RIFT VALLEY UNIVERSITY

ADAMA TVET College

ASSESSMENT FOR ACCOUNTING
TRAINEEs LEVEL- IV.
A. Project Work one
1.Assuming that the followings account & account balance were taken from Adama Supper Market on
January 1, 2012 which is owned by Jemal Bederu Assuming further the accounting period of the
business is one month (i.eJan. 1 –31)
Cash Birr 2,000
Account receivable 1,000
Merchandise Inventory 15,000
Supplies 500
Prepaid insurance 700
Machinery 20,000
Account payable 3,000
Jemal Bederu capital 36,200
The following transactions were madeduring in the month Jan. of2012
July, 1. Paid cash birr 200 for Jan. rent
2. Received cash birr 600 from the sale of merchandise
5. Received cash birr 500 from the sale of merchandise
6. Received cash birr 400 from the owner (Jemal, B)as additional investment
9.Cash purchase of merchandise birr 1000.00
11. Purchase merchandise on account birr1000.00 from “A” company
12. Sold merchandise on account to “X” Co. birr 1000.00
12. Received cash birr 500 from the sale of merchandise
12. Sales return on merchandise by “X” Company birr 200.00
17.Purchase merchandise on account birr900.00 from “B” company
17. Sold merchandise on account to “Y” Co. birr 1200.00
18. Sales return on merchandise by “Y” Company birr 200.00
19. Paid cash birr 300 for water consumption (utility expense)
22. Withdraw cash birr 400 by the owner (JemalBedru)
24. Bought additional supplies with cash birr 400.00
27. Paid cashbirr 1000 for electric power (utility expense)
28. Received cash birr 2500 from the sale ofmerchandise
29. Received cash birr 800 from “X” Company
29. Received cash birr 1000 from “Y” Company
31. Supplies on hand birr 500
31. Insurance policy shows birr 300 is not expired
31. Assume monthly deprecation on machinery was birr 500
31. The physical inventory shows merchandise inventory on hand is birr 14,000
 Instructions
1. Record the above transactions in general journal form
2. Open “ T ” & record their balances in the appropriate side
3. Post entries to the related ledger account using “T” account
4. Prepare adjusted trial balance
5. Prepare an income statement
6. Prepare the capital statement
7. Prepare the balance sheet
Project 2

The following information was taken from “ABC” Partnership. Assuming that, the partnership was
liquidated July 20 – 31, 2012

Cash …………………………………………….$90,000
Non – Cash Assets ……………………………….110,000
Notes payable ……………………………………40,000
X – Capital ………………………………………..50,000
Y – Capital ………………………………………...60,000
Z – Capital ………………………………………...50,000
Income /Loss/ sharing ration is 1፡2፡2
Assuming that Non – Cash Assets were sold $10,000
Instructions:- 1. Prepare the liquidation report
2. Show the necessary Journal entries in general Journal form
Project 3

Assuming that ``Z`` corporation issued 5000 preferred stocks at par birr 100 entitled to received
divided birr 10 per share & have birr 100.00 liquidation right. Assuming further the preferred
stocks holders have cumulative right. The corporation also issued 5000 common stock par birr
40.If the corporation’s total stock equity is birr 1,000,000 and the preferred stock holders have
dividend in arrears for the past three years.

Instruction:- Determine:

A) Equity allocated to preferred stock holders and common stock holders

B) Equity per share to preferred common stock holders

 Project 4
Adama Enterprise on October 31, 2012 cash at depositor’s cash account shows balance of birr
31,147.90 and on the same date the bank statement discloses the balance of birr 31,725.50. The
following information ware obtained during the course from various documents of the Enterprise
and the bank
 Outstanding deposit at October 31, 2012 total birr 8680.00
 The bank service charge birr 72.40
 The bank collected birr 5720.00 note and interest on the behave of the depositor
(the face value of the note was birr 4,900.00)
 Outstanding check on October 31, 2012, birr 5,840.00
 Not sufficient fund ( NSF) checks birr 2,500.00 returned with
bank statement ( check from charge customer X- Company )
 Check number 50 issued in payment of accrued interest of birr 650.00
was recorded by the depositor on the check register as birr 740.00
 A check for birr 950.00 paid by the bank was reported on the bank statement as birr 770.00
Instructions:
A) Prepare bank reconciliation October 31, 2012
B) Maintain the necessary journal entries
Project 5.
Assume that RVU pays the salary of its Instructors in the month Hamle 30/2011 as
follows.
Ser No Employee Name Basic Salary Transportation OT Earning Desert
allowance in Birr allowance
01 Kidist 4000 1400 800 1600
02 Almaz 3000 900 600 1500
03 Chaltu 2000 600 400 800

