Father Saturnino Urios University

Butuan City
SEMI-FINAL COMPREHENSIVE QUIZ

Notes and Instructions

1. This is a one hour and thirty minutes (1h 30m) Examination.
2. Admission slip and the student ID must be presented to the
proctor. This is a prerequisite so that you can take the
examination.
3. Please turn your cell phones off and place them inside your bag.
If you are found using them, it will be confiscated and will not
be returned.
4. All answers must be reflected on the answer sheet provided.
Erasures are not allowed.
5. All questions must be directed to the proctor. Talking and asking
questions with other examinees is construed to be cheating.
6. Cheating will not be tolerated. If you are caught cheating, your
answer sheet will be taken by your proctor, and you are to report
to the Dean. This is a ground for suspension or expulsion.
7. The test score is broken down as follows:

No. of Weight per Answer Sheet

Score
Questions question From To
Test 1
Test 2
Test 3
Name: Date:
Section:

1. Rizal Traders provided the following data for the year ended December
31, 2017. Operating Expenses, excluding finance cost, is 10% of Net
sales and 12.5% of cost of sales. Finance cost is 5% of Net sales.
Net profit for the year amounted to P125,000. How much is the Net
Sales?
a. 781,250
b. 735,294
c. 833,333
d. 2,500,000
2. This contain the vital information about the nature and amount of the
transactions.
a. Sales Invoice
b. Bill of lading
c. Source Documents
d. Official Receipt
3. A document issued by the carrier that specifies contractual conditions
and terms of delivery such as freight terms, time, place, and the
person named to receive the goods.
a. Sales Invoice
b. Bill of lading
c. Source Documents
d. Official Receipt
4. A written order to a bank by a depositor to pay the amount specified
in the check from his checking account to the person named in the
check.
a. Deposits Slips
b. Purchase Requisition
c. Credit Memorandum
d. Check
5. Which of the following comes first in the purchase transaction?
a. The purchasing department prepares a purchase order after
checking with the price lists, quotations, or catalogs of
approved vendors.
b. When certain items are needed, the user department fills in a
purchase requisition form and send it to the purchasing
department.
c. Before approving the invoice for payment, the accounts payable
department compares copies of the purchase requisition, purchase
order, receiving report and invoice to ensure that quantities,
descriptions, and prices agree.
d. After receiving the purchase order, the seller forwards an
invoice to the purchaser upon shipment of the merchandise.
6. Cash discounts from the point of view of buyer.
a. Buyer’s cash discounts.
b. Seller’s discounts.
c. Sales Discount
d. Purchase Discount
7. The following information were gathered from the records of Rivera
Merchandising.
Invoice Price P100,000
Discount terms 2/10, n/30
List Price P150,000
Compute for the amount due within discount period?
a. 100,000
b. 147,000
 c. 98,000
d. 144,060
8. The following information were gathered from the records of Quirequie
Merchandising.
Discount terms 2/10, n/30
List Price P150,000
Trade discount 20% and 10%
Compute for the amount due within discount period?
a. 100,000
b. 108,000
c. 105,000
d. 105,840
9. Which of the following is correct?
Who shoulders
the Who pays
transportation the
Freight terms ? shipper?
a FOB Destination, Freight Seller Buyer
. Prepaid
b FOB Shipping point, Freight Buyer Seller
. Collect
c FOB Destination, Freight Seller Buyer
. Collect
d FOB Shipping point, Freight Buyer Buyer
. Prepaid
10. Assume that Melqui Traders sold merchandise on account totaling
P20,000 FOB Shipping point, freight collect; terms 2/10, n/30. The
transportation cost amounted to P2,000. The entry to record this
transaction would include:
a. Dr. Accounts Receivable P21,600
b. Cr. Sales P19,600
c. Dr. Accounts Receivable P22,000
d. Cr. Sales P20,000
11. A merchandiser will earn an operating income of exactly zero when
a. Cost of goods sold equals gross margin
b. Gross margin equals operating expenses
c. Net sales equals cost of goods sold
d. Operating expenses equal net sales.
12. Gross margin equals the difference between net sales and
a. Cost of goods sold.
b. Cost of goods sold plus operating expenses.
c. Operating expenses.
d. Profit.
13. A sale on March 21 with terms of n/10 EOM due to be collected by
a. March 31
b. April 1
c. April 10
d. April 30
14. Under perpetual inventory system, which of the following accounts
would not be used?
a. Cost of goods sold
b. Merchandise Inventory
c. Purchases
d. Sales
For items 15-19, use the following problem to answer the following
requirement.
Account Name Debit Credit

Sales 750,000
Sales Returns and Allowances 15,000
Sales Discounts 10,000
Purchases 170,000
Purchase returns and allowances 20,000
Transportation In 30,000
Selling Expenses 75,000
General and Administrative Expenses 275,000

In addition, beginning merchandise inventory was P55,000 and ending

merchandise inventory was P35,000.

