GAGE COLLEGE TVET-PROGRAMS

DEPARTEMENT OF BUSINESS

EOS, ACCOUNTS, AND BUDGETSERVICE

LEVEL IV

Total Worth 20 %

Name:- Merone Kassahun

ID NO:____________SECTION:______________
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Campus: ADDISU GEBEYA

Learning Center: ADDISU GEBEYA

Submitted date January 10, 2022

PART I Short Answer (Each 1 point)

1. What is the difference between GAAP and IFRS? Brief

General accepted accounting principle one must be able to understanding

and benefit of principle rules of accounting to prepared financial statement
the following are the important accounting concept, business entity
concept, going concern concept dual aspect concept, accounting period
concept snatching principle (revenue and expense) and relation (valuation)
concept and international financing revenue system. Is allowed and
depend up on by general accepted accounting principle and modified and
adjusted the previously GAAP but IFSR are followed

 Cash and receivable

 Employee benefit

 Events after the reporting period

 Fair value
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 Government Grant

 Event after the reporting

 Lease policies to be

 Liabilities provision and contingencies

 Joint arrangement and investment association

 Plant and Equipment machinery investment, Property

2. Write some element or component of financial statement?

Balance sheet, income statement Cost of merchandise sold, revenue,

general administration expense gross profit income tax net profit
statement of owner equity

3. What is the main function of prepared financial statement at the end of

fiscal years?

 To compare actual financial reports with the expected budget

  To assist financial condition and results of operation

 To evaluate efficiency and effectiveness of business operation

 Financial reporting should assist fulfilling government duty

 Financial reporting should assessment to the user giving or

providing by government

Financial statement is consisting:- ,

1. Income statement

2. Statement of owner equity

3. Balance sheet

4.cash flow

UNIT COMPETANCE:-PREPARED FINANCIAL STATEENTS

FOR NON-REPORTING ENTITES

1. Which of the following is not of one of the activities categories of

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government, as described in this chapter?

a) Fiduciary

b) Business type

c) Profit seeking

d) government

2. A fund is a (an)

a) Legal entity created only when authorized or required by law

b) Self-balancing set of accounts recording cash and other financial

resource, together with all related liabilities and residual or
balances, and charges therein.,

c) Accounting but not a fiscal entity

d) All of the above

3. The government funds category is made up of

a) The general fund, special revenue fund , capital project fund and debt
service fund

b) The general fund, special revenue fund, capital project fund and internal
service fund

c) The general fund, special revenue fund , and permanent fund

d) The general fund, special revenue fund, capital project funds, and
permanent funds.

4. Self supporting activities that provide goods of services to the public on

a user’s charge basis should be accounted for in what fund category?

a) Government

b) Governmental Business type fund

c) Fiduciary

d) Proprietary

5. The Proprietary fund category is made up of

a) Enterprise funds, non-expendable trust funds, pension trust funds,,

and
4 internal service funds.

b) Internal service funds, special revenue funds, and enterprise funds

c) Enterprise funds, and internal service funds

d) Any of the above, depending on management intent

Part I Discussion

1. write the all types of funds and explain each?

Government, Governmental Business type fund, Fiduciary And

Proprietary

Fund can be getting supported by sponsorship from different

governmental and non-governmental organization and international world
bank, international monitory funds by debiting your country out source to
managing and financing your any project. long term, medium term and
short term project to be facilitating and implementing accomplished your
internal and external project
 2. What is the distinction between fund long term liabilities and
general long term liabilities?

Account payable that is getting from borrower lender banker to done any
things like residence, building, equipment, machinery and industry

To gain long term loan Bank Credit , Customer Advances, Trade Credit ,Factoring ,Public
Deposits And Money Market Instruments

3. UNIT COMPETENCIES:- Apply principles of professional

practice to work in the financial services industries

1. Define the revenue realization principles

2. What meant by the continuity or going-concern principle accounting

unit competence:- prepared job order cost system xyz manufacturing

company produces 3 Jobs #1,Job#2 and Job#3, the following
date relates to the production of t jobs
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1. Raw materials purchases birr 6000 on account

2. Direct the materials used and labor cost

Jobs Direct Material Direct labor %

Jobs#1 2600 240 144

Jobs#2 2500 360 216

Jobs#3 2000 400 240

3. Factory overhead is 60 % direct labor cost

4. Sales revenue 12,200

5. All jobs were completed and sold

Required

1. Recorded the necessary journal entries

2. Calculate cost of each job

3. Calculate growth profit

Part1:- Choose best answer

1. Finished Goods inventory account Credited when:

A. Goods are purchased on account

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B. Raw materials are purchased

C. Goods are sold

D. Under applied overhead is closed

2. Non-manufacturing costs are:-

A. Included in manufacturing overhead

B. Not part of product cost

C. Deducted from work in process

D. Added directly to cost of goods sold

3. The predetermined overhead rate is computed

A. Using a weighted –average method

B. Using actual activity as an allocation base

 C. At the beginning of the year, using estimate

D. After all actual costs have been incurred

4. Total manufacturing costs for the period consist of:-

A. Direct material, direct labor and manufacturing overhead applied

B. manufacturing overhead applied and selling expense

C. All expenses incurred , including selling and administration

D. Costs of goods sold plus ending Finished Goods inventory

5. Cost of Goods Sold is derived from

A. Job-cost sheets

B. Raw materials inventory account

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C. Finished goods inventory account

D. Estimate for the expected level of sales

UNIT COMPETANCE :-PREPARED FIONANCIAL REPORT

Parrt 1:

Multiple choice

1. Which of the following depreciation methods does not consider

salvage value in computing depreciation base of the asset?

