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Fundamental of Accounting I Assignment

The document is an individual assignment for a Fundamental of Accounting course, consisting of multiple parts including true/false statements, multiple-choice questions, and practical accounting tasks. It covers topics such as bad debt expense, notes receivable, gross profit calculation, and closing entries. Students are required to demonstrate their understanding of accounting principles through various exercises and calculations.

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Qhassen Hamza
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3 views

Fundamental of Accounting I Assignment

The document is an individual assignment for a Fundamental of Accounting course, consisting of multiple parts including true/false statements, multiple-choice questions, and practical accounting tasks. It covers topics such as bad debt expense, notes receivable, gross profit calculation, and closing entries. Students are required to demonstrate their understanding of accounting principles through various exercises and calculations.

Uploaded by

Qhassen Hamza
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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National aviation COLLEGE MEGENAGNA CAMPUS

Fundamental of accounting-1 Individual Assignment January 2016 E.C


Fundamental of accounting-1
ASSIGNMENT-I

Part I: write True if the Statement is correct and False if it is


Incorrect .
1.Bad debt expense is recorded when specific accounts are determined to be worthless.

2. Notes Receivable are usually recorded in a single note Receivable account to simplify record keeping.

3. Other receivables include nontrade receivables such as interest receivable, loans to company officers,
advances to employees, and income taxes refundable.

4. Notes receivable represent claims for which formal instruments of credit are issued as evidence of the
debit.

5. Receivables represent claims for money, goods, services, and non-cash assets from other firms.

6. A dishonored note is paid in full at maturity.

7. Companies debit Allowance for Doubtful Accounts and credit Accounts Receivable at the time the
specific account is Allowance Method as uncollectible.

8. Information provided indicates the reasons why retained earnings only increased during the period.

9. Convergence refers to efforts to increase differences between IFRS and U.S. GAAP.

10. The historical cost principle dictates that companies record assets at their cost. In later periods,
however, the fair value of the asset must be used if fair value is higher than its cost.

Part II: Choose the best answer from the given


alternative and write the letter of
your choice on the separate answer sheet
provided
1. A credit sale of $750 is made on June 13, terms 2/10, net/30. A return of $50 merchandise is granted
on June 16. The amount received as payment in full on June 22 is:
A. $700. B. $686 C. $685. D. $650.
2. If sales revenues are $400,000, cost of goods sold is $310,000, and operating expenses are $60,000, the
gross profit is: A. $30,000. B. $90,000. C. $340,000. D. $400,000.
3. If beginning inventory is $60,000, cost of goods purchased is $380,000, and ending inventory is $50,000,
cost of goods sold is: A. $390,000. B. $370,000. C. $330,000. D. $420,000.
4. Before posting a payment of $5,000, the Accounts Payable of Senator Company had a normal balance of
$16,000. The balance after posting this transaction was:
A. $21,000. B. $11,000. C. $5,000. D. Cannot be determined.
5. If total assets increased $20,000 during a period and total liabilities increased $12,000 during the same
period, the amount and direction (increase or decrease) of the change in owner’s equity for that period
is a(n): A. $32,000 increase. B. $8,000 increase. C. $32,000 decrease. D. $8,000 decrease
6. If revenue was $45,000, expenses were $37,500, and the owner’s withdrawals were $10,000, the
amount of net income or net loss would be:
A. $45,000 net income. B. $37,500 net loss. C. $7,500 net income. D. $2,500

Part III: Work out show all the necessary steps


clearly and neatly (20 pts) .
1.The trial balance of Celine’s Ekram and Besufekadu Shop at June 24 shows Inventory €25,000,
Sales Revenue €162,400, Sales Returns and Allowances €4,800, Sales Discounts €3,600, Cost of Goods
Sold $110,000, Rent Revenue €6,000, Freight-Out €1,800, Rent Expense €8,800, and Salaries and Wages
Expense €22,000. Prepare the closing entries for the above accounts.

2. Eyosyas Company lends Seyifu Inc. €10,000 on June 1, accepting a five-month, 9% interest note. If
Eyosyas presents the note to Seyifu Inc. on November 1, the maturity date, Eyosyas’s entry to record the
collection is:

3. Transactions made by Mahlet & Heran Company, a public accounting firm, for the month of August
are shown below. Prepare a tabular analysis which shows the effects of these transactions on the
expanded accounting equation and prepare the financial statement ( IS,RES & SOFP )

1. The company issued ordinary shares for €25,000 cash.

2. The company purchased €7,000 of office equipment on credit.

3. The company received €8,000 cash in exchange for services performed.

4. The company paid €850 for this month’s rent.

5. The company paid a dividend of €1,000 in cash to shareholders.

4. As Bitanya and Lishan shareholder, Abenezer engaged in the following activities in establishing her
Lishan, Hair It Is Company.

1. Opened a bank account in the name of Hair It Is Company SA and deposited €20,000 of her own
money in this account in exchange for ordinary shares.

2. Purchased equipment on account (to be paid in 30 days) for a total cost of €4,800.
3. Interviewed three applicants for the position of beautician. Prepare the general journal and post
entries for the above accounts.

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