Tax Accounting Final Examination
Tax Accounting Final Examination
Tax Accounting Final Examination
Section
General Instructions
Instruction: Write “True “if the statement is correct and “False” if the statement is in
correct in the attached answer sheet
Instruction: Choose the correct answer from the given alternatives in each question and
write your answer in the answer sheet attached
1. A tax structure that the tax rate decline as the tax base is increased ( the amount increased tax rate
decline)
A. Regressive C. progressive
B. Proportional D. None of the above
2. When individuals relocate their business to region with lower taxes or take advantage of loophole
in tax laws, it is said to be
A. Tax fraud C. Tax evasion
B. Tax reduction D. Tax avoidance
3. Which one of the following is/are not essentially the characteristics of taxation
A. It is a compulsory levy
B. It provides for non-proportionate return or benefit
C. It helps in financing governmental activity
D. It is an illegal collection
4. All are objectives of tax except
A. Diverting resources C. Enhancement of standard of living
B. Common benefit to all D. Reducing regional in balance
5. Which one of the following is indirect tax
A. Excise tax C. Value added tax
B. Turnover tax D. All are true answers
6. Which one of the following is subjected for withholding tax
A. Consultancy C. Advertisement service
B. Construction D. All
7. Which one of the following is acting as a withholding agent
A. Governmental enterprises
B. Private limited company
C. Not for profit organizations (NGO)
D. All
8. Which of the following taxpayers is required to file balance sheet
A. Category B C. Category C
B. Category A D. A and B are answers
9. The standard assessment of tax payment is applied for
A. Category B C. Category C
B. Category A D. A and B are answers
10. Which of the following taxpayers is required to file Income statement
A. Category B C. Category C
B. Category A D. A and B are answers
11. Employee income tax is determine in Ethiopia on the bases of
A. Generally Accepted Accounting principles
B. Tax law
C. Company law
D. International law
12. Which one of the following is not taxable benefit to employees
A. House allowance
B. Acting allowance
C. Medical allowance
D. Position allowance
13. Mr.Alemu earns a basic salary of Birr 4,500, transportation allowance of 500, position allowance of
1,000. What will be the taxable salary and net pay for Mr.Alemu
A. 5,500 and 5,190 C. 4,690 and 5,500
B. 6,000 and 4,690 D. 5,500 and 4,690
14. The total Brackets of employment tax are
A. 5 B. 6 C. 7 D. 1
15. Over time rate at Normal Hours are
A. 2 B. 1.25 C. 2.5 D. 1.5
16. One of the following is not deductible expenses in Ethiopia
A. Cost of maintaining the business
B. Expenses of operating the activities of the business
C. Entertainment
D. Advertising
17. Identify the true statement from the following about record keeping by companies
A. All business organizations are expected to keep book of accounts at least for tax purpose
B. Preparing an income statement is common obligation of category A &B Business
C. Any report prepared by category C taxpayers is always acceptable by the tax authority
D. The tax authority accepts statement in foreign language and will get translated at its cost
18. Under proclamation No 286/2002 business income tax is taxable under
A. Schedule B C. Schedule C
B. Schedule A D. Schedule D
19. Business income tax is determined in Ethiopia on the bases of
A. Tax law C. Company law
B. GAAP D. All
20. All but one is not required to fill an income statement to the tax authority
A. Category “A” tax payers
B. Category “C” tax payers
C. Category “B” tax payers
D. A and C are possible answers
21. One of the following is supplies is exempted from VAT in Ethiopia
A. Transport C. Books
B. Education D. All
22. Which one of the following is correct about VAT in Ethiopia
A. It is an indirect tax
B. The tax is based on Value add
C. The accounting period is three months
D. All
23. Good are purchased at VAT inclusive price of Birr 166,750. The amount of input VAT on
this transaction
A. Birr 25,012.50 C. Birr 21,750.00
B. Birr 21,000.00 D. Birr 19,837.50
24. Ato Meseret Yazachew , owner of Mabi PLC , purchased passengers vehicle for personal use at
Birr 200,000 subject to 15 % VAT which one of the following is true
A. The asset account is debited for Birr 200,000
B. VAT account is debited for Birr 30,000
C. The asset account is debited with 230,000
D. VAT account is debited with 26,087
Instruction: Answer the following questions clearly in the attached answer sheet
Name: Department:
ID. No: Sec: Year:
Program: Enrollment: Semester:
ADD: Drop: DD/MM/YYYY:
Part I: True False Part IV: Multiple Choice Questions (1 Short Answer
Questions point each)
1. 1. 11. 21. 1.
2. 2. 12. 22.
3. 3. 13.
23.
4. 4. 14. 2.
24.
5. 5. 15.
25.
16.
6. 26.
17.
7. 27.
18.
8. 28.
19.
9. 29.
20.
10.
30.
31.