Set By bayuterfa@gmail.

com BHST TVET College year 2017

Choose appropriate answer from the given alternatives

1. What is the primary objective of IFRS?

A Increase complexity in financial reporting b, Enhance transparency, comparability, and consistency

c) Provide guidelines for national GAAP d) Apply only to publicly traded companies

2. Which method of accounting for inventory costs is permitted under both GAAP and IFRS?

a) LIFO b)FIFO c)Weighted Average d)Specific Identification

3. What is the primary focus of IFRS principles in comparison to GAAP?

a) Strict adherence to rules b) Substance of the transaction

c) Industry-specific guidance d) Conservative accounting practices

4. What is the primary purpose of preparing for the first-time adoption of IFRS?

a) Introduce new accounting principles b) Align with local regulatory requirements

c) Evaluate the impact on financial statements d) Increase disclosure requirements

5. Which IFRS principle emphasizes caution when there is uncertainty about the realization or
measurement of assets or income?

a) Fair Presentation b) Prudence c) Going Concern d) Substance over Form

6. What is the basis for recording transactions and events in financial statements under the accrual basis
principle?

a) When the cash is received or paid b) When they occur

c) Only at the end of the financial year d) As per the legal form of the transaction

7. Which of the following is a key characteristic of IFRS for SMEs?

a) High level of complexity b) Exclusively for large corporations

c) Streamlined and tailored for smaller businesses d) Applicable only in the United States

8. What does the materiality principle in IFRS emphasize?

a. The need for detailed disclosure in financial statements

b. The significance of financial information for decision-making

c. The strict adherence to accounting rules d. The use of fair value in reporting assets

9. Which financial statement is not typically included in the preparation of end-of-period financial
reports?
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a) Statement of Comprehensive Income b) Statement of Changes in Equity

c) Statement of Cash Flows d) Statement of Budgetary Control

10. What is property, plant, and equipment?

A. Fixed assets with useful lives that extend beyond one year

B. Fixed assets with useful lives of one year or less

C. Tangible current assets D. Long-term intangible assets

11. Which of the following costs should be capitalized as a part of fixed assets?

A. Installation costs B. Repairs C. Maintenance D. Production salaries

12. The net balance for fixed assets is equal to the gross balance less _____ and _____.

A. Accumulated depreciation, impairment B. Current year depreciation, repairs expense

C. Expensed repairs, impairment D. Shipping charges, accumulated depreciation

13. The calculation of depreciation using the declining-balance method

A. Ignores salvage value in determining the amount to which a constant rate is applied.

B. Multiplies a constant percentage times the previous year's depreciation expense.

C. Yields an increasing depreciation expense each period.

D. Multiplies a declining percentage times a constant book value.

14. A plant asset with a cost of $900,000 and accumulated depreciation of $800,000 is sold for $80,000.
What is the amount of the gain or loss on disposal of the plant asset?

A. $20,000 loss. B.$80,000 loss.

C. $80,000 gain. D. $20,000 gain.

15. What is the purpose of recording depreciation in accounting?

A. To increase the value of fixed assets B.To reflect the ongoing usage of fixed assets over time

C. To decrease the value of accumulated depreciation D. To calculate the original cost of assets

16. Which method calculates depreciation by dividing the original cost of an asset by its useful life

A. Units of Production B. Double Declining Balance C.Straight-Line D. Sum-of-Years-Digits

17. In the journal entry for the sale of a fixed asset with a gain, which account is credited?

A. Cash B. Accumulated Depreciation

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C. Loss on Disposal D. Gain on Disposal

18.Under IFRS, how is the disposal of fixed assets recorded in the financial statements?

A. Only in the income statement B. Only in the balance sheet

C. In both the income statement and balance sheet D. It is not recorded under IFRS

19.How is the gain or loss on the sale of a fixed asset calculated?

A. Selling price - Book value B. Accumulated depreciation - Original cost

C. Accumulated depreciation + Original cost D. Book value - Selling price

20. What is the purpose of an adjusting entry for prepaid expenses?

A. To decrease the prepaid expense account B. To recognize expenses that have been paid in

advance

C. To increase the prepaid expense account D. To adjust the cash account

21.Under the direct write-off method, when is the bad debt expense recorded?

