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BKAL1013 BUSINESS ACCOUNTING

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1. Which of the following statements is INCORRECT?

A. Accounting is a link between business activities and decision makers.


B. Management must have a good understanding of accounting to set financial
goals and make financial decisions.
C. Management only needs to understand how accounting information is
compiled and processed.
D. Accounting information is imperfect and should be interpreted with caution.

2. Financial Reporting Foundation (FRF) is differ from Malaysian Accounting Standards


Board (MASB) because:

A. it was established under the Financial Reporting Act 1997.


B. it has no direct responsibility with regard to standard setting.
C. it comprises representation from all relevant parties in the standard setting
process.
D. both are working together to make up the new framework for financial
reporting in Malaysia.

3. A public accountant probably would NOT:

A. advise on management issues.


B. audit financial information.
C. prepare tax returns.
D. prepare marketing analysis.

4. Which of the following groups use accounting information primarily to help protect
the public?

A. Management
B. Regulatory agencies
C. Taxing authorities
D. Economic planners
5. The characteristic of accounting information that can provides predictive and
feedback value is:

A. relevance.
B. reliability.
C. creativity.
D. comparability.

6. The accounting information is comparable when:

A. it is trusted by users.
B. it is helpful in contrasting organizations.
C. it is timely presented.
D. it affects the decision of its users.
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7. The Statement of Profit or Loss and Other Comprehensive Income reports the
revenues and expenses for a period of time based on the:

A. historical cost.
B. matching principle.
C. objectively principle.
D. full disclosure.

8. The sources and uses of cash over a stated period of time are reflected on the:

A. profit and loss and other comprehensive income.


B. statement of owners equity.
C. statement of financial position (balance sheet).
D. statement of cash flows.

9. The accounting equation should remain in balance because every transaction affects:

A. only one account.


B. only two accounts.
C. two or more accounts.
D. none of the above.

10. The accounting principle that requires financial statement information to be based on
costs incurred in business transactions, and requires assets and services to be recorded
initially at the cash or cash-equivalent amount given in exchange, is the:

A. accounting equation principle.


B. historical cost principle.
C. going-concern principle.
D. business entity principle.

For question 11-17, please indicate the BEST effect of the transactions on the
accounting equation.

11. On 28 July 2016, Ms Dobi received cash of RM35,000 from the owner, Sally as
additional investment.

On 30 July 2016, a total cash of RM11,500 was used to pay the salary of the
employees and another RM5,000 was used to pay the bank loan. The changes caused
by these transactions may include:

A. Decrease in assets RM21,500; increase in owners equity RM35,000


B. Increase in assets RM35,000; decrease in liabilities RM10,000
C. Decrease in assets RM16,500, decrease in owners equity RM11,500
D. Increase in assets RM18,500; owners equity remains unchanged
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12. On 10 September 2016, Hussein purchased office supplies for RM4,500, paid
RM1,000 and agreed with the supplier to pay the remaining in the following month.

A. Decrease in assets RM1,000; increase in owners equity RM3,500


B. Increase in assets RM3,500; increase in liabilities RM3,500
C. Decrease in assets RM4,500, owners equity remains unchanged
D. Increase in assets RM4,500; increase in owners equity RM4,500

13. A RM10,000 account payable is paid by the business. How is the accounting equation
affected?

A. Assets decrease RM10,000; owner's equity increases RM10,000


B. Assets decrease RM10,000; liabilities decrease RM10,000
C. Assets increase RM10,000; owner's equity decreases RM10,000
D. Assets increase RM10,000; liabilities increase RM10,000

14. A shop-house is purchased by a business for RM300,000. The company pays for the
shop-house with a RM60,000 cash payment and the execution of an RM240,000
promissory note payable to the seller. How does this purchase affect the business's
accounting equation?

A. Assets increase RM240,000; liabilities decrease RM60,000


B. Assets increase RM60,000; liabilities decrease RM240,000
C. Assets increase RM240,000; owner's equity increases RM240,000
D. Assets increase RM240,000; liabilities increase RM240,000

15. Jasmine Bakery started the year with total assets of RM120,000 and total liabilities of
RM60,000. During the year, the business earned revenues of RM180,000 and incurred
expenses of RM105,000. There is no capital contributions during the year, but the
owner make withdrawals of RM90,000. What is the amount of owner's equity at the
end of the year?

