FINANCIAL ACCOUNTING - Financial Statements 1. The relevant...

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Financial Statements 1. The relevant data and accounts balances below were taken from the DO-IT- YOURSELF COMPANY on December 31, 2008. Number of units sold 1, 000 Selling price per unit P 20 Cost of goods sold P 15, 000 It is the policy of the company to classify income and expense according to its nature for management decision making. The overhead cost of production is P 100, while gain from disposal of asset is P 200. On December 31, 2008, what is the firm’s gross profit? 2. Which of the following is/are correct about Financial Statements? I. Violation of provision of a debt agreement may result in the classification of a liability as current in the financial statement. II. PAS1 requires to present current assets before non-current assets and current liabilities before non-current liabilities. III. Reserves portion in the equity includes retained earnings appropriated and unrealized gain on available for sale securities. A. Statement III is false C. Statements II and III are false B. Statement II is false D. All statement are correct 3. FLY-TO-ME COMPANY sells goods to LAND-TO-ME COMPANY for P 300, 000. In the sales agreement, there is a clause that FLY-TO-ME COMPANY has an obligation for unsatisfactory performance, which is not governed by normal warrant provisions. The cost of goods sold was P 100, 000 and it was believed by LAND-TO-ME COMPANY that the value of sales should be P 250, 000. After the calendar year, sales value is not yet settled between both parties. What is the net sale to be recognized in the financial statements based on the above scenario?
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4. BARBIE-KEN COMPANY prepared a draft of it 2011 statement of financial position. The draft reported a current liabilities totaling P 2, 000, 000. However, none of the following items were included in this preliminary total at December 31, 2011. Advances from employee P 300, 000 Cash in bank, net of P 100, 000 over draft P 100, 000 Long term debt, P150, 000 matures on March 2012 P 300, 000 Advances to customer P 200, 000 How much should BARBIE-KEN COMPANY recorded as current liabilities? Bank reconciliation and Proof of cash 1. Which of the following is/are correct about bank reconciliation? I. A formal financial statement that list of the bank account balances of a firm. II. Discovering cash receipts that have not been recorded in the journal. III. A summary of cash receipt and cash payment. A. Statement III is false C. Only statements II and I are true B. Statements I and III are false D. All statements are false 2. In preparing its bank reconciliation for the month of October, STOP TEASING COMPANY has the following information: Balance per bank P 400, 000 Deposit in transit P 250, 000 Outstanding checks P 100, 000 Bank service charge P 5, 000
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Credit received by bank from STOP TEASING COMPANY’s creditor P 455, 000 What is the company cash account per book on September 31, 2011? A.
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FINANCIAL ACCOUNTING - Financial Statements 1. The relevant...

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