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Questions 1: (2 Points)

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23 views1 page

Questions 1: (2 Points)

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MID-TERM EXAMINATION

Course:Fundamental of accounting Time: 90 minutes


Date of test: Full name:
CODE: 31 Class:

Questions 1 : ( 2 points)

Distinguish between the original price principle and the fair value
principle.Give the example for each price.

Question 2: ( 2 points)

Analyze the definitions of accounting, then draw conclusions about the


recording process of accounting.

Exercise ( 6 points)
Roger Federer Company was incorporated on January 1, 2014 with an initial capital of
5,000 shares which valuing $20/share.
During the first month of its operations, the company engaged in following transactions:
Date Transaction
Jan 2 An amount of $60,000 was paid as advance rent for three months.
Jan 3 Paid $30,000 cash on the purchase of equipment costing $150,000. The remaining
amount was recognized as a one year note payable with interest rate of 9%.
Jan 4 Purchased office supplies costing $78,000 on account.
Jan 13 Provided services to its customers and received $80,000 in cash.
Jan 13 Paid the accounts payable on the office supplies purchased on January 4.
Jan 14 Paid wages to its employees for first two weeks of January, aggregating $89,000.
Jan 18 Provided $80,000 worth of services to its customers. They paid $32,900 and
promised to pay the remaining amount.
Jan 23 Received $45,000 from customers for the services provided on January 18.

Instructions:
(a) Journalize the January transactions. (Use J1 for the journal page number.)
(b) Open ledger accounts and post the January transactions.
(c) Prepare a trial balance at January 31, 2014.

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