Sector: - Labor and Social Affairs

Sub Sector: - Business and Finance

Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

The assessment covers the following units of competencies.

LSA ACF2 01 1221 Use Business Technology and equipment
LSA ACF2 02 1221 Process Customer Accounts and Transactions
LSA ACF2 03 1221 Develop Understanding of the Ethiopian Financial System and Markets
LSA ACF2 04 1221 Develop Understanding of Taxation
LSA ACF2 05 1221 Prepare and Use a Personal Budget and Savings Plan
LSA ACF2 06 1221 Develop Understanding of Debt and Consumer Credit
LSA ACF2 07 1221 Apply Business Communication in the work place
LSA ACF2 08 1221 Produce, Record & maintain Business Documents
LSA ACF2 09 1221 Apply 5S Procedures
LSA ACF3 01 1221 Process Financial Transactions and Extract Interim Reports
LSA ACF3 02 1221 Administer, Monitor and Control General and Subsidiary Ledgers
LSA ACF3 03 1221 Perform Financial Calculations
LSA ACF3 04 1221 Administer Financial Accounts
LSA ACF3 05 1221 Prepare, Match and Process Receipts
LSA ACF3 06 1221 Process Payment Documentation
LSA ACF3 07 1221 Balance Cash Holdings
LSA ACF3 08 1221 Process Payroll
LSA ACF3 09 1221 Prepare Financial Reports
LSA ACF3 10 1221 Calculate and Administer Taxes, Fees and Charges
LSA ACF3 11 1221 Handle Foreign Currency Transactions
LSA ACF3 12 1221 Prevent and Eliminate MUDA
LSA ACF4 01 1221 Prepare Financial Statements for governmental and not for profit Entities
(NFP)
LSA ACF4 02 1221 Set up and operate a Computerized Accounting Information System
LSA ACF4 03 1221 Apply Principles of Professional Practice to Work in the financial services
industry
LSA ACF4 04 1221 Prepare Financial Reports based international financial report standard
(IFRS)
LSA ACF4 05 1221 Process Business Tax Requirements
LSA ACF4 06 1221 Develop and Use Complex Spread sheets
LSA ACF4 07 1221 Produce Job order and Process Costing System
LSA ACF4 08 1221 Maintain Inventory Records and valuation system
LSA ACF4 09 1221 Establish and Maintain a Cash and Accrual Accounting System
LSA ACF4 10 1221 Manage Overdue Customer Accounts
LSA ACF4 11 1221 Provide Management Accounting Information
LSA ACF4 12 1221 Perform auditing and reporting

Assessor’s Package for Accounting and Finance L_IV

 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

Contents of the Assessor’s Package:

1. Instructions for the competence Assessor
2. Evidence Plan
3. Project Information or Problem
4. Worksheet (If necessary)
5. Demonstration/Observation Checklist
6. Product Evaluation Sheet (If required in the practical project)
7. List of Equipment, Tools and Materials
Methods of Assessment
a) Observation/Demonstration
b) Written test
Nature of assessment:
1. Holistic – based
All Core units of competence are included in practical projects
INSTRUCTIONS FOR THE COMPETENCE ASSESSOR
Occupation Accounting and Finance – Level IV

BEFORE THE ASSESSMENT

1. Establish the assessment context and purpose of the assessment
2. Familiarize self with the qualification or units of competence to be assessed
 Assessment context
 Assessor’s guide
 Assessment methods
 Product evaluation sheets
 Time limits
 Evidence to be collected
 Performance Criteria
 Assessment and Certification arrangements
3. Ensure that the Assessment Center complies with the relevant occupational health and
safety requirements as:
 Well lighted and well ventilated assessment room

Assessor’s Package for Accounting and Finance L_IV

 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

 Risk areas properly marked

4. Ensure that the following assessment resources are available in the Assessment Center:
 Complete set of safe and functional equipment and tools
 Complete set of supplies and materials
 Assessor’s guide and rating sheets (Assessment Package)
5. Notify candidates of any resources they have to bring during the assessment

ON THE DAY OF ASSESSMENT

1. Check the attendance of the candidates
 Check the candidates registered number
 Instruct candidates to sign on the attendance sheet
 Check accomplished self assessment guide
 Provide overview of the qualification to be assessed refer to (EOS)
2. Orient the candidates (Time allotment is 15 minutes)
 explain the context and purpose of the assessment and the assessment process
 explain the Qualification or units of competency to be assessed and the evidence to be
collected
 outline the assessment procedures to be undertaken
 assess the needs of the candidates and establish any allowable adjustments in the
assessment procedure
 seek feedback regarding the candidate’s understanding of the occupational
standard/units of competence being assessed, evidence requirements and assessment
process
 make all necessary announcement just before the start of the assessment
 specify the do’s and don’ts inside the assessment room
3. Instruct candidates to accomplish the competency assessment agreement
 Provide the candidates with all materials, tools and equipment required to complete the
tasks. Ensure that all tools should be of the same kind and quality
 Administer the assessment in accordance with the outcome-based assessment methodology
 Give specific instructions to the candidates clearly and slowly and provide each candidate
with a copy of the Candidate Instructions Guide and Worksheets
 Inform each candidate that s/he has fifteen (15) minutes reading time and the total time
duration for each is indicated in the Project Information.
 Make certain that the candidate fully understands what is expected and knows the time
limits allowed to finish each assessment project.
 Stay at the assessment area during the entire duration of the assessment activity and observe
the candidate perform the tasks.
 Inhibit self from providing any assistance during the assessment or indicate in any way
whether the candidate is or not performing the activity correctly.
 Intervene only for safety reasons
Assessor’s Package for Accounting and Finance L_IV
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

 Implement the evidence gathering process and ensure its validity, reliability, fairness and
flexibility
 Judge the evidence in terms of the four dimensions of competency – task skills, task
management skills, contingency management skills and job/ role environment skills
 Record details of evidence collected and make judgment about the candidate’s
competence based on the evidence and the relevant standards required of the units of
competence
 Make no alterations/erasures in the Observation Checklist

POST ASSESSMENT
1. Provide feedback on the outcome of the assessment process. This includes providing the
candidate with:
 clear and constructive feedback on the assessment decision
 Give the candidates your feedback on the assessment result.
Feedback should indicate whether the candidate is:
 COMPETENT
 NOT YET COMPETENT
On each of the competencies assessed
 information on ways of overcoming any identified gaps in competency revealed by the
assessment
 information on reassessment process, if applicable
2. Prepare the necessary assessment reports
 Record the assessment outcome using the prescribed Observation Checklist
 Make sure the report or rating sheets are properly signed by you and the candidate
 Maintain records of the assessment procedures, evidence collected and assessment outcome
 Endorse assessment results/outcomes to assessment centre

