts expense?
a. 5,000
b. 11,000
c. 15,000
d. 21,000
9. Short-term receivables including non-trade receivables that are currently collectible may not be
discounted to their present values because
a. their face values are normally immaterial.
b. they are so near their maturity dates that their values do not change.
c. present value computation is very complex.
d. the effect of discounting may be immaterial.
10. On January 1, 20x1, ABC Co. received a 3-year, noninterest bearing note of ₱133,100 in exchange
for land with carrying amount of ₱100,000. The note is due on December 31, 20x3. The effective
interest rate is 10%. How much is the carrying amount of the note on December 31, 20x2?
a. 133,100 c. 110,000
b. 121,000 d. 100,000
11. Which of the following statements is incorrect concerning the expected credit loss model of PFRS
9?
a. The expected credit loss model applies to all financial instruments within the scope of PFRS
9, debt and equity alike.
b. A credit loss may be recognized on the initial recognition of a debt instrument.
c. The measurement of loss allowance is the same in ‘Stages 2 and 3.’
d. Credit losses equal to “12-month expected credit losses” may be recognized on debt
instruments acquired that were issued by entities having a high credit rating.
12. A note that the maker fails to pay on the due date is referred to as
a. discounted note.
b. expected credit loss note.
c. dishonored note.
d. disappointed note.
13. Assume that a company records purchases net of discount. If the company bought merchandise
valued at ₱10,000 on credit terms of 3/15, net 30, the entry to record the payment for half of the
purchase within the discount period would include a debit to
, Page |3
a. Accounts Payable for ₱4,850 and a credit to Cash for ₱4,850.
b. Accounts Payable for ₱5,000 and a credit to Cash for ₱5,000.
c. Accounts Payable for ₱4,850 and to Interest Expense for ₱150, and a credit to Cash for ₱5,000.
d. Accounts Payable for ₱5,000 and to Interest Revenue for ₱150 and to Cash for ₱5,000.
14. Ami Retailers purchased merchandise with a list price of ₱100,000, subject to a trade discount of
20 percent and credit terms of 2/10, n/30. At what amount should Ami record the cost of this
merchandise if the gross method is used?
a. 100,000 b. 80,000 c. 98,000 d. 78,400
Use the following information for the next two questions:
Campbell's Clothing Store sells jeans. During January 2002, its inventory records for one brand of
designer jeans were as follows:
Beginning Inventory .................... 10 pairs @ ₱ 20 = ₱200
January 6 Purchase ..................... 4 pairs @ 25 = 100
January 10 Sale ........................ 5 pairs
January 15 Purchase .................... 7 pairs @ 30 = 210
January 20 Sale ........................ 10 pairs
January 25 Purchase .................... 4 pairs @ 30 = 120
15. How much is the cost of goods sold using periodic FIFO?
a. 330 b. 300 c. 430 d. 250
16. How much is the cost of goods sold using the weighted average cost method applied in a periodic
inventory system?
a. 378 b. 358 c. 265 d. 236
17. The following information is available for Hudson Company:
Disbursements for purchases ........................... ₱290,000
Increase in trade accounts payable .................... 25,000
Decrease in merchandise inventory ..................... 10,000
Cost of goods sold was
a. 325,000 b. 305,000 c. 275,000 d. 255,000
18. An entity’s assets include the following. Which is not a debt security?
a. Convertible bonds
b. Commercial paper
c. Loans receivable
d. All of these are debt securities.
19. Walsh, Inc. began business on January 1, 2002, and at December 31, 2002, Walsh had the following
investment portfolios of equity securities:
FVPL FVOCI
Aggregate cost ₱150,000 ₱225,000
Aggregate fair value 120,000 185,000
None of the declines is judged to be other than temporary. Unrealized losses at December 31, 2002,
should be recorded with corresponding charges against
