POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

Bataan Branch
FAB, Mariveles, Bataan

MID TERM EXAMINATION

IN
Fundamentals of Accounting P-1

I. Identification. For each number, match the definition with the following accounting terms. Write
the letter only on the space provided. (Strictly no cheating. Those who will be caught
cheating will automatically be given a grade of 5.0 in the exam.)
A. Accounting K Single Proprietorship
B Business Transaction L Merchandising
C Summarizing M Entity Concept
D Income Statement N Stable Monetary Unit of Measure
E Balance Sheet O Generally Accepted Acctg. Principles
F Assets P Objectivity Principle
G. Liability Q Consistency
H Partnership R Faithful Representation
I Accounts Receivable S Prepaid Expenses
J The Account T Equity

________ 1. An Accounting principle that requires company to use the same accounting
methods from period to period to achieve comparability over time within a single
enterprise
________ 2. The basic summary device in accounting.
________ 3. The financial claim of the owner to the asset of the business.
________ 4. The phase of Accounting which is involve in the preparation of financial
statement.
________ 5. An Accounting Principles that requires accounting records and statements are
based on the most reliable data available and verifiable.
________ 6. Is a service activity whose function is to provide quantitative information primarily
financial in nature about an economic entities that is intended to be useful in making
economic decisions.
________ 7. Refers to things or rights of value owned by the business.
________ 8. A business engaged in buying and selling of goods or commodities
________ 9. An event wherein there must be two parties involved, a exchange between these
two parties and can be measured in terms of peso values.
________ 10. A fundamental Accounting Concept that assumed that the purchasing power of our
Philippine Peso is constant.
________ 11. A Financial Statement that shows the profitability of the company at a given period
of time.
________ 12. Refers to claims against customers arising from sale of services on credit.
________ 13. Refers to obligations to pay or to render services.
________ 14. A fundamental accounting concepts that state that the business or organization
should stand apart from other organization and individuals as an economic unit.
________ 15. Is an statement that shows the liquidity and solvency of the business.
________ 16. The set of guideline and procedures that constitute acceptable accounting practice
at a given time.
________ 17. An organization wherein two or more people binds themselves to contribute
money, property or industry to a common fund with the intention of dividing profits
among themselves.
________ 18. Expenses paid by the business in advance and will benefit future periods.
________ 19. A fundamental qualitative characteristic of financial information that dictates
completeness, neutrality and freedom from errors.
________ 20. A business owned by only one person.

II. Instruction: Write the letter of your choice in the column provided. For column A, identify the
financial statement where you can find the given accounts, for column B – the proper classification
and for column C, write the normal balance of the account. Your choices are:
Column A: Column B: Column C:
A – Balance Sheet A – Current Asset A– Debit
B – Income Statement B - Non-Current Asset B – Credit
C – Current Liability
D – Non-Current Liability
E – Owner’s Equity
F – Revenue
G – Expenses

A B C
1. Salary Expense ____________ ____________ ___________
2. Accounts Payable ____________ ____________ ___________
3. Service revenue ____________ ____________ ___________
4. Accounts receivable ____________ ____________ ___________
5. Mr. Cruz, Withdrawals ____________ ____________ ___________
6. Furnitures & Fixtures ____________ ____________ ___________
7. Cash ____________ ____________ ___________
8. Unearned Revenues ____________ ____________ ___________
9. Mr. Cruz, Capital ____________ ____________ ___________
10. Supplies ____________ ____________ ___________

III. Record the following transactions in the Financial Transaction Worksheet.

Diane is an experience event planner. The following transactions were completed during the
period.
1. Invested P100,000 cash to start her own business.
2. Paid the month’s rent of P5,000.
3. Bought office furniture for P15,000 in cash.
4. Bought laptop computer P54,000. Paid 50% cash and the balance on account.
5. Rendered services to various clients, P12,000 in cash.
6. Rendered services for P10,800 on credit.
7. Acquired a fax machine for P7,500. Paid P3,000 in cash and balance on account.
8. Collected P5,400 from clients on account in no. 6.
9. Paid salaries of employees P10,000.
10. Paid the balance of P 4,500 on the fax machine acquired in no. 7.
11. Received P7,000 in cash from clients for services rendered.
12. Rendered services for P12,000 on credit.
13. Paid P1,350 for the telephone bill.
14. Collected P2,000 from client on account.
15. Diane withdraw P7,000 cash for her personal use.
Cash Accounts Office Office Accounts Dianne,
Receivable Furniture Equipment Payable Capital
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

IV. For each of the transactions below, fill in the spaces to answer the following questions:
1. Received P250,000 cash from clients for services rendered.
2. Paid P480,000 salaries of employees.
3. The owner withdraw P80,000 for personal use.
4. Billed clients P150,000 for services rendered.
5. Bought supplies, P50,000 on account.

1. What are the accounts affected? State the specific account titles.
2. What type of account is affected? Asset, Liability, Owner’s Capital, Owner’s withdrawal,
Revenue or Expenses
3. Should the account be increase or decrease?
4. Should the account be debited or credited?

Tran Account Affected Type of Account Increase/decrease Debit or Credit

s
1

End of examination. Good luck!