EVIDENCE PLAN
Sector Labour and Social Affairs
Occupation Accounting and Finance
Level IV
Instrument/ tool (Oral question using interviews,
Practical exercises & Demonstration, Portfolio,
Role plays, simulation) Please specify in the table
below.
Units of competence to be assessed: Obser Question Practical Oral
vation ing questioning

Assessor’s Package for Accounting and Finance L_IV

 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

Project1: Understanding and develop of X Practical

Ethiopian taxation, payroll system and exercises
foreign currency transaction.
LSA ACF2 04 1221 Develop Understanding X Practical
of Taxation exercises

LSA ACF3 08 1221 Process Payroll X Practical

exercises
LSA ACF3 10 1221 Calculate and X Practical
Administer Taxes, Fees and Charges exercises
LSA ACF3 11 1221 Handle Foreign X Practical
Currency Transactions exercises
LSA ACF2 05 1221 Prepare and Use a X Practical
Personal Budget and Savings Plan exercises
LSA ACF4 05 1221 Process Business Tax X Practical
Requirements exercises
Project2: Produce and process cost and
inventory cost valuation management
system.
LSA ACF4 07 1221 Produce Job order and X Practical
Process Costing System exercises
LSA ACF4 11 1221 Provide Management X Practical
Accounting Information exercises
LSA ACF4 08 1221 Maintain Inventory X Practical
Records and valuation system exercises
Project3: Preparing Financial Report
LSA ACF4 04 1221 Prepare Financial X Practical
Reports based international financial exercises
report standard
LSA ACF2 02 1221 Process Customer X Practical
Accounts and Transactions exercises
LSA ACF4 12 1221 Perform auditing and X Practical
reporting exercises
LSA ACF3 09 1221 Prepare Financial X Practical
Reports exercises

Assessor’s Package for Accounting and Finance L_IV

 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

LSA ACF3 01 1221 Process Financial X Practical

Transactions and Extract Interim Reports exercises
LSA ACF3 02 1221 Administer, Monitor X Practical
and Control General and Subsidiary exercises
Ledgers
LSA ACF4 01 1221 Prepare Financial X Practical
Statements for governmental and not for exercises
profit Entities (NFP)
Project 4. Controlling cash and cash
Equivalents.
LSA ACF3 07 1221 Balance Cash X Practical
Holdings exercises
LSA ACF4 03 1221 Apply Principles of X Practical
Professional Practice to Work in the exercises
financial services industry
LSA ACF4 09 1221 Establish and Maintain X Practical
a Cash and Accrual Accounting System exercises
LSA ACF3 05 1221 Prepare, Match and X Practical
Process Receipts exercises
LSA ACF3 06 1221 Process Payment X Practical
Documentation exercises

Project 5. Perform Financial

Calculations and Financial system and
market
LSA ACF2 06 1221 Develop X Practical
Understanding of Debt and Consumer exercises
Credit
LSA ACF3 03 1221 Perform Financial X Practical
Calculations exercises
LSA ACF2 03 1221 Develop X Practical
Understanding of the Ethiopian Financial exercises
System and Markets

Assessor’s Package for Accounting and Finance L_IV

 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

NOTE: The OS must be the guide in preparing the plan, considering the various elements of
the unit of competence and performance Criteria indicated. Underpinning knowledge and
skills must also be considered.
Project Information
Given the necessary tools, equipment and information, you are expected to perform the
following project
Assessment Venue: Well Equipped Assessment Centre or real work place
Total time for all projects 3:30 Hrs.
Project1: Understanding and develop of Ethiopian taxation, payroll system and foreign
currency transaction. (1Hr.)
This project covers the following competencies.
1. LSA ACF2 04 1221 Develop Understanding of Taxation
2. LSA ACF3 08 1221 Process Payroll
3. LSA ACF3 10 1221 Calculate and Administer Taxes, Fees and Charges
4. LSA ACF3 11 1221 Handle Foreign Currency Transactions
5. LSA ACF2 05 1221 Prepare and Use a Personal Budget and Savings Plan
6. LSA ACF4 05 1221 Process Business Tax Requirements
Balema trading is one of a merchandising firm established for the purchase & sale of goods in
Adama town. The following data shows a sample of employees of the firm & their earnings
for the month of October 2015.
Employee Overtime Duration of
ID Name of Employees Basic Worked Overtime Work
Salary Hours
01 Keneni Lemi 6,500 10 6:00pm-10:00am
02 Samuel Bekele 4,400 10 10:00am-12:00pm
03 Admasu Leta 2,800 4 Weekend
04 Abera Mekesha 850 - -
Additional information
1. All employees are permanent
2. Samuel is a member of saving & credit association of the firm & saves 10% of his
basic salary.
3. Each employee is entitled for desert allowance of 20% of his/her basic salary.
4. The firm expects every employee to work 40 hours per week.

Assessor’s Package for Accounting and Finance L_IV

 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

5. Transport allowance of each employee is 25% from basic salary which in access 600
is taxable
Required
Task 1.1: Prepare payroll register for the month of October, 2015
Task 1.2: Record the necessary journal entries for payment of salary for the month October,
2015
Task 1.3: keneni Lemi plan to prepare personal budget based on net pay for the month based
on the following percentage and the remaining she wants plan to save as personal saving.
Food.................25%
Cloth..................10%
Rent.....................40%
Transportation.........5%

Task 1.4: List factors affecting foreign exchange rates.

Project 2: Produce and process cost and inventory cost valuation management system.
(30Min).
This project covers the following competencies.
1. LSA ACF4 07 1221 Produce Job order and Process Costing System
2. LSA ACF4 11 1221 Provide Management Accounting Information
3. LSA ACF4 08 1221 Maintain Inventory Records and valuation system

Case I- Produce and process cost

Morgan steel manufacturing company conducted the following transactions for the year 2016.
 Direct material purchase birr 54,000.
 Ending direct material inventory birr 40,000.
 Direct labor cost birr 30,000.
 Beginning finished goods inventory birr 40,000.
 The company generate revenue from sales birr 136,000.
 Beginning direct material inventory birr 24,000.
 Ending finished goods inventory birr 42,000.
 Manufacturing overhead cost is 60% of labor cost.