15. Nat sales for the period were

a. P755,000
b. P725,000
c. P735,000
d. P775,000
16. Net purchases for the period were
a. P150,000
b. P180,000
c. P210,000
d. P430,000
17. Cost of goods sold for the period was
a. P235,000
b. P160,000
c. P200,000
d. P170,000
18. Profit for the period was
a. P525,000
b. P450,000
c. P250,000
d. P175,000
19. If the beginning and ending merchandise inventories were ignored
in computing profit, then profit would be
a. Overstated by P20,000
b. Understated by P55,000
c. Understated by P35,000
d. Understated by P20,000
20. When a seller of merchandise allowed a customer a reduction from
the original price for defective goods, the seller will issue to the
customer a
a. Credit memorandum
b. Debit memorandum
c. Official receipt
d. Sales invoice
21. Which of the following activities is not a component of the
operating activities?
a. Sale of Merchandise
b. Ordering of Merchandise
c. Purchase of Merchandise
d. Collection of Cash from merchandise sales.
22. A source document that is prepared by the seller of goods and sent
to the buyer. It specifies the amount of sales and the transportation
and payment terms.
a. Credit Memorandum
b. Receiving Report
c. Sales Invoice
d. Purchase Invoice
23. Discount given for prompt payment.
 a. Trade discount
b. Net discounts
c. VAT discounts
d. Cash discounts
24. This encourage the buyers to purchase products because of markdowns
from the list price.
a. Cash discounts
b. Trade discounts
c. Discounted Value
d. Account discount
25. The largest single expense of the merchandising business.
a. Administrative Expenses
b. Selling Expenses
c. Cost of Gods Sold
d. Finance Cost
26. The beginning balance of inventory is
a. The beginning balance of the prior period.
b. The ending balance of the current period.
c. The beginning balance of the next period.
d. The ending balance of the prior period.
27. Which of the following does not belong to the group?
a. Sales salaries expense
b. Office salaries expense
c. Utilities expense – office
d. Bad debts expense
28. Which of the following does not belong to the group?
a. Loss on sale of Equipment
b. Sales salaries expense
c. Depreciation Expense – Store Equipment
d. Utilities Expense – Store
29. Income derived from sources other than company’s main line of
business. Which is not?
a. Interest Income
b. Dividend Income
c. Sales
d. Commissions Income
30. A consumption tax levied of the sale, barter, exchange or lease of
goods or properties and services in the Philippines and on importation
of goods into the Philippines.
a. Value Adding Tax
b. Exclusive Value Adding Taxes
c. Indirect Taxes
d. Value Added Tax
Problem 1: Trade and Cash Discount Calculation

On June 1, 2018, Elvie Bee Forest products sold merchandise with a

P150,000 list price.

Trade Discount Credit Terms Date Paid

a. 30% 2/10,n/30 June 8
b. 40% 1/10, n/30 June 15
c. - 2/10, n/30 June 11
d. 20% 1/15, n/30 June 14
e. 40% n/30 June 28
Required:
For each of the following sales terms, determine the following:
1. The amount recorded as sale.
2. The amount of cash received.

Problem 2: Cash Discount and Remittance Calculations

For each of the following Mary Paz Abad Retailers purchases, assume that
credit terms are 2/10, n/30 and that any credit memorandum was issued
and known before Mary Paz Abad Retailers made the payments.

Purchases Shipping Terms Prepaid freight Credit Memo

a. P12,000 FOB Shipping point P1,000 P3,000
b. P24,000 FOB destination P2,400 P2,000
c. P28,000 FOB Shipping point P4,000
d. P40,000 FOB Shipping point P3,000
Required:
1. Determine the cash discount available.
2. Determine the cash remitted if the payment is made within the
discount period.

Problem 3: Point of Recognition

Edgel Abear Car Repairs Shop purchases a large amount of auto parts for
its business. The following table summarizes selected transaction data:

Order Date Shipped Date Received Amount

A. June 26 July 5 P30,000
B. July 10 July 15 P75,000
C. July 16 July 22 P40,000
D. July 23 July 30 P60,000
E. July 27 August 1 P75,000
F. August 3 August 7 P50,000
Required:
Determine the July total purchases under each of the following
assumptions:
1. The entity recognize purchases when orders are shipped.
2. The entity recognize purchases when order are received.

Problem 4: Sales Transactions

Some of the sales transactions of Jefferson Triguero Distributirs whose

credit terms are 2/10, n/30 follow:

June 1 Cash sales, P180,000.

