CONFIDENTIAL ACIJUN 2014/ACC106/100/105/107/ 4111114115115, UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION COURSE : INTRODUCTION TO FINANCIAL ACCOUNTING AND REPORTING / ACCOUNTING / FINANCIAL, ACCOUNTING 1 / ACCOUNTING 1 / INTRODUCTION TO ACCOUNTING 14 / FINANCIAL ACCOUNTING / PRINCIPLES OF ACCOUNTING 4 COURSE CODE : ACC106/100/105/107/111/114/115/150 EXAMINATION : JUNE 2014 TIME : 3HOURS INSTRUCTIONS TO CANDIDATES 1, 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 10 printed pages: (© Hak Cipta Universiti Teknologi MARA, CONFIDENTIALCONFIDENTIAL 2 ACIJUN 2014/ACC106/100/105/107! PARTA 4911114/1151150 This part consists of 10 multiple-choice questions. Choose the most suitable answer. 1. Which one of the following is a characteristic of partnership? Limited liability Limited life Single owner Capital from public com> (1: mark) 2. One of the following statements about users of accounting information is INCORRECT: ‘A. Government is considered as internal user B. Income Tax Department is considered as external user C. Management is considered as internal user D. Accounts payable are considered as external users 3. Which of the followings are CORRECT? Transactions Debit i. Sold goods for cash Cash account ii, Bought van for cash Motor vehicle account ii, Purchased goods on credit Ali from Ali iv. Repaid part of the loan Bank account from BIMB by cheque A. ionly B. iandiii only C. iandiionly D. iiandiv only 4. The process of accounting can be described as: A. Classifying, recording, summarising and interpreting B. Classifying, interpreting, recording and summarising C. Recording, summarising, interpreting and classifying D. Recording, classifying, summarising and interpreting (© Hak Cipta Universit Teknologi MARA (1 mark) Credit Sales account Cash account Purchases account Loan account (1 mark) (1 mark) CONFIDENTIALCONFIDENTIAL dq ACIJUN 2014/ACC106/100/105/107/ 111/114/1151150 5. Bookkeeping differs from accounting. Bookkeeping primarily involves which part of the accounting process? A. Measurement B. Identification ¢. Communication D. Recording (1 mark) 6. The following steps in the accounting cycle have not been listed in the correct order. Rearrange the following steps to show the correct sequence in the accounting cycle. i, Trial balance ii. Journalising ili, Business transaction iv, Source document v. Posting vi. Financial statements A. vii, vii, iiand iv B. ii, iv, ii, v, and vi Cc. viii, ii, i, v and vi D. iiiv, viii, i and vi (1: mark) 7. AQ Enterprise bought a refrigerator on credit from World Electricals Sdn Bhd. What is the effect of this transaction? A. Decrease in liability and increase in assets B. _ Increase in assets and increase in liability C. Decrease in both assets and liability D. Increase in assets and increase in capital (1: mark) 8 — The sale journal is ‘A. _ used only to record credit sales. B. _ used only to record cash sales. C. _ used to record all sales, D. _ used only to record credit purchases. (1: mark) © Hak Cipta Universiti Teknologi MARA CONFIDENTIAL,CONFIDENTIAL 4 ACIJUN 2014/ACC106/100/105/107/ 111/1141115/150 9. On 4 January 2013, Ahmad Said Enterprise purchased a piece of land at the cost of RM850,000, a small office building at RM675,000 and equipment at RM475,000. What is the amount being debited to the land account on the date of purchase? RM675,00 RM475,000 RMB50,000 RM2,000,000 oom> (1 mark) 10. Recognising prepaid rent expense in Statement of Financial Position will result in: A. _ Increase in asset B. Increase in liability C. Decrease in asset D. Decrease in liability (1 mark) (Total: 10 marks) © Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL 5 PARTB. QUESTION 1 ACIJUN 2014/ACC106/100/105/107/ 114/114/115/150 Puan Nun and her sons are the owners of Mentari Sdn Bhd. They started their stationery business on 1 January 2013. None of them has accounting background, At the end of the accounting period which is on 31 December 2013, they have difficulties in preparing financial reports for their business. Since you have knowledge in accounting, they seek your help to prepare the reports. Given below are the particulars of Mentari Sdn Bhd. Particulars [Building ‘Accounts Receivable [Rent received ty bill Loan from Bank Islam Short term deposit Amount(RM) 80,000 Interest on loan ‘Commission revenue Insurance Required: Based on the scenario above, answer the following questions: State the type of business entity owned by Puan Nun and her sons? (1 mark) State any five (5) characteristics possessed by Mentari Sdn Bhd. Classify the items above into assets and liabilties. Calculate the total amount of assets. Caloulate the total amount of expenses. Calculate the total amount of liabilities. Calculate the total amount of revenue. (© Hak Cipta Universiti Teknologi MARA (5 marks) (3 marks) (2 marks) (2 marks) (1 mark) (1 mark) CONFIDENTIALCONFIDENTIAL 6 ACIJUN 2014/ACC106/100/105/107/ 4911114/115/150 h. Calculate the amount of capital for Mentari Sdn Bhd using the accounting equation. (2 marks) i. Ifthe building has to be depreciated at 10% per annum using the straight line method, calculate the amount of depreciation for a year. (Assuming depreciation was provided for a full year in the year of purchase) QUESTION 2 (3 marks) (Total: 20 marks) A. Allis the owner of Ali Trading since year 2013. Below are the business transactions of Ali Trading for the month of April 2014. April [1 | Ali Trading bought goods from Kiki Trading on credit amounting to RM20,000 2 ‘A customer bought goods from Ali Trading RM200 by cash. ‘Ali Trading took a loan from Public Bank of RM50,000 by cheque. ~ [5 | Hassan who is in debt with Ali Trading returned goods amounted | RM200. 