Required
Assessor’s Package for Accounting and Finance L_IV
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

Based on the given data compute:-

Task 2.1: Cost of goods manufactured.
Task 2.2: Cost of goods sold.
Task 2.3: Gross profit.
Case II- Inventory valuation
Shirkina Merchandise Company has provided the following data about purchase and sales of
merchandise goods during the year 2020.
January 01 2020 Beginning inventory 1000 unit at birr 16 per unit
February 16 Purchased 1200 unit at birr 18 per unit
February 19 sold 2000 unit
April 12 Purchased 1000 unit at birr 20 per unit
May 10 Purchased 1400 unit at birr 24 per unit
June 20 Sold 2000 unit
August 25 Purchased 1400 unit at birr 25 per unit
November 24 Sold 500 unit

Information: - assuming the company used periodic inventory system and FIFO cost flow
assumption. Based on the given information computes:-
Required
Task 2.1. Cost of ending inventory for the year end 2020.
Task 2.2. Cost of goods sold for the year end 2020.
Project3: Preparing Financial Report (1Hr).
This project covers the following competencies
1. LSA ACF4 04 1221 Prepare Financial Reports based international financial report
standard
2. LSA ACF2 02 1221 Process Customer Accounts and Transactions
3. LSA ACF4 12 1221 Perform auditing and reporting
4. LSA ACF3 09 1221 Prepare Financial Reports
5. LSA ACF3 01 1221 Process Financial Transactions and Extract Interim Reports
6. LSA ACF3 02 1221 Administer, Monitor and Control General and Subsidiary Ledgers
7. LSA ACF4 01 1221 Prepare Financial Statements for governmental and not for profit
Entities (NFP)
8. LSA ACF3 04 1221 Administer Financial Accounts

The account and their ledger balance in the ledger of Taylor Company on December 31 2010
year are as follows:
Assessor’s Package for Accounting and Finance L_IV
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

Taylor Company
Unadjusted Trial Balance
For the month ended December 31 2010
DESICRIPTION DEBIT CREDIT
Cash 68,175
Accounts Receivable 112,500
Merchandise Inventory 180,000
Prepaid Insurance 10,600
Store Supplies 3,750
Office Supplies 1,700
Store Equipment 112,000
Accumulated Depreciation Store Equipment 40,300
Office Equipment 50,000
Accumulated Depreciation Office Equipment 17,200
Accounts Payable 66,700
Unearned Rent 1,200
Note Payable 105,000
Taylor, Capital 220,510
Taylor, Drawing 40,000
Sales 995,000
Sales Returns and Allowances. 12,500
Sales Discounts 6,500
Purchases 635,000
Purchases Discounts 9,500
Purchases Returns and Allowances 5,500
Freight in 6,200
Sales Salaries Expense 86,400
Advertising Expense 30,000
Miscellaneous Selling Expense 1,335
Office Salaries Expense 60,000
Rent Expense. 30,000
Miscellaneous Administrative Expense 1,650
Interest Expense. 12,600
Total 1,460,910 1,460,910

Additional information
The data for year-end adjustments on December 31 2010 are as follows:
1. Merchandise inventory on ending . .. 220,000

Assessor’s Package for Accounting and Finance L_IV

 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

2. Insurance expired during the year ... .... 7,260

Inventory of supplies on December 31:
3. Store supplies ... 1,700
4. Office supplies . 400
Depreciation for the year:
5. Store equipment 9,500
6. Office equipment .. 4,800
Salaries payable on December 31:
7. Sales salaries . 2,750
8. Office salaries .. . 1,150
9. Unearned rent on December 31 . .. 400

Required
Task 3.1: Journalize the adjusting entries.
Task 3.2: Prepare multiple-step income statement.
Task 3.3: Prepare statement of owner's equity.
Task 3.4: Prepare balance sheet.

Project 4. Controlling cash and cash Equivalents. (30 Min)

This project covers the following competencies
1. LSA ACF4 03 1221 Apply Principles of Professional Practice to Work in the financial
services industry
2. LSA ACF4 09 1221 Establish and Maintain a Cash and Accrual Accounting System
3. LSA ACF3 05 1221 Prepare, Match and Process Receipts
4. LSA ACF3 06 1221 Process Payment Documentation
5. LSA ACF3 07 1221 Balance Cash Holdings

The bank statement for Dunlap Company for April 30 2015 indicates a balance of birr
10,543.11. The Dunlap Company employs the voucher system in controlling expenditures
and disbursements. All cash receipts are deposited each evening in a night depository, after
banking hours. The accounting records indicate the following summary data for cash receipts
and disbursements for April:
Cash in bank account
Balance as of April 1 . ..... 5,143.50
Cash receipts journal
Total cash receipts for April .. 28,971.60
Check register
Total amount of checks issued in April .... .. 26,060.85
Assessor’s Package for Accounting and Finance L_IV
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

Comparison of the bank statement and the accompanying cancelled checks and
memorandums with the records revealed the following reconciling items:

A. The bank had collected for Dunlap Company birr 1,502 on a note left for collection.
The face of the note was birr 1,300.
B. A deposit of birr 1,932.21, representing receipts of April 30 had been made too late to
appear on the bank statement.
C. Checks outstanding totaled birr 3,265.27.
D. Checks drown for birr 420 had been erroneously charged by the bank as birr 240.
E. A customer's check for birr 150 was returned by the bank due to insufficient funds.
F. A check drawn for birr 79 had been erroneously charged by the bank as birr 97.
G. A check for birr 10 returned with the statement had been recorded in the check register
as birr 100. The check was for the payment of an obligation to Davis Equipment
Company for the purchase of office supplies on account.
H. Bank service charges for April amounted to birr 8.20.
I. Check for birr 1,656.42 to Merion Company on account, record in cash payment journal
as a birr 1,216.42
Required
Task 4.1: Prepare bank reconciliation for April.
Task 4. 2: Journalize the entries that should be made by Dunlap Company.

Project 5. Perform Financial Calculations and Financial system and market (30 Min)

1. LSA ACF2 03 1221 Develop Understanding of the Ethiopian Financial System and
Markets
2. LSA ACF2 06 1221 Develop Understanding of Debt and Consumer Credit
3. LSA ACF3 03 1221 Perform Financial Calculations
4. LSA ACF4 10 1221 Manage Overdue Customer Account

Suppose ABC Company invest 100,000 at an annual interest rate of 9%. ABC Company
wants to calculate the future value of its investment.
Required
Task 5.1: calculate the future value of ABC company investment at the end of 5 years,
compounded quarterly
Task 5.2: calculate the future value of the investment at the end of second year simple
interest rate
Task 5.3: List marketable securities that are traded in money market.

