Tutorial 4

1. Identify and describe FOUR(4) users of

accounting information.
External users outside the organization(financial accounting)
1. Investors to make decisions whether to buy, hold, or sell
their share in the company.
2. Tax authority check for companys tax compliance.
Internal users within the organization(management
accounting)
3. Marketing managers often responsible for influencing the
level, timing, and composition of customer demand accepted
definition of the term.
4. Production supervisors responsible for a variety of job
duties.

2. Describe the differences between management

accounting and financial accounting.
Management
Accounting

Financial
Accounting

1. Users

Internal

External

2. Time
dimension

More emphasis on the

future

Historical perspective

3. Report
frequency

Not specific but

frequently for planning
and control

Published annually &

as directed

4. Precision
versus
timeliness

Emphasis on relevance
and in detail

Emphasis on
precision/ accuracy
but less detail

5. Focus

Focuses on segments of
an organization

Primary focus is on the

whole organization

6. Accounting
standards

Need not follow

accounting standards or
formats

Must follow
accounting standards
and formats

7. Legal
requirements

Not mandatory

Mandatory for external

reports

3. Complete the gaps in the following table:

Assets

Liabilities

Capital

RM

RM

RM

55,000

16,900

38,100

51,600

17,200

34,400

36,100

7,600

28,500

119,500

15,400

104,100

88,000

26,000

62,000

159,000

49,000

110,000

4. Classify the following items into liabilities and assets:

Assets

Liabilities

a) Motor Vehicles
b) Premises
d) Inventory
e) Other debtors
g) Cash in hand
i) Plant and Machinery

c) Trade Creditors
f) Bank Overdraft
h) Loan from Kamal

5. Fatimah is setting up a new business. Before commencing the business, she

purchased furniture for RM1,200, a van for RM6,000 and inventory worth RM2,800.
Although she has paid in full for the fixtures and the van, she still owes RM1,600 for
some of the inventory. To finance her business, Fatimah took a loan from CIMB Bank
which amounts to RM2,500. After taking into account all of the above transaction,
Fatimah has RM200 in the business bank account and RM175 cash in hand.
Calculate the capital of Fatimah.

Total Assets = furniture (1200) + van (6000) +

inventory (2800) +
business bank (200) +
hand (175)
= RM 10375
Total Liability = owes bank (1600) + loan (2500)
= RM 4100
Capital = owners equity liability = RM6275

6. The assets and liabilities of Kok Heng

RM as at 30 Nov 2011 is as follow:

Creditors

2800

Furniture

6200

Motor vehicle

7300

Inventory

8100

Debtors

4050

Cash at Bank

9100

Cash at hand

195

During the first week of December2011:

a) He bought extra equipment on credit for RM110
b) He bought extra stock by cheque RM380
c) He paid creditors by cheque RM 1150
d) Debtors paid Kok Heng RM640 by cheque and RM90 by cash
e) He put in extra RM1500 into the business, i.e. RM1300 by cheque and RM200
in cash
Work out the amount of assets, liabilities and capital for Kok Heng as at 7 Dec
2011

7. At the beginning of the year, Micha Jewelers had RM120,000 in

liabilities. During the year, assets increased by 150,000, and at year-end
they totaled RM350,000. Liabilities decreased RM20,000 during the year.
Calculate the amount of both the beginning and ending value of capital.

Beginning
of the year

During the
year

End of the
year

Assets

200,000

150,000

350,000

Liabilities

120,000

-20,000

100,000

Capital

80,000

170,000

250,000