Paradise Valley College Adola Branch
Internal Assessment Coc Accounting Budget Serivice Leve
Choose the Best Answer from The Following Question
Name --------------------------occupation ---------------------level-----------------------programming
1. Internal users of accounting data include:
A Economic planner’s B. Investor’s C . Company officers D. Customers
2. The monetary unit assumption: A/ Provides that the unit of measure fluctuates over term B/ Is unimportant in applying the cost principles C/ Is only used for financial statements of
banks
D /requires that only transaction data capable of being expressed in terms of money be included in the accounting records of the economic entity.
3. A proprietorship is a business: A / Owned by one person B/ Owned by two or more persons C/ Organized as a separate legal entity under state corporation law D /Owned by a
governmental agency
4. A net loss will result during a time period when: A/ Assets exceed liabilities B/ Assets exceed owner’s equity C / Expenses exceed revenues D/ Revenues exceed expenses
5. A company might carry on many activities that do not represent business transactions such as:
A/ Borrowing money from the bank B/ Placing an order for merchandise with a supplier C/ Using office supplies D/ Paying wages
6. Transactions are one type of business events, which may or may not be an accounting entry is:
A / Payment of monthly rent B/Sale of pizza and burgers to customers C/Use of paper, pens, and other office supplies C/Change of interest rate
7. Garden Beer Grill located around Bole receives a bill of Birr 400 from the Lion Advertising Agency. The owner, Elias Maru, is postponing payment of the bill until a later date. The effect on
specific items in the basic accounting equation is:
a. A decrease in cash and an increase in accounts payable
b. A decrease in cash and an increase in Elias Maru, Capital
c. An increase in accounts payable and a decrease in Elias Maru, Capital
d. A decrease in accounts payable and an increase in Elias Maru, Capital
8. The Lion Advertising Company is owned by Olana Peter. Alemitu, the inventory clerk, indicates that Birr 9,750 of supplies were used during the period. The effect on specific items in the basic
accounting equation is:
A/A decreases in supplies and a decreases in Olana Peter, Capital B/A decrease in cash and an increase in supplies
C/ An increase in accounts payable and a decreases in supplies D/ An increase in supplies payable and a decrease in Olana Peter, Capital
9. AlmazBirara, owner of the Habesh Bar and restaurant, withdraws Birr 5,000 in cash for personal use. The effect on the specific items in the basic accounting equation is:
a. An increase in accounts receivable and a decrease in Almaz Birara, Capital
b. An increases in salary expense and a decrease in cash
c. An increase in Almaz Birara, Capital and a decrease in cash
d. A decrase in Almaz Birara, Capital and a decrease in cash
10. Abyssinia Coffee Plc purchases Birr 60,000 of coffee from Ethiopian Commodity Exchange market after availing the required cash in its ECX payee out account. The effect on the components of
the basic accounting equation of Abyssinia Coffee Plc is:
A/An increase in assets and liabilities B/A decrease in assets and liabilities C/ No change in total assets D/An increase in assets and a decrease in liabilities
11. The Mohamed and Baubed Company have the following at September 17: Assets birr 13,000; Liabilities Birr 8,000; and Owner;s Equity Birr 5,000. On September 18, Mohamed and Baubed
Company receive Birr 500 of cash revenue and earn Birr 200 of revenue on credit. Michael Tekle, the only worker that day, works 8 hours and receives a wage rate of Birr 10 per hour. Michael will
not get paid unitl September 21. No other transactions occur during the day. At the end of September 18 the new totals are:
Assets Liabilities Owner’s Equity
a. 13,500 7,880 5,620
b. 12,500 8,000 4,500
c. 13,500 8,120 5,380
d. 13,700 8,080 5,620
12As of December 31, 1996, MohhamedandBaubed Company has liabilities of Birr 5,000 and owner’s equity of Birr 7,000. It received revenues of Birr 23,000 during the year ended
December 31,1996. What are the assets for Mohammed and BaubedCompany as of Decembwer 31, 1996?
a. Birr 2.000 b. Birr 12,000 c . Birr 35,000. d Birr 25,000
13The statement that reports revenues and expenses is the: A/Statement of owner’s equit B/Statement of financial position C/ Statement of financial performance D/ Statement of cash flows
14Dashen bank buys a Birr 1,200,000 VAN on credit. The transaction will affect the:
A/Income statement only B/Statement of financial position only C/ Income statement and owner’s equity statement only D/Income statement , owner’s equity statement, and balance sheet
15The financial statement that summarizes the financial position of a Dashen bank Plc is the :
a. Income statement b Balance sheet c Operating statement t d Owner’s equity statement
16Which of the following would not appear on the Mohammed and Baubed Company balance sheet?
