Microlink Information Technology and Business College
Department of Accounting and Finance
Final Exam(Home Take) for Principles of Accounting II
Course code: Acct -102
Academic Year: 2019/2020 Total Marks: 30 Time allowed: 1:30
Exam Date: _______________ Semester: II Program: Degree Batch: 1st year
Full Name __________________________ ID. No. __________________
Department _____________________ Section_______________________
Admission:
General Instructions
Write your specific department, section and admission properly
Be sure that your exam booklet contains four parts
Read each instruction carefully
Write your answers on the answer sheet provided
Mobile phone should be turned-off
Any type of cheating will invalid your result
1
Part I: True of False Questions (5 Marks)
Instruction:
Write True if the statement is correct or False if the statement is incorrect on the
the answer sheet provided (0.5 Mark each)
1. Absolute accuracy in accounting and full disclosure in reporting is not possible
2. In Ethiopia every citizen who earns more than 600 birr is required to pay income tax.
3. The accounting system of an organization should be consistent from year to year.
4. Each partner is personally and individually liable for all partnership liabilities.
5. Limited partnership is a partnership with limited liability.
6. A partnership requires large capital to establish.
7. All business transactions are recorded in terms of money.
8. A partnership is relatively easy to establish.
9. A corporation may acquire, own and dispose property in its own name.
10. Any business organization should be free from the intervention of the owner.
Part II: Matching Questions (5 Marks)
Instruction:
Match the Terms in Column A with a related meaning in column B and write the
letter of the answer on the answer sheet provided (0.5 Mark each)
A B
1. Salary A. The difference between gross income and total deductions
2. Wage B. A compensation for permanent employees
3. Pay day C. A compensation paid to temporary employees
4. Gross income D. The sum of all incomes
5. Net pay E. The day on which wages or salaries are paid to employee
F. payment of salary or wage through a check
G. amount earned as an overtime income
2
Part III: Multiple Choice Questions (10 Marks)
Instruction: Choose the correct answer and write the letter of the correct answer
on the answer sheet provided (1 Mark each)
1. It is a legal entity; distinct and separate from the individuals who create and operate it.
A. Sole proprietorship B. Partnership C. Corporation D. None
2. The sum of common stock and preferred stock is
A. Paid in capital B. Capital Stock C. Additional Investment D. Common Share
3. The capital of corporations is
A. Stockholders Equity B. Shareholders’ Equity C. Stockholders Investment D. all
4. The process of dissolving a partnership is said to be:-
A. Depreciation B. Liquidation C. Depletion D. Amortization
5. One of the following is not related with a corporation
A. Unlimited life B. Limited life C. Heavy Taxation D. Professional Management
6. The type of stock with preferential rights is
A. Common stock B. Capital stock C. Preferred Stock D, Common Share
7. It is the total income of an employee before deductions are made.
A. Net Pay B. Net earnings C. Gross income D. Total Deductions
8. The Ethiopian income tax system is
A. Progressive B. Regressive C. Progressive and regressive D. all
9. It is an association of two or more persons to carry a business for a profit.
A. Sole proprietorship B. Partnership C. Corporation D.
10. One is not the characteristic of a partnership
A. Limited life B. Unlimited liability C. Non taxable entity D. Double taxation
3
Part IV: Work out Questions (10 Marks)
Instruction: Show the necessary formulas and calculations
Given I: (3 Marks)
Ato Abebe had the following incomes for the month of Hamle 2012 E.C.
Basic salary…………………………..15,000
Overtime income……………………...5,000
Par-time income……………………….4,000
Taxable allowance…………………….6,000
Non-taxable allowance….…………….4,000
Required: Using the current Ethiopian Tax Proclamation, calculate:-
1. Gross Income
2. Taxable Income
3. Income Tax
4. Amount of pension contribution. Assume the rate is 7%
5. Total Deductions
6. Net Pay
Given 2: (5 Marks)
ABC Partnership had the following Revenue and expense for the year 20l2 E.C.
Revenue
Sales Income……………………………………………………………250,000
Other Income………………………………………………………….. 30,000
Expenses:
Salary expense…………………………………… 50,000
House Rent Expense…………………………….. 25,000
Telephone Expense…………………………….. 10,000
4
Electric Expense………………………………... 15,000
Transport Expense……………………………… 20,000
Miscellaneous expense…………………………. 10,000
Required:
1. Prepare an Income Statement for the month ended Sene 30, 2012 E.C
2. Determine the share of profit/loss for each partner using 40%, 30% and 30%.
Given 3 (3 Marks)
Assume a corporation sold 10,000 shares of preferred stock with a par value of birr 100 and
40,000 shares of common stock with a par value of birr 60.
Required: Determine the amount of:-
1. Preferred stock
2. Common stock
3. Capital stock
5
Answer Sheet
Name____________________________Dept________ ID No______________ Section____
Admission:
I. True/False Questions II. Matching Questions III. Multiple choice Questions
No Answer No Answer No Answer
1 1 1
2 2 2
3 3 3
4 4 4
5 5 5
6 6
7 7
8 8
9 9
10 10
Part IV: The work out part should be answered on the space provided below.