Assessor’s Package for Accounting and Finance L_IV

 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

Answer
Project1: Understanding and develop of Ethiopian taxation, payroll system and foreign currency transaction.
Task 1.1: Prepare payroll register for the month of October, 2015
Balema trading plc
Payroll register sheet
For the month of October 2015
desert pensio employee Credit total SI
Id basic allowan transport over gross taxable n & saving deducti G
no Employee Name salary ce allowance time income income payabl income associati on Net pay N
1 KENENI LEMI 6,500 1300 1625 e
609.37 10,034.3 8,134.37 455 tax on
1,485.31 - 1,940. 8,094.06
2 SAMUEL BEKELE 4,400 880 1,100 481.25 76,861.25 5,381.25 308 780.31 440 31
1528.3 5332.94
3 ADMASU LETA 2,800 560 700 140 4200 3040 196 313.5 - 509.5 3690.5
4 ABERA MEKESHA 850 170 212.5 - 1232.5 850 59.5 25 - 84.5 1148
TOTAL 14,550 2910 3637.5 1230.6 22,328.1 17,405.6 1,018. 1904.12 440 4062.6 18,265.5
2 2 2 5 2
Prepared By _________________ Checked by ____________ Approved By __________________
Date ______________________ Date __________________ Date ____________________
Sign _______________________ Sign _________________ Sign _________________

Assessor’s Package for Accounting and Finance L_IV

 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

Task 2: Record the necessary journal entries for payment of salary for the month October, 2015

Before payment

Salary expense .22, 328.12

Tax payable 1904.12
Pension payable .1, 018.5
Credit & saving payable .. 440
Salary payable ...18,265.5
After payment
Tax payable 1904.12
Pension payable .1, 018.5
Credit & saving payable .. 440
Salary payable ...18,265.5
Cash .22, 328.12

Pension contribution for employer (11%)

14,550 × 11%=1600.5
Before payment
Pension expense .1600.5
Pension contribution payable .1600.5
Assessor’s Package for Accounting and Finance L_IV
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

After payment
Pension contribution payable .1600.5
Cash 1600.5
Task 3; keneni Lemi plan to prepare personal budget based on net pay for the month based on the following percentage and the
remaining she wants plan to save as personal saving.
Keneni lemi
Personal budget
For the month of October 2015
Description Rate Total Amount
Net income Birr 8,094.06
Expenses
 Food 25%
 Cloth 10%
 Rent 40%
 Transportation 5%
Total expenses Birr 6475.23
Saving Birr 1618.83
Task 1.4. List factors affecting foreign exchange rates
 Inflation  Terms of trade
 Interest rate  Economic recession
 Government debit
Assessor’s Package for Accounting and Finance L_IV
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

Project2: Produce and process cost and inventory cost valuation management system.

Case I- Produce and process cost

Task 2.1. Cost of goods manufactured.
Cost of goods Direct material + Direct labour Manufacturing
manufactured = used Cost + Overhead cost

Direct material used = (Beginning direct material inventory + Direct material purchase) –
Ending direct material inventory.
Direct material used = (birr 24,000 + birr 54,000) – birr 40,000.
= Birr 38,000.
Cost of goods manufactured = Birr 38,000 + Birr 30,000 + Birr 18,000.
= Birr 86,000

Task. 2.2. Cost of goods sold.

Cost of goods sold = (Beginning finished goods inventory + Cost of goods manufactured) –
Ending finished goods inventory
= ( Birr 40,000 + Birr 86,000) – Birr 42,000.
Cost of goods sold = Birr 84,000.

Task 2.3. Gross profit.

Gross profit = sales – cost of goods sold

Birr 136,000 – Birr 84,000.
= Birr 52,000.

Case II- Inventory valuation

Task 2.1. Cost of ending inventory for the year end 2020.
Ending inventory in unit = (Beginning inventory in unit + Merchandise purchase) – units sold
= (1000 + 5000) – 4500
= 1500 unit
Cost of ending inventory
= 1400 unit * birr 25 = birr 35,000.
= 100 Unit * birr 24 = birr 2400
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

= Birr 37,400

Task 2.2. Cost of goods sold for the year end 2020

Unit sold = (Beginning inventory in unit + Merchandise purchase) - Ending inventory in unit
= (1000 + 5000) – 1500
Unit sold = 4500 unit

Cost of goods sold =

January 01 2020 1000 * Birr 16 = Birr 16000
February 16 2020 1200 * Birr 18 = Birr 21,600
April 12 2020 1000 * Birr 20 = Birr 20,000
May 10 2020 1300 * Birr 24 = Birr 31,200
= Birr 88,800

Project 3: Preparing Financial Report

The account and their ledger balance in the ledger of Taylor Company on December 31 2010
year are as follows:
Taylor Company
Unadjusted Trial Balance
For the month ended December 31 2010
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

DESICRIPTION DEBIT CREDIT

Cash 68,175
Accounts Receivable 112,500
Merchandise Inventory 180,000
Prepaid Insurance 10,600
Store Supplies 3,750
Office Supplies 1,700
Store Equipment 112,000
Accumulated Depreciation Store Equipment 40,300
Office Equipment 50,000
Accumulated Depreciation Office Equipment 17,200
Accounts Payable 66,700
Unearned Rent 1,200
Note Payable 105,000
Taylor, Capital 220,510
Taylor, Drawing 40,000
Sales 995,000
Sales Returns and Allowances. 12,500
Sales Discounts 6,500
Purchases 635,000
Purchases Discounts 9,500
Purchases Returns and Allowances 5,500
Freight in 6,200
Sales Salaries Expense 86,400
Advertising Expense 30,000
Miscellaneous Selling Expense 1,335
Office Salaries Expense 60,000
Rent Expense. 30,000
Miscellaneous Administrative Expense 1,650
Interest Expense. 12,600
Total 1,460,910 1,460,910
Additional information
The data for year-end adjustments on December 31 2010 are as follows:
1. Merchandise inventory on ending . .. 220,000
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

2. Insurance expired during the year ... .... 7,260

Inventory of supplies on December 31:
3. Store supplies ... 1,700
4. Office supplies . 400
Depreciation for the year:
5. Store equipment 9,500
6. Office equipment .. 4,800
Salaries payable on December 31:
7. Sales salaries . 2,750
8. Office salaries .. . 1,150
9. Unearned rent on December 31 . .. 400

Task 3.1. Journalize the adjusting entries.

No DESICRIPTION DEBIT CREDIT
1 Merchandise inventory 220,000
Income summary 220,000
Income summary 180,000
Merchandise inventory 180,000
2 Prepaid Insurance expense 7,260
Prepaid Insurance 7,260
3 Store supplies expense 2,050
Store supplies 2,050
4 Office supplies expense 1,300
Office supplies 1,300
5 Depreciation expense 9,500
Accumulated Depreciation-Store Equipment 9,500
6 Depreciation expense 4,800
Accumulated Depreciation-Office Equipment 4,800
7&8 Sales salaries expense 2,750
Office salaries expense 1,150
Salaries Payable 3,900
9 Unearned Rent 800
Rent Income 800
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

Task 3.2. Prepare a multiple-step income statement.

Taylor Company
Income statement
For the month ended December 31 2010
Revenue
Sales 995,000
Less Sales Returns and Allowances 12,500
Sales Discounts 6,500 (19,000)
Net sales 976,000
Cost of goods sold
Beginning inventory 180,000
Add Purchase 635,000
Less Purchases Discounts 9,500
Purchases Returns and Allowances 5,500 (15,000)
Net 620,000
purchase
Add Transportation in 6,200
Cost of merchandise purchased 626,200
Cost of merchandise available for sale 806,200
Less Ending inventory (220,000)
Cost of 586,200
goods
sold
Gross profit 389,800
Expense
Less Sales Salaries Expense 89,150
Advertising Expense 30,000
Depreciation Expense-Store 9,500
Equipment
Store Supplies Expense 2,050
Miscellaneous Selling Expense 1,335
Office Salaries Expense 61,150
Rent Expense 30,000
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
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Insurance Expense 7,260

Depreciation Expense Office 4,800
Equipment
Office Supplies Expense 1,300
Miscellaneous Administrative 1,650
Expense
Interest Expense 12,600
Total Expense (250,795)
Operating Income 139,005
Add Other Income
Rent Income 800
Net income 139,805

Task 3.3. Prepare a statement of owner's equity.

