Question 1

In the Statement of Comprehensive Income, which of the following is correct?

Accepted Answer

Freight-in is added to Purchases

Answer

Freight-out is added to Purchases

Answer

Freight-in deducted from Purchases

Answer

Freight-in is added to operating expenses

Question 2

In the preparation of Statement in Changes in Equity, which of the following is correct?

Accepted Answer

provide a link between the SCI and SFP

Answer

The total liabilities and owner’s equity must be equal to the total assets.

Answer

The total liabilities and owner’s equity must exceed the total assets.

Answer

The total owner’s equity must be equal to the total assets.

Question 3

The total assets indicated in the Statement of Financial Position is P250,000, which of the following statements describes SFP?

Accepted Answer

The total liabilities must also be equal to the total assets.

Answer

The total liabilities and owner’s equity must be equal to the total assets.

Answer

The total liabilities and owner’s equity must exceed the total assets.

Answer

The total owner’s equity must be equal to the total assets.

Question 4

If you are to prepare the Statement of Financial Position, which of the following is the correct description of the account format?

Accepted Answer

The assets accounts are listed on the left side and liabilities andowner’s equity accounts are on the right.

Answer

The assets, liabilities, and owner’s equity accounts are listed in a horizontal sequence.

Answer

The assets, liabilities, and owner’s equity accounts are listed in avertical sequence.

Answer

The assets accounts are listed on the right side and liabilities and owner’s equity accounts are on the right.

Question 5

Statement of Comprehensive shows the operating results of the business, which of the following is correct?

Accepted Answer

Revenue and expenses are the elements of SCI

Answer

Sales Returns and Allowances are deducted from the Net Sales

Answer

Sales is the revenue account for the Service business.

Answer

Gross Profit is obtained by deducting the Operating Expenses from Net Sales

Question 6

Statement of Changes in Equity will give the readers with information about the movement of equity, which of the following is correct?

Accepted Answer

Net income is added to the capital balance beginning.

Answer

Investment is deducted from capital balance beginning.

Answer

Withdrawals are deducted from the capital balance end.

Answer

Additional capital is added to the capital balance end.

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