N.B All Instructors are permanent

Instruction:-
A)Prepare a payroll register sheet as of Hamle 30/2011
B) Record the payments of salary Hamle 30/2011 using CK.No 01 as source document
C) Record the payroll tax expense for the month of Hamle, use Memo No 10
D) Assuming that the withholding taxes & payroll taxes of the month of Hamle 30/2011
have been paid on Nehase 5, 2011 in Ck- No 4 show the required journal entry
 Project 6
KK Company purchase a diesel generator motor on January 2012, with cost of birr 105,000 its
estimated residual value is Birr 5000 and it is expected to operate for 400,000 hours or it has an
estimated useful life of Ten years. Based on the above information answer the following A to C
A) If the company use unit of production method, determine the depreciation expense if the
generator is operated 2000 hours in 2012
B) If the company uses straight line method, determine the depreciation expense for Dec.31,
2012
C) If the company uses sum-of – the years - digit method, determine the depreciation expense for
Dec.31, 2012

Project 7
Assuming that Dema Company has a unit contribution of birr 1000 & the income tax rate levied
on the company is 40%. The company plan to have income after tax birr 100,000 &through
annual fixed cost of birr 500,000.Using the above data, calculate
A) Units to be sold to achieve the target profit after tax
B) Profit before tax
Project 8
Assume that Titay – Company purchased goods with a total invoice price before VAT of Birr
1,000,000 from VAT registered business in Ethiopia. 20% of the invoice price of the goods was
exempted. Titay – Company exported 50% of the goods to a firm in Germany with selling price
of Birr 500,000.00. The remaining 50% of the items were sold in domestic market with selling
price of Birr 600,000.00 before VAT within tax period. Compute:

A) Input VAT
B) Output VAT
C) VAT refund/VAT Liability
 A. KNOWLEDGE TEST
I. Choose the best answer from the given alternatives& write your answer on the
space provided.
_____1. Costs that do not vary with the level of output are:
A) Variable cost B) Fixed cost C) Product costs D) All E) A & C
_____ 2. Fixed cost per unit is:
A) No change at all levels of output B) Decrease when output is increased
C) Increased when output is decreased D) A& B E) B&C
_____3.Which of the following accounts are included in post-closing trial balance?
A/ Balance sheet accounts B/ Expense accounts
C/ Purchase account D/ All E/ none
_____4.If the total charge sale is birr 3000.00 and the total cash sale is birr 4000.00, the
total sales in birr will be
A/8000.00 B/4000.00 C/3000.00 D/7000.00 E/ none
Assuming Adama Flour Company sells each unit it produces for $30.00 which its
fixed cost of $80,000, and variable costs of $20per unit. Based on the above
information answer question 6- 9
_____5. Unit contribution margin is $: A) 30 B) 20 C) 10D) 15 E) None
_____6. Breakeven point (BEP) in units will be:
A) 10,000 units B) 80,000 units C) 8000 units D) 16,000 units E) None
_____7. Contribution margin rate will be:
A) $150,000 B) $80,000C) $160,000D)$1,600,000 E) None
_____9. Which of the following is not representing partnership characteristics?
A) Unlimited life B) Formed by law C) Charter D) All E) B&C only
____10. Which of the following situation terminate the partnership activity?
A) Completion of the project B) If there is disagreement between the partners
C) If new partners are admitted to the partnership D) All E) None
Assuming price is constantly increases for identical Commodity. Based on the
giveninformation answer question 11& 12
_____11. Which inventory cost assumption report highest inventory cost?
A) LIFO B) FIFO
C) Average D) All E) None
_____12. Highest cost of goods sold is reported by:
A) FIFO B) LIFO
C) Average method D) AllE) None