Taylor Company
Owner equity statement
For the month ended December 31 2010
Taylor Capital December 31 2010
Taylor beginning capital 220,510
Add Net income 139,805
Less Taylor drowning (40,000)
Total increase in capital 99,805
Taylor Ending Capital 320,315

Task 3.4. Prepare a balance sheet.

Taylor Company
Balance Sheet
December 31 2010
Asset
DEBIT CREDIT
Cash 68,175
Accounts Receivable 112,500
Merchandise Inventory 220,000
Prepaid Insurance 3,340
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
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Store Supplies 1,700

Office Supplies 400
Store Equipment 112,000
Accumulated Depreciation Store Equipment 49,800
Office Equipment 50,000
Accumulated Depreciation Office Equipment 22,000
Total Asset 568,115
Liability
Accounts Payable 66,700
Salaries Payable 3,900
Unearned Rent 400
Note Payable 105,000
Total liability 176,000
Owner Equity
Taylor Ending capital 320,315
Total Liability and Owner Equity 568,115

Project 4. Controlling cash and cash Equivalents.

The bank statement for Dunlap Company for April 30 2015 indicates a balance of birr 10,543.11.
The Dunlap Company employs the voucher system in controlling expenditures and
disbursements. All cash receipts are deposited each evening in a night depository, after banking
hours. The accounting records indicate the following summary data for cash receipts and
disbursements for April:
Cash in bank account
Balance as of April 1 . ..... 5,143.50
Cash receipts journal
Total cash receipts for April .. 28,971.60
Check register
Total amount of checks issued in April .... .. 26,060.85

Comparison of the bank statement and the accompanying cancelled checks and memorandums
with the records revealed the following reconciling items:
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

A. The bank had collected for Dunlap Company birr 1,502 on a note left for collection. The
face of the note was birr 1,300.
B. A deposit of birr 1,932.21, representing receipts of April 30 had been made too late to
appear on the bank statement.
C. Checks outstanding totaled birr 3,265.27.
D. Checks drown for birr 420 had been erroneously charged by the bank as birr 240.
E. A customer's check for birr 150 was returned by the bank due to insufficient funds.
F. A check drawn for birr 79 had been erroneously charged by the bank as birr 97.
G. A check for birr 10 returned with the statement had been recorded in the check register as
birr 100. The check was for the payment of an obligation to Davis Equipment Company for
the purchase of office supplies on account.
H. Bank service charges for April amounted to birr 8.20.
I. Check for birr 1,656.42 to Merion Company on account, record in cash payment journal as
a birr 1,216.42

Task 4.1: Prepare bank reconciliation for April.

Dunlap Company
Bank Reconciliation
For the month ended April 30 2015
Balance per bank statement 10,543.11
Add Deposit of April 30 not recorded by bank 1,932.21
Bank error in charging 18 1,950.21
Deduct Outstanding checks 3,265.27
Bank error in charging 180 (3445.27)
Adjusted Balance 9,048.05
Balance per depositor statement 8,054.25
Add Note collected by bank 1,300
Interest income 202
Error in recording check 90 1,592
Deduct Bank service charge 8.20
NSF 150
Error in recording check 440 (598.2)
Adjusted Balance 9,048.05

Task 4. 2. Journalize the entries that should be made by Dunlap Company.

 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

DEBIT CREDIT
To Record the Collection of Note
Cash in bank 1,502
Note receivable 1,300
Interest income 202
To Record the Bank Error
Cash in bank 90
Account payable 90
To Record Service Charge
Miscellaneous administrative expense 8.20
Cash in bank 8.20
To Record Insufficient Funds
Account receivable 150
Cash in bank 150
To Record the Depositor Error
Account payable 440
Cash in bank 440

Project 5. Perform Financial Calculations and Financial system and market

Task 5.1: calculate the future value of ABC company investment at the end of 5 years,
compounded quarterly.
 Principal (P) = 100,000 birr
 Annual interest rate (r) = 9%
 Number of years (n) = 5
 Number of times compounded per year (t) = 4 (quarterly)

A = P (1 + r/t) ^n t
Calculation:
First, convert R as a precent to r as a decimal
r = R/100
r = 9/100
r = 0.09 rate per year,
Then solve the equation for A
A = P(1 + r/n)nt
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

A = 100,000.00(1 + 0.09/4)(4)(5)
A = 100,000.00(1 + 0.0225)20
A = 100,000.00(1.0225)20
A = Birr156,050.92

Task 5.2: calculate the future value of the investment at the end of second year simple
interest rate
Simple interest formula A = P + (P * r * t)
 Principal (P) = 100,000birr
 Annual interest rate (r) = 9% = 0.09
 Number of years (t) = 2
Calculation
A = 100,000birr + (100,000 *0.09* 2)
A = 100,000birr + $18,000
A = 118,000 birr

Task 5.3: List marketable securities that are traded in money market.
 Bill of exchange
 commercial bill
 government bill
 promissory note
 treasury bill

Observation Checklist
Candidate’s Name:
Assessor’s Name:
Occupational Standard: Accounting and Finance IV
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

Unit of Competency: LSA ACF3 11 1221,LSA ACF2 05 1221, LSA ACF4 05 1221,
LSA ACF4 07 1221, LSA ACF4 11 1221, LSA ACF4 08 1221 ,
LSA ACF4 04 1221 , LSA ACF2 02 1221, LSA ACF4 12 1221,
LSA ACF3 09 1221, LSA ACF3 01 1221, LSA ACF3 02 1221,
LSA ACF4 01 1221 , LSA ACF3 04 1221, LSA ACF4 03 1221,
LSA ACF4 09 1221, LSA ACF3 05 1221, LSA ACF3 06 1221,
LSA ACF3 07 1221, LSA ACF2 03 1221 , LSA ACF2 06 1221 ,
LSA ACF3 03 1221, LSA ACF4 10 1221
Date of Assessment:
Time of Assessment:
Instructions for the Assessor
 Observe the candidate.
 Describe the assessment activity and the date on which it was undertaken
 Place a tick in the box to show that the candidate completed each aspects of the activity to the
standard expected in the enterprise.
 Complete the feedback sections of the form.
OBSERVATION
During the demonstration of skills, did the candidate: Yes No
Project1: Understanding and develop of Ethiopian taxation, payroll system and foreign
currency transaction.
Task 1.1: Prepare payroll register for the month of October, 2015

Task 2: Record the necessary journal entries for payment of salary for
the month October, 2015

Task 3; keneni Lemi plan to prepare personal budget based on net pay
for the month based on the following percentage and the remaining she
wants plan to save as personal saving.

