Islamic university – Gaza

Faculty of commerce

Accounting department Accounting in English

MID exam of accounting in English ( 1 hour )

Name :…………………………………………………………………………………………

Id : ………………………………………………. Class : ………………………………...

QUESTION 1 : please choose the best answer for the following statement :

1. On the last day of the period, AL ASHI Company buys a $900 machine on

credit. This transaction will affect the:

A. / income statement only.
B. / balance sheet only.
C. / income statement and owner's equity statement only.
D. / income statement, owner's equity statement, and balance sheet.

2.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.

3.The cost principle states that:

A. / assets should be initially recorded at cost and adjusted when the market value changes.
B. / activities of an entity are to be kept separate and distinct from its owner.
C. / assets should be recorded at their cost.
D. / only transaction data capable of being expressed in terms of money be included in the accounting records.

4.Accounts that normally have debit balances are:

A. / assets, expenses, and revenues.
B. / assets, expenses, and owner's capital.
C. / assets, liabilities, and owner's drawings.
D. / assets, owner's drawings, and expenses
.

5.Posting:

A. / normally occurs before journalizing.
B. / transfers ledger transaction data to the journal.
C. / is an optional step in the recording process.
D. / transfers journal entries to ledger accounts

6.Which of the following statements is incorrect concerning the work sheet?

A. / The work sheet is essentially a working tool of the accountant.
B. / The work sheet is distributed to management and other interested parties.
C. / The work sheet cannot be used as a basis for posting to ledger accounts.
D. / Financial statements can be prepared directly from the work sheet before journalizing and posting the adjusting entries.

7. When a net loss has occurred, Income Summary is:

A. / debited and Owner's Capital is credited.
B. / credited and Owner's Capital is debited.
C. / debited and Owner's Drawing is credited.
D. / credited and Owner's Drawing is debited.

8.Gross profit will result if:

A. / operating expenses are less than net income.
B. / sales revenues are greater than operating expenses.
C. / sales revenues are greater than cost of goods sold.
D. / operating expenses are greater than cost of goods sold
9 .an account that will have a zero balance after closing entries have been journalized and posted is :
A. / Service revenue.
B. / Advertising supplies.
C. / Prepaid insurance.
D. / Accumulated depreciation.

10.Under a perpetual inventory system, when goods are purchased for resale by a company:

A. / purchases on account are debited to Merchandise Inventory.
B. / purchases on account are debited to Purchases.
C. / purchase returns are debited to Purchase Returns and Allowances.
D. / freight costs are debited to Freight-out.
PLEASE POST YOURS ANSWER TO THE TABLE
10 / 9 / 8 / 7 / 6 / 5 / 4 / 3 / 2 / 1 / QUESTION NO.
ANSWER

Question 2 :

The trial balance of M. ALASHI company contained the following accounts at December 31.12.2006

M. ALASHI COMPANY

TRIAL BALANCE

31.12.2006

Credit / Debit / Accounts
$25,400 / cash
37,600 / Accounts receivable
90,000 / Merchandise inventory
92,000 / land
197,000 / Buildings
$54,000 / Accumulated depreciation-buildings
83,5000 / equipment
42,400 / Accumulated depreciation- equipment
50,000 / Notes payable
39,000 / Accounts payable
267,800 / M. Alashi ,capital
10,000 / M. Alashi ,drawing
904,100 / sales
6,100 / Sales discounts
709,900 / Cost of goods sold
69,800 / Salaries expense
19,400 / Utilities expense
5,900 / Repair expense
7,200 / Gas and oil expense
3,500 / Insurance expense
$1,357,300 / $1,357,300 / TOTAL

OTHER ENTRIES :

  1. Purchased merchandise from Ahmad company for $ 20,.000 on a credit
  2. paid freight costs of $ 900 on merchandise purchase.
  3. sold 3,000 of merchandise to Ali the cost of merchandise sold was $1,500 ( ON CREDIT).
  4. Ali company returned $ 2,000 of merchandise purchased .the cost of merchandise return was $1,000

REQUIRED :

1. RECORD THE ENTRIES (USING PERPETUAL)

2. TAKE BALANCES TO A NEW TRIAL BALNCE AND ENTER ON A WORK SHEET

WITH THE FOLLOWING ADJUSTMENT DATA

ADJUSTMENT DATA :

1.Depreciation is $10,000 on building and$9,000 on equipment.)

2. Interest of $5,000 is due and unpaid on notes payable at December 31.

3. Accrued salaries are $1,500.

4. the amount of insurance for the year is $ 2,400.

5. revenue earned but unrecorded $2,000.