4 Sales on account, P650,000.
 7 Received returned merchandise sold on account, P90,000.
10 Collected the amount due from credit sales.
Required:
Prepare the journal entries.

Problem 5: Purchase Transactions

Several purchase transactions of the Joey Beringuela Pharmacy are

presented below. The credit terms of the entity are 3/10, n/30.

October 6 Purchased merchandise for cash, P200,000; FOB Shipping point

12 Purchased merchandise on account, P700,000.
15 Returned Merchandise purchased on account, P50,000.
17 Paid Supplier the amount due.
19 Paid freight charges of P7,000 on merchandise acquired last
Oct. 6.
Required:
Prepare the journal entries.

Problem 6: Worksheet and Financial Statements

Jowei Coffee-bookstore

It was a plan of Jowei and Josh to establish a coffee-bookstore

when they were still in a relationship. They planned to put up the
business near the university where they both graduated. Due to unforeseen
event, they ended up their relationship. The plan to establish a coffee-
bookstore was left with Jowei, it was later in 2017 when she founded the
coffee-bookstore. The company sells books and coffee. The establishment
is divided into two. The first division is a bookstore, and the second
division is a coffee shop. The ledger accounts of the company for the
year ended December 31, 2017 for the bookstore are as follows:

Accumulated Depreciation – Store P100,000

Accumulated depreciation - Store Equipment 150,000
Accounts Receivable 136,000
Accounts Payable 74,000
Cash 72,000
Transportation In 72,000
Insurance Expense 25,000
Interest Expense 208,000
Lei, Capital 1,510,000
Lei, Withdrawals 200,000
Land 400,000
Merchandise Inventory 598,000
Mortgage Payable 1,100,000
Notes Payable due in 2 years 200,000
Store Building 1,600,000
Store Equipment 570,000
Supplies 42,000
Prepaid Advertising 75,000
Purchase Discounts 172,000
Purchase Returns and Allowances 133,000
Purchases 2,643,000
Salaries Expense 862,000
Sales Discounts 161,000
Sales Returns and Allowances 187,000
Sales 4,600,000
Travel Expense 188,000
Additional Information:
a. Supplies consumed during the year amounted to P17,000.
b. Advertising expense in the amount of P25,000 has expired during
the year.
c. Salaries of P21,000 have accrued as at December 31, 2018.
d. Depreciation on the store building and on the store equipment
amounted to P15,000 and P20,000, respectively.
e. The December 31, 2018 ending inventory is P723,000.

Prepare the following:

1. Worksheet
2. Financial Statements
3. Adjusting and closing entries.

Problem 7: Closing Entries

A portion of the December 31, 2018 worksheet for J.L.E. Distributors is

shown below. For simplicity, all operating expenses have been combined.
The periodic inventory system is used.

Income Statement Balance Sheet

Account Titles
Debit Credit Debit Credit
Merchandise Inventory, beg. 128,000
Estelle, Capital 280,000
Estelle, Withdrawal 24,000
Sales 1,000,00
0
Sales Returns and Allow. 3,000
Sales Discounts 9,000
Purchases 660,000
Purchase Returns and Allow. 6,000
Purchase Discounts 13,200
Transportation In 16,000
Operating Expenses 250,000
Merchandise Inventory, end. 118,000 118,000

Prepare the closing entry.

Problem 8: Financial Ratios

Given the Income statement and Statement of financial position of SDS

Trading, compute the missing information given the following additional
information:

Additional Information:
1. All sales are on credit.
2. The current ratio on December 31, 2017, is 3.0.
3. The receivables turnover for 2017 is 10 times.
4. The inventory turnover for 2017 is 4.8 times.
5. The net profit margin for 2017 is 14.5%.
6. The return on assets is 22% for 2017.

Show computations in good form:

SDS Trading
Income Statement
For the Year Ended December 31, 2017
Net Sales 2,750,000
Cost of Goods Sold ?
Gross profit ?
Selling and Administrative Expenses 556,250
Operating Income ?
Income Tax Expense 140,000
Net Income ?

SDS Trading
Statement of Financial Position
As of December 31

Assets 2017 2016

Current Asset
Cash P112,500 P93,750
Trade Receivable ? 237,500
Merchandise Inventory ? 430,000
Total current assets ? P761,250
Property, Plant and Equipment, net 1,155,000 988,750
Total Assets P ? P1,750,000

Liabilities and Owner’s Equity

Current Liabilities
Trade Payable P ? P206,250
Non-current Liabilities
Loan Payable ? 700,000
Total Liabilities P ? P906,250
Owner’s Equity 850,000 843,750
Total Liabilities and Owner’s Equity P ? P1,750,000
“It is impossible to live without failing at something, unless you
live cautiously that you might as well not have lived at all – in
which case, you fail by default”. – JK Rowling