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.
