Morgan Phrasaddha Naidu A/L Puspakaran (255843)

BKAL1013 A172

Tutorial 1
Dr. Oluwatoyin Muse Johnson Popoola

Name Morgan Phrasaddha Naidu A/L Puspakaran

Matric 255843
Number
Course Bachelor of Law with Honours ( LLB Hons.)
Semester 2
Subject Business Accounting – BKAL 1013, Group S
Lecturer Dr. Oluwatoyin Muse Johnson Popoola
Morgan Phrasaddha Naidu A/L Puspakaran (255843)
BKAL1013 A172

Tutorial 1
Dr. Oluwatoyin Muse Johnson Popoola

PART A: 20 MULTIPLE CHOICE QUESTIONS

1. Who is the business stakeholder?

A. A person who protect users from fraudulent financial information.
B. A customer who purchase the business’s products or services as well as the
vendors who supply inputs to the business.
C. A person who provide the major financing for the business in order for the
business to begin and continue its operations.
D. A person or entity having an interest in the economic performance and well-
being of a business.

2. Below are the primary objective of accounting EXCEPT:

A. To help management assess cash flows.
B. To provide financial information for retirement purpose.
C. To help investors make credit decisions.
D. To protect users from fraudulent financial information.

3. Business structure that combines attributes of a partnership and a corporation in

that it is organized as a corporation, can elect to be taxed as a partnership, a
popular alternative to a partnership, has tax and liability advantages to the
owners is known as a:
A. partnership.
B. corporation.
C. proprietorship.
D. limited liability company.

4. All the statements are correct EXCEPT:

A. proprietorship owned by one individual.
B. partnership is owned by two or more individuals.
C. in partnership, ownership is divided into shares of stock, sold to shareholders
(stockholders).
D. corporation is organized under state or federal statutes as a separate legal
taxable entity.

5. Fields of accounting could be classified as follows:

A. auditing, taxation and business accounting.
Morgan Phrasaddha Naidu A/L Puspakaran (255843)
BKAL1013 A172

Tutorial 1
Dr. Oluwatoyin Muse Johnson Popoola
B. financial, management, auditing and taxation.
C. financial, auditing and corporation.
D. management, taxation, auditing and partnership.

6. Accountants employed by a business firm or a non-profit organization are said to

be employed in:
A. Business accounting
B. Service accounting
C. Public accounting
D. Private accounting

7. Which of the following statements about users of accounting information is

CORRECT?

A. Manager is an internal user

B. Customer is an internal user
C. Investor is an internal user
D. Lender are internal users

8. An association of accounting professions established to control the accounting

profession and conduct examinations to determine the level of profession is
called________________________________.
A. Malaysian Accounting Standard Board (MASB)
B. Financial Reporting Standard (FRS)
C. International Federation of Accountants (IFAC)
D. Malaysian Institute of Accountants (MIA)

9. Which combination best describe a corporation?

Morgan Phrasaddha Naidu A/L Puspakaran (255843)
BKAL1013 A172

Tutorial 1
Dr. Oluwatoyin Muse Johnson Popoola
I. Ownership is divided into shares of stock, sold to shareholders
(stockholders)
II. Can elect to be taxed as a partnership
III. Able to obtain large amount of resources by issuing share.
IV. Is used only by large businesses.

A. I, II, III
B. I, II, IV
C. I, III, IV
D. II, III, IV

10. Process by which accounting provides information to business stakeholders?

I. Identify stakeholders.
II. Assess stakeholders’ information needs.
III. Design the accounting information system to meet stakeholders’ needs.
IV. Record economic data about business activities and events.

A. I, II, III
B. I, II, IV
C. I, III, IV
D. I, II, III, IV

11. The financial statements of a business entity are prepared in accordance with the
Generally Accepted Accounting Principle (GAAP). What is the aim of GAAP?
Morgan Phrasaddha Naidu A/L Puspakaran (255843)
BKAL1013 A172

Tutorial 1
Dr. Oluwatoyin Muse Johnson Popoola
A. Stakeholders can compare financial performance and condition of one
company to another.
B. Stakeholders can know the recording and reporting of economic data and
activities for a business.
C. Stakeholders can monitor management of the company in running day-to-day
operations.
D. None of the above.

12. When developing GAAPs, there are certain basic assumptions made. Which of
the following are accounting assumptions?
A. Economic entity and cost unit
B. Economic entity and monetary unit
C. Cost unit and monetary unit
D. Monetary unit and revenue recognition

13. Below are basic accounting principle guiding accounting practices EXCEPT:
A. Cost principle
B. Objectivity principle
C. Time period principle
D. Matching principle

7. The historical concept as one of the principle in accounting requires that:

A. economic data be recorded in dollars.
B. transactions are recorded based on actual value.
C. the accounting records and reports must be supported by independent or
unbiased evidence.
D. Recognizes revenue when it is earned.

