FINAL EXAM FORM B
The Hashemite University, Department of Accounting,
Principle of Accounting (1), Dr Husam Al-Khadash
Student Name Seat No Instructor
Question One (12.5 marks): Identify the answer of each of the following cases,
1. At The beginning of the year, Al-Huda Co. had total assets of $ 1500,000 and total liabilities of $ 1350,000. During the year, total liabilities increased $ 150,000 and owners equity increased $ 30,000, the amount of total assets at the end of the year is:
2. Al-Theqa Co. purchased 1000 calculators at $ 30 each for cash, and paid $ 300 as freight cost, the total cost of the calculators is:
3. W Com. uses a periodic inventory system. During Septemper, the following transactions occurred.
Sept. 3 Purcahased 100 television at $250 each from Z Company, terms 2/27, net 30.
Sept. 6 received credit of $3000 for the return of 12 televisions purchased on Sept. 3 that were defective.
Sept. 9 Sold 20 televisions for $400 each to Y Com., terms 2/10, net 30
Sept. 12 Purchased 50 televisions at $270 each from Dima Com.
Sept. 15 Sold 30 televisions for $ 410 each to AB Com.
Sept. 30 Paid Z company in full.
Required:
(a) Journalize the transaction on September 30.
(b) Using the FIFO assumption, calculate the amount assigned to the inventory at hand on Sept.30.
(c)Assuming perpetual Inventory system, calculate the amount assigned to the inventory at hand on
Sept.30 by using the LIFO assumption.

Case
Question Two(37.5 marks ) : Select the one best answer for each of the following statements :
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Answer
1. Under periodic Inventory system if the ending inventory balance is understated then: a.
C.G.S. understated. b. Net income overstated c. Assets understated. d. Liabilities overstated.
2. When a company received $4325 cash for services rendered, the entry contains: a.
Debit cash 4325 and credit AP 4325 b. Debit cash 4325 and credit AR 4325
c. Debit cash 4325 and credit services revenue 4325 d. Debit cash 4325 and credit owner’s equity 4325
3.
In a worksheet, equipment is entered in the following column: a.
Income statement (Dr.) b. Income statement (Cr.)
c. Balance sheet (Dr.) d. Balance sheet (Cr.)
4. The Accumulated Depreciation account is a (an) a.
Asset b. Liability c. Expense d. Contra asset
5. The cost flow method that often similar to the actual physical flow of merchandise is the
a. FIFO method b. LIFO method c. Average cost method d. Gross profit method
6. A com. hired a secretary at a salary of $4000 per month, the entry contains: a) No journal entry is needed b) Debit cash 4000 and credit salaries expense 4000 c) Debit salaries expense 4000 and credit accounts payable 4000 d) Debit salaries expense 4000 and credit cash 4000
7.
Expenses paid and recorded as assets before they are used are called
a. Accrued expenses b. Interim expenses c. Prepaid expenses d. Unearned expenses
8. If the total debit column exceeds the total credit column of the income statement columns on a work sheet, then the company has
a. earned net income for the period. b. an error because debits do not equal credits.
c. a net loss for the period. d. to make an adjusting entry.
9 . If services are rendered for credit, then
a. assets will decrease. b. liabilities will increase.
c. owner's equity will increase. d. liabilities will decrease.
10. Income from operations will always result if
a. the cost of goods sold exceeds operating expenses. b. revenues exceed cost of goods sold.
c. revenues exceed operating expenses. d. gross profit exceeds operating expenses.

11. On October 4, 2002, Terry Corporation used a perpetual inventory system and had credit sales transactions of $2,500 from merchandising having cost $1,900. The entries to record the day's credit transactions include a
a. debit of $2,500 to Merchandise Inventory.
b. credit of $2,500 to Sales.
c. debit of $1,900 to Merchandise Inventory.
d. credit of $1,900 to Cost of Goods Sold.
12. FOB shipping point means that the a. Goods are placed free on board to the buyer's place of business
b. Buyer pays the freight c. Seller pays the freight d. Common carrier pays the freight
13 .Accrued expenses are
a. paid and recorded before they are used or consumed.
b. paid and recorded after they are used or consumed.
c. incurred but not yet paid or recorded.
d. incurred and already paid or recorded
14. Hale Company sells merchandise on account for $3,000 to Karr Company with credit terms of
2/10, n/30. Karr Company returns $500 of merchandise that was damaged, along with a check to settle (pay)the account within the discount period. What is the amount of the check?
a. $2,940. b. $2,950. c. $2,500.
d. $2,450.
15 Under periodic system, which of the following would be debited when assets are purchased if the assets will be resold? a. Cost of goods sold. B. Merchandise inventory c. Purchases d. Assets
16.
On June 12 Al-Salam Co. bills Nehad $ 300 for services done on account, the debit side of the journal entry on June 12 is : a. A/p…300 b . Service Revenue….300 c. A/R….300 d. Cash….300
17. On January,2 Muna Co. purchased supplies for $1,700 and recorded as supplies expenses. On January,31 a physical count of supplies reveals that only $ 800 of supplies still on hand, the credit side of the adjusting entry on January, 30 is ; a.
Supplies …………900 b. Supplies….800
c. Supplies Expense…900 d. Supplies Expense…800
18. In a periodic inventory system, the entry to record a return of goods purchased to a supplier includes a credit to a. Merchandise Inventory b. Purchases
c. Purchases Returns and Allowances d. Sales Returns and Allowances
19.
An adjusting entry that debits an asset and credits a revenue is necessary for
a. Prepaid expenses b. Unearned revenues
c. Accrued revenues d. Accrued expenses
20.
The loss on sale (disposal) of an asset will appear in which of the following section of the multiple step income statement:

a.
Selling Expenses b. Administrative Expenses. c. Other revenues and gains. d. Other Expenses and losses.
21.
A $ 400 withdrawals of cash for Samer’s personal use. Was debited to salaries Expense
$ 400 and credited to cash $ 400, the correcting entry to correct this transaction is: a.
Drawing…..400
Cash………..400 b.Salaries Exp. …….400
Drawings…………..400 c.
Drawings………..400
Salaries Exp……….400 d.Salaries…………400
Cash…………….400
22.
Islam Co. prepares its financial statement on quarterly base, on March 31 before adjustments are made the unearned rent revenue, was $ 9,900, if two- third(2/3) of the unearned rent revenue was earned during the quarter, what is the balance of the unearned rent revenue after adjusting entry is made: b.
$ 3,300 b. $ 6,600 c. Zero d.$ 9,900
23.
Amman Co. accumulates the following cost and market data at Dec.31
Inventory Categories Cost Data Market Data
$15,500
$8,700
$13,000
24.
An account that will have a zero balance after closing entries been journalized and posted is: a.
Service revenue b. Supplies c. Prepaid expenses d. Accumulated depreciation
25.
In periods of rising prices, LIFO will produce: a.
Higher net income than FIFO b. The same net income as FIFO
c. Lower net income than FIFO d. Higher net income than average costing.
Answers
Radios
Recorders
Televisions
$15,000
$9,000
$ 14,000
The lower of cost or market valuation using categories is: a.
$38,000 b.$37,200 c.$36,700 d.$37,000
Case answer
1
30300
2
180000
3
Dr AP 22000
Cr. Discount 440
Cash 21560
4
23000
5
22400
Case 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
C C C D A A C C C D B B C D C C D C C D C A C A C Answer