University of Santo Tomas

ACCOUNTING 123

GENERAL INSTRUCTIONS. This test is composed of four parts each with their own sets of instruction. Read them carefully before answering the questions. Erasures are strictly not allowed. This test is good for two hours only. God bless.  MULTIPLE CHOICES. On the blanks provided, write the letter of your BEST answer (in CAPITAL LETTERS). Strictly, erasures or alterations of any kind will not be given points. (2 points each) ________1. Which of the following errors would result in an overstatement of both current assets and shareholders’ equity? a. An understatement of accrued sales commissions b. Noncurrent note receivable principal is misclassified as current asset c. Annual depreciation on manufacturing machinery is understated d. Holiday pay expense for administrative employees is misclassified as manufacturing overhead ________2. For an entity with a periodic inventory system