8. ______________ is an assumption that accounting involves only transactions

that can be valued in the form of money.
A. Economic entity
B. Monetary Unit
C. Going concern
Morgan Phrasaddha Naidu A/L Puspakaran (255843)
BKAL1013 A172

Tutorial 1
Dr. Oluwatoyin Muse Johnson Popoola
D. Time period

9. Financial statement is a formal record of the financial activities and position of a

business, person, or other entity. Which are the following is NOT part of the
financial statement?
A. Statement of profit or loss.
B. Statement of debt.
C. Statement of changes in equity.
D. Statement of financial position.

10. The ________ ________ statement report reported on the company’s

activities, particularly its operating, investing and financing activities.
A. economic condition
B. financial position
C. profit loss
D. cash flow

11. Which one of the following BEST describe the accounting equation?
A. Owner’s equity minus liability equals to asset.
B. Asset equals to liability minus owner’s equity.
C. Liability divided by asset equals to owner’s equity.
D. Asset equals to owner’s equity plus liability.

12. An account with a normal credit balance is….

A. An asset
B. An expense
C. A liability
D. A machine
Morgan Phrasaddha Naidu A/L Puspakaran (255843)
BKAL1013 A172

Tutorial 1
Dr. Oluwatoyin Muse Johnson Popoola
13. Owner’s equity is decreased by…
A. Owner’s withdrawal
B. Notes payable
C. Account receivables
D. Debt owed to lenders
Morgan Phrasaddha Naidu A/L Puspakaran (255843)
BKAL1013 A172

Tutorial 1
Dr. Oluwatoyin Muse Johnson Popoola

PART B: STRUCTURED QUESTION

1. Accounting is a process which involves analyzing and interpreting financial

information to assist business decision making. What is meant by analyzing and
interpreting?

 Analysis and interpretation of financial statements are an attempt to

determine the significance and meaning of the financial statement
data so that a forecast may be made of the prospects for future
earnings, ability to pay interest, debt maturities, both current as well
as long term, and profitability of sound dividend policy.
Morgan Phrasaddha Naidu A/L Puspakaran (255843)
BKAL1013 A172

Tutorial 1
Dr. Oluwatoyin Muse Johnson Popoola
 The main function of financial analysis is the pinpointing of the
strength and weaknesses of a business undertaking by regrouping and
analysis of figures contained in financial statements, by making
comparisons of various components and by examining their content.
The analysis and interpretation of financial statements represent the
last of the four major steps of accounting.

2. Ethics is the moral principles that guide the conduct of individuals. Why ethics is
important in accounting and business?

 Proper ethics and ethical behavior are extremely important in

accounting for a variety of reasons. To begin with, accountants are
often privy to sensitive information regarding their clients, such as
Social Security or bank account numbers. This gives accountants a
good deal of power in regard to their clients and it is important that
the trust between an accountant and their clients not be abused. In the
same way it is important that the industry itself does not become
stigmatized as an unethical one, something that could potentially
harm business for all accounting firms.
Morgan Phrasaddha Naidu A/L Puspakaran (255843)
BKAL1013 A172

Tutorial 1
Dr. Oluwatoyin Muse Johnson Popoola

 Many negative consequences can result from poor ethics in

accounting practices. The first result is generally a lag in business.
Accounting firms rely heavily on word-of-mouth for promotion, and
it's all too easy for a few bad stories about unethical behavior to sway
prospective clients away from a particular firm. There can also be
serious legal repercussions for those who are found to be violating
legal codes and standards for their jurisdiction

3. Based on the transactions below, complete the accounting equation:

A. Wudda Amnani started a business with RM50,000.

 An increase in Asset and Owner’s Equity by RM 50,000.

B. Received cash from customers RM30,000.

 An increase in Asset and Revenue by RM 30,000.

C. Wudda Amnani withdraw RM20,000 to buy a car for his wife.

 A decrease in Asset and Owner’s Equity by RM 20,000.

D. Pay utility bills RM500 by cash.
Morgan Phrasaddha Naidu A/L Puspakaran (255843)
BKAL1013 A172

Tutorial 1
Dr. Oluwatoyin Muse Johnson Popoola

 A decrease in Asset by RM 500 and increase in Expense by RM

500.

E. Purchase equipment RM5,000 by credit.

 An increase in Asset and Liability by RM 5,000.

F. Purchase materials worth RM10,000 by credit.

 An increase in Asset and Liability by RM 10,000.

G. Purchase merchandise RM10,000 from Syarikat Along Sdn. Bhd. 40% paid
by cash and another 60% by credit.

 An increase in Asset by RM 10,000, a decrease in Asset by RM

4,000 and an increase in Liability by RM 6,000.

END OF QUESTIONS

Lecturer’s Comments