EN - 2019-2020 Spring - Final Exam 22.05.2021

Nova School of Business and Economics
Spring 2020/2021
Financial Accounting
22nd May 2021 135 minutes
FINAL EXAM
STUDENT NUMBER:________________
N.B.
Do not separate any paper sheet.
Please check that your exam has 14 pages, including a page with the chart of accounts.
Write your student number in every page.
All final answers must be provided in wiseflow.
Regarding the detailed computations, you may either present them in the wiseflow box
or submit them in paper, using separate sheets for each group of the exam.
GOOD LUCK!
Mark your answers to the multiple choice questions of group I in the answers grid you
may find below. Only the answers marked in the answers grid will be considered valid.
Answers grid – Group I
Mark the right answer with a circle or with an “X”.

Each multiple choice question correctly answered is worth 0.5 points. For each wrong
answer, 0.1 points will be deducted. If more than one answer is correct, choose the most
comprehensive one.
Multiple Choice
a b c d
I.1 a b c d
I.2 a b c d
I.3 a b c d
I.4 a b c d
I.5 a b c d
I.6 a b c d
I.7 a b c d
I.8 a b c d
1
STUDENT NUMBER:___________
Group I (4 points)
Mark your answers to the questions of this group in the answers grid provided in page 1.
Each multiple choice question correctly answered is worth 0.5 points. For each wrong answer,
0.1 points will be deducted. Select only one answer. If more than one option is correct, choose
the most comprehensive one.
1. A company acquired a plot of land in October N for 60,000 euros. In this land, the
company built its headquarters, which were inaugurated in April N+2. The construction
costs were 210,000 euros. Which of the following statements is true, knowing that the
useful life of the construction is 20 years and that the company computes depreciation
using the straight line method on a monthly basis, and assuming that this is the only
tangible fixed asset of the company?
a. On 31/12/N+2, the balance of account 438 – Accumulated depreciation is 30,375
euros.
b. In N+2, the depreciation expense is 7,312.5 euros.
c. On 31/12/N+3, the tangible fixed assets amount presented in the balance sheet of
the company is 241,625 euros.
d. None of the other options.
2. Consider a car lease agreement with the following conditions: contract value of 40,000
euros and semi-annual rents of 6,000 euros each. The first rent is paid on the date of
the contract and the reimbursement included in the second rent is of 5,000 euros.
Which of the following statements is true?
a. If the contract is subject to VAT at 20% and if VAT is deductible, account 252 – Capital
lease is credited for 40,000 euros when the contract is signed.
b. If the contract is subject to VAT at 20% and if the VAT is not deductible, account 431
– Tangible fixed assets is debited for 48,000 euros when the contract is signed.
c. If the contract is subject to VAT at 20% and if the VAT is not deductible, account 252
– Capital lease will be debited for 6,000 euros when the 2nd rent is paid.
d. All options are true.
3. A company is in the business of serving meals and it owns the store where its restaurant
is installed. Due to the covid-19 pandemic, the recoverable amount of that store is, on
31/12/N, lower than the carrying amount. This property is measured at its acquisition
cost. Thus, on 31/12/N, this company has to:
a. Record an extraordinary depreciation of the property.
b. Record a fair value loss.
c. Record an impairment loss.
d. Record a provision.
2
4. Which of the following operations results in an increase in both total assets and total
owners’ equity?
a. Credit sale of a tangible fixed asset with a gain.
b. The reversal of write-downs in inventories.
c. The revaluation of a tangible fixed asset.
d. All options are true.
5. Consider the following information on company WWW:

 Account 211 – Accounts receivable from customers had a 120,000 euros balance
on 31/12/N;
 Account 219 – Accumulated allowances for doubtful debts from customers had
a 20,000 euros balance on 31/12/N-1;
 The expenses with allowances for doubtful debts from customers presented in
the income statement of year N were of 6,000 euros.
Which of the following statements is true?
a. In the balance sheet as at 31/12/N, the Accounts receivable from customers show
an amount of 100,000 euros
b. In the balance sheet as at 31/12/N, the Accounts receivable from customers show
an amount of 94,000 euros
c. Account 219 – Accumulated allowances for doubtful debts from customers has a
balance of 6,000 euros on 31/12/N
d. None of the other options.
6. In a given business sector, company A is more efficient in terms of cash management

