Section A -Multiple choice equations

Choose the best answer from the give alternatives and write your answer on the space provide in the separate
answer sheet
1. The amount of the net loss of the company in the six column work sheet is extended to :-
A. Income statement debit side & balance sheet credit side
B. Income statement debit side & balance sheet debit side
C. Income statement credit side & balance sheet credit side
D. Income statement credit side & balance sheet debit side
2. On December 31, the cash account of ABC Company had a normal balance of birr 30,000. During
December, the account with debited for a Total of Birr 20,000 and credited for a total of Birr 18,000.
What must have been the balance in the Cash account on December 1?
A. A Birr 28,000 debit balance C. A Birr 32,000 credit balance
B. A Birr 28,000 credit balance D. A Birr 32,000 debit balance
3. On April, 30,2012 a one year insurance policy was purchased for birr 12,000 that will be renewed every
year coverage to begin Immediately . What the amount of prepaid insurance that would appear on the
balance sheet of the company’s financial statements for the year ended December, 31, 2012.
A. Birr 4,000 C. Birr 12,000
B. Birr 8,000 D. Birr 5,000
4. The financial statement shows the financial progress of the business within the accounting period.is
A. Balance sheet C. Cash Flow statements
B. Retained Earnings statement D. Income statement
5. Which of the following is not essentially the characteristic of taxation?
A. It is a compulsory levy
B. It provides for non proportionate return or benefit
C. It helps in financing government activities
D. It is an illegal collection
6. Assets in the statement of financial condition for in individuals reported at
A. Cost C. Estimated cost
B. Lower of cost or market D. Market value
7. A corporation financial statement do not report cents amount. This is an example of the application of
which of following concepts?
A. Business entity C. Consistency
B. Going concern D. Materiality
8. Types of loan granted for a period over night to a maximum of fourteen days:
A. Cash credited C. Over draft facility
B. Money at call D. Term loan
9. A payment of cash for the purchase of merchandise would be recorded in
A. Purchase journal C. Cash journal
B. Sales journal D. Purchase discount journal

10. The controlling account in the general ledger that summarizes the debits and credits to the individual
customers in the subsidiary ledger in credit entitled:
A. Account payable D. Purchase
B. Account Receivable
C. Sales
11. The balance in unearned rent at the end of period represents:
A. An asset C. A Revenue
B. A Liability D. An Expense
12. What is the maturity value of 90 -days, 12% for 100,000
A. 88,000 C. 103000
B. 100000 D. 112000
13. The end of the fiscalyear before accounts are adjusted account receivable has a balance of birr 400,000
and allowance for doubtful account has a credit balance 5,000? If the estimated of uncollectable

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 accounts
A. 5,000
determine by against receivable is 17,000, the current portionC.to be
17,000
made for uncollectable
accounts
B. 12,000
expenses will be D. 400,000

14. A credit may signify

A. An increase in asset account C. A Decrease in liability
B. A Decrease in asset account D. A Decrease in Capital account
15. The payment of cash for your client for thesettlement of purchase on account would be
recorded by a:
A. Debit for cash and credit for account receivable
B. Debit for account receivable and credit for cash
C. Debit for account payable and credit cash
D. Debit for cash and credit for account payable
16. The properties owned by a business enterprise are
A. A Capital C. Assets
B. Owner’s Equity D. Liabilities
17. In a business transaction the first occurrence can be recorded in the book of accounts is
A. Journal C. Payment journal
B. Ledger D. Receipt journal
18. Assume that you have 6,000 Euro in your hand. What is the equivalent amount of it in USD
if the exchange for a Dollar is birr 20 and for a Euro is birr 25?
A. 7,500 USD C. 12,000 USD
B. 4,800 USD D. 15,000 USD

SECTION A-MACHAING TYPE QUESTIONS

Mach the appropriate words or phrases listed under column “B” with the appropriate description or
definition stated under column “A” and blacken the letter of your choice in the space provided in the
space provided.Note that you can use a word or phrase list under column “B” only once.
Column B
Column A A. Used to keep accurate data records
____________1. Mutual Agency B. Account Receivable
____________2. System Design C. Payment Instrument
_____________3. In direct tax D. Partnership
_____________4. Botch E. Stamp Duty
_____________5. Ledger F. Salary Payable
_____________6. Visa Card G. Used to improve business performance
_____________7. Cash H. Granted for fixed period of time
_____________8. L/C (Letter of Credit) I. Small team
_____________9. Credit Memos J. Original Book
_____________10, SWOT Analysis K. Divided income tax
_____________11. Direct tax L. Helps to protect from fraud/corruption
_____________12. Maintain quality M. Secondary Book
Documentation _____________ 13. Accrued N. The customer is to be debited
Expense O. Needs the involvement of issuing and
advisory banks
P. Agroup of journal
Q. Credit card
R. Most liquid assets

