Exit Exam for Accounting & Finance Question and answer pdf

Model Exam for Accounting & Finance

Exit Exam for Accounting & Finance  Question and answer pdf

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1. Which of the following statements is true for both governmental organizations and for-profit organizations?

1. a. Absence of owners.

 b. Lack of a profit motive.

c. Resources are provided by individuals and entities that may not directly benefit from the use of the resources.

d. Revenue may be earned through exchange transactions.

 Answer d

2. Assume that the sales revenue of ABC Share Company is Birr 10,000,000 during Tax Year ended Sene 30, 2014. Cost of goods sold was Birr 4,000,000 determined on the basis of the average cost method and expenses were Birr 1,000,000. operating expenses comprises of salary expense Birr 270,000, store rent expense of Birr 100,000, a 5%depreciation expense on a not fully depreciated Building with a cost of Birr 4,000,000, a penalty of Birr 40,000, an interest expense of Birr 190,000 on Birr 1,000,000 principal amount of loan where the

interest rate between National Bank of Ethiopia and Commercial Banks was 10%, and a donation of Birr 200,000 to help its sister Company recover from the fire damage on its working infrastructures. What is the amount of business tax liability of the Share Company?

a. Birr 1,533,000

b. Birr 1,629,000

c. Birr 1,500,000

d. Birr 1,593,000

Answer c

3. The City of Turkana arranged for a 10-year, Birr 40 million loan to finance construction of a toll En If the toll bridge is accounted for as an Enterprise Fund activity and a certain portion of the tolls collected is required to be set aside for maintaining the bridge, these resources should be accounted for in

a Capital Projects Fund

a Debt Service Fund

c. the General Fund

d. the Toll Bridge Enterprise Fund

Answer d

4. Which of the following adjustments do not occur in the consolidating process?

A. elimination of parent's retained earnings

B. .elimination of intra-company balances.

C. Elimination of the investment account.

D. Allocation of difference between implied and book values.

5. Which of the following statement is correct?

a. When sales journal is used, daily posting is made to control account and monthly posting of total is made to subsidiary ledger

 b. The combined balance of every account incredit customer's subsidiary ledger equals the balance of accounts Payable in the general ledger.

c. General journals are designed to record a single kind of transaction that occurs frequently.

d. Companies create subsidiary ledgers whenever they need to monitor the individual components of a controlling general ledger account.

6. Sharp Company uses specific identification method to value its inventory. It purchases Communication Radio on different dates at different costs as follows:

: January 5: 2units at a cost of Birr 2,000 3,February 8: 3 units at a cost of Birr 3,000June 10: 5 units at a cost of Birr 4,000On June 25, 6 units are sold at Birr 5,000 each. From

the items sold, 3 units are from February 8's

purchase and 3 units are from June 10" purchase.The amount of cost of goods sold and ending

inventory as of June 30 are and respectively

A. Birr 21,000 and Birr 12,000.

B. Birr 12,000 and Birr 21,000

C. Birr 17,000 and Birr 16,000

Birr 30,000 and Birr 20,000

7. A products standard cost card specifies that a unit of the product requires 4 direct labor-hours. During

September, 3,350 units were made, which was 150units less than budgeted. The total budgeted i -,

labor cost for September was Birr 117,600. The direct labor cost incurred during September was Birr

111,850 and 13,450 direct labor-hours were worked.The direct labor efficiency variance for the month was

:a. Birr 415.80 Unfavourable

b. Birr 420.00 Favourable

c. Birr 420.00 Unfavourable

d. Birr 415.80 Favourable

8. Refer to the following lease amortization schedule.

The five payments are made annually starting with

the beginning of the lease. A Birr2,000 purchase

option is reasonably certain to be exercised at the

end of the five-year lease. The asset has an

expected economic life of eight years.Lease | Cash Effective Decrease in OutPayment | Payment in birrInterest in birrBalance in birrBalance in birr34,600

1 | 8,000 7? 2? 26,600

2 | 8,000 2,660 | 5,340 21,260

3 8,000 2126 5,874 15,386

4 | 8,000 | 1,539 | 6,461 | 8,925

5 | 8,000 | 7? | 7? 76 2,000 182 1,818 0What would be the amount of interest expense

recorded with payment 5?

a. Birr 893

b. Birr 7,107.

c. Birr 2,000.

d. Birr 1,107.

9. Company uses process costing system in weighted average method. Records for department

1 shows the following for March 2022:Beginning Work in process , 80% complete as to

Conversion cost.....5,000Units stared in

March... nse 20000Ending work in process, 25% complete as to

Conversion cost............8,000Beginning work in process inventory cost:MEENA! ven anna DIN 20.000

Conversion COST... cere een 60,000

Costs in March:Material... co cevverirsrscnens ens seen BIT 34,000

Conversion COSt.....ccvevnmnvcvccnsrncnnennne. 12,000All material is added at the start of the process and

all finished products are transferred out. What is the

cost per equivalent unit of production for material

and conversion cost?a. Birr 1.70 and 5.30 respectively

 b. Birr 1.80 and Br 5.50 respectively

c. Birr2.70 and 6.6 respectively

d. Birr 2.20 and 5.40 respectively

10. At the beginning of the year, a company purchases a

patent for Birr 2,400,000. The remaining legal life of-the patent is 12 years, but management estimates that the patent will generate additional revenue for the next 16 years because there are currently no known competitors. At the end of the first year, 3,

management calculates straight-line amortization tobe Birr 150,000. Which of the following statements

Is correct?

a. Management should not amortize the asset

until its useful life becomes more evident.

b. Management's calculation is correct.

C. Management should amortize the asset

over 12 years.

d. Management should amortize the asset

11. Creditors and investors would generally find the

statement of cash flows least useful for assessing

the:

a. Ability to generate future cash flows.

b. Financial position at a point in time

c. Quality of earnings.

d. Ability to pay dividends

12. Which of the following is FALSE?

a. Organizations use audited financial

statement to reduce information risk

b. Internal auditors independence is

maintained by organizational structure

c. Audit is classified as internal & external

based on the type of information audited

d. The value of assurance depends on the

independence of the assurance provider

13. Which of the following is a characteristic of a joint

venture?

a. Debt incurred by the venture is reported the venturers’ statement of financial

position.

b. The initial carrying value reported must

equal the book value of resources

contributed.

c. The partners all jointly share in managing

and controlling the venture.

d. The partners can be individuals, but cannot

be businesses

14. What is the major source of revenue for an insurance company?

a. Interest income

b. Insurance premiums

c. Salvaged.

d. Rental income

15. According to the acquisition method of accounting for business combinations, costs paid to

and accountants for services in arranging a merger

should be:H

a. Included in recognized goodwill

b. Capitalized as part of the overall fair value

acquired in the merger

.c. Written off over a 5-year maximum useful

life.

d. Recorded as an expense in the period the

merger takes place.

