FINANCIAL ACCOUNTING AND REPORTING
LATEST GRADING EXAMINATION 2025/2026
WITH QUESTION ONLY GRADED A+
1. The branch of accounting that deals with providing financial information to external
decision makers is
a. Public accounting.
b. Government accounting.
c. Financial accounting.
d. Managerial accounting.
2. Financial accounting applies to which of the following:
a. Businesses
b. Non-profit organizations
c. Governments
d. All of the above
3. The main purpose of accounting is
a. to account for money so it will not be lost.
b. to provide information that is useful in making economic decisions.
c. to safeguard the assets of a company.
d. to provide a clear view of the state of the industry’s economy.
4. Under the accrual basis of accounting,
a. income is recorded only when cash is received and expenses are recorded only
when cash is paid.
b. liabilities, owner's capital, and drawings all have normal credit balances.
c. all real accounts have normal debit balances.
d. income is recorded in the period it is earned and expense is recorded in the period
it is incurred, irrespective of when cash is received or paid.
5. Under this concept, some costs are initially recognized as assets and recognized only
as expenses when the related revenue is recognized.
a. Separate entity concept
b. Historical cost concept
c. Going concern
d. Matching principle
6. It is the official accounting standard setting body in the Philippines.
a. Philippine Institute of Certified Public Accountants
b. Financial Reporting Standards Council
, c. Accounting Standards Council
d. American Accounting Association
7. Businesses are required by law to file tax returns with this government agency.
a. Security and Exchange Commission
b. Bureau of Internal Revenue
c. Cooperative Development Authority
d. Bangkok Sentral ng Pilipinas
8. Under this concept, assets are initially recorded at their acquisition cost.
a. Single entity concept
b. Historical cost concept
c. Going concern concept
d. Matching principle
9. Under this concept, the business is assumed to continue to exist for an indefinite
period of time.
a. Separate entity concept
b. Historical cost concept
c. Going concern
d. Matching principle
10.Which of the following is not a correct expanded accounting equation?
a. Assets = Liabilities + Equity + Income - Expenses
b. Assets + Expenses = Liabilities + Equity + Income
c. Assets – Liabilities = Equity + Income - Expenses
d. Assets = Liabilities + Equity + Income + Expenses
11.The start-up capital of a business consisted of ₱1,000,000 cash provided by the
business owner and an additional ₱250,000 from a bank loan. The total start-up
assets of the business therefore is
a. ₱1,250,000
b. ₱1,000,000
c. ₱750,000
d. ₱250,000
12.Which of the following statements is correct?
a. Of the five major types of accounts, only two have normal debit balances.
b. All accounts are increased by a debit and decreased by a credit.
c. A contra asset account is increased through debit.
d. A debit and a debit result to a credit.
13.It is the aggregate of estimated losses from uncollectible accounts receivable.
, a. Bad debts expense
b. Allowance for bad debts
c. Accounts receivable
d. Notes receivable
14.Journal entries are recorded in the journal
a. chromatically.
b. chronologically.
c. pharmaceutically.
d. cutely.
15.Which of the following is not one of the important parts of a journal entry?
a. Date
b. Account titles and amounts to be debited and credited
c. A detailed narrative of the reason why management entered into the transaction
d. Short description of the transaction
e. All of these
16.The primary purpose of posting is to
a. record transactions.
b. classify transactions.
c. summarize transactions in a report form.
d. all of these
17.The balance of an accounts receivable from a certain customer at any given point of
time can be determined by referring to the
a. general journal.
b. general ledger.
c. subsidiary ledger.
d. financial statements.
18.In accounting, recording a transaction in a debit-credit form is called
a. journalinging.
b. posting.
c. identifying and analyzing.
d. journalizing.
