Islamic university – Gaza

Faculty of commerce
Accounting department Accounting in English

MID exam of accounting in English ( 1 hour )

Name :…………………………………………………………………………………………
Id : ………………………………………………. Class : ………………………………...

QUESTION 1 : please choose the best answer for the following statement :

1. On the last day of the period, AL ASHI Company buys a $900 machine on
credit. This transaction will affect the:
A. income statement only.
B. balance sheet only.
C. income statement and owner's equity statement only.
D. income statement, owner's equity statement, and balance sheet.

2.Performing services on account will have the following effects on the

components of the basic accounting equation:
A. increase assets and decrease owner's equity.
B. increase assets and increase owner's equity.
C. increase assets and increase liabilities.
D. increase liabilities and increase owner's equity.

3.The cost principle states that:

A. assets should be initially recorded at cost and adjusted when the market value changes.
B. activities of an entity are to be kept separate and distinct from its owner.
C. assets should be recorded at their cost.
D. only transaction data capable of being expressed in terms of money be included in the accounting records.

4.Accounts that normally have debit balances are:

A. assets, expenses, and revenues.
B. assets, expenses, and owner's capital.
C. assets, liabilities, and owner's drawings.
D. assets, owner's drawings, and expenses
.
5.Posting:
A. normally occurs before journalizing.
B. transfers ledger transaction data to the journal.
C. is an optional step in the recording process.
D. transfers journal entries to ledger accounts

6.Which of the following statements is incorrect concerning the work sheet?

A. The work sheet is essentially a working tool of the accountant.
B. The work sheet is distributed to management and other interested parties.
C. The work sheet cannot be used as a basis for posting to ledger accounts.
D. Financial statements can be prepared directly from the work sheet before journalizing and posting the
adjusting entries.

7. When a net loss has occurred, Income Summary is:

A. debited and Owner's Capital is credited.
B. credited and Owner's Capital is debited.
C. debited and Owner's Drawing is credited.
D. credited and Owner's Drawing is debited.

8.Gross profit will result if:

A. operating expenses are less than net income.
B. sales revenues are greater than operating expenses.
C. sales revenues are greater than cost of goods sold.
D. operating expenses are greater than cost of goods sold

9 .an account that will have a zero balance after closing entries have been journalized and posted is :
A. Service revenue.
B. Advertising supplies.
C. Prepaid insurance.
D. Accumulated depreciation.

10.Under a perpetual inventory system, when goods are purchased for resale by a company:
A. purchases on account are debited to Merchandise Inventory.
B. purchases on account are debited to Purchases.
C. purchase returns are debited to Purchase Returns and Allowances.
D. freight costs are debited to Freight-out.

PLEASE POST YOURS ANSWER TO THE TABLE

QUESTION 1 2 3 4 5 6 7 8 9 10
NO.
ANSWER

: Question 2

The trial balance of M. ALASHI company contained the following accounts at December 31.12.2006

M. ALASHI COMPANY
TRIAL BALANCE
31.12.2006
 Accounts Debit Credit
cash $25,400
Accounts receivable 37,600
Merchandise inventory 90,000
land 92,000
Buildings 197,000
Accumulated depreciation-buildings $54,000
equipment 83,5000
Accumulated depreciation- equipment 42,400

Notes payable 50,000

Accounts payable 39,000
M. Alashi ,capital 267,800
M. Alashi ,drawing 10,000
sales 904,100
Sales discounts 6,100
Cost of goods sold 709,900
Salaries expense 69,800
Utilities expense 19,400
Repair expense 5,900
Gas and oil expense 7,200
Insurance expense 3,500
TOTAL $1,357,300 $1,357,300

OTHER ENTRIES :
1. Purchased merchandise from Ahmad company for $ 20,.000 on a credit
2. paid freight costs of $ 900 on merchandise purchase.
3. sold 3,000 of merchandise to Ali the cost of merchandise sold was $1,500 ( ON CREDIT).
4. Ali company returned $ 2,000 of merchandise purchased .the cost of merchandise return was $1,000

: REQUIRED
RECORD THE ENTRIES (USING PERPETUAL) .1
TAKE BALANCES TO A NEW TRIAL BALNCE AND ENTER ON A WORK SHEET .2
WITH THE FOLLOWING ADJUSTMENT DATA

: ADJUSTMENT DATA
).Depreciation is $10,000 on building and$9,000 on equipment.1
.Interest of $5,000 is due and unpaid on notes payable at December 31 .2
.Accrued salaries are $1,500 .3
.the amount of insurance for the year is $ 2,400 .4
.revenue earned but unrecorded $2,000 .5