16. The contribution margin ratio always increases

when the

a. Break-even point decreases

b. Variable expenses as a percentage of net

sales increase

c. Variable expenses as a percentage of net

sales decrease

d. Break-even point increases

17. On January 1, 2022, Bright light Hotel purchased a

walking machine for Birr 30,000. The machine 4

estimated useful life of five years and has a residual of Birr 5,000. The company uses double declining balance method. What will be the amount

of depreciation expense for the year ending December 31, 20227?

a. Birr12,000

b. Birr 25,000

c. Birr 5,000

d. Birr 10,000

18. A corporation acquires new funds only when its 3,

securities are sold in the :

a. Secondary market by a securities dealer

b. Primary market by a stock exchange broker.

c. Primary market by an investment bank.

d. secondary market by a commercial bank

19. Which of the following statements is FALSE about

partnership business?

a. Ina partnership business, an asset

contributed by one partner is jointly owned

by all.

b. A partnership business is similar to a sole

proprietorship business except in the number of owners

.c. In a general partnership there should be at

least one limited partner.

d. When a partnership is not solvent, creditors

can claim recovery from personal assets of

Partners

20. In case of property held under an operating lease

and classified as investment property:

a. The entity has to account for the

investment property under the cost model

only.

b. The entity needs only to disclose the fair

value and can use the cost model

.c. The entity has the choice between the cost

model and the fair value model.

d. The entity has to use the fair value model

Only

21. Which of the following is not a revenue source for

the Regional Governments of Ethiopia

a. Profit and sales tax collected from

individual traders

b. Taxes collected on income from air, train

and marine transport activities

c. Rural land use fee.

d. Taxon income from inland water

22. Before 3 years, HH Company issued 10,000, Birr 100

par value ordinary shares at Birr 120 per share. The

following transactions occurred during the current

year:October 1: Purchased 2,000 shares for the

treasury at Birr 90 per share.December 5: Sold 1,000 treasury shares at Birr

95 per share.December 31: Dividend of Birr 45,000 is

declared.Based on the above information, which of the

following is correct?

a. Dividend per share is Birr

b. Treasury stock account is credited for Birr

120,000

C. Dividend per share is Birr 4.5

d. Cash is debited by Birr 120,000.

23. Hubo Company manufactures card tables. The

company has a policy of maintaining a finished

goods inventory equal to 40% of the next month's

planned sales. Each card table requires 3 hours of

labor. The budgeted labor rate for the coming year is

Birr 13 per hour. Planned sales for the months of

April, May, and June are respectively 4,000; 5,000;

and 3,000 units. The budgeted direct labor cost for

June for Hubo Company is Birr 136,500. What are

budgeted sales for July for Hubo Company?

a. 3,750 units

b. 4,000 units

c. 3,500 units

d. 4,250 units

24. An impairment loss is

a. The amount by which the carrying amount of an asset exceeds its market value.

b. The amount by which the recoverableamount of an asset exceeds its carrying Amount

c. The amount by which the carrying amount of an asset exceeds its recoverable amount.

d. The amount by which the recoverable amount of an asset exceeds its written down value.

25. A business has acquired a special purpose machine

at a cost of Birr 100,000. After it is purchased it is

known that it was unwise to buy this item. No

amount of regret can relieve the firm from this

decision and there is no any future decision that can

avoid this cost. What is the appropriate

classification for this cost?

a. Management cost

b. Period cost

c. Sunk cost

 d. Uncontrollable cost

26. Which of the following is part of the analytical-procedures applied to assess the likelihood of

material misstatements in depreciation expense and

accumulated depreciation?

a. Examine vendor invoice for additions.

b. Compare depreciation expense divided by

gross equipment cost with previous years

c. Examine for classification errors such as

expending assets

 d. Perform physical inventory of fixed assets

27. Assuming that the ideal measure of short-term receivables in the statement of financial position is the discounted value of the cash to be received in the future, failure to follow this practice usually doesn't make the statement of financial position misleading because

a. The allowance for uncollectible accounts includes a discount element

b. The amount of the discount is not material

c. Most short-term receivables are not

interest-bearing

d. Most receivables can be sold to a bank or

factor.

28. Which of the following may be used by managers to discourage unnecessary use of service of a support department by user departments?

a. Prohibiting user departments from using service of support departments

b. Allocate support department costs based upon user department usage

c. Allocate a fixed amount of support department costs to each department regardless of use

d. Not allocate any support department costs to user departments

29. Which of the following actions would be likely to shorten the cash conversion cycle?

a. Change the credit terms offered to customers from 3/10 net 30 to 1/10 net 50.

b. Adopt a new manufacturing process that speeds up the conversion of raw materials to finished goods from 20 days to 10 days.

c. Adopt a new manufacturing process that saves some labor costs but slows down the conversion of raw materials to finished goods from 10 days to 20 days

d. Begin to take discounts on inventory purchases; we buy on terms of 2/10 net 30.

30. Which one of the following is most apt to align management's priorities with shareholders’ interests?

a. Paying a special management bonus on every fifth year of employment. Compensating managers with company shares that must be held for a minimum of

three years

b. Increasing the number of paid holidays that long-term employees are entitled to receive

d. Holding corporate and shareholder meetings at high-end resort-type locations preferred by managers

31. Which of the following transactions involving the issuance of shares does not come within the definition of a share-based payment?

a. Employee share purchase plans.

b. . Employee share option plans

c. . Share-based payment relating to an Sai acquisition of a subsidiary.

d. Share appreciation rights

32. Your firm is considering investing in one of two mutually exclusive projects. Project A requires an initial outlay of Birr 3,500 with expected future cashflows of Birr 2,000 per year for the next three years.Project B requires an initial outlay of Birr 2,500 with

expected future cash flows of Birr 1,500 per year for

the next two years. The appropriate discount rate for

your firm is 12% and it is not subject to capital

rationing. Assuming both projects can be replaced

with a similar investment at the end of their

respective lives, compute the NPV of the two chain

cycle for Project A and three chain cycle for Project. Birr 5,000 and Birr 1,500

b. Birr 2,232 and Birr 857

c. Birr 3,528 and Birr136

d. Birr2,865 and Birr 94

 The following cost information is taken from

Chereka textile firm:Cost of Cotton used in production during the

period.............. 600,000Factory supervisors

 100000 Cost incurred for factory labour converting

cotton in to tape...... 300,000Factory overhead cost other than indirect

labour...............................80,000Based on the above information, what is the

amount of prime cost?

