INTRODUCTION TO ACCOUNTING TECHNIQUES

FOUNDATION IN ARTS
MIDTERM TEST

INTAKE : MARCH 2015

SEMESTER : ONE (1)
SUBJECT TITLE : INTRODUCTION TO ACCOUNTING TECHNIQUES
SUBJECT CODE : PACT001

TIME ALLOWED FOR THIS PAPER:

Working time for the paper : ONE (1) hour THIRTY (30) minutes

MATERIALS ALLOWED
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Special items : Non- programmable calculators, Authorised dictionary without thesaurus
and translations, NO digital dictionaries allowed.

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hand it to the supervisor/invigilator before reading any further.

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STUDENT NAME: _______________________________________

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 INTRODUCTION TO ACCOUNTING TECHNIQUES
STRUCTURE OF THIS PAPER

Number of Number of Suggested

Marks
questions questions to be working time Answer in
available
available answered (minutes)
3 3 90 55 Question paper
Total Marks 55 Marks

INSTRUCTIONS TO CANDIDATES
1. There are TEN (10) pages (excluding the cover page).

2. This question booklet contains THREE (3) questions.

Answer ALL questions in this section.

Write your answer in the spaces provided.
Total marks available: 55 marks

For Examiners Use Only

Question Marks available Marks allocated

1. Theoretical framework 21

2. Double entry 12

3. Financial Statements 22

Total marks /55

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 INTRODUCTION TO ACCOUNTING TECHNIQUES
Question 1: Theoretical Framework
(a) Explain in details the term liabilities in the business. Provide ONE (1) example of liabilities.
(3 marks)

(d) Describe the term carriage inwards and carriage outwards. Also, explain the section in
which each item should be reported in the income statement. (4 marks)

Carriage inwards:

Carriage outwards:

(e) Explain TWO (2) types of returns in relations with inventories. (2 marks)

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 INTRODUCTION TO ACCOUNTING TECHNIQUES
Question 2: Double entry
(a) Jenny Lee has started her business in kids clothing few years ago. She provided you with
the following business transactions for the month of March 2015:

Balance as at 28 February 2015:

Debtors:
Melanie C RM 15,200
Kangaroo Enterprise RM 8,850

Creditors:
Blue Hippo RM 9,280
Red Apple Trading RM 8,475

March 1 Purchased inventory from Orange Bright amounting RM 1,250 paying by cheque
immediately.
4 Bought goods from Red Apple Trading amounting RM 2,450, promised to pay within
30 days.
5 Received cash from Melanie C amounting RM 5,000 to settle part of the amount
owing.
10 Sold goods on credit to Kangaroo Enterprise RM 2,750.
12 Return some of the damaged inventories to Orange Bright RM 365.
22 Received the returned of the goods from Kangaroo Enterprise RM 1,550. This is due
to damaged items.
24 Blue Hippo sold the inventories to Jenny RM 620. Jenny had agreed to pay in the next
month.
25 Paid rental of the premises RM 900, by cash to Andrew.
26 Sold inventories RM 800 by cash to Melanie C.
26 Paid only 60% of the amount owing to Red Apple Trading by cheque.
29 Returned some of the defective inventories to Blue Hippo RM 90.
30 Melanie C has settled their account, payment received by cheque. Jenny gave them
discount RM 200 on this settlement.
31 Paid insurance premium RM 650 and salaries by cheque RM 6,900.

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 INTRODUCTION TO ACCOUNTING TECHNIQUES
Required to prepare:

(i) All debtors account and balance it off as at 31 March 2015. (5 marks)

Solution:

Melanie C
Kangaroo Enterprise

(ii) All creditors account and balance it off as at 31 March 2015. (5 marks)

Solution:

Blue Hippo
Red Apple Trading

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 INTRODUCTION TO ACCOUNTING TECHNIQUES
(b) State the effect to assets, liabilities or capital for these transactions: (2 marks)

(i) The owner pays the businesss creditor using her own personal cash.

(ii) The owner introduces new capital by paying a cheque into the bank.

(Total: 12 marks)

Question 3: Financial Statements

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 INTRODUCTION TO ACCOUNTING TECHNIQUES
Adam is the owner of wooden furniture business. He just started this business on 1 April 2014.
The following information has been extracted from his business accounting books:

Adam Wooden Trading

Trial balance as at 31 March 2015

Dr Cr
RM RM
Capital/ Drawings 550 25,000
Furniture and fittings, at cost 3,000
Purchases 33,045
Sales 35,200
Advertising expenses 400
Accounts receivable/Accounts payable 12,500 6,750
Purchases returns/ Sales returns 235 510
Office equipment, at cost 3,500
Motor vehicles, at cost 35,000
Maintenance and repairs 150
Insurance 500
Carriage 600
Discounts 198 250
Sundry expenses 100
Salaries and wages 9,000
Rent 1,500
Commissions 1550
Utilities expenses 300
Cash 682
Loan from Jeremy 1,000
Bank 31,000

101,260 101,260

Additional information to be taken into account as at 31 March 2015:

(i) Closing inventory as at 31 March 2015 was valued at RM 5,500.

(ii) Carriage inwards are totalled RM 420 and the remaining are carriage outwards.
(iii) Loan from Jeremy is payable in November 2015.

Required to prepare:

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 INTRODUCTION TO ACCOUNTING TECHNIQUES
(a) Income statement for the year ended 31 March 2015. (12 marks)

Solution:
Net loss (3,018)

(b) Statement of Financial Position as at 31 March 2015. (10 marks)

Solution:

Total capital 21,432

(Total: 22 marks)
END OF QUESTIONS