A. RM60,000
B. RM75,000
C. RM45,000
D. RM15,000

16. Equipment is purchased for cash. Which of the following is TRUE?

A. There is an increase in total assets


B. There is a decrease in both total assets and total liabilities
C. There is an increase in total assets and a decrease in total liabilities
D. There is no effect on total assets
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17. A utility bill is received for expenses incurred. It will be paid in the following
accounting period. Which of the following would be TRUE as a result of the receipt
of the utility bill?

A. Net income will increase


B. Owner's equity will decrease
C. Total liabilities will decrease
D. There will be no effect on total liabilities

18. A company sells goods on credit for RM30,000. Which of the following entries
correctly records the transaction?

A. Debit cash and credit sales RM30,000


B. Credit inventories and debit accounts receivable RM30,000
C. Credit accounts payable and debit sales RM30,000
D. Debit accounts receivable and credit sales RM30,000

19. A company had a cash balance of RM30,000 on 1 August 2014. During August total
payments were RM384,000 and total receipts were RM357,000. What is the cash
book balance at 31 August 2014?

A. RM 1,800
B. RM 3,000
C. RM 4,500
D. RM 6,000

20. The recording of debit and credit parts of a transaction is:

A. checking equality.
B. double-entry accounting.
C. single-entry accounting.
D. transaction analysis.

Structure Question- refer text book-Rosli et al. (2011). PR 2-1, chapter 2, page 92.

END OF QUESTION
BKAL1013 BUSINESS ACCOUNTING
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TUTORIAL # 1 DUE DATE: 12th March 2017

MATRIC NO: 250666 GROUP: D POSITION NO: ______

NAME: Mohamad Quyyum bin Mohd Saad

ANSWER:

1. C 16. D
2. B 17. B
3. D 18. D
4. B 19. B
5. A 20. B
6. B 21.
7. B 22.
8. D 23.
9. C 24.
10. B 25.
11. C 26.
12. B 27.
13. B 28.
14. D 29.
15. C 30.
BKAL1013 BUSINESS ACCOUNTING
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Structure Question- refer text book-Rosli et al. (2011). PR 2-1, chapter 2, page 92.

1. Journal

No Item Folio Number Debit (RM) Credit (RM)


.
a) Debit Cash 25,000
Credit Capital 25,000
b) Debit Rent Expenses (office 2000
and work room)
Credit Cash 2000
c) Debit Automobile 16500
Credit Cash 1500
Account payable 15,000
d) Debit Office and Computer 6500
equipment
Credit Account payable 6500
e) Debit Supply 975
Credit Cash 975
f) Debit Prepaid Insurance 1200
Credit Cash 1200
g) Debit cash 3750
Credit Fees earned 3750
h) Debit Miscellanous expenses 240
Credit Cash 240
i) Debit Account payable 2500
Credit Cash 2500
j) Debit Account payable 450
Credit Cash 450
k) Debit Blue Print expenses 750
Credit Account payable 750
l) Debit Account receivable 3150
Credit Fees earned 3150
m) Debit Salary expenses 1500
Credit Cash 1500
n) Debit Automobile expenses 280
Credit Cash 280
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2. Ledger

a) Account : Cash

No Item Debit (RM) Credit (RM) Balance (RM)


:
a) Capital 25,000
b) Rent Expenses (office and 2000
workroom)
c) Automobile 1500
e) Supply 975
f) Prepaid Insurance 1200
g) Fees earned 3750
h) Miscellanous expenses 240
i) Account payable 2500
j) Account payable 450
m) Salary expenses 1500
n) Automobile expenses 280 18,105

b) Account: Capital

N Item Debit (RM) Credit (RM) Balance (RM)


o
a) Cash 25,000 25,000

c) Account: Account payable

No Item Debit (RM) Credit (RM) Balance (RM)


c) Automobile 15,000
d) Office and Computer 6500
equipment
i) Cash 2500
j) Cash 450
k) Blue Print expenses 750 19,300

d) Account: Rent expenses (Office and workroom)

N Item Debit (RM) Credit (RM) Balance (RM)


o
b) Cash 2000 2000
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e) Account: Automobile