a. Birr 600,000

b. Birr900,000

c. Birr480,000H

d. Birr400,000

33. All of the following are examples of temporary book-tax differences except:

a. Contingent liabilities

b. Product warranty costs

c. Depreciation

d. Payment of premiums for life insurance

34. Western PLC uses periodic inventory system. The following balances were taken from its accounting record;*

Merchandise inventory balance as of March 1,2023 neon Birr 400,000« Merchandise inventory balance as of March 31, 2023.............. Birr 150,000« Purchase during the8 1=1¢ [0 FONT Birr 510,000» Purchase 10,0008ce sieres eos seus onetasons ores shove ousasems soraeos Birr 5,000

The cost of merchandise sold is:

a. Birr 250,000 b. Birr 760,000

c. Birr 750,000 d. Birr 745,000

35. The auditor wants to examine whether shipping documents are properly billed. He selected 100 shipping documents from a population of 1,000 shipping documents and performed examination. 5unbilled shipping documents were found. If the tolerable deviation rate is 4%, which one of the following is FALSE?

a. The auditor needs to modify audit opinion

b. The auditor needs to test alternative

controls to achieve the objective

c. The auditor needs to extend substantive

Procedures

36. The repayment of bond principal should be reported

in the fund statements of a debt service fund as

a. A reduction of bonds payable

b. An expenditure

c. Direct charge to fund balance

d. An “other financing

37. Which of the following is FALSE about public debts

A. lts one source of financing budget deficit.

b. Public debt raised for productive purpose will not be a burden on the economy.

c. lt can only be used to promote economic development not to finance wars.

d. Public debt may be raised to meet the normal current expenditure, exigencies like war, finance productive government enterprise, finance public social welfare and economic development

38. On November 30, year 1, Star, Inc. purchased for cash at Birr 15 per share all 250,000 shares of the outstanding common stock of Green Co. At November 30, year 1, Green's statement of financial position showed a carrying amount of net assets of Birr 3,000,000. At that date, the fair value of Green'sproperty, plant and equipment exceeded its carrying amount by Birr 400,000. In its November 30, year 1 consolidated statement of financial position, what amount should Star report as goodwill?

a. Birr400,000

b. Birr 350,000

c. Birr 750,000

d. Birr

39. Accounts and notes receivable are reported in the current assets section of the statement of financial position at

:a. Lower-of-cost-or-net realizable value

b. Net realizable value

c. Net book value

d. Invoice cost

40. The variance that is BEST for measuring operating performance is the

:a. static-budget variance

b. sales-volume variance

c. selling-price variance

d. flexible-budget variance

41. Substantive procedures to examine the cut-off assertion for accounts payable include

a. Selecting a sample of vouchers and agreeing them to authorized purchase orders

b. . Re-computing the mathematical accuracy of a sample of vendor invoices

c. Selecting a sample of receiving reports around year-end and comparing dates on related vouchers to dates in the purchases Journal

d. Selecting a sample of vouchers and agreeing them to the purchases journal

42. Which of the measurement bases identified in the

Conceptual Framework of IPSASB for liabilities will

often be the relevant measurement basis for

liabilities?

a. Cost of release

b. Historical cost

c. Assumption price

d. Cost of fulfillment

43. Bonds are

A. sold to finance the construction of a new

public safety station.

B. Bond proceeds equal to the

face value of the bonds are reported in a Capital

44. Projects Fund as

:a. arevenue

b. deferred inflow of resources

c. other financing source

d. other financing

45. which of the following funds, would a government be least likely to record its annual

budget and thereby integrate it into its accounting

system?

a. Special revenue fund

b. General fund

c. Capital project fund

d. Enterprise fund

46. Which one of the following is FALSE about perpetual

inventory system?

a. FIFO cost of goods sold will be the same as

in a periodic inventory system

.b. Average costs are computed as a simple

average of unit costs incurred.

c. Inventory records continuously show

balances that should be on hand

.d. Cost of goods sold is determined after each

sale.

47. The primary purpose of deposit insurance is to

a. Protect bank employees from Unemployment

b. Protect bank shareholders against losses.

c. Prevent banking panics.

d. d. Improve the flow of information to investors.

48. Parent Inc. and Sub Inc. had the following balances on July 31, 2022:Parent Inc.Sub Inc.Sub Inc.carrying value in carrying value in fair value Birr in

Cash 180,000 36,000 36,000

Accounts Receivable 100,000 40,000 40,000

Inventory 60,000 24,000 27,000

Plant and Equipment net200,000 80,000 93,000

Goodwill i 8,000

Trademark ~ 12,000 15,000

Total Assets | 540,000 200,000

Current Liabilities | 80,000 50,000 50,000

Bonds Payable | 320,000 20,000 24,000

Ordinary Shares | 90,000 80,000

Retained Earnings | 150,000 50,000

Total Liabilities and Equity | 540,000 200,000Assuming that Parent Inc. acquires 100% of Sub Inc.

on August 1, 2022 for cash of Birr 135,000, what

would be the amount of goodwill or a gain from

bargain purchase or negative goodwill appearing on

the Consolidated financial statements on the date of-acquisition if the identifiable net assets INA or partial goodwill method were used?

a. Birr2,000

b. Birr2,000

c. Bir7,000

d. Birr7,000‘

49. Lower-of-cost-or-net realizable value as it applies to

inventory is best described as

:a. The method of determining cost of goods

Sold

.b. The assumption to determine inventory

flow.

c. The reporting of a loss when there is a

decrease in the future utility below the

original cost.

d. The change in inventory value to net

realizable value.

50. Typically, borrowers have superior information relative to lenders about the potential returns and

risks associated with an investment project. The difference in information is called:

a. Moral selection.

b. Risk sharing.

c. Adverse hazard.

d. Asymmetric information.

51. Which of the following is not true about maturity

matching financing approach:

a. It minimizes the risk that the firm will be unable to pay off its maturing obligations

b. Exact maturity matching is difficult as there is uncertainty about the lives of assets and

as some common equity must be used

c. Maturity matching seeks to avoid financing

long-term assets with long-term borrowing.

d.It matches asset and liability maturities.