A. When an account becomes uncollectible B. At the end of the accounting period

C. When the sale is made D. When the cash is received

22. Which method estimates bad debt expense based on the percentage of total receivables?

A. Direct Write-Off Method B.Allowance Method

C. Aging Method D. Percentage of Sales Method

23. How is the ending inventory recorded in an adjusting entry when using FIFO?

A. Debit Inventory, Credit Cost of Goods Sold B. Debit Cost of Goods Sold, Credit Inventory

C. Debit Inventory, Credit Accounts Paya D. Debit Cost of Goods Sold, Credit Accounts
Receivable

24. What is the purpose of balance day adjustments in accounting?

a) To close financial statements b)To ensure accurate representation of business transactions c)

To prepare tax returns d) To calculate profits

25. Which of the following is an example of a prepayment adjustment?

a) Accrued salaries b) Depreciation expense

c) Unearned revenue d) Bad debt expense

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26. In the Columnar Format of a General Ledger, what does the "Balance" column represent?

a) Net income b)Total debits c) Closing balance d) Beginning balance

27. What is the purpose of posting in accounting?

a) To create financial statements b) To transfer entries from the journal to the ledger

c) To calculate depreciation d) To record opening balances

28. How is an opening entry recorded in the General Ledger?

a) "By Balance b/d" on the debit side b) "To Balance b/d" on the debit side

c) "By Balance c/d" on the credit side d) "To Balance c/d" on the credit side

29. What does a credit balance in an account indicate?

a) The account has more credits than debits b) The account has a surplus

c) The account has more debits than credits d) The account has a deficit

30. When is a prepayment adjustment made in accounting?

a) At the end of the accounting period b) At the beginning of the accounting period

c) Throughout the accounting period d) Only in case of losses

31. What does "Accumulated Depreciation" represent in the General Ledger?

a) A liability account b) An expense account

c) An asset account d) A revenue account C. When the sale is made

32. Henderson Inc. reports the following: assets of $500,000, liabilities of $350,000 and capital stock
of $100,000. What is the balance in retained earnings?

a. $450,000 b.$50,000 c. $250,000 d. $750,000

33. You are considering investing in the stock of Mogul Corporation. On which of the following
statements would you find information about what a company has to help it generate revenue in the future
and what the company owes to others?

a. Income statement b. Statement of retained earnings c. Balance sheet d. Statement of cash flows

34. Which of the following is not a correct representation of the accounting equation?

a. Assets = Liabilities + Capital Stock + Retained Earnings b. Assets – Liabilities = Owners’

Equity

c. Assets = Liabilities + Owners’ Equity d. Assets + Liabilities = Owners’ Equity

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35. Which of the following is NOT a key component of financial statements?

A) Income Statement B) Budget Details C) Cash Flow Statement D) Balance Sheet

36. What is the purpose of benchmarking in financial analysis?

A) To compare budgeted figures with actual performance

B) To identify areas of high or unnecessary costs

C) To assess a company's creditworthiness

D) To compare financial performance against industry standards or competitors

37. Which financial ratio measures a company's ability to cover its short-term obligations with its short-
term assets?

A) Debt-to-Equity Ratio B) Net Profit Margin

C) Current Ratio D) Return on Equity (ROE)

38. What is the main purpose of an executive summary in a financial presentation?

A) To provide a brief overview of key findings B) To present detailed financial statements

C) To compare budgeted figures with actual performance D) To analyze financial trends over time

39. Why is it important to use consistent formatting in a financial presentation?

A) To make the presentation visually appealing B) To confuse the audience

C) To maintain confidentiality of financial data D) To ensure clarity and professionalism

40.Which step in preparing a work plan involves determining the sequence or order of tasks?