Section B -Multiple choice equations

Choose the best answer from the give alternatives and write your answer on the space provide in the separate
answer sheet
1. A profit ---making business that is a separate legal entity and in which ownership is divided in
shares of stock is Known as a

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 A. Sole proprietorship C. Partnership
B. Single proprietorship D. Corporation
2. The properties owned by a business enterprise are called:
A. Assets C. Stockholders’ equity
B. Liability D. Owner’s equity
3. A list of asset increase and owner’s equity of a business entity as of a specific date
A. A balance C. A statement of owner’s equity
B. An income statement D. A retained earnings statement
4. If total assets increase $ 20,000 during liabilities increase by $ 12,000 during the same period. The
amount and direction (increase or decrease of the period’s change in owner’s equity is:
A. $ 32,000 Increase C. $ 8,000 Increase
B. $ 32,000 Decrease D. $ 8,000 Decrease
5. If revenue was $ 45,000, expense were $ 37,500, and the owner’s withdrawals were 10,000, the
amount of net income or not loss was:
A. $45,000 net income C. $37,500 net loss
B. $7,500 net income D. $2,500 net loss
6. A Debit may signify C. A Increase in a liability
A. An Increase in an asset account
account D. An increase in the owner’s
B. A Decrease in a asset account capital account
7. The type of account with a normal credit balance is :
A. A asset C. A revenue
B. A drawing D. An Expense
8. The current asset category would include:
A. Cash C. Supplies on hand
B. Account receivable D. All of the above
9. The receipt cash from customers in the payment of their account their account would be recorded :
A. Debit to cash ;Credit to account C. Debit to cash; Credit to Account Payable
receivable D. Debit to Account Payable ; Credit to
B. Debit to Account receivable ; Credit to cash
cash
10. The form listing the balance and the titles of the accounts in the ledger on a given :
A. Income statement C. Retained earnings statement
B. Balance Sheet D. Trail Balance
11. If supplies account before adjustment on May, 3 indicated a balance of $ 2,250 Inventory of
supplies on hand May 31, Totaled $ 950, the adjusting entry would be :
a. Debit supplies $950;Credit Supplies Expanse $950
b. Debit supplies expense $2,250;credit supplies $ 2,250
c. Debit supplies $1,300; credit supplies expanse $ 1,300
d. Debit supplies expanse $1,300; credit supplies $ 1,300
Section c -Multiple choice equations
1. In the business transaction first accurate can be recorded in a book of
A. Journal C. Ledger
B. Payment Journal D. Receipts journal
2. Proprieties owned by business
A. Asset C. Liabilities
B. Capital D. Revenue
3. Assume that you have 500 ERUO in your hand what is the equivalent amount USD if USD is
birr 18 for EURO 24 birr
A. 666.6/USD C. 5833.33USD
B. 500 USD D. 120.00 USD
4. Post closing trail balance may include which one of the account:
A. Sales B. Account Receivable

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 C. Salary Expense D. Interest Expense
5. Goods and document are examined in accordance with legislative requirement it need bank
Permit base on CBE directive this:
A. To have principle legislative certificates
B. Related to import and export activity
C. Regulation declaration of tax
D. Internal control system
6. Payment of cash for settlement of purchase on account would be recorded :
A. Cash debit C. Account Payable debit
B. Account payable credit D. Account Receivable credit
7. Credit may Signify
A. Increase an Assets C. Decrease in Assets
B. Decrease in liability D. Decrease in Capital
8. Salary expanse has a credit balance of birr 10,000 on hamle beginning of period reversing
entries posted but before any transaction occurred the balance represent:
A. Assets C. Liability
B. Revenue D. Expense
9. What is the Maturity Value 90- day, 12% for
A. 9,000 C. 103,000
B. 5,000 D. 3,500
10. Before adjusting entry account receivable has a balance of birr 400,000 allowance for doubtful
account has birr 5,000 if. Estimated uncollectable account determine by against receivable is
birr17,000, the current portion to be made uncollectable account expense
A. 15,000 C. 12,000
B. 5,000 D. 400000
11. One of the following not closed the end of the accounting fiscal period
A. Expense C. Revenue
B. Income summary D. Liability
12. Minor amount of mone, to replenish the company activity
A. Change fun B. Petty cash
C. Capital receipt journal D. Cash receipt journal
13. Sales or purchase is recorded in which financial report.
A. Income statement C. Balance sheet
B. Trail balance D. Cash flow
14. Controlling account that summarize the balance of each customer is.
A. Account payable C. Account receivable
B. Merchandise inventory D. Income summary
15. Which of the following does not need journal
A. Note collected and bank service charge
B. Non sufficient fund
C. Deposit in transit
D. Service charge
SECTION D -MULTIPLE CHOICE EQUATIONS
Choose the best answer from the following alternative gives:
1. Which of the following reconciling item necessary entry in the depositors records
A. Bank charge and note collecting by
B. Deposit in transit and outstanding checks
C. Deposit in transit and bank service charge
D. Errors made by bank outstanding checks
2. One of the following forms is not permanent work