19.You are an accountant. You obtained the source documents for the business
transactions your company has entered into during the day and started inspecting the
documents. What step of the accounting cycle are you performing?
a. Reading
b. Identifying and analyzing
c. Journalizing
LATEST GRADING EXAMINATION 2025/2026
WITH QUESTION ONLY GRADED A+
1. The branch of accounting that deals with providing financial information to external
decision makers is
a. Public accounting.
b. Government accounting.
c. Financial accounting.
d. Managerial accounting.
2. Financial accounting applies to which of the following:
a. Businesses
b. Non-profit organizations
c. Governments
d. All of the above
3. The main purpose of accounting is
a. to account for money so it will not be lost.
b. to provide information that is useful in making economic decisions.
c. to safeguard the assets of a company.
d. to provide a clear view of the state of the industry’s economy.
4. Under the accrual basis of accounting,
a. income is recorded only when cash is received and expenses are recorded only
when cash is paid.
b. liabilities, owner's capital, and drawings all have normal credit balances.
c. all real accounts have normal debit balances.
d. income is recorded in the period it is earned and expense is recorded in the period
it is incurred, irrespective of when cash is received or paid.
5. Under this concept, some costs are initially recognized as assets and recognized only
as expenses when the related revenue is recognized.
a. Separate entity concept
b. Historical cost concept
c. Going concern
d. Matching principle
6. It is the official accounting standard setting body in the Philippines.
a. Philippine Institute of Certified Public Accountants
b. Financial Reporting Standards Council
, c. Accounting Standards Council
d. American Accounting Association
7. Businesses are required by law to file tax returns with this government agency.
a. Security and Exchange Commission
b. Bureau of Internal Revenue
c. Cooperative Development Authority
d. Bangkok Sentral ng Pilipinas
8. Under this concept, assets are initially recorded at their acquisition cost.
a. Single entity concept
b. Historical cost concept
c. Going concern concept
d. Matching principle
9. Under this concept, the business is assumed to continue to exist for an indefinite
period of time.
a. Separate entity concept
b. Historical cost concept
c. Going concern
d. Matching principle
10.Which of the following is not a correct expanded accounting equation?
a. Assets = Liabilities + Equity + Income - Expenses
b. Assets + Expenses = Liabilities + Equity + Income
c. Assets – Liabilities = Equity + Income - Expenses
d. Assets = Liabilities + Equity + Income + Expenses
11.The start-up capital of a business consisted of ₱1,000,000 cash provided by the
business owner and an additional ₱250,000 from a bank loan. The total start-up
assets of the business therefore is
a. ₱1,250,000
b. ₱1,000,000
c. ₱750,000
d. ₱250,000
12.Which of the following statements is correct?
a. Of the five major types of accounts, only two have normal debit balances.
b. All accounts are increased by a debit and decreased by a credit.
c. A contra asset account is increased through debit.
d. A debit and a debit result to a credit.
13.It is the aggregate of estimated losses from uncollectible accounts receivable.
, a. Bad debts expense
b. Allowance for bad debts
c. Accounts receivable
d. Notes receivable
14.Journal entries are recorded in the journal
a. chromatically.
b. chronologically.
c. pharmaceutically.
d. cutely.
15.Which of the following is not one of the important parts of a journal entry?
a. Date
b. Account titles and amounts to be debited and credited
c. A detailed narrative of the reason why management entered into the transaction
d. Short description of the transaction
e. All of these
16.The primary purpose of posting is to
a. record transactions.
b. classify transactions.
c. summarize transactions in a report form.
d. all of these
17.The balance of an accounts receivable from a certain customer at any given point of
time can be determined by referring to the
a. general journal.
b. general ledger.
c. subsidiary ledger.
d. financial statements.
18.In accounting, recording a transaction in a debit-credit form is called
a. journalinging.
b. posting.
c. identifying and analyzing.
d. journalizing.
19.You are an accountant. You obtained the source documents for the business
transactions your company has entered into during the day and started inspecting the
documents. What step of the accounting cycle are you performing?
a. Reading
b. Identifying and analyzing
c. Journalizing
