CONFIDENTIAL AC/OCT 2012/ACC106/100/105/107/

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UNIVERSITI TEKNOLOGI MARA

FINAL EXAMINATION

COURSE INTRODUCTION TO FINANCIAL ACCOUNTING

AND REPORTING / ACCOUNTING / FINANCIAL
ACCOUNTING 1 / ACCOUNTING 1 /
INTRODUCTION TO ACCOUNTING 1 / FINANCIAL
ACCOUNTING / PRINCIPLES OF ACCOUNTING 1
COURSE CODE ACC106/100/105/107/111/114/115/150
EXAMINATION OCTOBER 2012
TIME 3 HOURS

INSTRUCTIONS TO CANDIDATES

This question paper consists of two (2) parts PART A (10 Questions)
PART B (4 Questions)

2. Answer ALL questions in the Answer Booklet. Start each answer on a new page.

3. Do not bring any material into the examination room unless permission is given by the
invigilator.

4. Please check to make sure that this examination pack consists of:

i) the Question Paper

ii) an Answer Booklet - 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 ten (10) multiple-choice questions. Choose the most suitable
answer.

1. Rudie Trading bought a motor vehicle costing RM45.000 on credit from Irfan Agency.
What is the effect of this transaction?

a. Increase in both asset and liability

b. Increase in asset and decrease in liability
c. Increase in liability and decrease in asset
d. Decrease in both asset and liability

(1 mark)

2. The sales journal is

a. Used only to record credit sales

b. Used only to record cash sales
c. Used to record all sales
d. All of the above
(1 mark)
3. Which of the following users rely on accounting information for decision making?

a. Creditors
b. Managers
c. Investors
d. All of the above
(1 mark)

4. Given the amount of premises RM20.000, inventory RM8.500, cash RM100, account
payables RM3,000 and loan RM4,000. What is the amount of capital?

a. RM21.100
b. RM21,600
c. RM21.400
d. RM21.200
(1 mark)

5. "Accounting is concerned with those facts which can be measured in monetary terms".
Based on the above statement, which concept should be best applied for?

a. Accruals concept
b. Prudence concept
c. Historical cost concept
d. Money measurement concept
(1 mark)

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6. Which of the expenses could be considered as capital expenditure?

Fuel for motor vehicle

i. Repairs of motor vehicle
ii. Depreciation of motor vehicle
v. Cost of extension of a building

a.
b.
c. iii
d. iv
(1 mark)

7. What is the effect of accrued expenses in the Statement of Financial Position?

a. Increase in current asset

b. Decrease in current asset
c. Increase in current liability
d. Decrease in current liability
(1 mark)

8. Account receivables of Shin Enterprise as at 31 January 2012 extracted from the trial
balance is amounting to RM15,000. RM500 of debts was to be written off. If allowance
for doubtful debts is to be provided at 2% of the remaining balance of the account
receivables, calculate the amount of the allowance for doubtful debts as at 31 January
2012.

a. RM300
b. RM200
c. RM310
d. RM290

(1 mark)

9. Which one of the following accounts normally has a credit balance?

a. Sales account
b. Purchase account
c. Return inward
d. Bank account
(1 mark)

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10. Which statement is true regarding the accumulated depreciation account?

a. The accumulated depreciation account will be shown in the income statement

as an expense.
b. The accumulated depreciation account will be shown in the trial balance in the
debit column.
c. The accumulated depreciation is created to provide allowance related to the net
account receivables.
d. The accumulated depreciation is a deduction in a value of cost of non-current
assets.
(1 mark)
(Total: 10 marks)

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PARTB

QUESTION 1

a) Transactions for the month of January 2012 for Balierre Trading are as follows:
Effects of transaction
on accounting Double Entry
equation
Transactions Increase Decrease Debit Credit
Example: Asset Maia Sales
Sold goods to Maia on credit Revenue (Account
receivables
account)
Delan sets up the Balierre
Trading with cash RM8,000 and
motor vehicles RM50,000
Purchased computers RM4.000
for office use on credit from IT
Genuine Sdn Bhd
Sold goods by cash RM500 to
Tucker
Deposited RM3.000 of cash in the
bank
Bought goods RM2,000 from
Special A Sdn Bhd on credit
Delan took goods worth RM300
and cash RM800 for personal use

Required:

State the effects and double entry of the above transactions based on the format
given.
(14 marks)

b) Below is the list of accounting transactions during the month of January 2012 for Elena
Enterprise. You are required to identify the specialised journal for each transaction:
Business transaction: Specialised Journal
An example is given to you: Cash Payment
Owner withdrew cash for his personal used Journal
1. Record credit purchases of goods
2. Record credit purchases of machinery
3. Goods returned by customer previously sold on credit
4. Goods returned to supplier previously purchased on
credit.
5. Record cash purchases of fixtures and fittings
6. Accrual and prepayment adjustments at the end of the
year
(6 marks)
(Total: 20 marks)
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QUESTION 2

The following balances were extracted from the books of Sofia Enterprise as at 31
December 2011.
Sofia Enterprise
Trial Balance as at 31 December 2011

