Accounting questions

MULTIPLE CHOICE QUESTIONS

Circle the preferred choice.

1. (3 points) Cost of goods manufactured equals $30,000 for 2013. Finished goods inventory is

$1,000 at the beginning of the year and $3,500 at the end of the year. Total manufacturing overhead is $5,500. The cost of goods sold for the year is:

(a) $22,500

(b) $30,500

(c) $27,500

(d) $28,500

$30,000 cost

2. (4 points) Patrick and John are partners in a firm. The partnership deed provides that interest on

drawings will be charged 8% p.a. During the year ended 31-12-2013 Patrick withdrew $35,000 at

the beginning of the every month and John withdrew $35,000 at the end of each month. The

interests on the partner’s drawings are:

(a) $18,200 (Patrick) and $15,400 (John)

(b) $15,400 (Patrick) and $18,200 (John)

(c) $16,800 (Patrick) and $16,800 (John)

(d) $17,200 (Patrick) and $16,400 (John)

3. (3 points) The city council passes its annual budget for all General Fund activities. Revenues

are expected to be $2,000,000 and approved expenditures are $1,800,000. These budgetary

amounts are recorded through a journal entry at the beginning of the year (an entry that is

removed at the end of the year). In recording this budget, an estimated revenue account, is

debited for:

(a) $800,000

(b) $1,000,000

(c) $1,800,000

(d) $2,000,000

4. (4 points) The vending machine contains only items that are subject to a sales tax of 9%. For a

recent month the vending machine receipts were $397.85 which includes the amounts received for

sales of product and for the sales tax on these products. The 9% of sales tax on the true sales is:

(a) $30.85

(b) $32.85

(c) $42.85

(d) $44.85

5. (4 points) Multinational companies need to report about corporate social responsibility. That is,

for a model set of reporting about social accounting and social audit, the company should create

social report on equal opportunities with implementation of aspect covered which includes one of

the follows:

(a) objective of social encouragement

(b) minimizing resources cost

(c) people`s reaction

(d) accounting standards, rules and regulations

SECTION B

6. (9 points) From the following balance sheet of Portal and Orchid, calculate opening capital and

interest on capitals 12% p.a. payable to Portal and Orchid for the year ended 31st December,

2013 given that during the year 2013 the Portal’s drawings were $12,000 and Orchid`s drawings

were $7,000. Profit during the year, 2013 was $50,000.

Liabilities Amount Assets Amount

Portal’s Capital 70,000 Sundry Assets 153,000

Orchid’s capital 60,000 Drawings (Portal) 12,000

P & L appropriation A/c (2003) 35,000

165,000 165,000

7. (8 points) Assume a large organization in New York turned to a forensic team to assist in the

assessment of a large misappropriation of cash receipts from the organization over an eighteenth

month period. The forensic team received notification of potential fraud from an internal

whistleblower of alleged improprieties by a member of the Executive team. Describe the clear

actions of the forensic team according to standards of Forensic Accounting.

 
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