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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 ACC106/100/105/107/111/114/115/150 OCTOBER 2012 3 HOURS

COURSE CODE EXAMINATION TIME

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

2. 3.

Answer ALL questions in the Answer Booklet. Start each answer on a new page. 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) the Question Paper an Answer Booklet - provided by the Faculty

4.

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

This examination paper consists of 11 printed pages
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AC/OCT 2012/ACC106/100/105/107/ 111/114/115/150

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. b. c. d. Increase in both asset and liability Increase in asset and decrease in liability Increase in liability and decrease in asset Decrease in both asset and liability (1 mark) 2. The sales journal is a. b. c. d. 3. Used only to record credit sales Used only to record cash sales Used to record all sales All of the above

(1 mark) Which of the following users rely on accounting information for decision making? a. b. c. d. Creditors Managers Investors 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. b. c. d. RM21.100 RM21,600 RM21.400 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. b. c. d. Accruals concept Prudence concept Historical cost concept Money measurement concept (1 mark)

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6.

Which of the expenses could be considered as capital expenditure? Fuel for motor vehicle Repairs of motor vehicle Depreciation of motor vehicle Cost of extension of a building

i. ii. v. a. b.
c.

iii

d.

iv (1 mark)

7.

What is the effect of accrued expenses in the Statement of Financial Position? a. b. c. d. Increase in current asset Decrease in current asset Increase in current liability 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. b. c. d. RM300 RM200 RM310 RM290 (1 mark)

9.

Which one of the following accounts normally has a credit balance? a. b. c. d. Sales account Purchase account Return inward Bank account (1 mark)

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10.

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

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AC/OCT 2012/ACC106/100/105/107/ 111/114/115/150

PARTB QUESTION 1 a) Transactions for the month of January 2012 for Balierre Trading are as follows: Effects of transaction Double Entry on accounting equation Credit Debit Transactions Decrease Increase Example: Maia Sales Asset Sold goods to Maia on credit (Account Revenue 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: Specialised Journal Business transaction: Cash Payment An example is given to you: Journal Owner withdrew cash for his personal used 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) CONFIDENTIAL

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AC/OCT 2012/ACC106/100/105/107/ 111/114/115/150

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 (RM) 77,750 2,300 24,500 1,850 14,300 10,730 43,000 35,000 5,000 63,000 4,050 250 34,000 9,200 2,800 9,425 15,100 700 670 256,375 110 500 700 256,375

Particulars Purchases and sales Carriage inwards Account receivables and account payables Cash Bank Inventory as at 1 January 2011 Machinery Motor vehicle (Purchased on 1 January 2011) Accumulated Depreciation Machinery 10% Fixed deposit at Maybank Berhad Capital Drawings Interest on fixed deposit 15% loan from RHB Bank Rent Postage and stationery Advertising Salaries and wages Bad debts Allowance for doubtful debts Discount allowed and discount received Bad debts recovered TOTAL Additional information: i. ii. iii. iv. v. Inventory as at 31 December 2011 was RM9.500. RM700 of the advertising was prepaid. There was still outstanding rent of RM200. Half of a year interest on fixed deposit had not been received.

Credit (RM) 138,050 16,540

3,225

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 One of the account receivables having debts worth of RM150 was declared bankrupt. The amount should be written off. Allowance for doubtful debts is to be increased by RM120. Interest on loan was still accrued. The loan was made on 1 March 2011.

vii.

viii. ix.

Required: a) Statement of Comprehensive Income for the year ended 31 December 2011. (16 marks) Statement of Financial Position as at 31 December 2011. (14 marks) Note: Use vertical format presentation. Calculate to the nearest ringgit. (Total: 30 marks)

b)

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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 November 1 3 6 13 18 21 27 30 Details Balance b/d Cash CSL Bhd Cash Sales CSL Bhd Sales Balance c/d RM 2,062 200 2,400 2,000 320 164 500 6,394 14,040 Date November 4 10 12 20 22 25 28 Details Saudah Bhd Salmiah Bhd Saudah Bhd Purchases Gina Trading Telephone Salaries Cheque No. 301284 301285 301286 301287 301288 301289 RM 420 2,640 400 4,400 180 1,000 5,000 14,040

Public Bank Berhad Statement as at 30 November 2011 Date November 4 8 6 12 13 14 23 24 25 26 27 28 28 29 30 Particulars Balance b/d Deposit Deposit Cheque Cheque Cheque Deposit Cheque Credit Transfer Dividend Deposit Cheque Dishonoured Cheque Standing order Charges and interest Direct Debits Cheque No. Debit RM Credit RM 200 2,400 301284 301285 301286 301287 420 2,460 400 2,000 4,400 300 180 320 301288 1,000 400 460 120 220 Balance RM 2,062 (CR) 2,262 (CR) 4,662 (CR) 4,242 (CR) 1,782 (CR) 1,382 (CR) 3,382(CR) 1,018(DR) 718 (DR) 538 (DR) 218 (DR) 1,218 (DR) 1,618 (DR) 2,078 (DR) 2,198 (DR) 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. The amount of RM180 received from Gina Trading was wrongly recorded as payment in the Cash Book.

2.

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) ii) Uncredited cheque 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 BM BINA Enterprise RM RM 120,000 22,000 91,000 (17,000)

Particulars Sales Less: Cost of Sales Opening Inventory Add: Purchases Less: Closing Inventory Gross Profit Add: Revenues Less: Expenses Net Profit

RM 80,000

25,000 50,000 (15,000)

(60,000) 20,000 5,000 25,000 (10,000) 15,000

(96,000) 24,000 7,000 31,000 (11,000) 20,000

Statement of Financial Position as at 31 December 2011 ANA Enterprise RM BINA Enterprise RM RM 20,000

Particulars Non-Current Assets Current Assets: Closing Inventory Account Receivables Bank Financed by: Capital Add: Net Profit Less: Drawings Current Liabilities: Account Payables

RM

10,000

15,000 30,000 5,000 60,000

17,000 25,000 3,000 65,000

38,000 15,000 (6,000)

47,000

36,000 20,000 (7,000)

49,000

13,000 60.000

16,000 65.000

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Required: a) Compute the following ratios for both companies: i) ii) iii) iv) v) b) Current ratio Quick ratio Inventories turnover ratio (in times) Account receivables collection period (in days) Net profit ratio (17 marks) 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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