A. Define Project Objectives B. Identify Tasks and Activities

C. Sequence Tasks D. Develop a Timeline

41. What is the purpose of a Work Breakdown Structure (WBS)?

A. To assign responsibilities B. To define project objectives

C. To visually represent the hierarchy of tasks D. To allocate resources

42. What is a key consideration in making contributions to the organizational planning process. A solation
from external factors B. Resistance to change

C. Collaborative decision-making D. Lack of communication

33. What is a crucial strategy for adapting to changes in technology and work organization?
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A. Resistance to new work structures B. Lack of continuous learning

C. Embracing a culture of flexibility D. Avoiding collaboration tools

34. Which skill is important for remote work in the digital era?

A. Traditional communication B. Data illiteracy

C. Lack of adaptability D. Limited use of collaboration tools

35. What is one way to identify professional development needs?

A. Completing a relevant certification B. Attending networking events

C. Ignoring feedback from peers D. Avoiding self-assessment

36. Which aspect is crucial for authorization in a professional context?

A. Completing background checks B. Pursuing entrepreneurship programs

C. Ignoring organizational policies D. Avoiding skills assessments

37. What is a recommended strategy for encouraging team members?

A. Withholding recognition and appreciation B. Setting unclear goals

C. Demonstrating a lack of leadership D. Acknowledging and appreciating their efforts

38. Which professional development opportunity falls under the category of on-the-job learning?

A. Attending industry conferences B. Enrolling in coding boot camps

C. Taking language courses D. Undertaking challenging assignments

39.What is the primary purpose of a financial statement audit?

A. Evaluate operational efficiency B. Assess compliance with regulations

C. Confirm the accuracy of financial statements D. Review environmental impact

40. Which type of audit is focused on assessing the efficiency and effectiveness of organizational\

activities?

A. Financial Statement Audit B. Compliance Audit C. Operational Audit D. Investigative Audit

41. According to the International Standards on Auditing (ISA), what is the purpose of audit evidence?
A. Confirming management's assertions B. Assessing compliance with laws

C. Evaluating operational efficiency D. Investigating potential fraud

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42. What is the primary responsibility of internal auditors? A. Provide an independent opinion on
financial statements B. Assess compliance with laws and regulations

C. Evaluate the effectiveness of internal controls D. Conduct investigations into potential fraud

43. The Yellow Book provides standards for which type of audit?

A. Financial Statement Audit B. Operational Audit C. Government Auditing D. Investigative Audit

44. What is the main goal of cost accounting?

A. Maximizing revenue B. Determining selling price

C. Facilitating financial statements preparation D. All of the above f. None of the above

45. Which type of cost accounting focuses on eliminating waste and promoting value-based pricing?

A. Standard Cost Accounting B. Activity-Based Costing

C. Lean Cost Accounting E. Marginal Cost Accounting F. Both A and B

46. What is the primary purpose of data extraction in the ETL process?

A. Consolidating data from different sources B. Transforming data into a common format

C. Retrieving disparate types of data D. All of the above E. None of the above

47. Which cost allocation method allocates service department costs to other parts of a business by fully
loading operating departments with those overhead costs?

A. Direct allocation method B. Step-down method C. Reciprocal method D. Physical unit method

48. What is the primary basis for allocating joint costs in the relative sales value method?

A. Physical quantities B. Machine hours C. Prices at which products will be sold D. Maintenance hours

49. What is cost assignment?

A. Budgeting process B. Allocating costs to cost objects C. Profit calculation D. Financial forecasting

50. Which of the following is an example of a direct cost?

A. Rent B. Utilities C. Raw materials D. Administrative expenses

51. What does the average cost of production represent?

A. Total fixed costs B. Total variable costs C. Per-unit cost of production D. Marginal cost

52. What is the purpose of cost information in managerial decision-making?

A. Calculating profits B. Assessing market trends C. Making informed decisions about pricing and
resource allocation D. Forecasting macroeconomic indicators
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53. What is the main goal of budget variance analysis?

A. Increasing costs B. Achieving a positive variance

C. Avoiding budgeting altogether D. Ignoring actual expenses

54. a type of indirect tax that imposed on luxury goods.

