FIN 805 Test 2 Revision

The asset which is fixed in nature of the context that is not readily convertible into cash is :

• Building

• Stock

• Accrued Income

• Inventory

The amount that the owner expects to receive from disposing the asset at the end of its benefit period is called ---------------- Value :

• Actual

• Remaining

• Scrap

• Outstanding

A method of depreciation that allocates an equal amount of depreciation to each year of the useful life it the fixed asset is purchased at the begining of the accounting period.

• Sum of year digit

• Straight line depreciation

• Declining balance

• Units of production method

On January 1, 2019 Ali company acquired a truck at a cost of BD 16000.The truck is expected to have a salvage value of BD 2000 and a useful life of 7 years.

Then, the annual depreciation for the third year using the straight line method is :

• BD 14000

• BD 2000

• BD 2571

• BD 2285

Assets which are easily convertible into cash within a year is called --------------- Assets :

• Plant

• Current

• Long term

• Hard

On 1 Jan,2019 The prepaid rent was BD5000 in advance for a year.

On 31 March 2019, an analysis showed that BD1250 of office rent got expired.

The adjustment entry on 31 March 2019 will be:

• Dr. Rent Expense1250 / Cr. Prepaid Rent Expense1250

• Dr. Prepaid Rent Expense1250 / Cr. Rent Expense1250

• Dr. Prepaid Rent Expense5000 / Cr. Cash5000

• Dr. Rent Expense5000 / Cr. Cash5000

Tyra Company accountant recorded a BD4500 of salaries expense that not paid yet.

The entry will be:

• Dr.Salaries Expense4500/ Cr.Salaries Receivable4500

• Dr.Salaries Expense4500/ Cr.Salaries Payable4500

• Dr.Salaries Payable4500/ Cr.Salaries Expense4500

• Dr.Salaries Expense4500/ Cr.Cash4500

On January 1 ,2013 Middle East Company purchased Equipment that costs BD65000.

Its salvage value is BD5000 and the useful life is 5 years.

On January 1,2018 the company sold the equipment at BD9000 and computed the accumulated depreciation until that date at BD60000.

Then the company should record a BD4000 as :

• Loss on disposal on its debit side

• Loss on disposal on its credit side

• Gain on disposal on its credit side

• Gain on disposal on its debit side

Enma Company shows the Following accounting balances .

Calculate the Net Income/Loss amount:

• BD 5500

• BD 3500

• BD 16500

• BD 20000

Fatima company Shows the following accounting balances .

Calculate the Capital at the end of the period.

• BD 41500

• BD 15700

• BD 44000

• BD 13200