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    01 Quiz 1

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    Laisan Santos
    This document is a quiz on analyzing business transactions and adjusting entries. It contains two sections. The first section lists 15 transactions and asks the student to identify the accounts that would be debited and credited for each. The second section provides two examples of adjusting entries related to prepaid insurance and prepaid rent, asking the student to calculate expense amounts and asset balances under cash and accrual accounting for each scenario.

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    01 Quiz 1

    Uploaded by

    Laisan Santos
    194 views2 pages
    This document is a quiz on analyzing business transactions and adjusting entries. It contains two sections. The first section lists 15 transactions and asks the student to identify the accounts that would be debited and credited for each. The second section provides two examples of adjusting entries related to prepaid insurance and prepaid rent, asking the student to calculate expense amounts and asset balances under cash and accrual accounting for each scenario.

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    01_Quiz_1

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    This document is a quiz on analyzing business transactions and adjusting entries. It contains two sections. The first section lists 15 transactions and asks the student to identify the accounts that would be debited and credited for each. The second section provides two examples of adjusting entries related to prepaid insurance and prepaid rent, asking the student to calculate expense amounts and asset balances under cash and accrual accounting for each scenario.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    194 views2 pages

    01 Quiz 1

    Uploaded by

    Laisan Santos
    This document is a quiz on analyzing business transactions and adjusting entries. It contains two sections. The first section lists 15 transactions and asks the student to identify the accounts that would be debited and credited for each. The second section provides two examples of adjusting entries related to prepaid insurance and prepaid rent, asking the student to calculate expense amounts and asset balances under cash and accrual accounting for each scenario.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    BMSH2003

    NAME: Santos, Laisan Shayne T. _ SECTION: ABM-2A SCORE:


    General Instructions: Write your final answers on the space provided. The use of a calculator is allowed.

    I. ANALYZING BUSINESS TRANSACTIONS (30 items x 1 point)


    Using the transactions given, state the accounts that will be debited and credited.

    Transactions Debit Credit


    1. The owner invests cash in the business Cash Capital
    2. Received cash for providing services to clients. Cash Revenue
    3. Paid employees’ salaries. Salaries Expense Cash
    4. Issued check for equipment purchased for cash. Equipment Cash
    5. The owner of the firm took assets out of the business Owner, Drawing Cash
    for personal use.
    6. Performed services to clients on account Accounts Receivable Revenue
    7. Received payment from clients previously billed for Cash Accounts Receivable
    services rendered on account.
    8. Purchased office supplies on account. Office Supplies Accounts Payable
    9. Issued check in payment for supplies purchased on Accounts Payable Cash
    account.
    10. Billed customers for services rendered on account. Accounts Receivable Revenue
    11. Paid Meralco bill for the light and power consumed for Utilities Expense Cash
    the month.
    12. Received a bill from PLDT but payment is to be made Notes Payable Utilities
    next month.
    13. The owner invested additional cash in the business. Cash Capital
    14. Rendered services to clients receiving a promissory Notes Receivable Revenue
    note
    15. The owner withdrew cash for personal use. Owner, Drawing Cash

    II. ADJUSTING ENTRIES (23 items x 2 points)


    Analyze the items below. Write your answers on the space provided.

    1. Edge Company paid P18,000 premium on a three-year insurance policy on September 1, 201A. The
    effectivity of the policy begins on September 1, 201A.

    a. Under the Cash basis of accounting, how much insurance expense shall be reported for each of the
    following years?
    201A 0 201C 0
    201B 0 201D 18,000

    b. Under the accrual basis of accounting, how much insurance expense shall be reported each of the
    following years?
    201A 18,000 201C 6,000
    201B 6,000 201D 4,000

    c. Assuming a cash basis, how much of the premium will appear as an asset on the balance sheet of each
    of the following dates?
    December 31, 201A 4,500 December 31, 201C 4,500
    December 31, 201B 4,500 December 31, 201D 4,500

    d. Assuming accrual basis, how much of the premium will appear as an asset on the balance sheet of
    each of the following dates?
    December 31, 201A 4,500 December 31, 201C 4,500
    December 31, 201B 4,500 December 31, 201D 4,500
    01 Quiz 1 *Property of STI
    Page 1 of 2
    BMSH2003

    2. On June 1, 201A, Santillan Fitness Center paid an advance rental in the amount of P180,000. The amount
    covers one-year rent paid in advance beginning month of June.

    a. Entry on June 1, 201A:


    Asset Method Expense Method
    Prepaid Rent P180,000 Rent Expense P180,000
    Cash P180,000 Cash P180,000
    To record the payment of rent in To record the payment of rent
    advance expense in advance

    b. How much of the P180,000 advance rental will expire at the end of each month? P15,000
    c. How much will be considered as expense on December 31, 201A? P105,000
    d. How much will be considered as asset on December 31, 201A? P75,000
    e. Prepare the adjusting entry on December 31, 201A:

    Asset Method Expense Method


    Prepaid Rent P105,000 Rent Expense P75,000
    Cash P105,000 Cash P75,000
    To record the payment of rent in To record payment of rent expense
    advance for the remaining 5 months in advance

    01 Quiz 1 *Property of STI


    Page 2 of 2

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