A/Accounts receivable B/Mohamed and Baubed, capital C/Utilities expense D/Wages payable
17 Give two examples of adjustments made at the end of the accounting period
A/ Depreciation expense and accounts payable B / Provision for loan losses and accounts receivable C/ Current asset and non-current asset D/ supplies service
18 . Depreciation What are the three elements which change equity:
a. Income, investments by owner(s) and distribution to owners(s)
b. Depreciation expense, accumulated depreciation and provision for loan losses
c. Investments by owner(s), long term liability and interest bearing deposits
d. Distribution to owner(s), interest income, current loans and cash
19 How should an accountant convert a previous sale on account to a note receivable?
a. Debit accounts receivable and credit owner’s equity
b. Debit accounts receivable and credit accounts payable
c. Debit notes receivable and credit accounts receivable
d. Debit notes receivable and credit notes payable
20 .A company has decided to buy an expensive piece of equipment. The company can either pay for it in full at the current time or with equal yearly payments over ten years. Which of the
following factors is most important to consider in making the decision about how to pay for the equipment?
a. Standard cost and compounding rate
b. Amortization cost and annuity value
c. Leasing cost and assets valuation
d. Opportunity cost and interest rate
21 One of the following is an element that helps managers make decisions in a legal context.
a. Identifying compliance requirements
b. Financial auditing
c. Scheduling and planning
d. Technical requirements
22 The pervasive formula of accounting i.e. A=L+C is mainly shown in one of the following financial statements
a. Cash flow statement
b. Capital statement
c. Income statement
U8
Paradise Valley College Adola Branch
Internal Assessment Coc Accounting Budget Serivice Leve
d. Balance sheet
23 Even though a company is under taking a computerized accounting systems, the possible accounting cycle which still needs the manual intervention of an accountant is
a. Classifying
b. Summarizing
c. Identifying and recording
d. Analyzing
24 DEK CO, a VAT registered company purchased construction materials and delivered services for birr 500,000 and 600,000 respectively including VAT in the month of June 2005. The
amount of VAT and month of payment with no penalty is:
a. VAT payable 13,043.50, during July 2005
b. VAT receivable 13,043.50, during July 2005
c. VAT payable 15,000.50, during July 2005
d. VAT receivable 15,000.50, during June 2005
25 WakjiraHagos has been paying monthly income tax birr 1,234.85 to the tax office. His monthly pension contribution that has been deducted from his basic salary is 26.34% of his
monthly income tax. Using the current pension proclamation (i.e. 6 and 8), what is Wakjira’s monthly Net Pay? (Assume no overtime and other taxable allowances).
a. 5,421.00 c. 3,860.89
b. 4,215.89 d. 1,897.35
26 The overstatement of ending inventory in the financial statements results in
a. Overstatement of net income, understatement of CGS, and understatement of profit tax.
b. Understatement of net income, overstatement of CGS, and understatement of profit tax.
c. Overstatement of net income, understatement of CGS, and overstatement of profit tax.
d. Overstatement of net income, overstatement of CGS, and understatement of profit tax.
27 Abay Merchandising received in advance cash of birr 700,000.00 from its customer and recorded it as an income. At the end of the fiscal year, birr 95,000.00 is being earned. The
adjusting entry will be:
a. Debit income and credit unearned revenue by birr 95,000.00
b. Credit income and debit unearned revenue by birr 95,000.00
c. Credit income and debit unearned revenue by birr 605,000.00
d. Debit income and credit unearned revenue by birr 605,000.00
28 Jalud merchandising company has receipts of 2% tax withheld by different legitimate companies at the time of business transaction which add upto birr 49,000.00 at the end of the fiscal
year 2005. At the same time, the company announces profit before tax of birr 220,000.00. Given 30% of business tax rate, what is the amount of profit tax expected to be paid by the
company?
a. 66,000.00 c. 49,000.00
b. 17,000.00 d. 115,000.00
29 Employees at same level pay equal amount of tax. It is principles of tax.
a. Horizontal equity
b. Vertical equity
c. Simplicity
d. Convenience
30 The banker accountant credited the customer account in error and in preparing bank reconciliation the error could be adjusted by:
a. Adding to depositor balance
b. Deducting to depositor balance
c. Adding to bank balance
d. Deducting to bank balance
31 The process of implementing tasks for small/medium business operation is:
a. Identifying daily work requirements
b. Starting a new designed task
c. Developed effective work habits
d. Evaluate work performance
32 The use of accounting software’s is not:
a. Increase speed
b. Increase source documents
c. Increase accuracy
d. Decrease time of manual processing
33 The sales person of a drug store maintains petty cash of birr 14,000.00. Payment documents of sales person found to be birr 11,000 utilities, birr 2,000 postage, birr 150 taxi, birr 550
loading and unloading and birr 350 in currencies. Which one is correct to the sales person.
a. Petty cash can be replenished at birr 13,650.00
b. Petty cash can be replenished at birr 13,500.00
c. A cash overage of birr 150.00
d. A cash shortage of birr 50.00
34 Cash received but not earned is an example of
a. Cash accounting c. Accrued revenue
b. Accruals d. Deferrals
35 Financial institutions should be monitored by:
a. Commercial bank b. Ministry of finance
b. National bank d. expense and provision
36 w/c one of the following internal user accounting
a .mangers b supervision c customer service d all
Summery result feedback_________/36 Satisfactory Not satisfactory
Trainee sign____________ Trainer sign____________
Mind you: - if summery result >=50% satisfactory else not satisfactory. Prepared by Gudeta Dekema 2013 E.C /2021
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