52. ABC Company is considering replacing a machine,

The following data are available:Old Machine Replacement Machine

Original cost Birr 45,000 Birr 35,000

Useful life in 10 a

years

Current age in years 5 0

Book value Birr 25,000 -

Disposal value Birr 8,000 -

now

Disposal value in 5 0 0

years Annual cash operating Birr 7,000 Birr 4,000

costs The difference between keeping the old machine

and replacing the old machine is:

a. Birr 37,000 in favour of keeping the old

Machine

b. Birr 37,000 in favour of replacing the old

Machine

c. Birr 12,000 in favour of keeping the old

Machine

c. Birr 12,000 in favour of replacing the old machine

53. Which of the following statements is correct?

a. We should use historical measures of the

component costs from prior financing that

are still outstanding when estimating a

company's WACC for capital budgeting

Purposes

b. A firm's cost of retained earnings is the rate

of return stockholders require on a firm's

common stock

.c. In the WACC calculation, we must adjust

the cost of preferred stock for tax

d. The cost of new equity Could possibly

be lower than the cost of retained earnings

Rsif the market-risk premium, risk-free

rate, and the company’s beta all decline by a

sufficiently large amount.

54. Rice Industries owns a manufacturing plant in a

foreign country. Political unrest in the country

indicates that Rice should investigate for possible

impairment. Below is information related to the

plant's assets Birr in millions:Book value

Birr 190Undiscounted sum of future estimated cash

flows 210Present value of future cash flows

175Fair value less cost to sell determined by

appraisal180The amount of impairment loss that Rice should

recognize is:

a. There is no impairment. b. Birr 10 million c. Birr 20 million d. Birr 15 million

55. You own two annuities that will each pay Birr 500 a

month for the next 12 years. One payment is

received at the beginning of each month while the

other is received at the end of each month. Ata

discount rate of 7.25%, compounded monthly, what

is the difference in the present values of these

annuities?

a. Birr 289.98

b. Birr 299.01

c. Birr 265.42

d. Birr 308.00

56. Which of the following principle may reduce or entirely eliminate auditor liability to a client?

a. Client constructive negligence

b. Client contributory negligence

c. Auditor ordinary negligence

d. Auditor gross negligence

57. X has control over the composition of Y's board of directors. X owns 49% of Y and is the largest

shareholder. X has an agreement with Z, which owns 10% of Y, whereby Z will always vote in the same way as X. Can X exercise control over Y?

a. can exercise control solely because it has an agreement with Z for the voting rights to

be used in whatever manner X wishes.

b. X cannot exercise control because it can control only the makeup of the board and

not necessarily the way the directors’ vote.H

c. X cannot exercise control because it owns

only 49% of the voting rights.

d. X can exercise control because it controls more than 50% of the voting power, and it

can govern the financial and operating policies of Y.

58. Slick Co. had a Swiss franc receivable resulting from exports to Switzerland and a Mexican peso payable resulting from imports from Mexico. Slick recorded foreign exchange gains related to both its franc receivable and peso payable. How did the foreign currencies increase or decrease in Birr value from the date of the transaction to the settlement date?

a. Decrease Franc, Increase Peso

b. Decrease Franc, Decrease Pesoc

c. Increase Franc, Increase Peso

d. Increase Franc, Decrease Peso

59. JJ manufacturing uses process costing system with two departments: Department A and Department B.It uses weighted average method. Which of the following is correct to compute cost per equivalent unit for a given cost component?

a. Current period cost divided by EUP

b. Current period cost plus the cost of beginning inventory divided by EUP

c. .Current period cost plus the cost of ending inventory divided by EUP

d. Current period cost less the cost of beginning inventory divided by EUP

60. Central City was awarded two state grants during its fiscal year ending September 30, 2020: a Birr 2 million block grant that can be used to cover any operating expenses incurred during fiscal 2021, and a Birr T million grant that can be used any time to acquire equipment for its police department. For the year ending September 30, 2020, Central City should recognize in grant revenue in its fund financial statements in millions:

a. Birr 2 million

b. Birr0

c. Birr 1 million

d. Birr 3 million

61. Which one of the following tasks in NOT part of the

recording process?

a. Entering transactions in a journal

b. Analysing transactions

c. Posting journal entries

d. Preparing an income statement

62. High dividends may increase stock values due to all

of the following reasons except:

a. dividends are more certain than capital Gains

b. higher dividends allow companies to increase their proportion of external equity

Financing

c. dividends are used as a tool to minimize agency costs

d. higher dividends are used to signal higher expected future earnings

63. The principal lender-savers in a financial system are:

a. Governments.

b. Foreigners.

c. Households.

d. Businesses.

64. Which of the following is least likely to cause uncertainty about the ability of an entity to continue as a going concern?

a. The entity has significant recurring operating losses

b. The entity has a court case with competitor for a minor patent infringement

c. The entity has working capital deficiencies

d. The entity has lost a major customer

65. Which of the following is commonly traded in the money market

a. Preferred shares

b. Treasury note

c. Government bond

d. Treasury bills

66. VW When agricultural produce is harvested, the harvest should be accounted for by using IAS 2, Inventories, or another applicable International Accounting Standard. For the purposes of that Standard, cost at the date of harvest is deemed to be :

a. Its fair value less estimated point-of-sale costs at point of harvest.

b. The historical cost of the harvest.

c. The historical cost less accumulated Impairment losses.

d. Market value.

67. The amortized cost method of accounting for investments is not applicable to:

a. Trading equity instruments.

b. Available-for-sale debt instruments.

c. Held-to-maturity debt instruments.

d. Trading debt instruments.

68. Which of the following is correct?

A. Shareholders’ equity account is credited by authorized shares multiplied by par value.

B. As compared to other form of businesses

C. its difficult to raise funds in share companies

D. .Declaration of all types of dividend reduces

cash balance.

E. Dividend payable is recorded on the date of

declaration of dividend

69. Hope Bank purchased a special Copier machine. The machine, costs Birr 340,000, and was estimated to have a useful life of 10 years. The estimated residual value is Birr 40,000. After two years of service it became evident that the copier machine's total useful life is 7 years instead of 10 years. Depreciation was recorded for two years based on straight line method. There is no change on estimated residual value. Based on this information,

what is the new annual depreciation charge on the

basis of the revised estimated useful life?

a. Birr 56,000

b. Birr 52,000

c. Birr42,500

d. Birr 30,000

70. In 2021, Cupid Construction Co. CCCbegan work

on a two-year fixed price contract project. CCC

recognizes revenue over time according to

percentage of completion for this contract, and

provides the following information birr in millions:Accounts receivable, 12/31/2021 from construction

progress billings Birr 75Actual construction costs incurred in

2021 Birr 270Cash collected on project during

2021 Birr 210Construction in progress,

12/31/2021 Birr

414Estimated percentage of completion during 2021

60%How much cash remains to be collected by CCC on

the project?

