AFIRICA BEZA UNIVERSITY COLLEGE

DEPARTMENT OF ACCOUNTNG

Final Examination of Financial Accounting I

Time allowed 2:30hrs

Instructor Gu.E

Name ID_____________ program group

Instruction: Choose the correct answer and write your answer choice on the space provided

1. Necessarily true about revenue

A. Enhancement of asset
B. A result of increases cash and receivable
C. Settlements of liabilities during an accounting period from own investment
D. In flow of asset during an accounting period from regular activities
2. True about realization of revenue
A. Process of converting non-cash asset to cash
B. Measurable transaction has been completed
C. Transaction has been sufficiently finalized to warrant the recording of earned revenue in the
accounting records D) all
3. Increases in business enterprise’s owners’ equity from incidental transactions
A. Revenue B) Investment C) Gain D) expense
4. An account needs a reversing entry
A. For an adjusting entry affects an asset and a liability account that normally is not used during
accounting period
B. For an adjusting entry affects an asset and a liability account that normally is used to record
transaction during accounting period
C. For corrections entry D) all
5. Decrease in business enterprise’s owners’ equity from incidental transactions or events except those
that result from distributions to owners or consumption and incurrence of asset for revenue generations
is
A) Expense B) Loss C) dividend D) withdrawal E) all
6. Expense of accounting period in which they occur
A) Product cost B) period cost C) expired cost D) all E) none

7. Not used for under conditions of a revenue realization

A) Sufficient reliable evidence exists to measurable
B) Cost associated with current operation
C) Earning process is completed
D) collection of the claims from customers is reasonably assured

8. Installment plan of revenue recognition used by

A) a business not used accrued basis
B) a business not has a possibility of calculating uncollectable amount
C) a business used cash basis system D) all

9. In the case of revenue recognition by type of after delivery of goods under cost recover method

the cash collected in advance will recorded

 A) as accrued revenue B) as deferred liability C) as deferred Expense D) None
10. Type of expense recognition used for recognize the expired cost
A) Cause and effect Method B) Systematic and rational allocation method
C) immediate recognition method D) Installment method
11. Used for revenue recognition of service render business enterprise transaction consist of
like specific number of similar act ,specific number and dissimilar act or unspecific number
of similar act
A) Specific performance method C) Completed performance method
B) proportional performance method D) Deposit method
12. The process of apportioning income taxes among two or more accounting periods because of
temporary differences in the recognition of revenue and expenses
A) Inter period tax allocation B) Intra period tax allocation C) business segment D) none
13. True about revenue recognition
A) Sufficient reliable evidence exists to measure the market value of the output.
B) The earning process is completed
C) Collection of the claims forms customers and clients who have purchased goods &
services is reasonably assured.
D) ALL
14. One of the method used for revenue recognition at time of sales & delivery
A) Installment plan C) period of production
B) C) During production D) cash collection method D) all
15. One of the method used for revenue recognition by construction type of business
A)Installment plan B) period of production
C) During production D) cash collection method E) all
16.True about Expense
A) Decreased capital B) cash inflow C) used of asset D) incurrence of liability based
on current operational activities
17. An asset spoilage without gives any service is
A) Expense B) loss C) retired D) discarded
18.Makes accounting information reliable

A) Verifiability B) Neutrality C) faithfulness D) all

19. To say accounting information is relevance, it should be

A) Predicative B) feedback value C) timeline D) none

21. One of genera accepted accounting principle disclose as the recording of owner & business

property & transactions should be separate

A) Revenue realization B) Going Concern C) Adequate disclosure D) business entity

22. A principle that compares the accomplishment with effect related with to the accomplishment

for determine the result of the accounting period.

A) Monetary B) matching C) valuation D) comparability

 23. An increasing of net assets of a particular enterprise resulting from transfer s to it from other

entity of something of value to obtain or increasing owner interest in it.

A) Investment by owner B) equity C) comprehensive income D) revenue

24. Change in equity of an entity during a period from a transaction & other event & circumstance
from non owner source.
A) Investment by owner B) equity C) comprehensive income D) Revenue
25. Which account is occurred by deferred transaction
A) Interest receivable B) salary payable C) unearned revenue D) prepaid E) none
26.Which account is occurred by accrued asset transaction
A) Interest receivable B) salary payable C) unearned revenue D) Prepaid
27. For which type of adjusted transaction a reversing entry required
A) Deferred liability B) deferred Asset C) for valuation adjustment D) accrued asset
28. An entry required during the accounting for make proper recording for which had not recorded
properly at time of journalizing the external transaction
A) Adjusting entry B) correcting entry C) closing entry D) journal entry

PART II MATCHING
1. Revenue recognition after deliver A) Initial direct cost
2.Revenue recognition before deliver by construction type business B) Installment method
3. Cost classification type of service transaction C) Loss
4. Expense incurred but not paid D) Accrued Expense
5. prepaid insurance E) Deferred Asset
6. Disposable of Fixed asset without provide service F)During production
7. An entry needed on the beginning of accounting period G) Reversing entry

PART II WORK OUT

1. Assume that in yr 1 Cox company constructed to construct of dam for a fixed price of 10milion .In
year 1, Cox incurred cost of 2.2 m & expects to incur additional cost of 6.6 m to complete the
construction .in yr 2 Cox incurred costs of 5m on the construct, & estimated that additional cost of
1.8m.in Yr 3 Mori completed the construct by incurring additional cost of $ 1.75m & then competed.
Required:- calculate each period revenue recognized by using percentage of completed
Method, Gross profit and its necessarily journal entry
2. Assume beginning inventory BR 80,000.00, purchases ,Br 275,000.00 , freight – in Br
40,000. Purchase return and allowance ,Br 2,500.00 Dec 31 inventory included applicable
freight in br 60,000.00 Prepare the journal entry to close the accounts and to record the
ending inventory .
Part III : Describe the following question

1. Why and for what type of Adjusting entry reversing entry requires ?

2. Describe the revenue and expense of Merchandise business recognition types