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Perform Financial Calculation Exam

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175 views6 pages

Perform Financial Calculation Exam

Uploaded by

gelilalemlemadem043640
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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ADEM MOHAMMED NOVEMBER 27,2024

HORN INTERNATIONAL COLLEGE


DEPARTMENT OF ACCOUNTING

LEVEL III REGULAR AND EVENING PROGRAM

INSTITUTIONAL ASSESSMENT FOR THE UNIT OF COMPETENCY:


PERFORM FINANCIAL CALCULATIONS

MAXIMUM ACHIVABLE POINT: 50 % EXAM ALLOWED TIME: 80 MINUTES

ALWAYS REMEMBER THIS


“ALL OF US ARE BORN WITH CAPACITY, SO WE SHOULD NOT MERELY
EXPECT OTHERS TO DO FOR US”

GENERAL INSTRUCTIONS:
 YOUR EXAM PAPER CONSISTS OF THREE PARTS: PART I TRUE or FALSE
QUESTIONS, PART II MULTIPLE CHOICE QUESTIONS AND PART III
WORKOUT QUESTIONS RESPECTIVELY.
 ATTEMPT ALL QUESTIONS UNDER EACH PART.
 MAKE SURE YOUR EXAM PAPER HAVE 5 PAGES INCLUDING THE COVER
PAGE AND THE ANSWER SHEET.
 WRITE YOUR ANSWERES ONLY ON THE ANSWER SHEET WHICH IS
ATTACHED ON THE BACK OF THIS EXAM PAPER.
 IT IS NOT ALLOWED TO USE PENCIL AND RED PEN.
 USING MOBILE PHONE FOR CALCULATION PURPOSE IS NOT ALLOWED
ONLY USE CALCULATOR OF ANY KIND FOR CALCULATION PART.
 TAKING TO EXAMMATE IS NOT ALLOWED.

“WISH U ALL THE BEST OF LUCK”

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ADEM MOHAMMED NOVEMBER 27,2024

Part I- TRUE or FALSE Items (1.5% EACH)


Instruction: Write the word “TRUE” if the given statement is correct, if not write the word
“FALSE” on the answer sheet.
1. Data is a collection of facts, such as numbers, words, measurements, observations or just
descriptions of things.
2. Financial data are the set of documents prepared by the business organization at the end
of the accounting period.
3. Financial data should be accurate and based on facts.
4. Tax is a voluntary payment or charge collected by local, state, and national governments
from individuals or businesses.
5. Simple interest is an interest accumulated on the principal and interest together over a
given time period.
6. The monetary value of a physical fixed asset increases over time due to use, wear and
tear or obsolescence.
7. Inflation is the percentage change in the value of the Wholesale Price Index (WPI) on a
year-on year basis.
8. Financial analysis is a method used to evaluate the viability of a proposed project by
assessing the value of net cash flows that result from its implementation.
9. Dividing the most liquid current assets value by current liabilities value results current
ratio.
10. Dividing the value of current assets by current liabilities results quick ratio.
Part II- Multiple Choice Items (1.5% EACH)
Instruction: Choose the correct answer for the following questions from the given
alternatives listed under each question and write your answers on the answer sheet.
1. Which one of the following is correct about asset turnover ratio of a company?
A. Asset turnover shows how efficiently your company is converting its assets into sales.
B. A rising asset turnover ratio over time shows assets are being utilized more
effectively.
C. A decreasing turnover ratio over time shows assets are being utilized less effectively.
D. The higher the asset turnover ratio indicates the lower revenue generation from its
assets.
2. Which one of the following is correct about interest?
A. Interest is the price paid for the use of a sum of money over a period of time.
B. Interest is usually computed as percentage of the principal over a given period of
time.
C. It is a fee paid for the use of another’s money, just rent is paid for the use of another’s
house.
D. All of the above
3. Which one of the following is not examples of fixed cost?
A. Rent or Mortgage expenses C. Equipment expenses

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ADEM MOHAMMED NOVEMBER 27,2024