than company B if:
a. The days sales outstanding in company A is longer than that in company B.
Days sales outstanding = [Accounts receivable from customers / (Sales + Services
rendered)] x 365
b. The days payable outstanding in company A is longer than that in company B.
Days payable outstanding = [Accounts payable to suppliers / (Purchases + Services
and supplies expenses)] x 365
c. The number of days in inventory in company A is longer than that in company B.
Days in inventory = (Inventories / COGS) x 365
d. The days payable outstanding in company A is longer than that in company B and
the days sales outstanding in company A is longer than that in company B.
3
7. In the balance sheets as at 31/12/N-1 and 31/12/N of a given company, the investment
properties item presents the values of 50,000 and 55,000 euros, respectively. Which of
the following statements is true, knowing that there were no purchases of investment
properties in year N?
a. The valuation method used in investment properties by this company is the
acquisition cost.
b. The valuation method used in investment properties by this company is the
revaluated cost.
c. The valuation method used in investment properties by this company is the fair
value.
d. There is not enough information to determine the valuation method used by this
company in its investment properties.
8. Which of the ratios allows to compare the profitability that the equity holders
(shareholders) obtain in a company with other alternative investments?
a. Return on sales (Net income / Sales)
b. Return on equity (Net income / Owners’ equity)
c. Return on assets (Net income / Assets)
d. None of the other options
4
Group II (7.5 points)

Regarding the detailed computations, you may either present them in the wiseflow box or submit
them in paper, using separate sheets for each group of the exam.
Part A
Consider the following information on a company that sells only merchandise A and uses FIFO
as a cost flow in its inventories. There were no other transactions relating to the purchase and
sale of inventories besides the ones stated.
 In the balance sheet as at 31/12/N, the inventory item (which is a single batch of 5,000
units of merchandise) has a value of 40,000 euros.
 The balance of accounts 329 – Accumulated write-downs in inventories on 31/12/N-1
and 31/12/N were 14,000 euros and 10,000 euros, respectively.
 In January N+1, the company purchased 2,000 units of merchandise for 11 euros per
unit, plus VAT at 20%. Transportation expenses were paid in the amount of 2,000 euros
plus VAT at 20%.
a) Determine the balance of account 321 – Merchandise as at 31/12/N. (1 point)

Answer:
Computations:
b) Present the journal entries regarding the recognition of write down expenses, or write
down reversal, that the company recorded on 31/12/N (if you are not able to determine
the proper amount, record a 2,000 euros reversal). (1 point)
Description Debit account Credit account Amount
c) In February N+1, the company sold 6,000 units of merchandise to customer ZZ for a unit
sale price of 30 euros, less a trade discount of 10%, plus VAT at 20%. Determine the cost
of goods sold and record this sale, knowing that this customer previously made an
advance payment in the amount of 1,000 euros, plus VAT at 20%, and that at the date
of the sale the customer paid the remaining amount that was due. (2 points)
Answer:
Computations:
5
Part B
Consider that account 241 – Income tax accounts receivable or payable has, on the balance
sheet as at 31/12/N, a debit balance of 2,000 euros, after all the records of year N related to
income tax were recorded.
In year N, regarding income tax, the company made payments on account in the total amount
of 10,000 euros and the company received interest, all concerning year N, with a gross amount
of 8,000 euros, which were subject to withholding tax at 25%.
a) Calculate the amount of income tax expense of the company in year N and present the
record that was made regarding this tax on 31/12/N. If you are not able to determine
the proper amount, assume it to be 8,000 euros. (1 point)
Answer:
Computations:
6
b) Compute the net income of the company in year N, knowing that the income tax rate is
25%. (0.5 points)
Answer:
Computations:
c) Present that accounting record regarding the interest received in N. (1 point)

Part C
Account 245 – Social Security accounts payable presents a credit balance of 6,950 euros on
31/12/N which refers to social security amounts on the wages paid in December N. The
employees' wages were subject to IRS withholding tax at 10% and to social security taxes of 11%
and 23.75% regarding employees and the company, respectively. Determine the balance of
account 242 – Tax withholding accounts payable on 31/12/N knowing that it concerns solely to
the wages of December N. (1 point)
Answer:
Computations:
7
Group III (1.5 points)