N Item Debit (RM) Credit (RM) Balance (RM)


o
c) Cash and Account payable 16,500 16,500

f) Account: Office and Computer equipment

No Item Debit (RM) Credit (RM) Balance (RM)


d) Account payable 6500 6500

g) Account: Supply

No Item Debit (RM) Credit (RM) Balance (RM)


e) Cash 975 975

h) Account: Prepaid Insurance

No Item Debit (RM) Credit (RM) Balance (RM)


f) Cash 1200 1200

i) Account: Fees earned

No Item Debit (RM) Credit (RM) Balance (RM)


g) Cash 3750
l) Account receivable 3150 6900

j) Account: Miscellanous expenses

No Item Debit (RM) Credit (RM) Balance (RM)


h) Cash 240 240

k) Account: Blue Print expenses

No Item Debit (RM) Credit (RM) Balance (RM)


k) Account Payable 750 750

l) Account: Account Receivable

No Item Debit (RM) Credit (RM) Balance (RM)


l) Fees earned 3150 3150

m) Account: Salary expenses


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No Item Debit (RM) Credit (RM) Balance (RM)


m) Cash 1500 1500

n) Automobile expenses

No Item Debit (RM) Credit (RM) Balance (RM)


n) Cash 280 280
3. Unadjusted Trial balance

Item Debit (RM) Credit (RM) Total (RM)


Cash 18,105
Automobile 16,500
Rent expenses 2000
Office and Computer equipment 6500
Supply 975
Prepaid insurance 1200
Miscellaneous expenses 240
Blue print expenses 750
Account receivable 3150
Salary expenses 1500
Automobile expenses 280
51,200
Capital 25,000
Account payable 19,300
Fees earned (Revenue) 6900
51,200
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Siti Noliza established a consultancy service business, called Siti Consultant on 1 Jan 2017.
The following transactions for Siti Consultant have been completed during the first month:

Jan 1 Deposit of RM25,000 from personal fund into the business account.

1 Paid office rent for Jan, RM500.

2 Purchased equipment on account, RM4,200.

9 Billed a customer for consultation services provided on account, RM2,800.

18 Purchased supplies on account, RM2,500.

22 Paid cash from business account for personal and family expenses, RM1,000.

26 Received cash for services given during 9 Jan, RM2,100.

27 Paid utility expenses, RM400.

REQUIRED:

(a) Journalize the transactions from 1st until 27th Jan 2017 (journal explanation is not
required).

(b) Post the journal entries in (a) above to the three column ledger. Please answer in the
Appendix provided.

( c) Prepare a trial balance as at 31 Jan 2017


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a) Journal

Date Item Folio Debit (RM) Credit (RM)


Number
Jan 1 Debit Cash 25,000
Credit Capital 25,000
Jan 1 Debit Rent expenses 500
Credit cash 500
Jan 2 Debit Equipment 4200
Credit Account payable 4200
Jan 9 Debit Account receivable 2800
Credit Fees earned 2800
Jan Debit Stock (Supplies) 2500
18 Credit Account payable 2500
Jan Debit Withdraw 1000
22 Credit cash 1000
Jan Debit Cash 2100
26 Credit Account receivable 2100
Jan Debit Utilities expenses 400
27 Credit Cash 400

b) Ledger

1. Account: Cash

Date Item Debit (RM) Credit Balance


(RM) (RM)
Jan 1 Capital 25,000 25,000
Jan1 Rent expenses 500 24,500
Jan Withdraw 1000 23,500
22
Jan Account receivable 2100 25,600
26
Jan Utilities expenses 400 25,200
27

2. Account: Capital

Date Item Debit (RM) Credit (RM) Balance (RM)


Jan 1 Cash 25,000 25,000

3. Account: Account payable

Date Item Debit (RM) Credit (RM) Balance (RM)


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Jan 2 Equipment 4200 4200


Jan Stock (Supplies) 2500 6700
18

4. Account: Rent expenses

Date Item Debit (RM) Credit (RM) Balance (RM)


Jan 1 Cash 500 500

5. Account: Account receivable

Date Item Debit (RM) Credit (RM) Balance (RM)


Jan9 Fees Earned 2800 2800
Jan 26 Cash 2100 700

6. Account: Equipment

Date Item Debit (RM) Credit (RM) Balance (RM)


Jan 2 Account payable 4200 4200

7. Account: Fees earned

Date Item Debit (RM) Credit (RM) Balance (RM)


Jan 9 Account receivable 2800 2800

8. Account: Stock

Date Item Debit (RM) Credit (RM) Balance (RM)


Jan 18 Account payable 2500 2500

9. Account: Withdraw

Date Item Debit (RM) Credit (RM) Balance (RM)


Jan 22 Cash 1000 1000

10.Account: Utilities expenses

Date Item Debit (RM) Credit (RM) Balance (RM)


Jan 27 Cash 400 400
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c) Unadjusted Trial Balance

Item Debit (RM) Credit (RM) Total (RM)


Cash 25,200
Rent expenses 500
Account receivable 700
Equipment 4200
Stock 2500
Withdraw 1000
Utilities expenses 400
34,500
Capital 25,000
Account payable 6700
Fees earned 2800
34,500

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