MEKELLE UNIVERSITY

COLLEGE OF BUSSINES AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE

Quiz 2: weight 15%

Course title: Principle of Accounting-II Time allowed: 1:20
Name__________________________ Id no________section_____ Exam date: /05/2017
Part I Multiple choice (1 point each)

1. The payroll period is;

A. The length of time covered by each payroll payment
B. A detailed listing of the firms total payroll
C. The day on which wages or salaries are paid to employees
D. Money paid monthly to an employee for special reasons
2. Regulations issued pursuant to the income tax proclamation further exempt the following
from income tax, except
A. Amounts paid by employers to cover the actual cost of medical treatment of employees.
B. Allowance in view of means of transportation granted to employees under contract of
employment,
C. Desert allowance
D. Amounts paid by employee in reimbursement of travelling expenses incurred on duty.
E. None

3. What is the total amount deducted as income tax for an employee who earns a basic
monthly salary of Br. 2,640, a monthly nontaxable allowance of Br. 200, and worked 8
hrs. during holiday.

A. 253.5 B.283.5 C.298.5 D.328.5 E. none

4. Denial is permanent employee of the MH organization. Denial Pays monthly pension

contribution of $140 to the provident fund agency. Denial has position allowance of $800
and has worked 8 hrs overtime during weekends. Denial also agreed to pay 10% of his
basic salary to donations. What is the net pay for denial Assuming 176 working hour per
month?

A. 2337* B. 2457* C. 2364* D. 2181*

5. What is the employer share of pension contributions for a government permanent

employee whose regular monthly salary of Br. 2400?

A. 168 B. 264 C. 432 D. 360 E. none

GOOD LUCK!!
Part-II: work out (10 points)

ABC Company is governmental organization in Ethiopia. it has four employees. Their salary is
paid according to the Ethiopian calendar and the following data are compiled from the month of
ginbot 2008 E.C

No Name of Basic allowance over Duration

employees salary Desert Hard time
ship hour
1 Tariku 7000 500 300 12 7 hour in Weekends
Desta and 5 hour before
10 pm evening.
2 Hiwot mola 4000 400 15 Public holiday

3 Kibrom 2500 200 12 10pm-6am

Welu
4 Selam 1200 - - -
Abera
Additional information

Three were no absentees during the month

Employees are required to work 8 hours a day and 22 working days a month (176
working hour a month).
All employees are permanent except Selam abera.
Tariku and Hiwot agreed to pay 10% of their salary for donation (other deduction).
Note: Use pension contribution according to Ethiopian legislation.

Required

1) Computation of Gross earnings, Deduction and Net pay of each employee (5 pts).
2) Prepare a payroll register for the month of Megabit (2 pts).
3) Record payroll expenses and liabilities (1 pts).
4) Record payment of the payroll (0.5 pts).
5) Record the payroll tax expenses (11% of pension) of the month (0.5 pts).
6) Record the remittance of withholding taxes and other deductions to each recipient (1 pts).

GOOD LUCK!!