-1 –

_____13. On July 16, an enterprise discounts a 90 day, 10%note receivable for Birr 20,000, dated June 1,
at the rate of 12%. The proceed is:
A/ Birr 20,000.00 B/ Birr 20,021.25 C/ Birr 20,192.50 D/None
_____14.The inventory system employing accounting records that continuously discloses the amount of
inventory is:
A/ Periodic B/ Perpetual C/ Physical D/ Retail method E/All
_____15.All materials & relevant facts concerning financial position & the results of operations are
communicated to users. This is stated by ________ principles
A) Going concern B) Business entity C) Full disclosure D) Objectivity
____16. Which of the following is true about process costing system?
A) Large no of identical units are processed
B) Different types of batches are processed
C)Large amount of identical units are produced D)A&B E) A&C
_____17.Fiduciary funds which should be accounted for in a manner similar to governmental funds are:
A) Agency funds and expendable trust funds
B) Expendable trust funds and Nonexpendable trust funds.
C) Agency funds and nonexpendable trust funds
D) None of the fiduciary funds.
_____18.Departmental accounting system is used in:-
A) Service rendering business
B) Merchandising business
C) Manufacturing business D) All E) A& B
_____19. Which of the following is the cause for loss on disposal of plant asset?

A) When the book value is exceed selling price of old plant asset
B) When the trade in allowance is less than the book value of the old plant asset
C) When the plant asset disposed by discarding has a book value
D) All E) A&C only
______20. Which of the following is included in stock holder’s equity section of balance sheet?
A) Paid in capital B) Retained earning C) Treasury stock if any D) all E) A&B
______21. ______is a delay of the recognition of expense already paid or revenue already received
A) Accrual B) Deferral C) Accrued revenue D) All E) none
______22. Revenue earned but not yet collected is:
A/ Accrual revenue B/ Revenue received in advance
C/ Deferral revenue D/ A & B E/ None
______23. Costs incurred beyond the split – off point that are assignable to one or more
individual products is:
A) Joint cost B) Separable costs
C) Further processing cost D) A & B E) B&C
 If retained earnings at the beginning of the accounting period wasBirr 35,000 & net income for the
accounting period is Birr 100,000 and if the boards of directors are decided to declare 25% of the
net income to distribute as divided. Based on the above data answer question 27 to 28
______24. Retained earnings ending is Birr:
A) 35,000 B) 100,000 C) 55,000 D) 110,000 E) none
______25. Amount of divided declared is $:
A) 55,000 B) 35,000 C) 25,000 D) 110,000 E) none
______26. An auditor shall not disclose any secret information of the client without the willingness
of the client. This auditor’s professional ethics is:
A) Due-professional care B) Integrity and objectivity C) Confidentiality
D) allE) none
______27. If the FOH- applied is greater than that of FOH – control, the situation is:
A) Over applied B) Under applied C) Unknown D) A & B E) None
______28. Which of the following is/are the cause/s/for under applied or over applied?
A) If There Is Poor Control On Over Head Spending
B) If there is inability to accurate forecast over head costs
C) If there is error in selecting allocation baseD) All E) None
______29. Process costing is used in:
A) Homogeneous products B) Continuous products
C) Mass production D) All E) A&B only
______30. In cost of production report, the quantity schedule includes:
A) Beginning WIP B) Ending WIP

C) Units started during the current period D) All E) None

II. MatchColumn “B” with Column “A”

Column “A” Column “B”

______1.Normal spoilage A) Amount of net income distributed to share holders

______2.Withdrawal B) Normal spoilage plus abnormal spoilage
______3. Position allowance C) Position statement
______4.Dividend D) VAT Computed from purchase
______5. Excise Tax E) Prepared at any time when information is required by the user
______6. Balance sheet F) Allowances given for responsibility
______7. Interim statement G) Selective Tax
______ 8. Input VAT H) VAT Computed from supplies
______9.Work in process I) Assets taken out of the business for personal use
______10. Source document J) The expected /estimated spoilages
K) An evidence to record business transaction in the journal
L) Works started in one accounting period but not yet competed
END OF ASSIGNMENT SUMETE April 30/2012 E.C project
But Choose and Matching on A pril 26/2012 E.C

Only Answer Choose

1--------30
Only Answer Matching

1-----10