Fa Ii Final Exam

Wollega university
College of Business and Economics

Department of accounting and finance
Fundamentals of Accounting II October/2021 Final Exam - 50%
Time Allowed: 1:40 minutes
Name: ________________________________ID NO_________________ Signature ____
General Instructions:
 The exam has three parts, read the instructions carefully and answers the questions
accordingly on the space provided only
 Show your computations clearly and neatly whenever needed
 Switch off your mobile phone before you start the exam. Use of mobile as a calculator is
not allowed.
 Any form of cheating in the exam hall is strictly forbidden.
 Any measures taken by invigilators are not to be compromised.
 Use of pencil and red pen is prohibited
Part I: True False questions (each 2 mark)
After carefully reading the following statements, write true if the statement is correct and
false if otherwise
1. wages is more correctly used to refer to payments to unskilled-manual
labor
2. Withholding taxes are taxes collected from the earnings of employees
by the employer organization as per the regulations of the government
3. One and one half (1 ½) times his ordinary hourly rate for overtime
work performed between 10:00 P.M and six (6:00 A.M) in the morning
4. Pay Day is the day on which wages or salaries are paid to employees
Part II-Multiple Questions (3 pts Each)
Choose the best answer from the given alternative and write the letter on the space
provided (use block letter)
1. A partnership may be liquidated if:
A. The objectives sought in forming the partnership have been achieved.
B. the time period for which the partnership was formed expires (ends)
C. newly enacted laws have made the partnerships activities illegal,
D. The partnership becomes bankrupt. E.all of the above F.none of the above
2. The money paid for employee services
a. Salary
b. Total earnings
c. Payroll
d. Base earnings
3. The total amount of pay due to an employee for a pay period before any deductions are taken
a. Salary
b. Net Pay
c. Gross Pay
d. Total Pay
 Based on the following data answer the next questions:
Senait Jemal is an employee of Ethiopian Airlines who earns a basic salary of Br. 780, a monthly
transportation allowance of Br. 320, with 5 over time hours worked up to 10 p.m., 2 hours
worked from 10p.m. to 6 a.m., 3 overt time hours worked in rest days and 1 overtime hour
worked in public holidays. The employee earns Br. 6 as Basic Salary per hour.
4. How much shall be reported as a total overtime earning of the employee?

A. Birr 61.50
B. Birr 66.00
C. Birr 58.00
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D. Birr 106.50
E. None
5. How much of the employee’s earning shall be exempted from employment income tax?
A. Birr 150.00
B. Birr 450.00
C. Birr 5000.00
D. Birr 200.00
E. None
6. How much shall be deducted from the employee as an employment income tax
A. Birr 88.48
B. Birr 133.48
C. Birr 82.10
D. Birr 119.68
E. None of the above
7. How much is the employee’s net pay for the month:
A. Birr 1086.82
B. Birr 1118.02
C. Birr 1,054.46
D. Birr 1,132.80
E. None of the above
8.Ato Bonsa Gizaw is employed at the rate of Br. 3.40 per hour for the first 50 hours worked in
the weekly pay period in Aleltu Restaurant and 1.25 of his ordinary hourly rate for any additional
hours worked. His time card shows that he worked 59 hours in the current week. The weekly
gross earning of Ato Bonsa will be:
A. Br. 170.00
B. Br. 212.50
C. Br. 208.25 D Br. 308 E None
9. Which of the following is the characteristic of a partnership?
A. Limited life
B. Double taxation
C. separate owner ship and management
D. continuous life
E. A and D
10.Which of the following departments should have the responsibility for
authorizing payroll rate changes?
a. personnel
b. payroll
c. treasurer
d. timekeeping
11. The purpose of segregating the duties of hiring personnel and distributing
payroll checks is to separate the
a. Administrative controls from the internal accounting controls.
b. Human resources function from the controllership function.
c. Operational responsibility from the recordkeeping responsibility.
d. Authorization of transactions from the custody of related assets.
Part III: Work Out Questions (9 points)
Work out the following problems on the separate answer sheet attached. Showing each steps and
computations in a clear and neat manner is rewarded.
1. An employee earns Br. 120 per hour with one and quarter (1¼) times the regular hourly rate
for all hours in excess of 40 per week. If the employee worked 52 hours during the current
week, what were the gross earnings for the week?
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Good Chance!!!!!
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College of Business and Economics

4. How much shall be reported as a total overtime earning of the employee?

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