A. VAT B. BPT C. Excise tax D. SUR TAX

55. a type of tax that imposed on annual profit? A. BPT B. EIT. C. EXCISE TAX D. VAT

56. Income tax is collected on all types of income, except?

A. Agricultural income. B. Industrial income C. Capital gain D. Household property

57.. Income Tax is charged in –

A. Financial Year B. Assessment Year. C. Previous Year. D. Accounting Year

58. In case of non-residents engaged in shipping business freight paid or payable to the owner or
charterer shall be deemed to be total income. A. 5%. B. 10%. C. 7.5 %. D. 20%

59.What the rate of employment income tax. A, 30%. B,10%. C, 2%. D, no answer

60____refers to physical currency in the form of coins and banknotes that are used as a medium of
exchange for goods and services. A, Tax B, charge C, cash D, check

61. Physical currency in the form of metal coins, typically made of copper, nickel, or other alloys.

A, bank note B, Check C, Coins D, money order

62. Regularly reconcile the recorded cash transactions with the actual cash on hand to ensure accuracy.
A, bank note B, check note C, reconciliation D, none

63__Cash received from customers . A, cash out flows B, cash in flow C, A & B D, none

64___Payment to suppliers to inventory . A, cash out flows B, cash in flow C, A&B D, none

65___is a small amount of money a company keeps for small, incidental expenses.

A, cash B, petty cash C, receipt D, All E, none

66. W/c one of the ff is bank reconciliation is different.

A, deposit B, Bank error C, outstanding check D, add collection by bank

67. W/c one of the ff increase cash account of company.

A, debit memo B, credit memo C, A & B D. None E, except "D" all are answer

68.w/c one of the ff decrease cash account of company.

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A, debit memo B, credit memo C, A & B D. None E, except "D" all are answer

69.Which of the following is an example of a non-cash document?

a) Sales receipt b) Credit card statement c) Cash register tape d) Bank deposit slip

70. Accumulated Depreciation is:

a. A contra asset account. b. An expense account. c. An owner’s equity account. d. a liability account

71. Amounts have already incurred by an organization but not yet paid

A. Accrued expenses. B. Accrued revenue C. Prepaid expense. D. Prepaid revenue

72. Claims Against the asset a. Liabilities b. Equities c. Revenue d. Capital

73. In a worksheet, net income is entered in the following columns:

a. Income statement (Dr) and balance sheet (Dr). b. income statement (Cr) and balance sheet (Dr)

c. Income statement (Dr) and balance sheet (Cr). d. Income statement (Cr) and balance sheet (Cr).

74. Which of the following statements about users of accounting information is incorrect

a. Regulatory authorities are internal users b. Taxing authorities are external users

c. Present creditors are external users d. Management is an internal users

75. Which one of the following is most liquid asset

a. Cheque. b. Account receivable. c. Inventory. d. Cash

76. Which one of the following errors can be identified with the help of trial balance?

a. Omitting a transaction b. Debiting of cash instead of account receivable with the same account
c. Posting account to the wrong side d. Recording a single transactions twice

77. Amount expected on account to be collected from customers on account is

a. Accounts receivable. b. Sales c. Account receivable. d. Cost of sales

78. Closing trial balance. a. Temporary account b. Nominal account.

c. Permanent account d. Account shown in the income statement columns of work sheet

79. Land is generally shown on the balance sheet under

a. Intangibles b. Current assets c. Fixed asset. d. investment

80.Debit side of an account represent

a. Left side. b. Increase c. Decrease. d. Right side

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81. Transferring journal entries in to a ledger is called

A. Journalizing B. Closing C. Cross referencing D. Posting

82. A group of accounts for a business entity

a. Ledger b. Income statement c. Balance sheet d. journal

83.. An inflow of cash would result from which of the following

a. The decreases in liability account b. The decreases in an equity account

c. The decreases in an asset account other than cash d. Increases in an asset account other than cash

84. The three types of business entities are:

A. Proprietorships, small businesses, and partnerships . B. Proprietorships, partnerships, and corporations.

C. Proprietorships, partnerships, and large businesses.

D. Financial, manufacturing, and service companies.

85. Performing services on account will have the following effects on the components of the basic
accounting equation:

A. Increase assets and decrease owner’s equity. B. Increase assets and increase owner’s equity

. C. Increase assets and increase liabilities. D. Increase liabilities and increase owner’s equity.

