MIDA&F(MS447) - Questions to practice. balance sheet, ledger accounts, closing enteries PDF

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Questions to practice. balance sheet, ledger accounts, closing enteries...

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Ghulam Ishaq Khan Institute of Engineering Sciences and Technology Department of Management Sciences Accounting & Finance for Engineers- (MS447) Online Mid Term Exam Spring - 2021

Total Marks: 25

Time allowed: 120 Minutes

Name: ________________________ Reg: _______________ Section: ___

INSTRUCTIONS 1. The midterm exam is composed of 3 questions in total. 2. Solve MCQs over MS teams in 20 minutes. 3. Question 2, 3 need to be solved over blank sheet, and clear image in PDF format (1 file only) should be uploaded within 100 minutes. 4. Question 1 is MS Teams based, D2 Approach (closed book) is desirable. 5. Question 2&3 are numerical based questions, Open Book approach (A1) is desirable and exam solutions should be uploaded over MS-teams with in timeframe of 100 minutes. 6. ATTEMPT ALL QUESTIONS. 7. Use your own MS-Teams account to login and upload answer sheet. ----------------------------------------------------

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Question 1 MCQs

(10 Marks)

1. Why is the journal used to correct errors in the ledger? a) To avoid making alterations in the ledger to complete the double entry to provide a record explaining ledger entries to save the book-keeper's time b) To complete the double entry c) To provide a record explaining ledger entries d) To save the book-keeper's time 2. An Accounting information system provides: a) Income and Cost Information for Managers b) Tax Liabilities of a company for a particular year c) Information about Company’s Financial Health/condition d) All of the above 3. Business Transactions are recorded in a Journal on: a) A very Next day b) Same Day c) Weekly d) Once in a month 4. The following is a statement showing the financial status of the company at any given time: a) Income Statement b) Balance Sheet c) Statement of Capital d) Trial Balance 5. The basic function of Financial Markets are: a) To assure there are less pronounced swings in business cycle. b) To assure government needs never resort to printing money. c) Bringing together people with funds to lend & who want to borrow funds. d) both (A) and (B) of the above. 6. Share capital is _________: a) Business borrowing capital from a financial institution b) Money given to a company by shareholders in return for a stake in the business c) Capital shared amongst owners d) Capital shared with shareholders

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7. A 'Debenture' is? a) Short Term loan b) Long Term Loan c) Current Asset d) Current Liability 8. Which of the following statements is most correct? a) By increasing the amount of debt in capital structure can reduce agency problem between principal and agent. b) Firm should structure managerial compensation to reduce agency problem between principal and agent. c) Both A & B are correct d) Both A & B are incorrect 9. Why do investors prefer Partnership over sole Proprietorship? a) Single tax filing b) Unlimited liability c) IPOs Selling d) Raising capital 10. In modern corporate structure, there exists a separation between a) Shareholders & Owners b) Shareholders & Equity Providers c) Shareholders & Managers d) Agent & Management

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Question 2&3 Open Book (Marks 15) Approach A1 Case Study Question 2 (Marks 10) Shown is the Trail Balance of Company “ABC” following January 31, 2020. By using Trial Balance Prepare Statement of Income, Retained Earning and Balance Sheet.

Company "ABC" Adjusted Trial Balance January 31, 2020 Accounts

Dr

Cash A/Receivable Interest Receivable Supplies Equipment Accumulated Depreciation: Equipment Account Payable Salaries Payable Unearned Revenue Common Stock Dividends Interest Revenue Service Revenue Supplies Expense Depreciation Expense: Equipment Salaries Expense Utility Expense Total

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Cr

24,800 1,200 140 400 3,500 75 500 1,500 3,400 20,000 100 140 10,100 100 75 5,100 300 35,715

35,715

Question 3 (Marks 5) Prepare Closing Entries Journal, Balance in accounts after each closing entry and Ledger after closing entries. Company "ABC" Adjusted Trial Balance January 31, 2020 Account

Dr 7,480 3,700 600 3,000 16,000

Cash A/Receivable Service Supplies Furniture & Fixtures Service Equipment Accumulated Depreciation Account Payable Utilities Payable Loans Payable Capital Drawing Service Revenue Rent Expense Salaries Expense Taxes and Licenses Utilities Expense Depreciation Expense Service Supplies Expense Total

Cr

720 9,000 1,800 12,000 13,200 7,000 9,850 1,500 3,500 370 1,800 720 900 46,570

46,570

_____________________________Goodluck_________________________________

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