UNIT TITLE: BALANCE CASH HOLDINGS

PART I: KNOWLEDGE PART

SECTION I
INSTRUCTION: This assessment contains 5 matching type questions, each worth 2 points.
Match the items in column “A” with the items in column “B” and write the letter of the best
match on the space provided. Use only capital letters.

Column “A” Column “B

________ 1.Non- cash document A. Notes and coins held for change
________ 2. Terminal B. Safe box
________ 3. cash handling device C. Neatness of cash in a safe box
________ 4. Organization policy D. Cheques
________ 5. Cash floats E. Manual equipment used for deposit

SECTION II:
INSTRUCTION: This assessment contains 5 multiple choice questions, each worth 2
points. Choose the best answer from the given alternatives and write the choice of the
correct letter on the space provided. Make sure that your answer is clearly marked. Use
only capital letters.

_______ 1. Accurate record of information requires recording on the following except;

A Proformas CPermanent hard copy
BDuplicate or triplicate D All of the above
copies E None of the above
________ 2. In establishing a petty cash fund what should be debited?
A. Cash at bank D. Petty cash
B. Expenses E. All of the above
C. Account payable F. None of the above
________ 3.When should be cash counted? D. When discrepancies exist
A. At close of business E. All of the above
B. When balancing cash floats F. None of the above
C. At opening of business
________ 4.One of the following is not categorized as a non-cash document.
A. Advance cards D. Suspense payment voucher
B. Cheques E. All of the above
C. Promissory note F. None of the above
_________ 5. For which activities should be organization policies required?
A. Processing transactions D. Terminal balancing
B. Recording of E. All of the above
discrepancies F. None of the above
C. Tidiness of cash in safe
box

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PART II: PRACTICAL PART
INSTRUCTION: This assessment contains 5 questions, total worth 30 points. Read and
analyze each question carefully so that when you understand, answer the questions
correctly.

PROJECT 1:
1. Demonstrate how to maintain accurate cash floats. (3 marks)
2. Discuss how to remove receipts from terminal. (3 marks)
3. Discuss in detail how to reconcile takings. (3 marks)

PROJECT 2:
TASK 1:A company has a petty cash fund of Br.1,000 that was established at November 1. At
the end of the month the petty cash receipts indicate expenditures for the following items:
Office supplies-------------------------------------------------- Br. 426
Store supplies -------------------------------------------------- Br. 340
Utilities expense ----------------------------------------------- Br. 112
Miscellaneous expenses --------------------------------------- Br. 78
Required:
Journalize the necessary entry for the following
A. Establishment of petty cash(3 marks)
B. Replenishment of petty cash(3 marks)
TASK 2:The bank statement of MURAEL Private Limited Company for December 31, 2017,
indicates a balance of Br. 28,000. All cash receipts of the company are deposited each day. The
accounting records indicate the following summary data for cash receipts and payments for May.
Cash balance as of May 1 ----------------------------------------------- Br. 9,294
Total cash receipts for May --------------------------------------------- Br 18,034
Total amount of checks issued for payment in May ------------------ Br. 8,656
Comparing the bank statement and the accompanying canceled checks and memos with
records reveal the following reconciling items:
a. The bank had collected for MURAEL PLC Br. 13,608 on a note left for
collection. The face amount of the note was Br. 12,600.
b. A deposit of Br. 14,000 representing receipts of May 31, had been made too late
to appear on the bank statement.
c. Checks outstanding: No. 456, Br. 4,644; No. 498, Br. 2500; No. 526, 2560
d. A check drawn for Br. 1496 had been incorrectly charged by the bank as Br. 1636
e. A check No. 522 for Br 300 returned with statement had been recorded in the
company’s records as Br. 540. The check was for the payment of an obligation to
Sun wholesaling company for the purchase of office supplies on account.
f. Bank service charges for May amounted to Br. 84.

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 Required:
I. Prepare bank reconciliation for May.(10 marks)
II. Journalize the entries that should be made by MURAEL Private Limited
Company.(5 marks)

UNIT TITLE: PROCESS PAYROLL

PART ONE: KNOWLEDGE TEST

Instruction I:

Choose the best answer from the given alternatives and write the choice of the
correct letter on space provided. Each questions worth 1.5 points. Make sure
that your answer is clearly marked. Use only capital letters.

_____1. All of the following are correct about Pension Contributions by

employeeexcept______
A. It is a subtraction made from earnings of employeesas a deduction by the order
of government as per the pension law.
B. It is expected only from permanent employees of an organization
C. The amount goes to government trust fund & repaid to employees after their
retirement
D. It is expected from all employees regardless of the type of employment contract
E. All of the above
_____2. One of the following is not required to calculate overtime earning:
A. Basic Salary C. OT Situation
B. Allowances D.Hours worked E. None
_____3. How much OT earning is entitled for an employee who earns Br.25 per hour&
worked 4 excess hours Performed on Ethiopian Easter?
A. Br. 125.00 B. Br. 150.00 C. Br. 200.00 D. Br. 250.00 F. None
_____4. Which of the following is a subtraction made from the earnings of employees as
a deduction by self-permission of employee him/herself?
A. Employment Income Tax C. Credit Association Savings
B. Higher Education Contribution D.Penalty E. None
_____5. For which of the following duration of excess hour work do we apply the
150%over time rate?
A. Late Hours C. Weekly rest day
B. Ordinary Time D. Public Holiday E. None

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 Ato Mulugeta is a permanent employee of a government organization with monthly basic
salary of Br. 2,400.00 and monthly allowances of Br. 1,200.00(allowance up to ¼ of
basic salary is tax exempted). He has worked 180 hours during the current month. The
overtime hours are performed in the weekends of the current month. The employee’s
regular working hour of a named employee is 160 hrs. per month.