86. Which of the following events is not recorded in the accounting records?

A. Equipment is purchased on account. B. An employee is terminated.

C. A cash investment is made into the business . D. The owner withdraws cash for personal use.

87. During 2012, Gibson Company’s assets decreased $50,000 and its liabilities decreased $90,000. Its
owner’s equity therefore:

A. Increased $40,000 . B. decreased $40,000 C. Decreased $140,000 D. increased $140,000.

88. Payment of an account payable affects the components of the accounting equation in the following
way. A. Decreases owner’s equity and decreases liabilities. B. Increases assets and decreases liabilities.

C. Decreases assets and increases owner’s equity. D. Decreases assets and decreases liabilities.

89. The financial statement that reports assets, liabilities, and owner’s equity is the:

A. Income statement. B. Owner’s equity statement. C. Balance sheet. D. Statement of cash flows

90. All of the following are considered asset account except?

A. Land B. Capital stock C. Short term investments D. Cash

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91. Accumulated Depreciation is:

A. A contra asset account. B. An expense account. C. An owner’s equity account. D. a liability account
92. The payment of an account payable

A. Decrease an asset and decrease liability B. Increase an expense and decreases a liability

C. Decrease an asset and increase a liability D. Increase liability & decrease an asset

93.The cost refers to the total cost of production divided by the number of units produced.

A. Variable cost B. Fixed cost C. Mixed cost D. Average

93. The cost encompasses both variable and fixed costs.

A. Variable cost B. Fixed cost C. Total cost D. all

94.______is the cost of producing one additional unit of output.

A. Variable cost B. Fixed cost C. Total cost D. Marginal cost

95.____are costs that change with the changes in the level of production.

A. Variable cost B. Fixed cost C. Total cost D. Marginal cost

96.___are expenses that do not change with the amount of output produced.

A. Variable cost B. Fixed cost C. Total cost D. Marginal cost

97.___is a financial picture of a business or project over a specific time period.

A. Budget report B. Variable cost C. Cost information D. all

98.What is cost assignment?

A. Budgeting process B. Allocating costs to cost objects C. Profit calculation. D. Financial forecasting

99. Which of the following is an example of a direct cost?

A. Rent B. Utilities C. Raw materials D. Administrative expenses

100. What does the average cost of production represent?

A. Total fixed costs B. Total variable costs. C. Per-unit cost of production D. Marginal cost

101. What is the main goal of cost accounting?

A. Maximizing revenue B. Determining selling price

d. Facilitating financial statements preparation E. All of the above

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102.___is I notes receivable there are two parties involved.

A, parties. B, due date. C, m/v D, proceed

103.___is. the date at which the note is retired or paid.

A , Due date B, Issue date C, ,parties D, all

104,____is the date at which the note is written or issued.

A, Issuance date B, due date C, M/V D, N/R

105.__is the amount that is due at the maturity or due date.

A, interest B, M/V C, proceed D, none

106,____is one of the subsidiary ledgers to the general ledger.

A, debtor ledger B, creditor C, subsidiary D, ALL E, none

107.____is stored against the receipt and shows on the customer's statement.

A, payment method B, receipt amount C, receipt processing D, receipt discount

108.___is person to whom the principal is owed.

A, principal B, Payee C, due date D, all

109.____is amount stated on the face of the note.

A, payee B, maker C, principal D, Interest

110.____is the charge for the use of money over a period of time.

A, maturity value B, Interest C, Maker D, Maturity date

111,___is paying the note in full on the maturity date.

A, dishonoring note B, honoring note C, discount rate D, discount selling

112.____not paying the note at the maturity date.

A, dishonoring a note B, honoring a note C, due D, None

114.___is notes receivables to a financial institution.

A, discount rate B, discount selling C, Payee D. all

115. The amount of the financial institution charges for discounting a note. A, discount rate B, discount
sale C. discount note D, ALL

115.The date the principal and interest are due to the payee.
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A, M/V B, maturity date C, proceeds D, none

116. The one making the promise issuer of the note or the buyer is called. A, maker B, payee C, parties
D,, Issue date E, all