REGINA MONDI COLLEGE, INC.

Highway 1, San Jose, Iriga City 4431

Tel. Nos. (054) 299-1498
Email Address: regina_mondi@yahoo.com

“We mean business to educate”

COST ACCOUNTING AND CONTROL

Preliminary Examination
1st Semester S/Y 2018 – 2019
July 18, 2018

NAME: ________________________________________________ Course _____________ Rating: ________________

PART I. The General Journal of MFJ shows the following entries:

1. Cash 20,000
Terrible Capital 20,000
2. Store Supplies 6,000
Cash 6,000
3. Rent Expense 5,000
Cash 5,000
4. Store Equipment 12,000
Accounts Payable 12,000
5. Cash 8,250
Service Income 8,250
6. Wages expense 1,250
Cash 1,250
7. Cash 19,300
Service Income 19,300
8. Accounts Payable 4,000
Cash 4,000
9. Terrible, Drawing 9,000
Cash 9,000

Required:

1. Open a T-account for the following

 Cash
 Store Supplies
 Store Equipment
 Accounts Payable
 Terrible, Capital
 Terrible Drawings
 Service Income
 Wages Expense
 Rent Expense
2. Post the above journal entries to the T-accounts
3. Prepare the trial balance

PART II. Multiple Choice

1. Statement 1: An accounting period is always comprised of 12 months.
Statement 2: An accounting period could end in a month other than December.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statement are correct
d. Both statement are not correct

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2. Equation 1: Profit = Revenue > Expenses
Equation 2: Assets = Liabilities + Capital
a. Only equation 1 is correct
b. Only equation 2 is correct
c. Both equations are correct
d. Both equations are not correct

3. Which of the following is not an expense account?

a. Prepaid supplies c. Salary expense
b. Advertising Expense d. Bad debt expense

4. Statement No. 1: Current assets are expected to be realized, or are held for sale or
consumption in the normal course of the business operating cycle.
Statement No. 2: Current assets are held primarily for trading purposes or for short-term
period and expected to be realized into cash within one year from the SFP date.
a. Only statement 1 is correct.
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are not correct

5. Statement No. 1: Current liability is expected to be settled in the normal course of

enterprise’s operating cycle.
Statement No. 2: current liability is expected to be paid within one year from the SFP date
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statement are not correct

6. Statement 1: The PICPA is the national professional organization of Accountancy graduates

of the Philippines.
Statement 2: Government accounting deals with the identification and application of
resources consistent with laws.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are not correct

7. Statement 1: An accountant who engages in public accountancy is an employee of a client

company.
Statement 2: A possession of CPA certificate is a pre-requisite for entering into the
Accountancy profession.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are not correct

8. Statement 1: Under accrual accounting, the enterprise profit is the difference of cash
receipts and cash disbursements.
Statement 2: Under accrual accounting, the enterprise’s income will include income earned
from uncollected sales.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are not correct

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 9. Statement No. 1: the statement of financial position reports the performance of the
business.
Statement No. 2: The statement of financial position reports whether the business is liquid
or not.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are not correct.

10. The working capital of the business is equal to

a. Assets – liabilities
b. Noncurrent liabilities – current liabilities
c. Current assets – current liabilities
d. Assets – current liabilities

11. All of the following are operating activities of the business, except
a. The owner put in his personal cash as initial working capital of the business
b. Spent portion of cash to pay salaries and wages of employees of the business
c. Render service t the customer and earned service income
d. Paid the accounts payable arising from previous purchase of supplies.

12. Which of the following is a financing activity of doing business?

a. Payment of salaries for the services of the employee for the period
b. Rendering of service to customers for a fee
c. Issued an interest-bearing note to the bank for cash proceeds of loan granted by the
bank
d. Purchase office equipment for business use

The total assets of the business amount is P210,000. The claim of the owner is 1/3 of the total
assets. The working capital during the year is P40,000. The liabilities falling due within 12 months
is P70,000.

13. The amount of owner’s capital is

a. P140,000 c. P50,000
b. P70,000 d. P40,000

14. The amount of total liabilities is

a. P70,000 c. P140,000
b. P100,000 d. P150,000

15. The amount of current assets is

a. P100,000 c. P120,000
b. P110,000 d. P150,000

The following economic activities transpired during the period:

 Cash investment of the owner in the servicing business, P50,000
 Cash purchase of office machine, P20,000
 Cash collection for P10,000 services rendered
 Cash payment for supplies used in rendering services, P5,000
 Cash receipt from borrowings, P35,000

16. The ending cash balance should be

a. P35,000 credit c.P70,000 debit
b. P55,000 credit d. P90,000 debit

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17. The amount of total assets is
a. P25,000 credit c. P70,000 debit
b. P35,000 credit d. P90,000 debit

18. The amount of total liabilities is

a. P25,000 credit c. P70,000 debit
b. P55,000 credit d. P90,000 debit

19. The amount of owner’s equity is

a. P25,000 credit c. P70,000 debit
b. P55,000 credit d. P90,000 debit

20. Which of the following is incorrect?

a. It is during the accounting period that the accounting cycle takes place
b. An accounting period is the time during which the transactions are recorded, and at the
end of which the financial statements are prepared
c. The accounting period is always a one-year period
d. The accounting cycle is the group of steps and procedures followed in recording the
transactions and preparing the financial statements

-----------END OF THE EXAM------------

“If a man empties his purse into his head; nobody can take away from him. An investment in
knowledge pays the best interest!”

Benjamin Franklin

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