Based the above information answer the questions from 6 to 8

_____6. The ordinary/regularhourly rate of an employee is equal to_____

A. Br. 20.00 per hour C. Br. 22.50 per hour E. None
B. Br. 15.00 per hour D. Br.12.50 per hour
_____7. The gross earnings of the above employee is:_______
A. Br. 4,050.00 C. Br. 4,350.00
B. Br. 3,600.00 D. Br. 4,200.00 E. None
_____8. The amount of employment income tax and pension contribution substracted
from earnings as deductions respectively are_____ _________
A. Br. 537.50 and Br. 168.00 C. Br. 217.50 and no pension
B. Br. 417.50 and Br. 168.00 D. Br. 417.50 and Br. 252.00 E. None
_____9. ________isa multicolumn format used to assemble and summarize payrolldata’s
along with earnings, deductions and net pay.
A. Payroll Register C. Pay Period
B. Pay Check D. Pay Day E. Payroll Tax
_____10. Which of the following statement is not correct about Gross Earnings of an
employee?
A. It is the summation of basic salary, allowances, OT earnings, & other incomes
B. It can be equivalent with taxable income for employees who do not have
‘nontaxable allowances’
C. It is the sum of basic salary, allowance, OT & others incomes excluding tax
exempted allowances
D. It is greater than or equal with taxable income
E. None of the above

Instruction II
Match the item in column ‘A’ with the item in column ‘B’ and write letter of the
best match on space provided. Each Question worth 2 points. Use only capital

letters.

‘A’ ‘B’
_____1. Net pay A. The length of time covered by each
_____2. The Pay period payroll payment
_____3. Time Sheet/ Attendance Sheet B. Source document for payroll data
_____4. Payroll Taxes C. The day on which salaries are paid
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_____5. Payroll Deductions D.Home take pay
E. Income Taxes
F. Charges levied against employer
& goes to government trust fund
G. Gross Earnings

H. Payroll System

I. Overtime Earnings

PART TWO: PRACTICAL TEST (25 Pts)

Read and analyze the following questions carefully and answer them correctly.
Try to write neatly as much as possible.

Project One:WyoLidiya and Ato Million are employees with the following payroll data for the
current month. Based on the given payroll data, perform the following tasks.

Name of Employees Wyo.Lidiya Ato. Million

Basic Salary per Month Br.6,400.00 Br. 9,600.00

Hours worked during themonth 172Hrs 200Hrs

Normal Working Hours 40 48 Hrs/Week

Hrs/Week
Both
employees have performed their excess hours by distributing or allocating equally to OT
situations of Public Holiday, Rest Day, Night and Evening scenarios;
Required:
A. Over Time Earnings of the month for both employees. (5 Pts)
B. Gross Earnings of the month for both employees (5 Pts)
Project Two:
The following payroll data is taken from Bahirdar Textile S.C for the month of Sene, 2009 E.C.

ID Name of Basic Allowances Overtim Overtime Hours

Employee’ Salary e Hours
No. s

001 Mengistu 8,640.00 1,200.00 6 Hrs 2 Hrs Ethiopian Christmas & 4 Hrs on
Evening

002 Genet 1,920.00 400.00 8 Hrs 4 Hrs Rest Day 4 Hrs on Ethiopian New

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 Year

003 Mentewab 5,760.00 1,000.00 10 Hrs 4Hrs@ Evening, 2Hrs@Night and 4Hrs on
Sunday (Rest Day)

004 Tewodros 9,600.00 1,400.00 4 Hrs 4 Hrs on Weekend Rest

005 Kebron 3,840.00 800.00 8 Hrs 4 Hrs@Night& 4 Hrs on Eid Al

Fitr(Ramadan)

Additional Information

 All employees except Genet are permanent and worked 48 hrs per week.
 All employess allowances are tax exempted up to Br.400.00.
 Mengistu is paying cost sharing liability monthly to ERCA deducting 10% of basic salary.
 All employees pay one month salary to Abay Dam paid monthly withithin a year.
 All employees contribute 5% of their basic salary for credit association as their personal
savings.
Required:

1- Prepare a payroll statement for the month of Sene, 2009 E.C. (10 Pts)
2- Prepare the necessary journal entries for payroll preparation and payments of deductions to
concerned body. (5 Pts)
Good Luck!!!

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