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UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION

COURSE COURSE CODE EXAMINATION TIME

: : : :

FINANCIAL ACCOUNTING 1 ACC100/105/107/111/114/115 OCTOBER 2007 3 HOURS

INSTRUCTIONS TO CANDIDATES 1. This question paper consists of two (2) parts. PART A (12 Questions) PART B ( 5 Questions)

2.

Answer ALL questions from all two (2) parts. i) ii) Answer PART A in the Objective Answer Sheet. Answer PART B in the Answer Booklet. Start each answer on a new page.

3. 4.

Do not bring any material into the examination room unless permission is given by the invigilator. Please check to make sure that this examination pack consists of: i) ii) iii) The Question Paper An Answer Booklet - provided by the Faculty An Objective Answer Sheet - provided by the Faculty

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 11 printed pages
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PART A This part consists of 12 multiple choice questions. Choose the most suitable answer and shade the corresponding alphabet representing the answer in the multiple choice answer sheet provided. 1. The separation of business transactions from personal transactions of owners, is known as the a. b. c. d. Prudence Concept Business Entity Concept Going Concern Concept Money Measurement Concept (1 mark) 2. Which of the following is incorrect? Asset RM 7,850 8,200 9,550 6,540 Liabilities RM 1,250 2,800 1,150 1,120 Capital RM 6,600 5,400 8,200 5,420 (1 mark) 3. "A firm instruct its bank to pay regular amount of money at stated date to persons or other firms". This statement refers to: a. b. c. d. Credit Transfer Direct Debit Standing Order Bank Charges (1 mark) 4. Which of the following should not be considered as a sale? a. b. c. d. 5. Goods sold on credit Goods sold to relatives Sale of items previously considered as "purchase" Sales of a fixed asset. (1 mark) Insurance paid in advance will be recorded as a. b. c. d. Accrued expenses Prepaid expenses Accrued revenue Prepaid revenue (1 mark)
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a. b. c. d.

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6.

From the legal point of view, which type of business organization has a separate legal entity from its owners, where the owners are not personally liable for the debts of the business? a. b. c. d. Company Partnership Proprietorship None of the above (1 mark)

7.

The stock of a business decreases when there are a. b. c. d. Sales and returns outwards Sales and returns inwards Purchases and returns outwards Purchases and returns inwards (1 mark)

8.

Ah Kim Enterprise has a total liabilities of RM300.000 and owner's equity of RM75.000. The business purchased goods on credit worth RM37.500 and collected RM22.500 from debtors. How much is the total assets? a. b. c. d. RM375,000 RM337.500 RM360.000 RM435.000 (2 marks)

9.

If sales revenue are RM600,000, cost of goods sold is RM420.000 and operating expenses are RM75.000, the gross profit is a. b. c. d. RM105,000 RM180,000 RM525.000 RM600,000 (1 mark)

10.

Which of the following best describes the financial position of an organization at a certain point of time? a. b. c. d. Trial balance Trading account Profit and loss account Balance sheet (1 mark)

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11.

Below are the characteristics of a business organization: Characteristics 2 - 5 0 persons Large Limited Must Be Audited

Number of Member Capital Contribution Liabilities Books of Accounts

Which of the answer below is the most suitable with the above characteristics? a. b. c. d. Joe Cendul Enterprise Poliklinik Aleena & Aleeya Cyber Sdn Bhd Rozi Landscapping Bhd (1 mark) 12. Moona and Miina are twins and set up a business known MM Twins Design. The business dealing with an interior design located at Klang Valley. They hired an account clerk, Halim to prepare their accounts. Based on the above scenario, who is the person responsible to the management and control of MM Twins Design? a. b. c. d. Moona, Miina and Halim Miina and Halim Moona and Halim Moona and Miina (1 mark) (Total: 13 marks)

