Faculty of Economics and administration
Accounting Department
SET "A"
ACCT 213
Mid-term Exam
Second Semester, 1431/1432 H
Time: 90 Minutes
Name:
University No.:
Section No.: BA
Course Teacher:
Question
Maximum
I
5
II
9
III
5
IV
7
V
4
Total
30
Score
I. MULTIPLE CHOICE QUESTIONS ( 5 Points)
1. If common stock is issued for an amount greater than par value, the excess should
be credited to
a) Paid-in Capital in Excess of Par Value.
b) Cash.
c) Retained Earnings.
d) Legal Capital.
2. Cash from sales of merchandise will be recorded in the
a) Purchases journal.
b) Sales journal.
c) Cash receipts journal.
d) General journal.
3. If a transaction cannot be recorded in a special journal
a) The company must refuse to enter into the transaction.
b) It is recorded directly in the accounts in the general ledger.
c) It is recorded as an adjustment on the work sheet.
d) It is recorded in the general journal.
4. Which of the following is not a principal characteristic of the partnership form of
business organization?
a) Limited liability.
b) Association of individuals.
c) Limited life.
d) Mutual agency.
5. Which of the following would not be recorded in the formation entry of a
partnership?
a) Allowance for doubtful accounts.
b) Accumulated depreciation.
c) Accounts receivable.
d) All of the above would be recorded.
2
II. (9Points)
Saleem Company uses a single-column purchases journal, and a cash payments
journal to record transactions with its suppliers and others. Record the following
transactions in the appropriate journals.
Transactions
Oct.
5
Purchased merchandise on account for SR.20,000 from Ahmed
Company. Terms: 2/10, n/30.
Oct.
8
Purchased Land on account for SR.700000 from Amr Company.
Oct. 11
Purchased merchandise on account for SR.14,000 from Khalid
Corporation. Terms: 2/5, n/15.
Oct. 13
Purchased car costing SR.30,000 for cash.
Oct. 15
Paid Ahmed Company for merchandise purchased on October 5, less
discount.
Oct. 16
Purchased merchandise for SR.8,000 cash from Sami Company.
Oct. 30
Paid Khalid Corporation for merchandise purchased on October 11.
Oct. 31
Cash payment of SR.10,200 employees salaries.
Oct. 31
Purchased office equipment for SR.30,000 cash from Office Supply
Company.
Saleem Company
Purchase Journal
Date
Account Credited
Terms
Merchandise Inventory Dr.
Accounts Payable Cr.
3
Saleem Company
Cash Payments Journal
Date
Account Debited
Other
Accounts Dr.
Accounts
Payable Dr.
Merchandise
Inventory Cr.
Cash Cr.


III. (5 Points)
Ahmed and Mohammad combine their proprietorships to start a partnership named
AM Restaurant in January first, 2011. Ahmed and Mohammad have the following
assets prior to the formation of the partnership:
Cash
Accounts receivable
Allowance for doubtful accounts
Equipment
Accumulated depreciation —Equipment
Book Value
Ahmed
Mohammad
SR.10,000
SR. 12,000
9,000
10,000
(1,000)
(500)
12,000
24,000
(2,000)
(4,000)
28000
41500
Market Value
Ahmed
Mohammad
SR. 10,000
SR. 12,000
9,000
10,000
(2,000)
(1,000)
13,000
20,000
-
Instructions
Prepare the journal entries necessary to record the formation of the partnership.
4
AM Restaurant
General Journal
Date
Account Titles and Explanation
Debit
Credit
IV. (7 Points)
Abdulmajeed and Abdullah are co-partners in the AA Company. The partnership
agreement provides for: (1) interest allowances of 10% on capital balances at the
beginning of the year, and (2) the remainder will be distributed equally. Capital
balances on January 1st. were Abdulmajeed SR.80,000, and Abdullah SR.120,000. In
2010, partnership net income is SR.90,000.
Instructions:
a) Prepare a schedule showing the division of net income.
b) Journalize the allocation of net income.
5
AA Company
Division of Net Income
a)
Abdulmajeed
Abdullah
Total
AA Company
General Journal
b)
Date
Account Titles and Explanation
Debit
Credit
6
V. (4 Points)
The corporate charter of Saudi Fishing Corporation allows the issuance of a
maximum of 2,500,000 shares of SR.1 par value common stock. During its
first year, Saudi Fishing Corporation issued 1,200,000 shares at SR.15 per
share.
Instructions
Based on the above information, answer the following questions:
a) How many shares were authorized?
b) How many shares were issued?
c) Journalize the issuance of the stock.
Saudi Fishing Corporation
General Journal
c)
Date
Account Titles and Explanation
Debit
Credit
7