Task 1.4. List factors affecting foreign exchange rates

 Inflation
 Interest rate
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
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 Government debit
 Terms of trade
 Economic recession

Project2: Produce and process cost and inventory cost valuation

management system.

Case I- Produce and process cost

Task 2.1. Cost of goods manufactured.
= Birr 86,000

Task. 2.2. Cost of goods sold.

= Birr 84,000.

Case II- Inventory valuation

Task 2.1. Cost of ending inventory for the year end 2020.
Cost of ending inventory
= 1400 unit * birr 25 = birr 35,000.
= 100 Unit * birr 24 = birr 2400
= Birr 37,400

Task 2.2. Cost of goods sold for the year end 2020

Unit sold = (Beginning inventory in unit + Merchandise purchase) - Ending

inventory in unit
= (1000 + 5000) – 1500
Unit sold = 4500 unit
Cost of goods sold =
January 01 2020 1000 * Birr 16 = Birr 16000
February 16 2020 1200 * Birr 18 = Birr 21,600
April 12 2020 1000 * Birr 20 = Birr 20,000
May 10 2020 1300 * Birr 24 = Birr 31,200
= Birr 88,800
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

Project3: Preparing Financial Report

Task 3.1: Journalize the adjusting entries

Task 3.2: Prepare a multiple-step income statement
Net income 139,805

Task 3.3: Prepare a statement of owner's equity

Taylor Ending Capital 320,315
Task3. 4: Prepare a balance sheet
Total Asset -------------------------------------568,115
Total liability --------------------------------------------------------176,000
Total Liability and Owner Equity-------------568,115
Project 4. Controlling cash and cash Equivalents.

TASK 4.1: Prepare a bank reconciliation for April

Adjusted Bank balance----------------------------------------9,048.05
Adjusted Book balance-------------------------------------------9,048.05
TASK 4.2: Journalize the entries that should be made by Dunlap Company
Project 5. Perform Financial Calculations and Financial system and
market

Task 5.1: calculate the future value of ABC company investment at the
end of 5 years, compounded quarterly
A = Birr156,050.92

Task 5.2: calculate the future value of the investment at the end of second
year simple interest rate
A = 118,000 birr

Task 5.3: List marketable securities that are traded in money market.
 Bill of exchange
 commercial bill
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
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 government bill
 promissory note
 treasury bill

The candidate’s overall performance in the practical project was:

 SATISFACTORY  NOT SATISFACTORY

________________________________
Name and Signature of Assessor
Knowledge Candidate Package With answers

1. A process of Selecting necessary item from un necessary is

A. Sustain C. Quality
B. Sorting D. Standardize

2. Is a person who plan organizes, direct and controls the activities of an established business.

A. Entrepreneurs C. Manager
B. Motivation D. Self-accepting

3. Involves what we ought to do, right and wrong, good and bad helps us to adjust ourselves in
a society.

A. Ethics C. Civics
B. Morality D. Politics

4. Estimated budget higher than actual expenditure

A. Deficit C. Surpluses
B. Balanced D. Actual expense
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

5. The receiver interprets the sender message and tries to understand in its possible manner was

A. Sender C. Channel
B. Receiver D. Decoding

6. XYZ plc sale goods for 500,000-birr exclusive vat, find the output vat.
A. 65,217.39 C. 540,000
B. 65,000 D. 75,000

7. All are exempt from payment of personal employment income tax except,

A. payment made to person as compensation

B. payment made to person as over time
C. payment made to employees to cover the actual cost of medical treatment
D. payment made to personal injuries
8. If the Company purchase merchandise goods at a cost of 200,000 after vat, how much is vat
amount.
A. 226,086.96 C. 26,086.96
B. 30,000 D. 230,00

9. A market for dealing with financial assets and securities which have a maturity period less
than one year

A. Money market C. Long term market

B. Capital market D. Equity market

10. A Plastic card that used to electronically withdraw funds directly from the card holder
account known as

A. Credit card C. Bank book

B. Debit card D. Mobile banking

11. ABC Company making a credit sale for customer on April 5, what entry is required to record
the necessary correcting entries?
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
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A. A/R credit side and cash debit C. A/R debit and sale credit
B. A/R debit side and cash credit D. A/R credit and sale debit

12. A payment that made by employers to employees for special reason is

A. Over time C. Basic salary

B. Gross salary D. Allowance

By using this data answer the next two questions. ERCA report the following tax during the
period of June 30 2014.

 Value Added Tax 15,865,000

 Personal Income Tax ...2,340,000
 Business Profit Tax ..20,000,000
 Turnover Tax 500,000
 Tax on Rental of Buildings ..6,210,000
 Dividend Income Tax 230,000
 Customs Duty .3,150,000
 Tax on Royalties 120,000
 Tax on Games of Chance 9,000,000
 Excise Tax ..11,000,000
13. Based on the above information how much is the total amount of direct tax.
A. 65,500,000 C. 37,900,000
B. 40,320,000 D. 52,410,000
14. Based on the above information how much is the total amount of indirect tax.

A. 25,515,000 C. 30,515,000
B. 13,400,000 D. 45,310,000

15. The current asset category would exclude

A. Cash C. Account receivable

B. Supplies on hand D. Equipment
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

16. Which one of the following is true about the bank reconciliation?
A. Outstanding check deduct from the depositors balance
B. .NSF check added to the bank statement balance
C. Outstanding check added to bank balance
D. deposit in transit added to bank balance
17. In preparing bank reconciliation, the amount of the check outstanding would be:
A. Added to the bank balance according to the bank statement
B. Deduct from the bank balance according to the bank statement
C. Added to the bank balance according to the depositors record
D. Deduct from the bank balance according to the depositors record
18. Which of the following is/are not external users of accounting information provided by a
particular organization?

A. Federal Revenue Authority C. Potential investors

B. Sales managers D. Bank

19. The correct accounting cycle sequence

A. Financial statement–trial balance–journalizing –posting
B. Trial balance –Financial statement –posting –journalizing
C. Journalizing –posting –Trial balance –Finical statement
D. Posing –journalizing –trial balance –Financial statement
20. Among the following one is indirect tax

A. Business profit tax C. Payroll tax

B. VAT D. Rental income tax

21. The credit term of company is stated as 1/10, n/30 meaning to say
A. If the customer paid within 10day he has a discount 1% otherwise pay total amount
within30day
B. If the customer paid within 30day no has a discount of 1%
C. The customer should pay 1% within 10days and the remaining within 30days
D. If the customer paid within 10day he has no discount
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

22. For sole proprietorship business. Find the missing (X) amount.
Beginning of the year:
 Assets = 200,000
 Liabilities = 90,000
End of the year:
 Assets = 240,000
 Liabilities = 110,000
During the year:
 Additional investment = X
 Withdrawals = 20,000
 Revenue = 90,000
 Expenses = 75,000

A. 16,000 C. 28,000
B. 45,000 D. 25,000

23. _________ is records bad debt expense only when an account is determined to be worthless.