B. Capital expenditures D. Wage Expenses


4. Breakeven point of a company for a given accounting period is determined by dividing
____________by______________.
A. Contribution Margin and Fixed Cost C. Fixed Cost and Contribution Margin
B. Total Revenue and Total Cost D. Total Cost and Total Revenue
5. The value of amount to be received in future where each payment is made at the
beginning of each period is known as_____________.
A. Present Value of ordinary annuity C. Future value of ordinary annuity
B. Future value of annuity due D. Present value of annuity due
Assume that an organization borrowed birr 2,000,000.00 for 10 years compound interest
percentage of 8% from a local bank. Using the following given financial data answer the
following questions.
6. What are the necessary journal entries at the time the organization borrowed the money?
A. A debit to cash and a credit to loan for birr 2,000,0000 respectively
B. A debit to loan and a credit to cash for birr 2,000,0000 respectively
C. A debit to loan and a credit to cash for birr 3,600,000 respectively
D. A debit to cash and a credit to loan for birr 3,600,000 respectively.
7. What will be the necessary journal entries by the organization after the company uses the
money at the end of 1st year?
A. A debit to cash and a credit to interest expense for birr 160,000 respectively
B. A debit to interest expense and a credit to cash for birr 160,000 respectively
C. A debit to loan and a credit to cash for birr 160,000 respectively.
D. A debit to cash and a credit to loan for birr 160,000 respectively.
8. What will be the necessary journal entries by the organization after the company uses the
money at the end of 3rd year?
A. A debit to loan and a credit to interest expense for birr 186,624 respectively.
B. A debit to loan and a credit to cash for birr 186,624 respectively.
C. A debit to cash and a credit to loan for birr 186,624 respectively.
D. A debit to interest expense and a credit to cash for birr 186,624 respectively

Abdi Pizza, PLC bought a new pizza oven in cash at the beginning of 2024 for birr10,000. Abdi
the owner, estimates that this oven will last about 10 years and probably won't be worth anything
after 10 years. Using the above data answer for the following questions.
9. What will be the necessary journal entries by Abdi Pizza PLC to record the acquisition of
the new pizza oven?
A. A debit to cash and a credit to pizza oven for birr 10,000.
B. A debit to depreciation expense and a credit to accumulated depreciation expense for
birr 10,000.
C. A debit to pizza oven and a credit to cash for birr 10,000.
D. A debit to accumulated depreciation expense and a credit to depreciation expense for
birr 10,000.

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ADEM MOHAMMED NOVEMBER 27,2024

10. How much will be the depreciation expense at the end of the year 2025 for the pizza oven
if Abdi Pizza PLC uses straight-line depreciation calculation method?
A. Birr 10,000 B. Birr 1,000 C. Birr 2,000 D. Birr 3,000.
Part III: Workout Items (20% ALL REQIRMENTS)
Instruction: Correctly perform the following workout questions with a neat and a clear
handwriting and also follow the necessary steps. Your answers must be written on the
answer sheet.
1. Assume that Mohammed Ahmed plans to deposit Birr 5,000 at the beginning of each year
for the next 5 years to save enough money for his daughter’s education fee.
Required
Task I. Calculate the amount of money Mohammed Ahmed should save at the end of 3
years.
Task II. Calculate the amount of money Mohammed Ahmed should save at the end of 5
years.
2. Suppose Xyz Company invested 2,000,000 in interest rate of 10% per year for the next
four years.
Required
Calculate present value of annuity due using the above data given.
3. Hodon has just opened her own gourmet soda shop and is looking at her projected costs
for the end of the first fiscal quarter, trying to determine what her break-even point is.
Let's say her fixed costs for this first quarter, which include kegs, vats, delivery trucks,
and the rent for the storefront, total out to Birr 20,000, and her variable costs have been
calculated to be Birr 1.50 per unit, or in her case, per bottle of soda. She plans on
charging approximately Birr 2.00 a bottle, which she'll sell in six-packs.
Required
Task I. Calculate the Break-Even point in units
Task II. Calculate the Break-Even point in Birr

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ADEM MOHAMMED NOVEMBER 27,2024

ANSWER SHEET
STUDENT’S NAME_______________________________________________
STUDENT’S ID. NO.______________________________________________
SECTION:______________________________________________________
PROGRAM: REGULAR EVENING

PART I-TRUE or FALSE QUESTIONS


1.___________2.____________3._____________4.______________5.___________
6.___________7.______________8.____________9.______________10.__________

PART II-MULTIPLE CHOICE QUESTIONS


1.____________2._______________3._____________4.____________5.____________
6.____________7._______________8.____________9._____________10.___________

PART III-WORKOUT QUESTIONS


1.

2.

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ADEM MOHAMMED NOVEMBER 27,2024

3.

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