6 Ali Trading returned damaged goods costing RM1,500 to Kiki Trading. | | 7 | Ali bought a van costing RM25,000 by cash for the business | operation. — 8 Ali took cash and goods valued RM200 and RM300 respectively from the business for his personal used 9 Ali incurred costs to repair the business's van amounted to RM500 and paid by cash. 10 | Ali invested an amount of RM10,000 by cheque in fixed deposit | ___| account. _ ae coe 11 __| Ali Trading settied its debt with Kiki Trading by ci "| 12 [Hassan settied his debt to Ali Trading for an amount of RM500 by cash ~|43 | Alipaid his employees salary amounting to RM2,000 by cheque. t 14 | Ali received rental income from Aisyah amounted to RM300 by cheque. a (© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL,CONFIDENTIAL 7 ACIJUN 2014/ACC106/100/105/107/ 419/114/1151150, Required: B. The following are the business transactions related to KOR! Enterprise: Prepare the journal entries for each of the transactions above from April 1 to April 8. (9 marks) ‘An example is given to guide you: [tassacroN a JOURNAL ENTRY | All started his business by investing | Dr. Cash 50,000 some cash of RM50,000. Cr. Capital 50,000 Identify the effects (increase or decrease) for each of the transactions from April 8 to April 14 on assets, liabilities, capital, revenue or expenses. (6 marks) An example is given to guide you: | TRANSACTION JINCREASE —| DECREASE Ali paid advertising expenses | Expenses Asset | RM300 by cash. ~~ Business transactions Book of Prime be ee | entry Example = Cash Payment | | Bought machinery by cash valued RM15,000, Journal | Bought goods RM30,200 on credit from XYZ Trading = | | Paid rental expenses amounted to RM2,500 by cheque. ‘A customer returned damaged goods previously sold on credit amounted to RM5,340. | Bought a delivery van on credit from Ah Seng Motor at the cost of RM75,000. Returned damaged goods previously purchased on credit to its supplier, XYZ Trading, amounted to RM2,300. ' Sold goods by cash for RM25,100. (© Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL 8 ACIJUN 2014/ACC106/100/105/107/ 114/1141115/150 Purchased office furniture worth RM6,000 on credit from Alan, Received RM100 from Ali by cash. Transferred RM10,000 from bank to petty cash. Required: Indicate the relevant books of prime entry for each of the transactions above. ‘An example is given to guide you. (10 marks) (Total: 25 marks) QUESTION 3 Sarahani is the owner of SH Trading, the business dealing with wholesaler of electrical appliances. Below is the trial balance extracted from the books of SH Trading as at 31 December 2013, Particulars apital as at {January 2013 [Drawings Inventories as at 1 January 2013 Accounts Receivable Accounts Payable Returns inwards Returns outwards | Furniture and Fittings Plant and Machinery Cash at bank Discount received Discount allowed Wages Salaries Electricity and water Sales Purchases Stationeries Insurance — ‘Accumulated Depreciation as at 1 January 2013: Furniture and Fittings = Plant and Machinery 214,660 __ 214,660 (© Hak Cipta Universiti Toknologi MARA CONFIDENTIALCONFIDENTIAL 8 ACIJUN 2014/ACC106/100/105/107/ 499/114/1151150, jonal information: 1. One of the accounts receivable returned defective good amounting RM110 to the business. This transaction was not recorded in the books yet. 2. Allowance for doubtful debts of 5% was to be provided on the net accounts receivable. 3. The closing inventories were valued at RM6,500. 4. Prepayment of insurance premium and wages were RM150 and RM300 respectively. 5, Depreciation for the year is to be provided as follows: Furniture and Fittings at 10%, straight line method, yearly basis Plant and Machinery at 10%, reducing balance method, yearly basis. 6. The owner took goods amounting RIM400 for her personal use. 7. The accruals of electricity and salaries were RM100 and RM200 respectively, 8. Along term loan from Bank Niaga amounted to RM50,000 was received by cheque on 1 June 2013. The 4% interest on loan is still accrued at the end of the year. Required: a. The Statement of Profit or Loss for the year ended 31 December 2013. (15 marks) b. The Statement of Financial Position as at 31 December 2013. (15 marks) Note: Calculate to the nearest RM (Total: 30 marks) © Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL 10 ACIJUN 2014/ACC106/100/108/107/ 1911441151150 QUESTION 4 The following information is for Jauhari Trading as at 31 December 2013: Statement of Profit or Loss (extract) for the year ended 31 December 2013 RM Sales 170,000 Gross Profit 50,000 ‘Average Inventories 20,000 Net Profit 22,000 ari Trading Statement of Financial Position (extract) as at 31 December 2013 RM RM Non-Current Assets 108,000 Current Assets: Inventories. 10,000 Accounts Receivable 8,000 Bank 2,000 Owner's equity Current Liabilities Required: a. Calculate the following ratios: i. Gross profit margin (2 marks) ii. Net profit margin (2 marks) iii, Inventory turnover ratio (2 marks) iv. Current ratio (2 marks) v. Acid test ratio (2 marks) b, Comment on the profitability ratios of Jauhari Trading for year ended 31 December 2013. (2 marks) ©. State three (3) objectives of financial statement analysis. (3 marks) (Total: 15 marks) END OF QUESTION PAPER © Hak Cipta Universiti Teknologi MARA CONFIDENTIAL