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 A. General ledger C. Journal
B. Work sheet D. Balance sheet
3. The debit and credit column of an income statement the work sheet are Birr 65,000 and
90,000 respectively if the credit total of the balance sheet is Birr 110,000 than what will
be the credit total of the balance net income net loss is recorded
A. Br 135,000 C. Br 85,000
B. Br 165,000 D. Br 50,000
4. Which of the following accounts will appear in post closing trial balance of adjusting?
A. Drawing C. Salary expense
B. Sales revenue D. Accumulated depreciation
5. Which of the following is/are not external user are of accounting of information
A. Ethiopia revenue and customer Authority
B. Potential investors
C. Creditor
D. Sales manager

6. The form which list an account with it a respective balance for policy
A. Income statement C. Trial balance
B. Income summary D. Balance sheet
7. If the appropriate adjusting entries for accrued sales
A. Asset for the period will over state
B. Liabilities for the period will period will under state
C. Expense for the period will overstate
D. Equity for the period will understate
8. A nominal sum of money established as change fund
A. Change fund C. Petty cash
B. Cash shortage D. Cash overage
9. Which of the following journal used to account payable and
A. Cash journal
B. Sales journal
C. Payment journal
D. General journal
10. Which of the following are cash and cash equivalent
A. Bank draft and note receivable
B. CPO (cash payment order) and prepayment
C. Check and book draft
D. CPO and bond
11. System or merchandise to recovering and collect bad debts
A. Legal action and letter of notes
B. Allow purchase discount and return goods
C. Third party intervention to allow sales discount
D. Letter with clients to allow purchase discount
12. A card which is used to effect payment or withdraw money in real by accessing the card
holders deposit account and function only if there is sufficient fund balance
A. Credit card C. Locality card
B. Debit card D. Withdrawal card
13. An electronic banking out let
A. ATM (Automatic Teller Machine)
B. POS (point of sales)

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 C. Automatic seller machine
D. Credit card
14. Trader who can accept card as payment tools in exchange a for the products the balance to
the card holder
A. The issuer C. The merchant
B. The acquire D. The card association
15. One of the following is internal user of accompany
A. The creditor C. Employees and trade union
B. Owners D. The production manager
16. Statement that reports the operating results of a company
A. Income statement C. Capital statement
B. Balance sheet D. Cash flow statement
17. The following data are taken from E company, liabilities birr 90,000 and assets 3 X of
capital calculate asset and capital
A. Asset Birr 90,000 and capital Birr 46,000
B. Asset Birr 45,000 and capital birr 120,000
C. Asset Birr 135,000 and capital Birr 45,000
D. Asset Birr 90,000 and capital Birr 120,000
18. If the revenue will be Birr 90,000 expense was Br45,000 and the owner withdrawal br.
20,000 what is the amount net income or loss?
A. Net income Birr 90,000
B. Net income Birr45,000
C. Net loss Birr 75,000
D. Net loss Birr 5,000
19. One of the following is the controlling account of customer account
A. Account payable
B. Bank account
C. Account receivable
D. Bank statement
20. Which one of the following is need to bank reconciliation
A. Check the depositor balance with customer account
B. Check the depositor balance with bank finance
C. Check bank balance with withdrawals
D. Check the account it self
21. In the corporation company claim two factors total in
A. Rating earning and withdrawal
B. Dividend and retain earning
C. Asset and withdrawal
D. Withdrawal and dividend
SECTION D -MACHAING TYPE QUESTIONS