Consider the following information obtained from a given company’s balance sheets as at
31/12/N-1 and 31/12/N:
31/12/N-1 31/12/N
Inventories 70,000 € 72,000 €
Accounts payable to suppliers 30,000 € 40,000 €
Furthermore:
 the services and supplies expenses in year N were of 40,000 euros;
 no inventories write-downs were ever recorded;
 the company is exempt of VAT;
 purchases of merchandise in year N were of 200,000 euros.
a) Determine the cost of goods sold in year N. (0.75 points)

Answer:
Computations:
b) Determine the payments to suppliers made by the company in year N and that should
be presented in the statement of cash flows of that year. (0.75 points)
Answer:
Computations:
8
Group IV (2.25 points)

The following information was obtained from company YYY’s financial investments, which uses
the Equity Method to value its only investment:
31/12/N-1 31/12/N
Assets
Investment in companies 110,000 € A=?
Owners equity
Equity method investment adjustments 0€ 6,000 €
Furthermore:
 the investment regards 80% of the shares of company ABC, in which establishment
company YYY participated in year N-1;
 In N-1, company YYY recognized a revenue of 10,000 euros, by crediting account 78 –
Other revenues and gains, regarding this investment;
 Except for net income and dividend distribution, the owners’ equity of ABC presented
no changes since its establishment.
a) Determine the amount recorded by company YYY in account 411 – Investment in

companies when ABC was established, in N-1. (0.3 points)
Answer:
Computations:
b) Determine the amount of share capital of company ABC. If you did not answer to the
previous question, assume that the amount invested by YYY was of 200,000 euros. (0.2
points)
Answer:
Computations:
9
c) Determine the amount of dividends received by company YYY in March N. (0.5 points)
Answer:
Computations:
d) The net income of ABC in year N was 18,750 euros. Present the appropriate accounting
records in the journal of company YYY on 31/12/N. (0.75 points)
e) Determine unknown A, i.e. the value of the investment in companies as at 31/12/N. (0.5
points)
Answer:
Computations:
10
Group V (2 points)

1. On 01/12/N a company issued an invoice for services that will be rendered in January
N+1. The amount of this invoice is 2,000 euros, plus VAT at 20%. Present the appropriate
accounting entries in year N regarding this invoice in the company that issued it. (0.75
points)
2. In November N+1, the same company will receive interest from the bank in the gross
amount of 2,400 euros, regarding the period from 01/11/N to 01/11/N+1, subject to
withholding tax at 25%. Present the appropriate accounting records in year N in the
journal of this company. (0.75 points)
3. Determine the amounts that this company shows in its balance sheet as at 31/12/N
regarding accruals and deferrals, identifying if they are assets or liabilities. (0.5 points)
Assets – accruals:
Assets – deferrals:
Liabilities – accruals:
Liabilities – deferrals:
11
Group VI (2.75 points)

a) Consider a company that trades sporting goods. The only transactions that occurred in
January N+1 are listed below. For each of them, state if a cash flow existed and, if so,
classify it in the proper activity and state its amount (clearly identifying if it is positive
or negative):
1. A credit note was issued to a customer regarding the granting of a trade discount in
the amount of 1,000 euros, plus VAT at 20%. (0.25 points)
A cash flow existed? (Yes or No)

If yes, of which activity? (Operating, Investing, Financing)
Cash flow amount:
2. A cash advance was received from a customer in the amount of 24,000 euros (VAT
included at 20%). (0.25 points)

Cash flow amount:
3. Cash purchase of diesel in the amount of 240 euros, with VAT included at 20%. The
VAT is 50% deductible and 50% non-deductible. (0.25 points)

Cash flow amount:
4. Cash sale of a computer equipment for the value of 5,000 euros, plus VAT at 20%. This
equipment had been purchased for 36,000 euros and had accumulated depreciation of
24,750 euros at the date of the sale. (0.25 points)

Cash flow amount:
12
b) Still regarding the described operations, knowing that the balance sheet as at 31/12/N
presented a debit balance in the account 243 – VAT of 1,000 euros and that the
company did not request a refund of VAT from the government, determine the
amount of VAT accounts receivable or payable as at 31/01/N+1, indicating if that item
is an asset or a liability. (0.75 points)
Amount:
Asset or liability?
Computations:
c) Present the accounting records of the computer sale described in point 4. (1 point)
13
QUADRO DE CONTAS / CHART OF ACCOUNTS