a. Birr 140 million.

b. Birr 405 million.

c. Birr 480 million

.d. Cannot be determined from the given

Information

71. Which of the following is not one of the five classes of transactions included in the sales and collection cycle?

a. Write-off of noncollectable accounts

b. Bad debt expense

c. Sales returns and allowances

D. Interest income

72. Which one of the following is not an insurance risk?

a. A possible change in a non-financial variable that is specific to a party to the contract.

b. Failure of a debtor to make a payment when it is due.

c. Loss of property due to damage or theft

d. A possible change in a non-financial variable that is not specific to a party to the

Contract

73. All of the following are advantages of indirect tax over direct tax except

a. In the case of indirect tax, the tax burden is distributed on different sections of the society in a just and equitable manner

b. Indirect tax has wider scope than direct tax

c. Tax evasion is relatively difficult in the case of indirect tax as taxes are included in the prices of commodities.

d. Indirect taxes are more convenient to the taxpayers than direct

74. which of the following items should be accounted for in an Agency Fund when a special assessment project is financed by issuing special assessment debt for which the government is not obligated in any manner?

a. The debt service transactions.

b. The capital assets constructed or acquired.

c. The bond proceeds and construction costs.

d. The long-term debt issued.

75. At the end of the year, after adjusting and closing entries, the Overvaluation of Branch Inventory

account on the home office books will contain:

a. The unrealized profit on branch sales for the Year

b. The markup on the branch's beginning inventory plus the markup on this year's shipments to the branch.

c. The markup on the branch's ending inventory less the markup on the branch's beginning inventory.

d. The markup on the branch's ending inventory.

76. Which of the following is not a legal requirement on Category 'B' tax payers:

a. Maintain accounting records

b. Submit the Tax Declaration Form to the tax

authority within 2 months from the end of

the tax year.

c. Use registered vouchers

d. Submit Balance st and a profit & loss

statement

77. Which of the following is correct about activity

based costing?

a. It tends to allocate too great a proportion of

overheads to high volume products

b. It allocates equal amount of overheads to all products

c. It assume that all products consume all resources in proportion to their production Volumes

d. Assign costs to a product on the basis of the product's consumption of the activities

78. A competitor has sued an entity for unauthorized use of its patented technology. The amount that the entity may be required to pay to the competitor if the competitor succeeds in the lawsuit is determinable with reliability, and according to the legal counsel it is less than probable but more than remote that an outflow of the resources would be needed to meet the obligation. The entity that was sued should at year-end ____

a. Make no provision or disclosure and wait

until the lawsuit is finally decided and then

expense the amount paid on settlement, if

any.

b. Make a disclosure of the possible obligation in the footnotes to the financial

Statements

.c. Set aside, as an appropriation, a contingency reserve, an amount based on the best estimate of the possible liability.

d. Recognize a provision for this possible obligation.‘

79. A company purchases a one-year insurance policy on June 1 for Birr 5,520. The adjusting entry on December 31 is

a. debit Insurance Expense, Birr 2,760, and credit Prepaid Insurance, Birr 2,760

b. debit Prepaid Insurance, Birr 5,520, and credit Cash, Birr 5,5207

c. debit Insurance Expense, Birr 3,220, and credit Prepaid Insurance, Birr 3,220

d. debit Insurance Expense, Birr 2,300, and credit Prepaid Insurance, Birr 2,300

80. Abebu is an employee in one of the factory owned by the government in Ethiopia. Her monthly salary is Birr 2,600. She has a taxable allowance of Birr 300 and a non-taxable allowance of Birr 200. She earned an overtime of Birr 100. What is the amount of tax deducted from Abebu's earning?

a. Birr277.50

b. Birr 247.50

c. Birr300

d. Birr 307.50

81. Assume that two parties structure a joint

arrangement in an incorporated entity entity Cin

which each party has a 50 per cent ownership

interest. The purpose of the arrangement is to

manufacture materials required by the parties for

their own, individual manufacturing processes. The

arrangement ensures that the parties operate the

facility that produces the materials to the quantity

and quality specifications of the parties.

Assessment of the relevant facts and circumstances

indicate that the arrangement is a:

 a. Joint vehicle.

b. Joint venture.

c. Joint structure.

d. Joint operation.‘

82. Which of the following is not among the responsibilities of an auditor?

a. Detecting direct-effect illegal acts

b. Performing an audit with an attitude of professional skepticism

c. Maintaining adequate internal control System

d. Detecting material misstatements in the financial statement

83. The additional incentive that a buyer of a Treasury security requires to buy a long -term security rather than a short-term security is called

a. Term premium.

b. Risk premium.

c. Market premium.

d. Tax premium.

84. The function of buying securities from a corporation at a predetermined price and then reselling them in the market by an investment bank is called

a. Advising

b. Underwriting.

c. Distributing.

d. Undertaking.

85. The “excess of the acquirers interest in the net fair

value of acquire identifiable assets, liabilities, and

contingent liabilities over cost” formerly known as

negative goodwill should be:

a. Carried as a capital reserve indefinitely.

b. Amortized over the life of the assets

acquired.

c. Recognized immediately in profit or loss.

d. Recognized in retained earnings.

86. A Company is planning its operations for the coming

year, and the CEO wants you to forecast the firm's

additional funds needed AFN. The firm is

operating at full capacity. Data for use in the

forecast are shown below. However, the CEO is

concerned about the impact of a change in the pay-

out ratio from the 10% that was used in the past to

50%, which the firm's investment bankers have

recommended. Based on the AFN equation, by how

much would the AFN for the coming year change if

the Company increased the pay-out from 10% to the

new and higher level? All Birrs are in millions.Last year's sales SpBirr 300.0 Last year's accounts payable Birr 50.0

Sales growth rate g40% Last year's notes payable Birr 15.0

Last year's total assets Ag*Birr 500.0 Last year's accruals Birr 20.0

Last year's profit margin PM20.0% Initial pay-out ratio 10.0%

a. Birr31.9

b. Birr 33.6

7c. Birr35.3

d. Birr 37.0

87. A Company issues its annual financial reports within

one month of the end of the year. This is an example

of which enhancing quality of accounting

Information

d. Timeliness

a. Relevance

b. Confirmatory value

c. Verifiability

88. Which of the following procedures is not performed

as a part of planning an audit engagement?

