Africa Beza University College

Hawassa Campus
Department of Accounting
Principle of accounting mid exam
Date Jane 22, 2014
Time Allowed: 1:45 hours
Instructor: Tarik S.
Name___________________________ ID. No. ____ Section ____ Group _____
Part I: Choose the best answer from the given alternatives and write on the
space provided.
1. The January bank statement sent birr Awash Bank to RAM co. Show Birr 4262. 83
Assume also that an January 31, 2000. The cash account of RAM co. Show balance of
Birr 5000.17
a. Deposit of birr 410.90 made after banking hour’s an Jan 31 does not appear an
the bank statement
b. Two checks issued in January have not been paid by bank
CK. No 301----------------------------- birr 110.25
CK. No 342----------------------------- 607.50
c. A credit memorandum was including. The bank statement, which was for
proceeds from collection of a non. Interest bearing note receivable from man co
birr 524.74
d. Three debit memorandum accompanies the bank statement fee charged by bank
for handling collection of note receivable birr 5 a check of birr 50.25 received
from customer. NOR, Co. and NOR, co charged beak as NIF and service charge
by the bank for the month of January a mount birr 12.
e. CK. No 305 was issued by OR co for payment of telephone expense in the
amount of birr 85 but was erroneously record in the cash payment journal as
birr 58
Required: i. The January 31, bank reconciliation for NOR co. show (7mark)
ii. Prepare necessary Journal entry (3 mark)
2. Assume that XYZ co issued birr 80.000, 90 days 10% note date June 28,2003, to Duma
Co.
Required:
a. Determine the due date of the note (2 mark)
b. Determine Interest income to the payee (2 mark)
c. Compute the maturity value of the note (2mark)
3. Assume that an January 5, Tana department store received birr 6000,90 day 10% note
from XYZ Co. Tan sold the note an January 25 by discounting it to a bank at 14%
Required
(a) Compute
1. The original interest amount (2 mark)
2. The maturity value (2mark)

3. Discounting period (2 mark)

4. Bank discount (2mark)
 5. Seller’s proceed (2 mark)
4. During the first year of operations, Z Company had net sales of Birr 800,000 (all are on
account). Industry experience suggests that Z’s bad debts will amount to 1% of net
credit sales. At December 31, 2003, Z’s accounts receivable total birr 80,000. The
allowance for doubtful account has a credit balance of birr 10, 000
Required:
a. If sales method of estimating uncollectible is used
1. Estimate the amount of bad debt expense for 2003 (2 mark)
2. Prepare the entry to record uncollectible accounts expense of 2003 (2 mark)
3. Determine the balance of allowance for doubtful accounts after adjustment
(2 mark)
b. If accounts receivable method is used and that 10% of accounts receivable is
expected to be uncollectible
1. Determine bad debt expense for 2003 (1 mark)
2. Prepare the entry to record uncollectible accounts expense (1 mark)
3. What is the balance of allowance for doubtful accounts after adjustment? (1 mark)

Africa Beza University College

Hawasa Campus
Department of Accounting
Principle of accounting mid exam
Date Jane 12, 2014
Time Allowed: 1:45 hours
Instructor: Tarik S.
Name___________________________ ID. No. ____ Section ____ Group _____
Part I: Choose the best answer from the given alternatives and write on the
space provided.
______1. Which one of the following is true about risk?
a. High less high risk d. A & C
b. High variance risk loss e. All of the above
c. High variance high risk
______2. The primary coucegn of risk is
a. To avoid risk c. To protect risk
b. To minimize risk d. A & B
e. To present of porterity for profit
______3. The actual outcome is perfectly known means
a. No loss d. A & C
b. No risk e. All of the above
c. No gain
______4. ___ is the cause of loss
a. Hazard d. Peril
b. Moral e. Probability
c. Morale
______5. A person who buy a lottery ticket on their birthday may be assosicated with
a. Subjective risk
b. Objective risk
c. Subjectivile probability
d. Objective probability
e. None of the above