A. direct write-off method C. allowance method

B. organizing method D. cost method

24. The correct flow cart of account is

A. Asset –liability –expense –capital- revenue
B. Asset –liability –capital-revenue-expense
C. Asset –liability –revenue – capital- expense
D. Asset –liability –expense-capital-revenue
25. During the VAT period, shop X (which is vat registered person purchase goods worth of birr
62,000, including VAT with a 15% VAT rate and sales goods at birr 65,000, excluding VAT
with a 15% VAT rate. Find the VAT payable/refund amount.

A. 9,750 C. 1,663.04
B. 2,310.15 D. 5,260

26. One of the following is the most liquidity asset

 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
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A. Account receivable C. Cash

B. note receivable D. supplies

27. The journal used to record liabilities when a voucher system is used is called:

A. a voucher C. a check register

B. an unpaid voucher file D. a voucher register

28. If total assets increased $20,000 during a period of time and total liabilities in- creased by
$12,000 during the same period, the amount and direction (increase or decrease) of the
period's change in owner's equity is:

A. 32,000 increase C. 8,000 increase

B. 32,000 decrease D. 8,000 decrease

29. The receipt of cash from customers in payment of their accounts would be recorded by a:
A. debit to Cash; credit to Accounts Receivable
B. debit to Accounts Receivable; credit to Cash
C. debit to Accounts Payable; credit to Cash
D. debit to Cash; credit to Accounts Payable
30. An allowance given to an employee because of shifting to inconvenient place by employer is

A. Desert allowance C. Hardship allowance

B. Position allowance D. House allowance

31. When cash decreases, prepayment increase and account payable increase record in

A. Debit, Debit & Debit C. Debit, Credit & Credit

B. Credit, Credit & Credit D. Credit, Debit & Credit

32. The post- closing trial balance would include which of the following accounts

A. Cash C. Salary expense

B. Sales D. Revenue
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
Assessor Package

33. Which of the following applications of the rules of debit and credit is true?
A. Increase rent expense with debits and the normal balance is a debit.
B. Decrease accounts receivable with credits and the normal balance is a credit.
C. Increase accounts payable with credits and the normal balance is a debit.
D. Decrease cash with debits and the normal balance is a credit.
34. The process of initially recording a business transaction is called

A. Sliding C. Journalizing
B. Posting D. Transposing

35. Net income will result during a time period when:

A. Assets Exceed Liabilities. C. Expenses Exceed Revenues.

B. Assets Exceed Revenues. D. Revenues Exceed Expenses

36. As of December 31, 2017, Kent Company has assets of Birr. 3,500 and owner’s equity of
Birr. 2,000. What are the liabilities for Kent Company as of December 31, 2017?

A. Birr. 1,500 C. Birr. 1,000

B. Birr. 2,500 D. Birr. 2,000

37. What are the Break-even point Sales in units; if fixed cost is Birr.10, 000 while the units
selling price and variable costs are birr 15 and birr 10 respectively?

A. 667 units C. 1,000 units

B. 10,000 units D. 2,000 units

38. The trial balance shows Supplies $1,350 and Supplies Expense $0. If $600 of supplies is on
hand at the end of the period, the adjusting entry is:

A. Supplies 600 Supplies Expense 600 C. Supplies Expense 750 Supplies 750
B. Supplies 750 Supplies Expense 750 D. Supplies Expense 600 Supplies 600
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
Model Holistic Assessment
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39. Nazerawi dairy processing company established on Ethiopia and the head office is located
Addis Ababa, and the company conducted some transaction on Saudi. Based on the above
statement which one of the following is the transactional currency of Hybrid Company?

A. Birr C. Dollar
B. Riyal D. Euro

40. Any goods imported or exported by any means of transport is

A. cargo C. ERCA
B. custom D. Premises

41. The following information is available for Naod company for the month of January 2023
Total Asset Total Liabilities
January 1, 2023 Br 400,000 Br 100,000
January 31, 2023 Br 750,000 Br 300,000

What is the net income (or loss) of Naod c company assuming that during the month the owner
made an additional investment of Br 90,000 and had withdrawn Br 40,000?
A. Br 150,000 C. Br 100,000
B. Br 60,000 D. Br 190,000
42. A process costing system is used by an company that
A. Produce homogeneous product C. Produce heterogeneous product
B. Accumulates cost by job D. Produce items special request of customer
43. An inventory system that record as all increase & decrease merchandise inventory account is
known as
A. FIFO inventory system C. Periodic inventory system
B. Perpetual inventory system D. LIFO inventory system
44. Which of the following is not financial statement?
A. Balance sheet B. Audit report
 Sector: - Labor and Social Affairs
Sub Sector: - Business and Finance
Occupation: Accounting And Finance L_IV
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Assessor Package

C. Cash flow statement D. Income statement

45. Which of the following items represents Deferral?
A. Salary payable C. Accumulated depreciation
B. Fees earned D. Prepared insurance
46. The following units of a particular commodity were available for sale during the period:
Beginning inventory............................................ 40 units at $20
First purchase .. ..50 units at $21
Second purchase . ..50 units at $22
Third purchase..................................................... 50 units at $23
What is the unit cost of the 35 units on hand at the end of the period as deter- mined under
the periodic system by the FIFO costing method?
 A. 20 C. 22
B. 21 D. 23

47. Which of the following is an example of tangible asset?

A. Good will C. Copyrights
B. patent D. Equipment
48. Checking account is known as
A. Accrual C. Personal account
B. Seller D. Deficit
49. Which of the following step in the step in the accounting process is done after analysing
business transaction?
A. Preparing the financial statements B. Preparing a trial balance
B. Entering transaction in a journal D .Posting journal entries

50. Statement of financial position

A. Income statement C. Owner equity statement
B. Cash flow statement D. Balance sheet
51. Profit distributed to owner of the corporation
A. Patent C. Economic entry assumption
B. Dividend D. Gain
52. Expense paid in advance for future use
A. Deferral revenue C. Actual revenue
B. deferral expense D. Deferral liability
53. Recording 110in correctly as birr 101
A. Error of Transposition C. Error of duplication
B. Error of commission D. Error of omission
54. Prepaid expense is ..to the business
A. Income C. Asset
B. Liability D. Revenue
55. Which one is revenue account
A. Wages and salaries C. Electricity
B. Commission received D. Insurance
56. The master budget process usually begins with
 A. Production budget C. Capital budget
B. Operating budget D. Sales budget
57. Which of the following will be included the adjusting entry to accrued interest expense?
A. Debit to cash C. Credit to interest payable
B. A debit to interest payable D. A debit to prepaid interest
58. An enterprise issued a 15,000 birr, 60day, 14% note to the bank, the amount due at maturity
is
A. 14,650 Birr C. 15100 Birr
B. 15000 Birr D. 15,600Birr
59. Which one is not external user of accounting information
A. Creditors C. Government agencies
B. the general public D. Managers
60. On September 1, 1000 birr of goods are sold with credit terms of 1/10, n/30. How much the
seller should receive if the buyer pays on September 8?
A. 990 birr C. 994 birr
B. 1010 birr D. 1000 birr
61. On question, NO.60 the customer returned 220 birr of the goods. How much the seller
receives if the buyer pays on September 8?
A. 770 birr . C. 772.2 birr
B. 1220-birr D. 780 birr

