BKAL1013 BUSINESS ACCOUNTING

SEMESTER A161

TUTORIAL 1: TOPIC 1 3
Date of submission: 05 OCTOBER 2016
Part A:
1. Accounting is the process of identifying, measuring, recording and ..financial
information about an entity to permit informed judgements and decisions by users of the
information. Which of the following words completes this definition of accounting?
A.
B.
C.
D.

translating
communicating
extracting
summarizing

2. Four accounting assumptions that provide a basis for the accounting process are:
A.
B.
C.
D.

monetary unit, going concern, time period, economic entity

conservatism, materiality, objectivity, economic entity
going concern, monetary unit, full disclosure, materiality
objectivity, going concern, revenue recognition, time period

3. Which of the following assumptions, principle, or constraint is relevant to a statement when

preparing a firms financial statement one should consider its operation would continue in
the foreseeable future?
A.
B.
C.
D.

Going concern
Time period
Revenue recognition
Conservatism

4. The matching principle

A. addresses the relationship between profit and loss
B. determines whether the normal balance of an account is debit or credit
C. requires that the dollar amount of debits equal to the dollar amount of credits in a trial
balance
D. states that the revenues and expenses should be reported in the same period.
5. The owner of a stationery store took three coloring sets for his children and no record has
been made. This action has violated the
A.
B.
C.
D.

historical cost principle

matching principle
business entity assumption
monetary unit assumption
1

BKAL1013 BUSINESS ACCOUNTING

SEMESTER A161

6. Assets should be recorded at the value exchanged at the time the asset is acquired. This
statement reflect the
A.
B.
C.
D.

matching principle
historical cost principle
business entity assumption
monetary assumption

7. What relates income statement and statement of owners equity?

A. Revenue
B. Beginning capital
C. Withdrawals
D. Difference between revenue and expenses
8. Which of the followings is NOT TRUE about statement of cash flow?
A. It reports the cash amount at the beginning of the period
B. It reports the borrowings and withdrawals of the owner
C. It is based on matching principle concept
D. It is interrelated with the balance sheet
9. Which of the following event is NOT considered as a business transaction?
A.
B.
C.
D.

Paid cash for current month rent and the following three month
Received utility bills
Placed an order for three units of machineries
Received cash for previous month sales

10. Mimi involves in a cleaning services business. In the second week of March she billed
customers on account for RM1,250. Which of the following statements indicates the TRUE
effect on the accounting equation element?
A.
B.
C.
D.

Asset is not affected

Expense increases by RM1,250
Owners Equity stays the same
Revenue increases by RM1,250

11. A business has assets of RM54,000 and liabilities RM31,000 as of December 31, 2015.
Determine its owners equity as of June 30, 2016 if the assets have increased by RM35,000
and liabilities decreased by RM5,000 over the six-month period.
A.
B.
C.
D.

RM53,000
RM63,000
RM31,500
RM26,500

BKAL1013 BUSINESS ACCOUNTING

SEMESTER A161

12. Which of the following BEST describes accountings role in business?

A. Accounting provides shareholders with information regarding the market value of the
companys shares
B. Accounting provides information to managers to operate the business and to other users
to make decisions regarding the economic condition of the company
C. Accounting helps in decreasing the credit risk of the company
D. Accounting is not responsible for providing any form of information to users. That is
the role of the information systems department
13. Which of the following groups are considered to be internal users of accounting
information?
A.
B.
C.
D.

Employees and customers

Customers and vendors
Employees and managers
Government entities and banks

14. Which of the following is NOT a characteristic of a corporation?

A. Corporations are organized as a separate legal taxable entity
B. Ownership is divided into shares
C. Corporations experience an ease in obtaining large amounts of resources by issuing
shares
D. A corporations resources are limited to its individual owners resources
15. Profit is the difference between
A. assets and liabilities
B. the incoming cash and outgoing cash
C. the assets purchased with cash contributed by the owner and the cash spent to operate
the business
D. the amounts received from customers for goods or services and the amounts paid for the
inputs used to provide the goods or services
16. Financial reports are used by
A.
B.
C.
D.

management
creditors
investors
all of the above

17. Which of the following is NOT an activity listed in the statement of cash flows?
A.
B.
C.
D.

Investment activities
Fixed assets reduction activities
Operating activities
Financing activities
3

BKAL1013 BUSINESS ACCOUNTING

SEMESTER A161

18. The recording process in accounting begins by documenting ..in the form of journal
entries.
A.
B.
C.
D.

business transactions
financial information
business minutes
business contacts

19. Which of the following entries records the receipt of cash for two months rent in advance?
A.
B.
C.
D.

Dr. Prepaid rent; Cr. Rent revenue

Dr. Cash; Cr. Unearned Rent
Dr. Cash; Cr. Prepaid rent
Dr. Cash; Cr. Rent expense

20. Which of the following accounts is increased by a credit entry:

A.
B.
C.
D.

Sales revenue
Salary expense
Accounts receivable
Discount

21. Which pair of accounts has the same set of rules for debit and credit entries?
A.
B.
C.
D.

Service revenue and Rent expenses accounts

Equipment and Salary payable accounts
Accounts receivable and Account payables
Machinery and Utility expense accounts

Use the following transactions to answer question 22 to 25:

Sep
t

Sent bills to clients for services provided amounting to RM2,900.

Kayukayan Furniture Sdn Bhd delivered equipment worth RM5,000 ordered on 2

September.
Paid half of the amount owed to Kayukayan Furniture Sdn Bhd.
Received a bill for electricity of RM300.

20
29

22. Journal entry to record the 1st September transaction may include an increase of RM2,900 to
A.
B.
C.
D.

cash
unearned revenue
account receivable
account payable

BKAL1013 BUSINESS ACCOUNTING

SEMESTER A161

23. Journal entry to record the 7th September transaction may include a credit of RM5,000 to
A.
B.
C.
D.

equipment
cash
account receivable
account payable

24. Journal entry to record the 20th September transaction may include a debit of RM2,500 to
A.
B.
C.
D.

equipment
cash
account payable
account receivable

25. Journal entry to record the 29th September transaction may include credit of RM300 to
A.
B.
C.
D.

cash
utility expense
utility payable
Not a transaction.

Part B:
Journalize transactions below, post to their respective ledgers and prepare the trial balance as
at 31 August 2016 for LAYNA ENTERPRISE.
a.
b.
c.
d.
e.
f.
g.
h.
i.

Owner invested RM12,750 cash into the business.

Purchased office supplies for RM375 cash.
Purchased office equipment worth RM7,050 on credit.
Received RM1,500 cash as fees for services provided to customers.
Paid RM5,000 as part of settlement for purchase of office equipment in transaction c.
Billed a customer for services rendered, RM2,700.
Paid monthly rent RM500.
Collect RM1,200 from customer in transaction f.
The owner took cash RM1,000 for personal use.

End of questions