A. Straight –line method C. Declining balance

B. Sum –of-the years ‘digits D. Units-of-output-method

2. ABC Company purchased a machine with a cost of birr 165,000 ad

salvage value of Birr 9,000.00 on January 1993. The machine will be
depreciated over a 12 year useful life using the sum-of-the-year’
 digital method. The amount of deprecation ABC Company would
record for the year ended 12 /31/94

Purchase price 165,000

Accumulated depreciation 9,000 =165,000-9,000=156,000

12 /31/94 13,000

22,000

A. 22,000 B. 24,000 C.16,500 D. 22,500

3. Erin Danielle company purchased equipment and incurred the

following cost

Cash price---------------------------$24,000

Sales taxes----------------------------$1,200
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Insurance during transit----------------$200

Installation and testing------------------$400

Total costs $ 25,800

4. What amount should be recorded as the cost of the equipment

A $24,000 B. $25,000 C. $25,400 D. $25,800

5. Depreciation is the process of:

A Valuation B. Cost allocation C. Cash accumulation D appraisal

6. Micha Bartlett Company purchased equipment on January 1, 2011

at a total invoice cost of $400,000.Theequipment has an estimated
salvage value % 10,000 and an estimated useful life of 5 years. The
amount of accumulated at December 31, 2012, if the straight –line
methods of depreciation is used, is.
 $400000-10000/5=$78000

A. $80,000 B. $78,000 C. $160,000 D.$156,000

7. Jefferson company purchased a piece of equipment on January1,2012.

The equipment cost is $60,000 and has an estimated life of 8 years and a
salvage value of $ 8,000. What were the deprecation expenses for the asset
for 2013 under the double –declining balance method?

A. $ 6,500 B. $11,250 C. $15,000 D.$ 6,562

8. Which of the following expenditure incurred in connection with the

acquisition of equipment is not a proper charge to the asset account?

A. Freight or transportation costs C. Taxes and tariffs

B. Cost of test to ready the machine for operation D. All of the above

9. If the Double-declining depreciation rate of a plant assets is 50% , then

its estimated life will be:-

A. 50 years B. 10 years C. 5 years D. 4 years E. Non of the above

10. Which 9 of the following methods will yield the highest expense during
the first year of an asset’s life?

A. Straight –line method

B. Sum –of-the years ‘digits

C. Units-of-production method

D. Non of the above

Part 1. WORK OUT

1. Assume that Hayes Manufacturing Company acquires real estate at a

cash cost of $100,000. The property contains an old warehouse is razed at
costs of $7,500 but with proceeds of $ 1,500 from sale of salvaged
materials of old warehouse. Additional expenditure are the attorney’s fee
$1,000, and the real estate broker’s commission $8,000

Required: Computed the cost of the land and records the necessary entry
the acquisition of the land
2.Merten Company purchases factory machinery at a cash price of
$50,000.related expenditures are for sales taxes $3,000, insurance during
shipping $ 500 , and installation and testing $1,000 Computed the cost of
the factory machinery is $ 54,500.

Required: Makes the summery entry to record the purchased and related
expenditures.

3. Assume that Famine Company recently purchased a crane for digging

purpose .Pertinent data concerning the purchase of the crane are:

Cost of crane ---------------------------Br.500,000

Estimated--------------------------------Br 50,000

Estimated Economic life ---------------- 5 years

Productive life in hours---------------30,000 hours

Instructions

Compute the depreciation expense for each of the five years under of the following methods

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a) Straight –line method

b) Unit of Activity deprecation method , assume machine usage was

800 hours

c) Double-declining-balance

d) Sum-of-the years’ digits

II. Prepare the necessary journal or adjusting entries for each case

Unit competence-established and maintain payroll systems and develop and use complete

Spreadsheets

Project 1 Addis Ababa University pays the salary of its employees according to the Ethiopian
calendar month. The data relating to the month of September, 2006 as follows

NO NAME OF BASIC MONTHLY OT DURATION

EMPLOYEE SALARY ALLOWAN HOURS
 CE WORKED OF OT WORK

1 ABEBE BR 5,600 BR300 915 UP TO 10 PM

2 MERON 4,000 200 48 WEEKELY REST DAYS

3 MOHAMMED 1,920 150 776.25 PUBLIC HOLID DAY

Additional information

All allowance are taxable except Meron allowance

Normal working hours per week 40 hours and all employees have done as they have been
excepted .

Meron is the member of labor union as a result she pays 3% of her basic salary for the
membership fee
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Required :

A. Prepare the payroll register as of September 30, 2006. (6points)

B. Record the payment of salary as of September 30,2006 (2points)

C. Record the payroll taxes expense for the month of September 30,2006 (2points)

D. Record the payment of the claim of the labor union of the agency that arose from
September ‘s payroll. Assuming that the payment was made on October1,2006 (1 points)

E. Assuming that the withholding taxes and payroll taxes of the month of September, 2006
haven been paid on October 5, 2006. Record the required January entry. (2points)