Debit
Particulars (RM) Credit (RM)
Purchases and sales 77,750 138,050
Carriage inwards 2,300
Account receivables and account payables 24,500 16,540
Cash 1,850
Bank 14,300
Inventory as at 1 January 2011 10,730
Machinery 43,000
Motor vehicle (Purchased on 1 January 2011) 35,000
Accumulated Depreciation Machinery 3,225
10% Fixed deposit at Maybank Berhad 5,000
Capital 63,000
Drawings 4,050
Interest on fixed deposit 250
15% loan from RHB Bank 34,000
Rent 9,200
Postage and stationery 2,800
Advertising 9,425
Salaries and wages 15,100
Bad debts 700
Allowance for doubtful debts 110
Discount allowed and discount received 670 500
Bad debts recovered 700
TOTAL 256,375 256,375

Additional information:

i. Inventory as at 31 December 2011 was RM9.500.

ii. RM700 of the advertising was prepaid.

iii. There was still outstanding rent of RM200.

iv. Half of a year interest on fixed deposit had not been received.

v. The owner took out RM370 worth of goods and RM180 cash for his own use.

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vi. Depreciation is provided as follows:

Machinery - 15% on reducing balance method, yearly basis
Motor vehicle - 10% on straight line method, yearly basis

vii. One of the account receivables having debts worth of RM150 was declared bankrupt.
The amount should be written off.

viii. Allowance for doubtful debts is to be increased by RM120.

ix. Interest on loan was still accrued. The loan was made on 1 March 2011.

Required:

a) Statement of Comprehensive Income for the year ended 31 December 2011.

(16 marks)

b) Statement of Financial Position as at 31 December 2011.

(14 marks)

Note: Use vertical format presentation. Calculate to the nearest ringgit.

(Total: 30 marks)

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QUESTION 3

The following is a summary from the Cash Book (bank column) and the Bank Statement of
Langkasuka Enterprise for the month of November 2011.

Cash Book (Bank Column Only)

Date Details RM Date Details Cheque No. RM

November November
1 Balance b/d 2,062 4 Saudah Bhd 301284 420
3 Cash 200 10 Salmiah Bhd 301285 2,640
6 CSL Bhd 2,400 12 Saudah Bhd 301286 400
13 Cash 2,000 20 Purchases 301287 4,400
18 Sales 320 22 Gina Trading 180
21 CSL Bhd 164 25 Telephone 301288 1,000
27 Sales 500 28 Salaries 301289 5,000
30 Balance c/d 6,394
14,040 14,040

Public Bank Berhad

Statement as at 30 November 2011

Date Particulars Cheque No. Debit Credit Balance

November RM RM RM
Balance b/d 2,062 (CR)
4 Deposit 200 2,262 (CR)
8 Deposit 2,400 4,662 (CR)
6 Cheque 301284 420 4,242 (CR)
12 Cheque 301285 2,460 1,782 (CR)
13 Cheque 301286 400 1,382 (CR)
14 Deposit 2,000 3,382(CR)
23 Cheque 301287 4,400 1,018(DR)
24 Credit Transfer 300 718 (DR)
25 Dividend 180 538 (DR)
26 Deposit 320 218 (DR)
27 Cheque 301288 1,000 1,218 (DR)
28 Dishonoured Cheque 400 1,618 (DR)
28 Standing order 460 2,078 (DR)
29 Charges and interest 120 2,198 (DR)
30 Direct Debits 220 2,418 (DR)

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Additional information:

1. A cheque (No: 301285) paid to Salmiah Bhd was wrongly recorded by bank as
RM2.460.

2. The amount of RM180 received from Gina Trading was wrongly recorded as payment
in the Cash Book.

Required:

a) Prepare an Adjusted Cash Book for the month of 30 November 2011.

(9 marks)

b) Draw up a Bank Reconciliation Statement as at 30 November 2011.

(7 marks)

c) Explain the following terms:

i) Uncredited cheque
ii) Credit Transfer
(4 marks)
(Total: 20 marks)

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QUESTION 4

The following is financial statement for ANA Enterprise and BINA Enterprise for the year
ended 31 December 2011.

Statement of Comprehensive Income for the year ended 31 December 2011

ANA Enterprise BINA Enterprise

Particulars BM RM RM RM

Sales 80,000 120,000

Less: Cost of Sales
Opening Inventory 25,000 22,000
Add: Purchases 50,000 91,000
Less: Closing Inventory (15,000) (60,000) (17,000) (96,000)
Gross Profit 20,000 24,000
Add: Revenues 5,000 7,000
25,000 31,000
Less: Expenses (10,000) (11,000)
Net Profit 15,000 20,000

Statement of Financial Position as at 31 December 2011

ANA Enterprise BINA Enterprise

Particulars RM RM RM RM

Non-Current Assets 10,000 20,000

Current Assets:
Closing Inventory 15,000 17,000
Account Receivables 30,000 25,000
Bank 5,000 3,000
60,000 65,000

Financed by:
Capital 38,000 36,000
Add: Net Profit 15,000 20,000
Less: Drawings (6,000) 47,000 (7,000) 49,000

Current Liabilities:
Account Payables 13,000 16,000
60.000 65.000

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Required:

a) Compute the following ratios for both companies:

i) Current ratio
ii) Quick ratio
iii) Inventories turnover ratio (in times)
iv) Account receivables collection period (in days)
v) Net profit ratio
(17 marks)

b) State which business is the best for potential investors? Give your reasons.
(3 marks)
(Total: 20 marks)

END OF QUESTION PAPER

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