a. Performing analytical procedures

 b. Reviewing the working papers of the prior Year

c. Confirmation of all major accounts

d. Designing an audit program

89. On March 31, Bora Company has the following information about cash at bank:Cash balance per bank statement Birr 10,500 Credit memo Birr 4,000Bank debit memo Birr 300.Outstanding checks Birr 1,500Deposits in transit Birr 1,200 Based on the above information, what is the amount of the adjusted cash balance per bank statement at March 31

a. Birr11,700

b. Birr 14,500

c. Birr 10,800

d. Birr10,200

90. On January 1, 2022, Star Ethiopian coffee exporter,shipped $120,000 worth of inventory to its main U.S. distributor, with full payment of these goods due by February 28, 2022. Star has a January 31 year end. A list of significant dates and exchange rates is shown below. Transaction Date: January 1, 2022 US $1 = Birr 59.332Year-End Date: January 31, 2022 US $1 = Birr 59.384Settlement Date: February 28, 2022 US $1= Birr 59.540The invoice price billed by Star was US $120,000. What is the amount of Star's foreign exchange gain or loss at year-end?

a. foreign exchange gains or losses are deferred to settlement birr

b. 24,960 gain

c. Birr 6,240 gain

d. Birr 6,240 loss

91. The main purpose for establishing a code of conduct for professionals is to:

a. Enable users to evaluate by themselves the quality of professional services

b. Guarantee that all members of the profession perform at the same level of competence

c. Protect members of the profession from being sued for substandard work

D. Demonstrate acceptance of responsibility to the interests of those served by the Profession

92. If one is able to fully diversify, what is the appropriate measure of risk to use?

a. Beta

b. Standard Deviation

c. Expected Return

d. Risk-free Rate of Return

93. Elizabeth, a public limited company, has granted 100 share appreciation rights to each of its 1,000 employees in January 20X4. The management feels

that as of December 31, 20X4, 90% of the awards

will vest on December 31, 20X6. The fair value of

each share appreciation right on December 31,

20X4, is Birr10. What is the fair value of the liability

to be recorded in the financial statements for the

year ended December 31, 20X47?

a. Birr 10 million

b. Birr100,000

c. Birr300,000

d. Birr90,000‘

94. The auditor tests entity policy of obtaining credit approval before shipping goods to customers to

support which of the following management

assertions?

a. Completeness

b. Valuation or allocation

c. Rights and obligations. Existence or occurrence

95. Which of the following method can help the auditor

to reduce non-sampling risk?a. Reducing supervision

b. Increasing sample size

c. Careful design of audit procedures Using a representative sample

96. Relevant costs of a make-or-buy decision include all

of the following EXCEPT:

a. Current direct material costs of the part.

b. Material-handling costs that can be eliminated.

c. Special machinery for the part that has no resale value.

d. Fixed salaries that will not be incurred if the part is outsourced.

97. The accounting equation shows

a. The equality of resources with sources

b. The equality of net income with net loss.

c. The equality of asset with owner's equity

d. . The equality of revenue with expense

98. Last year a small-firm had sales of Birr 205,000,

assets of Birr 127,500, a profit margin of 5.3%, and

an equity multiplier of 1.2. The finance manager

believes that the company could reduce its assets

by Birr 21,000 without affecting its profit margin.

Had it reduced its assets in this amount, and had the

debt ratio, sales, and profit margin remained

constant, by how much would the ROE havechanged?a. 2.22%

b. 1.81%

c. 2.44%

d. 2.02%

99. V M&M Proposition | with taxes is based on the

concept that’

:a. The optimal capital structure is the one that

is totally financed with equity

.b. The value of the firm increases as total debt

increases because of the interest tax shield.

c. The weighted average cost of capital increases as the debt-equity ratio of a firm

increases.

d. The capital structure of the firm does not

matter because investors can use

homemade leverage.

100. The basic principle used to value an asset acquired

in a non monetary exchange is to value it at:

a. Fair value or book value, whichever is smaller.

b. Book value of the asset given.

c. Fair value of the assets given up.

d. The book value of the asset given plus any cash or other monetary consideration

received

Answers.

1. The correct answer is d) Revenue may be earned through exchange transactions. Both governmental organizations and for-profit organizations can earn revenue through exchange transactions. In both cases, they can receive funds or resources in exchange for goods, services, or other valuable assets. This revenue can then be used to support their operations and fulfill their objectives.

2. To calculate the business tax liability of the Share Company, we need to determine the taxable income first. Taxable income is calculated by subtracting allowable expenses from the sales revenue.

Sales Revenue: Birr 10,000,000

Cost of Goods Sold: Birr 4,000,000

Expenses: Birr 1,000,000

Taxable Income = Sales Revenue - Cost of Goods Sold - Expenses

               = Birr 10,000,000 - Birr 4,000,000 - Birr 1,000,000

               = Birr 5,000,000

Now, we need to calculate the business tax liability based on the taxable income. The tax rate for business tax in Ethiopia is 30%.

Business Tax Liability = Taxable Income * Tax Rate

                      = Birr 5,000,000 * 0.30

                      = Birr 1,500,000

Therefore, the amount of business tax liability for the Share Company is c) Birr 1,500,000.

3. If the toll bridge is accounted for as an Enterprise Fund activity and a certain portion of the tolls collected is required to be set aside for maintaining the bridge, these resources should be accounted for in d) the Toll Bridge Enterprise Fund. An Enterprise Fund is a type of fund used to account for activities that are primarily financed and operated in a manner similar to a private business. Since the tolls collected are specifically designated for maintaining the bridge, they should be accounted for in the Toll Bridge Enterprise Fund to ensure proper tracking and management of these resources.

4. The correct answer is A) elimination of parent's retained earnings. In the consolidating process, the parent's retained earnings are not eliminated. Instead, they are combined with the subsidiary's retained earnings to calculate the consolidated retained earnings.

5. The correct statement is option B) The combined balance of every account in the credit customer's subsidiary ledger equals the balance of accounts Payable in the general ledger. In a subsidiary ledger, individual accounts are maintained for each customer or supplier, and the combined balance of these individual accounts should match the balance of the corresponding control account in the general ledger.

6. To determine the cost of goods sold and ending inventory, we need to calculate the cost of the units sold and the remaining units in inventory.

The cost of the units sold can be calculated as follows:

3 units from the February 8 purchase: 3 units * Birr 3,000 = Birr 9,000

3 units from the June 10 purchase: 3 units * Birr 4,000 = Birr 12,000

Total cost of goods sold = Birr 9,000 + Birr 12,000 = Birr 21,000

The ending inventory consists of the remaining units:

2 units from the January 5 purchase: 2 units * Birr 2,000 = Birr 4,000

5 units from the June 10 purchase: 5 units * Birr 4,000 = Birr 20,000

Total ending inventory = Birr 4,000 + Birr 20,000 = Birr 24,000

Therefore, the correct answer is C) Birr 17,000 for the cost of goods sold and Birr 16,000 for the ending inventory.