COLUMN A 8. Method of communication

9. Spread sheet
1. Balance sheet 10. Income summary account to close
2. Retain earning 11. Expense account
3. Coaching and monitoring 12. Complete documentation
4. Performance measurement 13. Specific need of customer
5. Promotion 14. Plan speared sheet
6. Feedback 15. Formula
7. Sales tax

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 H. Corporation
I. Freight in and out
COLUMN B J. Speaking to group
A. Controlling improvement K. Software function
B. Plan information L. Consumer
C. Provide maintenance of problem M. Automatic functional software
solving N. Capital
D. Business entity concept O. Percentage
E. Monitor and evaluation work place P. Related service process and
learning recorded
F. Security equipment Q. culture
G. Source of document R. Sales
SECTION E -MULTIPLE CHOICE EQUATIONS
1. Kaizen refers to
a. Slipping back to former practice
b. Digressing to less efficient practice
c. Give less attention to documentation and concentrate on production
d. Initiating and institutionalize change and improvement
2. Which one of the following data is used to diagnosis business performance
a. Market change d. Pricing policy of the
b. Revenue organization
c. Break even data’s e. All
3. Which one of the following is not the component of S.W.O.T analysis
a. Internal capability and staff capacity
b. External opportunities and competition economy
c. Poor technology and international economy
d. Governance investments policy
e. None of the above
4. Which one of the following is not the primary source of information for market research
a. Data from existing client
b. Data from prospective clients
c. Data from trade association journal and magazine
d. Data from customer interview
5. What dose team work mean
a. To work well with other c. To communicate well
b. To work hard d. To work using soft skill
6. What is not an important factor in team work
a. The team must not help the team member
b. The team must receive external support and encouragement
c. The team must have a result driven structure
d. The team must have a principle leadership
7. Which technology do you use to prepare report
a. Scanner c. Computer
b. Photocopier d. Printer
8. Work place communication can cause of all of the following EXCEPT
a. Increase workplace productivity c. Lower job turnover
b. Increase job satisfaction d. Better overall training
9. What is the function of automated teller machine (ATM)
a. To make loan more accessible to customer

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 b. To protect the financial right of the people
c. To give service to people at any place and time
d. To calculate interest on loan by customer
10. The Ethiopian employment income tax signifies
a. Progressive tax system c. Regressive tax system
b. Proportional tax system d. None of the above
11. Which one of the following is not element of principle of taxation
a. Equity c. Certainty
b. Marginality d. Neutrality
12. Fixed assets purchase at a cost of 50,000 birr with salvage value of 10,000 birr is expected
to use for ten year. What will be the amount of accumulated depreciation balance at the end
ofthird year
a. 4,000 c. 12,000
b. 5,000 d. 15,000
13. Which one of the following is correct when petty cash is replenished
a. Debit expense and credit to cash at bank
b. Debit petty cash and credit to cash at bank
c. Debit to expense and credit to petty cash
d. Cash short and over account will be credited when there is cash short
14. Teshager plc. Sell 40 units of packed product for br. 35 each including VAT what is the
amount of VAT liability to be paid to ERCA by teshager plc.
a. 1,400 c. 182.61
b. 1217.39 d. 24.35

15. Account Receivable Accounts has a balance of100,000 birr and Allowance for doubtful
account as a balance of 7,000 birr the expected realizable value of the Account Receivable
is
a. 93,000 c. 100,000
b. 7,000 d. 17,000
16. Which one of the following is notthe source document for payment
a. Invoice c. Payroll
b. Purchase requisition d. Trial balance
17. Abebe received cash transfer of 520 USD from abroad. What is the amount of cash received
in Ethiopian birr (exchange rate: 1EURO=23.50 and 1 EURO= 1.30 USD)
a. 9,400 c. 676
b. 12,220 d. 10,400
18. Which one of the following is not continuous improvement tools
a. Balanced score card c. Financial report
b. Bench marks and standard d. Performance measurement
19. Which one of the following is not much important to improve business performance
a. Check and ensure the suitability of organization structure
b. Review and development of objectives
c. Concentration on sally routine tasks
d. Market positioning and competitor analysis
20. Relevant legislation from all levels of government that may affect business operation
include all EXCEPT
a. Anti-discrimination legislation c. Financial legislation
b. Ethical principle d. Religious/spiritual principle

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 21. Account receivable account has a balance of br. 200,000 and allowance for dubtfull account
has a credit balance of br. 2,500. If the estimates of uncollectable account expense is br
8,500. What is the amount of current provision for uncollectable account expense
a. 2,500 c. 8,500
b. 6,000 d. 200.000

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