ACCOUNT
CÓDIGO CONTA ACCOUNT TITLE
CODE
11 CAIXA 11 CASH
12 DEPÓSITOS À ORDEM 12 CHECK DEPOSITS
13 DEPÓSITOS A PRAZO 13 TERM DEPOSITS
14 OUTROS INSTRUMENTOS FINANCEIROS 14 SHORT-TERM FINANCIAL INVESTMENTS
211 CLIENTES C/C 211 ACCOUNTS RECEIVABLE FROM CUSTOMERS
218 ADIANTAMENTOS DE CLIENTES 218 CASH ADVANCES FROM CUSTOMERS
219 PERDAS DE IMPARIDADES ACUMULADAS EM CLIENTES 219 ACCUMULATED ALLOWANCES FOR DOUBTFUL DEBTS FROM CUSTOMERS
221 FORNECEDORES C/C 221 ACCOUNTS PAYABLE TO SUPPLIERS
228 ADIANTAMENTOS A FORNECEDORES 228 CASH ADVANCES TO SUPPLIERS
241 IMPOSTO SOBRE O RENDIMENTO 241 INCOME TAX ACCOUNTS RECEIVABLE OR PAYABLE
242 RETENÇÕES DE IMPOSTOS E TAXAS 242 TAX WITHHOLDING ACCOUNTS PAYABLE
243 IVA 243 VAT ACCOUNTS RECEIVABLE OR PAYABLE
245 SEGURANÇA SOCIAL 245 SOCIAL SECURITY ACCOUNTS PAYABLE
251 EMPRÉSTIMOS BANCÁRIOS 251 BANK LOANS
252 LEASING FINANCEIRO 252 CAPITAL LEASE
26 ACIONISTAS 26 SHAREHOLDERS ACCOUNTS RECEIVABLE OR PAYABLE
271 ACRÉSCIMOS DE RENDIMENTOS 271 ACCRUED REVENUES
272 ACRÉSCIMOS DE GASTOS 272 ACCRUED EXPENSES
278 OUTRAS DÍVIDAS A RECEBER 278 OTHER ACCOUNTS RECEIVABLE
279 OUTRAS DÍVIDAS A PAGAR 279 OTHER ACCOUNTS PAYABLE
281 GASTOS DIFERIDOS 281 DEFERRED EXPENSES
282 RENDIMENTOS DIFERIDOS 282 DEFERRED REVENUES
29 PROVISÕES 29 PROVISIONS
321 MERCADORIAS 321 INVENTORIES - MERCHANDISE
329 PERDAS DE IMPARIDADES ACUMULADAS EM MERCADORIAS 329 ACCUMULATED WRITE DOWN IN INVENTORIES
411 INVESTIMENTOS FINANCEIROS 411 INVESTMENTS IN COMPANIES
419 PERDAS DE IMPARIDADES ACUMULADAS EM INV. FINANCEIROS 419 ACCUMULATED IMPAIRMENT (FINANCIAL INVESTMENTS)
421 PROPRIEDADES DE INVESTIMENTO 421 INVESTMENT PROPERTIES
428 DEPRECIAÇÕES ACUMULADAS DE PROP. DE INVESTIMENTO 428 ACCUMULATED DEPRECIATION (INVESTMENT PROPERTIES)
429 PERDAS DE IMPARIDADES ACUMULADAS EM PROP. DE INVESTIMENTO 429 ACCUMULATED IMPAIRMENT (INVESTMENT PROPERTIES)
431 ATIVOS FIXOS TANGÍVEIS 431 TANGIBLE FIXED ASSETS
438 DEPRECIAÇÕES ACUMULADAS EM AFT 438 ACCUMULATED DEPRECIATION (TANGIBLE FIXED ASSETS)
439 PERDAS DE IMPARIDADES ACUMULADAS EM AFT 439 ACCUMULATED IMPAIRMENT (TANGIBLE FIXED ASSETS)
441 ATIVOS INTANGÍVEIS 441 INTANGIBLE ASSETS
448 AMORTIZAÇÕES ACUMULADAS 448 ACCUMULATED AMORTIZATION (INTANGIBLE ASSETS)
449 PERDAS DE IMPARIDADES ACUMULADAS EM ATIVOS INTANGÍVEIS 449 ACCUMULATED IMPAIRMENT (INTANGIBLE ASSETS)
51 CAPITAL SOCIAL 51 SHARE CAPITAL
52 ACÇÕES PRÓPRIAS 52 TREASURY SHARES
53 OUTROS INSTRUMENTOS DE CAPITAL PRÓPRIO 53 OTHER EQUITY INSTRUMENTS
54 PRÉMIOS DE EMISSÃO 54 SHARE PREMIUM
55 RESERVAS 55 RESERVES
56 RESULTADOS TRANSITADOS 56 RETAINED EARNINGS / ACUMMULATED LOSSES
57 AJUSTAMENTOS DO MEP 57 EQUITY METHOD INVESTMENT ADJUSTMENTS
