Principles of Accounting exam
Instructions – PLEASE READ THEM CAREFULLY
- The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.
- Assignments submitted through email will not be accepted.
- Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page. Do not forget highlighting the answers.
- Students must mention question number clearly in their answer.
- Late submission will NOT be accepted.
- Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.
- All answered must be typed using Times New Roman (size 12, double-spaced) No pictures containing text will be accepted and will be considered plagiarism).
- Both the straight-line depreciation method and the double-declining-balance depreciation method:
Produce the same total depreciation over an asset’s useful life
B. Produce the same depreciation expense each year
C. Produce the same book value each year
D. Are acceptable for tax purposes only - Total asset turnover is calculated by dividing:
Gross profit by average total assets
B. Average total assets by gross profit
C. Net sales by average total assets
D. Average total assets by net sales
E. Net assets by total assets - The total cost of an asset less its accumulated depreciation is called:
Historical cost
B. Book value
C. Present value
D. Current (market) value - Which of the following is a method that allocates an equal portion of the total depreciable cost for a plant asset to each unit produced is called:
Accelerated depreciation
B. Declining-balance depreciation
C. Straight-line depreciation
D. Units-of-production depreciation
E. Modified accelerated cost recovery system (MACRS) depreciation
- At end of the day, the cash register’s record shows $155, but the count of cash in the cash register is $150. The correct entry to record the cash sales for the day is:
| Cash | 150 | |
| Sales | 150 |
B.
| Cash | 155 | |
| Sales | 155 |
C.
| Cash | 150 | |
| Cash over and short | 5 | |
| Sales | 155 |
D.
| Cash | 155 | |
| Sales | 150 | |
| Cash over and short | 5 |
- A machine that originally had an estimated useful life of 8 years, but after 3 complete years, it was decided that the original estimate of useful life should have been 10 years. At that point the remaining cost to be depreciated should be allocated over the remaining:
2 years
B. 5 years
C. 7 years
D. 12 years
E. 10 years - Which of the following is an Amortization:
Is the systematic allocation of the cost of an intangible asset to expense over its estimated useful life
B. Is the process of allocating to expense the cost of a plant asset to the accounting periods benefiting from its use
C. Is the process of allocating the cost of natural resources to periods when they are consumed
D. Is an accelerated form of expensing an asset’s cost.
- Khaled’s company had a machine destroyed by fire. The machine originally cost $120,000. The accumulated depreciation on it was $60,000. The proceeds from the insurance company were $90,000. The company should recognize:
A loss of $25,000
B. A gain of $25,000
C. A loss of $65,000
D. A gain of $30,000
E. A gain of $90,000
- Land improvements are:
Assets that increase the usefulness of land and like land, are not depreciated
B. Assets that increase the usefulness of land, but that have a limited useful life and are subject to depreciation
C. Included in the cost of the land account
D. Expensed in the period incurred
- ALI purchased merchandise from SAAD on October 17 of the current year. SAAD accepted ALI’S $10,000, 90-day, 10% note as payment. What entry should SAAD make on January 15 of the next year when the note is paid?
| Notes Receivable | 10,000 | |
| Interest Receivable | 250 | |
| Sales | 10,250 |
| Cash | 10,250 | |
| Notes Receivable | 10,250 |
| Cash | 10,250 | |
| Interest Revenue | 208 | |
| Interest Receivable | 42 | |
| Notes Receivable | 10,000 |
| Cash | 10,250 | |
| Interest Revenue | 42 | |
| Interest Receivable | 208 |
