Program : Academic

Damat Hotel and Business College of Degree Year: 2024

Distance Education
Assignment One

Course title – Intermediate Financial Accounting I

Submission Date:- _____________________

Full Name: -
ID No.:-
Department:-
Coordination Center: -
Part I: TRUE OR FALSE Questions (1 Point Each)
Instruction: If the statement is correct write letter A, if the statement is incorrect write letter B

1. Ownership of the goods passes to the buyer when the public carrier accepts the goods from the buyer.
2. Ownership of the goods remains with the seller until the goods reach the seller.
3. Inventory turnover measures the number of times on average the inventory is sold during the period.
4. IFRS permits revaluation of intangible assets (except for goodwill). GAAP prohibits revaluation of intangible
assets.
5. The accounting for plant asset disposals is essentially the same under GAAP and IFRS.
Part II: Multiple Choice Questions (1 Point Each)
Instruction: there are four alternative answers for each question. You should select only one
answer that you think is the best and then write the letter of your choice in BLOCK LETTER in the
spaces provided on the first page.
1. Goods in transit should be included in the inventory of the buyer when the:
A. Public carrier accepts the goods from the seller.
B. Goods reach the buyer.
C. Terms of sale are FOB destination.
D. Terms of sale are FOB shipping point.
2. The cost flow method that often parallels the actual physical flow of merchandise is the:
A. FIFO method.
B. Average cost method.
C. Gross profit method.
D. none of the above
3. Understating ending inventory will overstate:
A. Assets.
B. Cost of goods sold.
C. Net income.
D. Equity.
Damat Hotel and Business College of Distance Education
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 4. Which of the following should not be included in the inventory of a company using GAAP?
A. Goods held on consignment from another company.
B. Goods shipped on consignment to another company.
C. Goods in transit from another company shipped FOB shipping point.
D. None of the above.
5. Which method of inventory costing is prohibited under IFRS?
A. Specific identification.
B. FIFO.
C. LIFO.
D. Average-cost
6. Specific identification:
A. Must be used under IFRS if the inventory items are not interchangeable.
B. Cannot be used under IFRS.
C. Cannot be used under GAAP.
D. Must be used under IFRS if it would result in the most conservative net income.
7. Which of the following statements is correct?
A. Both IFRS and GAAP permit revaluation of property, plant, and equipment and intangible assets (except for goodwill).
B. IFRS permits revaluation of property, plant, and equipment and intangible assets (except for goodwill).
C. Both IFRS and GAAP permit revaluation of property, plant, and equipment but not intangible assets.
D. GAAP permits revaluation of property, plant, and equipment but not intangible assets.
8. Research and development costs are:
A. Expensed under GAAP.
B. Expensed under IFRS.
C. Expensed under both GAAP and IFRS.
D. None of the above.
9. Value-in-use is defined as:
A. Net realizable value.
B. Fair value.
C. Future cash flows discounted to present value.
D. Total future undiscounted cash flows.
10. The definition for plant assets for both GAAP and IFRS is essentially the same.
a. Both IFRS and GAAP follow the historical cost principle when accounting for property, plant, and
equipment at date of acquisition. Cost consists of all expenditures necessary to acquire the asset and
make it ready for its intended use.
b. Under both GAAP and IFRS, interest costs incurred during construction are capitalized. Recently,
IFRS converged to GAAP requirements in this area.
c. The definition for plant assets for both GAAP and IFRS is essentially the same.
d. All are the correct answer.

Damat Hotel and Business College of Distance Education

| Mobile: 0905515253/0905525354
E-mail: damattcollege@gmail.com P.O.Box: 29379 Addis Ababa, Ethiopia Telegram: Page 2
https://t.me/DamatHotelandBusinessCollege https://t.me/DamatHotelandBusinessCollegeሀ
”A Journey towards Excellence”
 Part III: Workout Questions (15 Points.)
Instruction: there are two workout questions. Attempt all the questions and show all the required steps and
computations clearly and neatly. The answers should be given on the separate lined paper you provided with.
1. ABC PLC has recorded of the following inventory information (7.5% marks )
January 1 inventory 200 units@ birr 9
January 10 purchase 300 unit @ birr 10
January 21 purchase 400 unit @ birr 11
January 30 purchase 100 units@ BIRR 12
ADDITIONAL INFORMATION
At end of the month the fiscal count shows that 300 unit are on hand the company use periodic as well as FIFO inventory method
Required:-
Task 1.1 what will be the cost of goods sold and inventory on hand
Task 1.2 assuming that selling price of birr 15 for the merchandise inventory, calculate the gross
profit of ABC company for the month June.
Task 1.3 the Company has incurred birr 2,500 general expense include birr 900 entertainment expense during the fiscal year, calculate the
business profit tax using 30% tax rate.
2. ABC Co. exchanged used trucks (original cost br64, 000 less br22, 000 accumulated depreciation) plus cash
of br17, 000 for a new semi-truck is?
Case 1. The used trucks had a fair market value of br26, 000.
Case 2. The used trucks had a fair market value of br56, 000.

Record disposal of assets (7.5%marks)

N.B: it a must to attaché this paper with your answers during submission!

Damat Hotel and Business College of Distance Education

| Mobile: 0905515253/0905525354
E-mail: damattcollege@gmail.com P.O.Box: 29379 Addis Ababa, Ethiopia Telegram: Page 3
https://t.me/DamatHotelandBusinessCollege https://t.me/DamatHotelandBusinessCollegeሀ
”A Journey towards Excellence”