BSIT Survival Kit

Prelim Exam Blueprint & Study Plan

What the Prelim Actually Covers

Your prelim exam is built from the first three units of this subject — nothing beyond them:

Unit	Typical Weight	What Gets Tested
Unit I: Introduction to Accounting	~25%	Definitions of accounting (AICPA, AAA, ASC viewpoints), history (Mesopotamia, Rome, Middle Ages, Pacioli 1494), the eight branches of accounting, strategic uses of financial information
Unit II: Generally Accepted Accounting Principles	~30%	The 10 GAAP principles by name and application, international bodies (IFRS Foundation, IASB, Monitoring Board), the Philippine framework (PFRS/PAS, Board of Accountancy, BSP)
Unit III: Business Organizations and the Accounting Equation	~45%	Forms of ownership (sole proprietorship, partnership, corporation, OPC), types of operations (service, merchandising, manufacturing), the accounting equation, debit/credit rules, normal balances, equity drivers

Unit III carries the most weight because it contains everything computable — and professors love computation items.

Question Types to Expect

Multiple choice — mostly Unit I and II theory: match the definition to the body, match the scenario to the GAAP principle.
True or false — statements with one twisted word ("conservatism anticipates gains" — false, it anticipates losses).
Classification — given an account, name its element (Asset / Liability / Owner's Equity) and its normal balance.
Equation computations — solve for the missing element of A = L + OE, or compute ending capital from investments, revenues, expenses, and drawings.

Your Exact Memorize List

The accounting equation and its variants. Assets = Liabilities + Owner's Equity, and the rearranged form Assets − Liabilities = Owner's Equity. Remember: in liquidation, creditors are paid before owners.
The 10 GAAP principles — economic entity, monetary unit, time period, cost, full disclosure, going concern, matching, revenue recognition, materiality, conservatism. Know each by its one-line trigger scenario.
Normal balances. Assets — Debit. Liabilities — Credit. Owner's Capital — Credit. Revenues — Credit (they increase equity). Expenses — Debit (they decrease equity). Owner's Drawing — Debit (it decreases equity).
Account classifications — which side of the equation each common account (Cash, Accounts Receivable, Supplies, Accounts Payable, Service Revenue, Owner's Drawing) sits on.
The four equity drivers — owner investments (+), revenues (+), expenses (−), drawings (−).
Business organization facts — DTI registration for sole proprietorships, SEC registration for partnerships with capital above ₱3,000, limited vs. general partner liability, stock vs. non-stock vs. One Person Corporation.

Top Mistakes That Cost Prelim Points

Treating "debit" as "increase" for every account. Debit increases assets, expenses, and drawings — but decreases liabilities, capital, and revenues.
Confusing revenue with cash receipts. Revenue is recognized when the service is performed, not when cash arrives. Collecting a receivable is not new revenue.
Calling owner's drawings an expense. Drawings reduce equity but are personal extractions, not costs of generating revenue.
Mixing the owner's personal finances into the business — the economic entity assumption makes them two separate entities for recording purposes, even in a sole proprietorship.
Forgetting that some transactions change only one side of the equation. Buying supplies with cash swaps one asset for another; totals stay the same.

7-Day Study Plan

Day	Focus	What to Do
1	Unit I: Introduction to Accounting	Read the definitions and the branches table. Write each branch with its audience from memory.
2	Unit I (finish)	History timeline (Mesopotamia → Rome → Middle Ages → Pacioli 1494) and the four strategic uses of financial information.
3	Unit II: GAAP	Memorize all 10 principles. For each, write one scenario that triggers it.
4	Unit II (finish)	Standard-setting bodies: IASB vs. IFRS Foundation vs. Monitoring Board, then the Philippine side (PFRS/PAS, Board of Accountancy, BSP).
5	Unit III: Business Organizations and the Accounting Equation	Ownership forms and operation types. Drill the DTI / SEC / liability details.
6	Unit III (finish)	Debit/credit rules, normal balances table, equity drivers. Redo every equation computation in the unit.
7	Full rehearsal	Take the free 15-item practice set below under time pressure, then a full mock exam. Review every miss against the unit it came from.

Free Practice Set — 15 Items with Answer Key

Instructions

Fifteen items covering Units I–III. Answer everything before scrolling to the key. Target: 20 minutes, no notes.

Part 1 — Multiple Choice

Which body defines accounting as "the art of recording, classifying, and summarizing financial transactions and events in monetary terms, followed by interpretation of the results"? a) American Accounting Association b) AICPA c) Accounting Standards Council d) IASB
The first formal published description of double-entry bookkeeping appeared in 1494 in a treatise written by: a) An IASB committee b) Roman treasury clerks c) Fra Luca Pacioli d) The AICPA
Which branch of accounting is not bound by strict GAAP enforcement because its reports serve internal managers only? a) Financial accounting b) Auditing c) Managerial accounting d) Tax accounting
A company records its delivery van at the ₱850,000 it paid three years ago, even though its market value has changed. Which principle applies? a) Cost principle b) Materiality c) Conservatism d) Going concern
A partnership whose capital is ₱50,000 must register with the: a) DTI b) SEC c) BSP d) Board of Accountancy

Part 2 — True or False

Under the monetary unit assumption, peso amounts from different years are combined assuming a constant unit of purchasing power.
A limited partner in a limited partnership is liable for partnership debts beyond their capital contribution.
A merchandising business changes the physical form of the goods it sells.
Revenues have a normal credit balance because they increase owner's equity.

Part 3 — Classification

For items 10–11, state the element (Asset, Liability, or Owner's Equity effect) and the normal balance.

Accounts Receivable
Owner's Drawing

Part 4 — Equation Computations

Total liabilities are ₱180,000 and owner's equity is ₱420,000. Compute total assets.
Total assets are ₱750,000 and owner's equity is ₱480,000. Compute total liabilities.
Total assets are ₱240,000 and liabilities equal one-fourth of total assets. Compute owner's equity.
An owner invested ₱500,000 to start a service business. During the period the business earned ₱200,000 in revenues, incurred ₱120,000 in expenses, and the owner withdrew ₱30,000. Compute ending capital.

Answer Key

No.	Answer	One-Line Explanation
1	b	The "art of recording, classifying, and summarizing" wording is the AICPA viewpoint.
2	c	Pacioli's 1494 Summa contained the 27-page treatise Particularis de Computis et Scripturis.
3	c	Managerial accounting serves internal managers without strict GAAP enforcement.
4	a	The cost principle keeps assets at historical cost — no upward market revaluation.
5	b	Partnerships with capital above ₱3,000 register with the SEC; DTI handles sole proprietorship business names.
6	True	The assumption ignores inflation and treats the peso as a stable measuring unit.
7	False	Limited partners are liable only up to their explicit capital contribution.
8	False	Merchandisers resell finished goods without altering their form; manufacturers transform them.
9	True	Increases in equity are credits, so revenue's normal balance is a credit.
10	Asset; normal balance Debit	It is a claim to collect cash from customers for services performed.
11	Reduces Owner's Equity; normal balance Debit	Drawings decrease equity, so they carry a debit balance.
12	₱600,000	Assets = 180,000 + 420,000 = ₱600,000.
13	₱270,000	Liabilities = 750,000 − 480,000 = ₱270,000.
14	₱180,000	Liabilities = 240,000 × 1/4 = 60,000; Equity = 240,000 − 60,000 = ₱180,000.
15	₱550,000	500,000 + 200,000 − 120,000 − 30,000 = ₱550,000.