7. To calculate the direct labor efficiency variance, we need to compare the actual labor hours worked with the standard labor hours allowed for the actual production.

Standard labor hours allowed = Standard labor hours per unit * Actual units produced

Standard labor hours allowed = 4 direct labor-hours per unit * 3,350 units = 13,400 labor-hours

The direct labor efficiency variance is calculated as:

Direct labor efficiency variance = Standard labor hours allowed - Actual labor hours worked

Direct labor efficiency variance = 13,400 labor-hours - 13,450 labor-hours = -50 labor-hours

8. To calculate the interest expense recorded with payment 5, we need to determine the interest portion of the payment and subtract it from the total payment.

In the lease amortization schedule, the interest portion of each payment is calculated as the beginning balance multiplied by the interest rate. The beginning balance for payment 5 is Birr 1,818, and the interest rate is not provided in the given information.

Since the interest rate is missing, we cannot calculate the exact interest expense recorded with payment 5. Therefore, none of the options provided (a, b, c, d) can be determined as the correct answer.

9. To calculate the cost per equivalent unit of production for material and conversion cost, we need to determine the total cost incurred and the equivalent units of production.

The total cost incurred for material is the sum of the beginning work in process inventory cost and the costs in March: Birr 20,000 + Birr 34,000 = Birr 54,000.

The total cost incurred for conversion cost is the sum of the beginning work in process inventory cost and the costs in March: Birr 60,000 + Birr 12,000 = Birr 72,000.

The equivalent units of production for material can be calculated as the units started in March plus the ending work in process units multiplied by their respective degree of completion: 20,000 + (8,000 * 25%) = 22,000 equivalent units.

The equivalent units of production for conversion cost can be calculated in the same way: 20,000 + (8,000 * 25%) = 22,000 equivalent units.

To calculate the cost per equivalent unit of production, we divide the total cost incurred by the equivalent units of production for each cost component:

Cost per equivalent unit of production for material = Birr 54,000 / 22,000 = Birr 2.45 (rounded to two decimal places).

Cost per equivalent unit of production for conversion cost = Birr 72,000 / 22,000 = Birr 3.27 (rounded to two decimal places).

Therefore, the correct answer is none of the options provided. The cost per equivalent unit of production for material is Birr 2.45, and for conversion cost, it is Birr 3.27.

10. The correct answer is c. Management should amortize the asset over 12 years.

Even though the legal life of the patent is 12 years, management estimates that it will generate additional revenue for 16 years due to the absence of competitors. However, the generally accepted accounting principle is to amortize the asset over its legal life, which is 12 years in this case. Management's estimate of additional revenue beyond the legal life does not affect the amortization period.

11. The correct answer is c. Quality of earnings.

The statement of cash flows provides information about the cash flows of a company, including its operating, investing, and financing activities. While creditors and investors may find the statement of cash flows useful for assessing the ability to generate future cash flows and the ability to pay dividends, it is least useful for assessing the quality of earnings. The quality of earnings is better evaluated through the income statement, which shows the company's revenues, expenses, and net income.

12. The correct answer is b. Internal auditors' independence is maintained by organizational structure.

This statement is false. The independence of internal auditors is maintained through their reporting lines and their ability to perform their duties objectively and without interference from management. Organizational structure alone does not ensure independence. The internal audit function should have a reporting line that allows for independent and objective reporting.

13. The correct answer is a. Debt incurred by the venture is reported on the venturers' statement of financial position.

In a joint venture, the debt incurred by the venture is reported on the financial statements of the venturers, not the venture itself. Each venturer recognizes its share of the joint venture's assets, liabilities, revenues, and expenses in its own financial statements.

14. The correct answer is b. Insurance premiums.

The major source of revenue for an insurance company is insurance premiums. Insurance companies collect premiums from policyholders in exchange for providing insurance coverage and assuming the risk of potential losses. Premiums are the primary source of income for insurance companies.

15. The correct answer is d. Recorded as an expense in the period the merger takes place.

Costs paid to lawyers and accountants for services in arranging a merger are recorded as expenses in the period the merger takes place. These costs are not capitalized as part of the overall fair value acquired in the merger or included in recognized goodwill. They are considered transaction costs related to the merger and are expensed as incurred.

16. The correct answer is b. Variable expenses as a percentage of net sales increase. The contribution margin ratio is calculated by subtracting variable expenses from net sales and dividing the result by net sales. If variable expenses increase as a percentage of net sales, it means that the contribution margin decreases. Therefore, the contribution margin ratio would decrease, not increase.

17. The correct answer is a. Birr 12,000. To calculate the depreciation expense using the double declining balance method, we first need to determine the annual depreciation rate. The formula for this method is (2 / useful life) x straight-line depreciation expense. In this case, the straight-line depreciation expense would be (30,000 - 5,000) / 5 years = Birr 5,000 per year. The annual depreciation rate would then be (2 / 5) x 5,000 = Birr 2,000. To find the depreciation expense for the year ending December 31, 2027, we need to apply this rate for each year, starting from January 1, 2022. Therefore, the calculation would be 2,000 x 6 years = Birr 12,000.

18. The correct answer is c. Primary market by an investment bank. A corporation acquires new funds when its securities are sold in the primary market by an investment bank. The primary market is where new securities are issued and sold for the first time. Investment banks play a crucial role in underwriting and distributing these securities to investors.

19. The correct answer is c. In a general partnership, there should be at least one limited partner. This statement is false. In a general partnership, all partners are typically general partners, meaning they have unlimited liability for the partnership's debts and obligations. Limited partners, on the other hand, have limited liability and are not actively involved in the management of the partnership. Therefore, in a general partnership, there are no limited partners.

20. The correct answer is b. The entity needs only to disclose the fair value and can use the cost model. In the case of property held under an operating lease and classified as investment property, the entity has the option to choose between the cost model and the fair value model for accounting purposes. However, regardless of the chosen model, the entity is required to disclose the fair value of the investment property in the financial statements.

21. The correct answer is d. Tax on income from inland water. Tax on income from inland water is not a revenue source for the Regional Governments of Ethiopia. The other options mentioned, such as profit and sales tax collected from individual traders, taxes collected on income from air, train, and marine transport activities, and rural land use fee, are revenue sources for the Regional Governments of Ethiopia.

22. The correct answer is c. Dividend per share is Birr 4.5. To calculate the dividend per share, we need to divide the total dividend declared (Birr 45,000) by the number of outstanding shares before the treasury stock transactions (10,000 shares). Therefore, the calculation would be 45,000 / 10,000 = Birr 4.5 per share.