58 EXECEDENTES DE REVALORIZAÇÃO 58 REVALUATION SURPLUSES
59 OUTRAS VARIAÇÕES NO CAPITAL PRÓPRIO 59 OTHER CHANGES IN EQUITY
61 CUSTO DAS MERCADORIAS VENDIDAS E DAS MATÉRIAS CONSUMIDAS 61 COST OF GOODS SOLD
62 FORNECIMENTOS E SERVIÇOS EXTERNOS 62 SERVICES AND SUPPLIES EXPENSES
63 GASTOS COM O PESSOAL 63 SALARIES AND WAGES EXPENSES
64 GASTOS DE DEPRECIAÇÃO E DE AMORTIZAÇÃO 64 DEPRECIATION AND AMORTIZATION EXPENSES
65 PERDAS POR IMPARIDADE 65 IMPAIRMENT, ALLOWANCE AND WRITE DOWN EXPENSES
66 PERDAS POR REDUÇÕES DE JUSTO VALOR 66 FAIR VALUE LOSSES
67 PROVISÕES DO PERÍODO 67 EXPENSES WITH PROVISIONS OF THE PERIOD
68 OUTROS GASTOS E PERDAS 68 OTHER EXPENSES AND LOSSES
69 JUROS DE FINANCIAMENTOS 69 INTEREST EXPENSES
71 VENDAS 71 SALES
72 PRESTAÇÃO DE SERVIÇOS 72 SERVICES RENDERED
76 REVERSÕES DE IMPARIDADES E PROVISÕES 76 IMPAIRMENT, ALLOWANCE, WRITE DOWN AND PROVISIONS REVERSAL
77 GANHOS POR AUMENTOS DE JUSTO VALOR 77 FAIR VALUE GAINS
78 OUTROS RENDIMENTOS E GANHOS 78 OTHER REVENUES AND GAINS
79 JUROS E DIVIDENDOS RECEBIDOS 79 INTEREST REVENUES
811 RESULTADOS ANTES DE IMPOSTOS 811 INCOME BEFORE TAXES
812 IMPOSTO SOBRE O RENDIMENTO DO PERÍODO 812 INCOME TAX EXPENSE
818 RESULTADO LÍQUIDO 818 NET INCOME
14

EN - 2019-2020 Spring - Final Exam 22.05.2021

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EN - 2019-2020 Spring - Final Exam 22.05.2021

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Nova School of Business and Economics

22nd May 2021 135 minutes

Mark the right answer with a circle or with an “X”.

5. Consider the following information on company WWW:

6. In a given business sector, company A is more efficient in terms of cash management

Group II (7.5 points)

All final answers must be provided in wiseflow.

a) Determine the balance of account 321 – Merchandise as at 31/12/N. (1 point)

Description Debit account Credit account Amount

Description Debit account Credit account Amount

Description Debit account Credit account Amount

c) Present that accounting record regarding the interest received in N. (1 point)

Group III (1.5 points)

All final answers must be provided in wiseflow.

a) Determine the cost of goods sold in year N. (0.75 points)

Group IV (2.25 points)

All final answers must be provided in wiseflow.

a) Determine the amount recorded by company YYY in account 411 – Investment in

All final answers must be provided in wiseflow.

Group VI (2.75 points)

All final answers must be provided in wiseflow.

A cash flow existed? (Yes or No)

A cash flow existed? (Yes or No)

A cash flow existed? (Yes or No)

A cash flow existed? (Yes or No)

QUADRO DE CONTAS / CHART OF ACCOUNTS

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