ALHAMD ISLAMIC UNIVERSITY

FINAL TERM EXAMINATION SPRING 2021

MBA/MBA-EXE-l
Financial Accounting
Total Marks: 30
Note: Attempt all questions only handwritten paper will be accepted.

Question 01: (10)

Kahala Secretarial Service is located in a suburban office building and provides typing, duplicating, and other
services to the tenants of the building and to other clients. As of March 31, the ledger accounts contained
entries as follows:

Cash Notes Payable

1,890.70 518.60 1,000.00 14,000.00
561.50 1,000.00  
2,465.00 595.00  
315.00 360.00  
   

Accounts Receivable Accounts Payable

3,798.00 260.00 318.60 232.35
263.00 55.00 200.00 318.60
55.00   360.00 890.00
190.50   267.00
2,105.00   511.35
   

Office Supplies Taxes Payable

1,500.00   265.00 1,465.00
250.00   330.00  
250.00    
   

Office Equipment Jill Kahala Capital

13,240.00   15,084.40
   

Delivery Equipment
6,200.00  
 

Required: Determine the balances of the accounts and prepare a trial balance at March 31, 19__.

Question 02: (10)

 ALHAMD ISLAMIC UNIVERSITY
FINAL TERM EXAMINATION SPRING 2021
MBA/MBA-EXE-l
Financial Accounting
Total Marks: 30
Note: Attempt all questions only handwritten paper will be accepted.
Security Service Company adjusts and closes its accounts at the end of the month on November 30 adjusting
entries are prepared to record:
a. Depreciation expense for November.
b. Interest expense that has accrued during November.
c. Revenue earned during November which has not yet been billed to customers.
d. Salaries payables to company employees which have accrued since the last payday in November.
e. The portion of the company’s prepaid insurance which has expired during November.
f. Earning a portion of the amount collected in advance from customer.
g. Rent expense for November.
h. Unrecorded Income Taxes Expense accrued during November.
i. Interest revenue that has accrued during November.
j. Prepaid Advertising expense for November.

Required: Indicate the effect of each of these adjusting entries upon the major elements of the company’s
Financial statements- that is upon revenue, expenses, net income, assets, liabilities and owner’s
equity.
Organize your answer in tabular form, using the column heading shown below and the symbols
I for increase, D for decrease and NE for no effect.

Adjusting Income statement Balance Sheet

Entry Revenue - Expense Net Income Assets = Liabilities + Owner’s Equity
XYZ NE - I D D = NE + D
a

Question 3:
a. Explain why each of the following groups is interested in the financial information
of the Business: (5)
i. Creditors
ii. Potential Investors
iii. Labor unions
iv. Owners
v. Management

b. Why are the total assets shown on a balance sheet always equal to the total of the liabilities
and the owner’s equity? (5)

……………Best of Luck………….