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PART B QUESTION 1 A. Beseri Indah Sdn Bhd started business on April 2006. transactions during the month of February 2007. Date February 2007 3 Owner brought in RM20.000 cash and motor vehicle valued RM35.000 into the business. Transfer cash of RM16,000 into bank account. Purchase of stock is made by cheque RM3.000 before receiving trade discount of 2%. Sold goods on credit RM5.000 to Karina. Bought goods on credit RM4.300 from llya. Make cash sales of RM3,800. Business purchased machinery on credit from Machine Suppliers of RM6.700. Karina paid the amount due in full by cheque and was allowed a discount of RM200. Paid llya the amount owed RM4.300 by cheque. Owner withdrawn goods of RM100 for his personal use. Issued a cheque of RM1,000 for rental paid to the landlord. Paid salary to workers RM2.300 by cheque. Received commission RM1,200 by cheque. Transactions Below are the business

4 7

8 9
11 14 17
18 22 24 25 28
Required:

Prepare ledger entries ("T" account) to record of the transactions above. (10 marks)

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B.

Match the following accounting terms which best describes the statements below: Credit Notes Accrued Expenses Revenue Expenditures Depreciation Bank Reconciliation Statement Drawings Balance Sheet Prepaid Expenses a. b. c. d. e. f. g. h. Part of the cost of the fixed asset consumed during its period of use by the firm. Expenses that has been incurred but not paid or recorded. Ali, a debtor returns back damaged good to us amounting to RM100. A calculation comparing the cash book balance with the bank statement balance. Resources in a firm taken by its owner for personal purposes. A statement showing the assets, capital and liabilities of a business. Expenses needed for the day to day running of the business. Expenses to be used up in the following period, but which has been paid for in advance. (8 marks) (Total: 18 marks)

QUESTION 2 The following balances were extracted from the books of Puji Nature Enterprise as at 31 December 2006: RM 148,564 250,500 124,500 20,000 3,134 150,000 35,370 100,000 48,000 25,200 15,000 750 1,000 45,350 31,125 5,520 65,400
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Capital Sales Purchases Bank Cash Freehold premises Motor van (cost RM65.500) Loan from Public Bank 10% Fixed deposit Stock / Inventory as at 1 January 2006 Rent received Bad debts Provision / Allowance for doubtful debt Trade debtors / Accounts Receivable Trade creditors / Accounts Payable Carriage expenses Wages and salaries
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Insurance on motor van Discount allowed Discount received Water and electricity Drawings Returns inwards Returns outwards Custom duties Office equipment (Cost RM15,000) Furniture and fittings Telephone

2,400 700 2,000 1,050 500 450 715 1,500 12,150 5,700 1,230

The following additional information is to be taken into consideration:1. 2. Stock/Inventory as at 31 December 2006 amounted to RM29.000. Furniture and fittings was purchased on 1 July 2006 for RM5.700. The payment was made by cheque and this transaction has been recorded in the accounts. Provisions for depreciation were to be made as follows:i. ii. iii. 4. Motor Van 20% per annum on straight line method Office equipment 10% per annum on reducing balance method Furniture and Fitting 15% per annum on straight line method

3.

Freehold Premises was a double-storey building. The lower level has been utilized for business purposes and the upper part was rented out for RM1,500 per month. The insurance on the Motor Van of RM2.400 was for twelve months beginning on 1 August 2006. It was discovered that Mr. Ahmad, one of the debtors had been declared bankrupt. The balance in his account amounted to RM1.500 had not been written off yet. The provision/allowance for doubtful debts was to be adjusted to 2.5% of the trade debtors' net balance. 35% of the carriage expenses were for carriage outwards. The following amounts were still outstanding as at 31 December 2006:Salaries Water and electricity Telephone RM1.500 RM500 RM350

5.

6.

7. 8.

9.

Madam Sue, the owner of the business had withdrawn some goods worth RM1.250 for her personal use and no record was made.

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10.

The loan from Public Bank was obtained on 31 July 2006 and the interest rate is 6.5% per annum. The 10% Fixed Deposit account was opened on 31 May 2006.

11.

Required: a. Income Statement/Trading, Profit and Loss Accounts for the year ended 31 December 2006. Balance Sheet as at 31 December 2006. (Use Vertical Presentation and round up to the nearest ringgit) (Total: 27 marks)

b.