62. In a job order cost accounting system, which account would be debited in recording a
materials requisition for direct materials?
A. Raw materials inventory C. Factory overhead
B. Raw materials purchases D. Working in process
63. Governments differ from businesses in that they
A. Do not raise capital in the financial markets
B. Do not engage in transactions in which they ‘‘sell’’ goods or services
C. Are not required preparing annual financial reports
D. Do not issue common stock
64. Cost of equipment br, 150,000 useful life 5 years, salvage value 10,000. Compute annual
deprecation using straight-line method
A. 30,000 C. 28,000
B. 18,000 D. .20,000
65. The organization responsible for setting accounting standards for state and local governments
is the

A. FASB C. FASAB
B. GASB D. AICPA

66. In a merchandizing business one should not be part of income statement

A. Gross profit C. Cost of goods sold

B. Accounts receivable D. expenses and revenue
67. If you sold on account, one of the following accounts is debit.

A. Account payable C. sales

B. Account receivable D. Capital

68. Which one of the following is a nominal account?

A. Prepaid rent C. Account receivable

B. Cash D. Expense
69. The uniform distribution of depreciation over the life of plant assets?
A. Sum of the years digit C. Straight line
B. Double declining D. Units of production
70. A statement that reports the operating result of accompany is ..
A. Capital statement C. Balance sheet
B. Cash flow statement D. Income statement
71. If revenue was $45,000, expenses were $37,500, and the owner's withdrawals were $10,000,
the amount of net income or net loss was:

A. 45,000 net income C. 37,500 net loss

B. 7,500 net income D. 82,500 net income

72. One of the following is the controlling account of customers account

A. Account receivable C. Credit account
B. Account payable D. Bank account
73. ABC Accessory shop started the year with total assets of birr 320,000 and total liabilities of
birr 180,000. During the year the business recorded birr 435,000 in revenues, birr 257,000 in
expenses and dividends of birr 90,000. The net income reported by ABC Accessory shop for
the year was
 A. Birr 172,000 C. Birr 178,000
B. Birr 170,000 D. Birr 17,800
74. Which of the following is an accelerated depreciation method
A. Straight –line C. Double - declining balance
B. Depletion D. Unit of production
75. Under the perpetual inventory costing method, the need of counting actual inventory is
A. To calculate cost of inventory C. for cross checking
B. To calculate cost of goods sold D. To calculate gross profit

76. The matching principal state that

A. Revenue should be reported when service are provide
B. Expenses should be reported when cash is paid
C. Revenue should be reported when cash is collected
D. Expenses should be recognized / recorded /as they are incurred to produce revenue
77. All of the following financial reports are prepaid as a specific date except
A. Trial balance C. Balance sheet
B. Income statement D. Bank reconciliation
78. The payment of an account payable
A. Increase a liability & decreases an asset
B. Decrease an asset & increase liability
C. Decrease an asset & Decreases a liability
D. Increase an expense & Decrease a liability
79. Distribution of earnings to stockholder is
A. Retained earnings C. Dividend
B. Withdrawal D. Expenses
80. A profit-making business that is a separate legal entity and in which ownership is divided
into shares of stock is known as a:

A. sole proprietorship
B. single proprietorship
C. partnership
D. Corporation
Questio Knowledge Assessment Answer Key Mark
ns

1 B. Sorting 1
2 C .Manager 1
3 B. Morality 1

4 C. Surpluses 1
5 D. Decoding 1

6 D.75,000 1
7 B. payment made to person as over time 1
8 C. 26,086.96 1
9 A. Money market 1
10 B. Debit card 1
11 C. A/R debit and sale credit 1
12 D. Allowance 1

13 C.37,900,000 1
14 C.30,515,000 1
15 D. Equipment 1
16 D. deposit in transit added to bank balance 1
17 D. Deduct from the bank balance according to the depositors 1
record
18 B. Sales managers 1
19 C. Journalizing –posting –Trial balance –Finical statement 1
20 B. VAT 1

21 A. If the customer paid within 10day he has a discount 1% 1

otherwise pay total amount within30day

22 D. 25,000 1
23 A. direct write-off method 1
24 B. Asset –liability –capital-revenue-expense 1
25 C. 1,663.04 1
26 C. Cash 1
27 B. an unpaid voucher file 1
28 C. 8,000 increase 1
29 A. debit to Cash; credit to Accounts Receivable 1
30 C. Hardship allowance 1
31 D. Credit, Debit & Credit 1
32 A. Cash 1

33 A. Increase rent expense with debits and the normal balance is a 1

debit.
34 C. Journalizing 1

35 D. Revenues Exceed Expenses 1

36 A. Birr. 1,500 1
37 D. 2,000 units 1
38 C. Supplies Expense 750 Supplies 750 1
39 B. Riyal 1
40 A. cargo 1
41 A. Br 150,000 1
42 A. Produce homogeneous product 1

43 B. Perpetual inventory system 1

44 B. Audit report 1
45 D. Prepared insurance 1
46 D. 23 1

47 D. Equipment 1
48 C. Personal account 1
49 B. Entering transaction in a journal 1

50 D. Balance sheet 1

51 B. Dividend 1
52 B. deferral expense 1

53 A. Error of Transposition 1
54 C. Asset 1

55 B. Commission received 1
56 D. Sales budget 1
57 C. credit to interest payble 1

58 A. 14,650 Birr 1
59 D. Managers 1

60 A. 990 birr 1
61 C. 772.2 birr 1
62 A. Raw materials inventory 1
63 D. Do not issue common stock 1
64 C. 28,000 1
65 B. GASB 1

66 B. Accounts receivable 1
67 A. Account receivable 1
68 D. Expense 1
69 C. Straight line 1
70 D. Income statement 1

71 B. 7,500 net income 1

72 A. Account receivable 1
73 C. Birr 178,000 1
74 C. Double - declining balance 1

75 A. To calculate cost of inventory 1

76 D. Expenses should be recognized / recorded /as they are 1
incurred to produce revenue

77 B. Income statement 1

78 C. Decrease an asset & Decreases a liability 1

79 C. Dividend 1

80 D. Corporation 1