midterm exam key answers ( Form A)
midterm exam key answers ( Form A)
Accounting department
First semester 2024/2025
Accounting principle 1 - 10861111
Question 1 (11 points): Choose the correct answer and fill your answers in the table (USE CAPITAL
LETTERS)
2. The accountant of Sanad company made the following error: a $400 credit posting to Accounts
receivable was made to account payable. Thus:
A. The trial balance will balance.
B. The trial balance will not balance, the debit column will be larger than the Credit column by
400.
C. The trial balance will not balance, the credit column will be larger than the debit column by
400.
D. The Trial balance will not balance, the credit column will be larger than the debit column by
800.
1
6. The accountant of XYZ company made the following error: A 200 purchase of equipment on
account was posted to equipment twice. Thus:
A. The trial balance will balance.
B. The trial balance will not balance, the debit column will be larger than the credit column by
200
C. The trial balance will not balance, the credit column will be larger than the debit column by
200.
D. The Trial balance will not balance, the credit column will be larger than the debit column by
400.
7. The Fair value principle states Assets should be initially recorded at cost and adjusted when the
fair value changes.
A. True
B. False
8. The economic entity assumption states that the entity and its owners are the same.
A. True
B. False
10. A Chart of accounts contains all the company’s accounts and their balances.
A. True.
B. False.
11. In 2023, Hadara co. received $92,000 cash from customers. Of that amount $12,000 were
related to services provided in 2022. In addition, Hadara provided $5,000 services on account in
2023. Thus, revenue for 2023 would be:
A. According to cash basis $92,000; According to accrual basis $85,000.
B. According to cash basis $85,000; According to accrual basis $92,000.
C. According to cash basis $80,000; According to accrual basis $85,000.
D. According to cash basis $92,000; According to accrual basis $80,000.
2
Question 2 (10 points): you are given the following information regarding sbitany company
Assets 35,000 ??
Equity (A) ??
Assets 15,000 ??
Liability 5,000 ??
Equity (D) ??
Revenue - 124,000
Expense - (E)
Dividends - 4,000
Required:
3
Question 3 (5 points): The trial balance of Azziza co. on 30.Sep.2024 reported the following: Prepaid
insurance expense: 2,400, supplies: 1,900, Equipment: 38,000, Accumulated depreciation – equipment :
8,000, unearned revenue: 12,000.
Required:
A. If you knew that Azziza Company prepares quarterly financial statement. Record the adjusting
entries on 30.sep.2024
B. Calculate the book value of equipment that will appear in Azziza co. balance sheet on
30.sep.2024
Question 4 (9 points): Paltel company had the following transactions during November.2024.
November 10. The company purchased $1,790 supplies on account from sha’ban co.
November 15. The company provided $25,000 services and received 40% of the amount in cash. The
balance remained on account.
November 20. The company paid salaries and wages expense for November $16,000.
November 25. The company paid sha’ban $500 of the balance due
November 29. The company received $5,000 from customers who were billed in November 15.
4
Required:
Question 1 Answers
1 D 7 A
2 A 8 B
3 B 9 A
4 B 10 B
5 A 11 A
6 B
5
Question 2.A Answers
A B C D E
6
RE (Beg) 2,000
Add: NI 24,000
LESS: div (4,000)
RE (End) 22,000
7
30.Sep. Dr Ins exp 200
Cr prepaid ins exp 200
8
Journal