23. The correct answer is d. 4,250 units. To determine the budgeted sales for July, we need to calculate the finished goods inventory for June and use it as the basis for July's planned sales. The finished goods inventory for June can be calculated as 40% of July's planned sales, which is 3,000 units. Therefore, the finished goods inventory for June is 3,000 x 0.4 = 1,200 units. Since the finished goods inventory for June is the beginning inventory for July, we add it to the planned sales for July, which is 3,000 units. Therefore, the budgeted sales for July will be 3,000 + 1,200 = 4,200 units.

24. The correct answer is c. The amount by which the carrying amount of an asset exceeds its recoverable amount. An impairment loss occurs when the carrying amount of an asset (the amount at which it is recorded on the balance sheet) exceeds its recoverable amount (the higher of its fair value less costs of disposal or its value in use). When an impairment loss is recognized, the carrying amount of the asset is reduced to its recoverable amount.

25. The correct answer is c. Sunk cost. A sunk cost is a cost that has already been incurred and cannot be recovered or changed by any present or future decision. In this case, since the decision to acquire the special purpose machine has already been made and there is no way to avoid or change the cost, it is considered a sunk cost. Sunk costs are not relevant for decision-making since they are in the past and cannot be changed.

26. b. Compare depreciation expense divided by gross equipment cost with previous years.

27. c. Most short-term receivables are not interest-bearing.

28. b. Allocate support department costs based upon user department usage

29. a. Change the credit terms offered to customers from 3/10 net 30 to 1/10 net 50.

30. b. Compensating managers with company shares that must be held for a minimum of three years

31. c. Share-based payment relating to an Sai acquisition of a subsidiary.

32. a. Birr 5,000 and Birr 1,500

33. c. Depreciation

34. d. Birr 745,000

35. a. The auditor needs to modify audit opinion

36. a. A reduction of bonds payable

The answer to question 37 is B:

A. lts one source of financing budget deficit. - This is true, public debt is used to finance budget deficits.

b. Public debt raised for productive purpose will not be a burden on the economy. - This is FALSE. All public debt is a burden on the economy, even if it is used for productive purposes.

c. lt can only be used to promote economic development not to finance wars. - This is false. Public debt can be used to finance wars as well as economic development.

d. Public debt may be raised to meet the normal current expenditure, exigencies like war, finance productive government enterprise, finance public social welfare and economic development - This is true.

So the FALSE statement is B: Public debt raised for productive purpose will not be a burden on the economy.

38. c

39. b

40. d

41. b Substantive procedures to examine the cut-off assertion for accounts payable would include selecting a sample of vendor invoices and agreeing them to the purchases journal, not authorized purchase orders. Re-computing the mathematical accuracy of a sample of vendor invoices is a substantive procedure.

42. d For liabilities, the relevant measurement basis identified in the Conceptual Framework of IPSASB will often be cost of fulfillment, not cost of release, historical cost, or assumption price..

43. c When bonds are issued, the proceeds equal to the face value of the bonds are reported as an other financing source, not revenue or deferred inflow of resources

44. B defferd inflow of resources

45. C A government is least likely to record its annual budget in the general fund, since that fund is used for day-to-day operations. Special revenue, capital project, and enterprise funds are more likely to include budgetary accounting.

46. B The statement that FIFO cost of goods sold will be the same as in a periodic inventory system is false regarding perpetual inventory systems. Perpetual systems track costs on an ongoing basis, while periodic systems do an inventory count only periodically

47.

47. c. Prevent banking panics.

48. b. Birr 2,000 (positive goodwill).

49. c. Reporting a loss when there is a decrease in the future utility below the original cost.

50. d. Asymmetric information.

51. c. Maturity matching seeks to avoid financing long-term assets with long-term borrowing.

52. c. Birr 12,000 in favor of keeping the old machine.

53. d. The cost of new equity could possibly be lower than the cost of retained earnings if the market-risk premium, risk-free rate, and the company's beta all decline by a sufficiently large amount.

54. b. Birr 10 million.

52. c. Birr 12,000 in favor of keeping the old machine.

53. d. The cost of new equity could possibly be lower than the cost of retained earnings if the market-risk premium, risk-free rate, and the company's beta all decline by a sufficiently large amount.

54. b. Birr 10 million.

55. a. Birr 289.98

56. c. Auditor ordinary negligence

57. d. X can exercise control because it controls more than 50% of the voting power, and it can govern the financial and operating policies of Y.

58. a. Decrease Franc, Increase Peso.

59. b. Current period cost plus the cost of beginning inventory divided by EUP.

60. a. Birr 2 million.

61. b. Analyzing transactions.

62. b. Higher dividends allow companies to increase their proportion of external equity financing.

63. c. Households.

64. b. The entity has a court case with a competitor for a minor patent infringement.

65. d. Treasury bills.

66. b. The historical cost of the harvest.

67. a. Trading equity instruments.

68. E. Dividend payable is recorded on the date of declaration of dividend.

69. b. Birr 52,000.

70. a. Birr 140 million.

71. d. Interest income.

72. b. Failure of a debtor to make a payment when it is due.

73. a. In the case of indirect tax, the tax burden is distributed on different sections of the society in a just and equitable manner.

74. c. The bond proceeds and construction costs.

75. c. The markup on the branch's ending inventory less the markup on the branch's beginning inventory.

76. d. Submit Balance sheet and a profit & loss statement.

77. d. Assign costs to a product on the basis of the product's consumption of the activities.

78. b. Make a disclosure of the possible obligation in the footnotes to the financial statements.

79. a. debit Insurance Expense, Birr 2,760, and credit Prepaid Insurance, Birr 2,760.

80. a. Birr 277.50.

81. d. Joint operation.

82. c. Maintaining adequate internal control system.

83. a. Term premium.

84. b. Underwriting.

85. c. Recognized immediately in profit or loss.

86. a. Birr 31.9.

87. d. Timeliness.

88. c. Confirmation of all major accounts.

89. c. Birr 10,800.

90. a. Foreign exchange gains or losses are deferred to settlement.

91. D. Demonstrate acceptance of responsibility to the interests of those served by the profession.

92. B. Standard Deviation.

93. C. Birr 300,000.

94. C. Rights and obligations. Existence or occurrence.

95. C. Careful design of audit procedures using a representative sample.

96. D. Fixed salaries that will not be incurred if the part is outsourced.

97. A. The equality of resources with sources.

98. c. 2.44%.

99. b. The value of the firm increases as total debt increases because of the interest tax shield.

100. c. Fair value of the assets given up