QUESTION 3 Latifi is a sole trader who maintains all fixed assets at cost. The following information relates to the purchases of motor vehicles as at 31 December 2006. Date of Purchased 1/6/2002 15/2/2004 5/4/2005 1/2/2006 1/9/2006 Reqistration No. AFF 1122 AFH 5588 AFI 6659 AFV 848 AFV 9800 Cost (RM) 45,000 55,000 48,000 50,000 65,000

Latifi provides depreciation for its motor vehicles at a rate of 20% per annum on cost, on an annual basis. All payments for the purchase of motor vehicles were made by cheque. You are required to prepare the following accounts for the year ended 31 December 2006: a. b. c. Motor vehicles Account Accumulated Depreciation Balance sheet (extract) as at 31 December 2006

(Total: 15 marks)

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QUESTION 4 Pujima Bakery's Cash Book and Bank Statement for the month of May 2007 are given below. Cash Book (Bank Column) RM May 2007 Balance b/d 14,670 11 Basmat Co. (224402) Cash (A 12290) 675 19 RST Co. (224404) Flour Mad Co. (A 53256) 1,025 22 Green Grass (224405) Raisin Ltd (224403) 900 23 Hygienic Co. (224406) Cash (A12345) 1,005 30 Balance c/d Sugary Bhd (567451) 525 Cash (A 12398) 480 Omellete (732489) 2,100 21,380

May 2007 1 1 7 18 19 20 29 30

RM 870 1,050 450 600 18,410

21 ,380

Additional information: 1. Cheque (A53256) paid to Flour Mad Co. amounting to RM2.025 had been debited in the bank but recorded in the Cash Book as RM1,025. The bookkeeper had incorrectly debited the Cash Book with a cheque (no 224403) paid to Raisin Ltd.

2.

Pujima's Bakery Bank Statement shows the following: Date Transaction Code Document Number Debit Credit Bal

RM 1/5/07 1/5/07 10/5/07 17/5/07 18/5/07 20/5/07 22/5/07 23/5/07 27/5/07 28/5/07 30/5/07 30/5/07 Total: Bal. b/f Cash Deposit Cheque Cheque Cheque Cash Deposit Bank Charges Cheque Standing Order Cheque Cash Deposit Cheque A12290 A53256 224401 224402 A12345 040010 567451 050020 224404 A12398 224403

RM 675

2,025 825 870 1,005 75 525 675 1,050 480 900 6,420 2,685

RM 15,495CR 16.170CR 14.145CR 13.320CR 12.450CR 13.455CR 13.380CR 13.905CR 132.30CR 12.180CR 12.660CR 11,760CR

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Required: a. Prepare the Adjusted Cash Book (Bank Column only) of Pujima Bakery. (7 marks) b. Prepare the Bank Reconciliation Statement as at 31 May 2007. (6 marks) (Total: 13 marks)

QUESTION 5 The following are the final accounts of Miss Azrena for the year ended 30 June 2007. Miss Azrena Trading, Profit and Loss Account for the year ended 30 June 2007 RM RM 100,000 Sales (3,200) Less: Return Inwards 96,800 Net Sales Less: Cost of Goods Sold Opening Stock 25,200 Add: Purchases 34,800 60,000 (48,000) Less: Closing stock (12,000) 48,800 GROSS PROFIT 6,000 Add: Revenue - Interest Received (14,200) Less: Expenses 40,600 NET PROFIT Miss Azrena Balance Sheet as at 30 June 2007 RM Fixed Assets Current Assets Stock Trade Debtors Bank Less: Current Liabilities Financed by: Capital Add: Net Profit

RM 169,000

12,000 11,400 6,000 29,400 (11,400)

18,000 187,000 146,400 40,600 187,000

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11

AC/OCT 2007/ACC100/105/107/ 111/114/115

You are required to calculate the following ratios and briefly explain your findings: a. b. c. d. e. Gross Profit Ratio Net Profit Ratio Stock Turnover Ratio Current Ratio Acid Test Ratio (Total: 14 marks)

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