CONFIDENTIAL 1 AC/SAMPLE/FAR110

UNIVERSITI TEKNOLOGI MARA

SAMPLE 4

COURSE : FINANCIAL ACCOUNTING 1

COURSE CODE : FAR110
EXAMINATION : SAMPLE
TIME : 1 HOUR 30 MINUTES

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of four (4) sections.

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 test 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 5 printed pages
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CONFIDENTIAL 2 AC/SAMPLE/FAR110

SECTION A

Part 1: MULTIPLE CHOICE QUESTIONS

This part consists of five (5) multiple-choice questions. Choose the most suitable
answer.

1. The economic resources of a business that are expected to provide future benefits to
the business are referred to as

A. owner’s equity
B. expenses
C. liabilities
D. assets
(1 mark)
2. Which of the following is NOT the purpose of accounting?

A. To provide financial information to the users.

B. To be used as a tool for performance evaluation.
C. To increase wealth of the users.
D. To assist management in controlling the business.
(1 mark)

3. The two (2) items that represent the decrease in owner’s equity are:

A. Capital and revenues

B. Revenues and expenses
C. Drawings and expenses
D. Capital and drawings
(1 mark)

4. Which of the following types of business organizations provides its owner with the
advantage of a limited legal liability in cases of insolvency?

A. Sole-proprietorship only
B. Partnership only
C. Company only
D. Sole-proprietorship and partnership only
(1 mark)

5 The following account balance are classified as assets EXCEPT

A. bank overdraft
B. fixed deposit
C. patents & trademarks
D. loan to an employee
(1 mark)

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CONFIDENTIAL 3 AC/SAMPLE/FAR110

Part 2:

Hassan is the owner of a business dealing in sports equipment. He prepares the accounts of
the business on the assumption that the business will continue in operation for the
foreseeable future and he ensures that all his business transactions are recorded in terms of
Ringgit Malaysia (RM).

Required:

a. Identify TWO (2) accounting concepts applied in the above scenario.

(2 marks)

b. Explain the accounting concepts identified in (a) above.

(3 marks)
(Total: 10 marks)

SECTION B

Ali Baba decides to open a cleaning and laundry service near the PFI Campus of UiTM that
will operate as a sole proprietorship business.

Transactions:

(1) Ali Baba invests RM30,000 in cash to start a cleaning and laundry business on
January 1.
(2) Purchased equipment for RM20,000 paying RM5,000 in cash and the remainder will
be paid by installment of RM1,000 per month.
(3) Purchased supplies (detergent and fabric softener) for RM1,400 cash.
(4) Paid RM300 for advertising in the local newspaper.
(5) Cash receipts from customers for cleaning and laundry services amounted to
RM2,400.
(6) Purchased supplies (detergent and fabric softener) on account from ABC Sdn Bhd
amounted to RM2,000.
(7) Billed the Local Football Team RM1,000 for cleaning and laundry services.
(8) Paid RM500 to ABC Sdn Bhd for the purchased of supplies in Transaction 6.
(9) Ali Baba withdrew RM1,000 from the business for his living expenses.

The business uses the periodic inventory system to record the supplies.

Required:

Show the effects of the above transactions on the accounting equation using the following
format.

Example:

January 1: Received cash RM400 for the rental income.

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CONFIDENTIAL 4 AC/SAMPLE/FAR110

Date Assets = Liabilities + Owner’s Equity

Capital - Drawings + Revenue - Expenses
Jan1 + 400 +400

(Total: 10 marks)

SECTION C

DEF Enterprise, is a business selling books and stationeries owned by Daud Emir bin Fadli.
The following were account balances of DEF Enterprise as at 31 December 2014:
RM
Bank 28,950
Office Equipment 21,000
Stock of books and stationeries 30,500
Accounts receivable/Debtor: APlus Tuition Centre 8,000
Accounts payable/Creditor: Sasbadi Sdn Bhd 10,500
Capital ?

The following transactions occurred during the month of January 2015:

Jan 1 Returned books purchased from Sasbadi Sdn Bhd costing RM500 due to wrong
edition.
2 Purchased stationeries from Q Stationers Sdn Bhd on credit for RM8,500.
8 Sold books and stationeries for cash RM3,300.
10 Received a cheque of RM7,840 from APlus Tuition Center, having deducted RM160
cash discount.
14 Settled amount owed by cheque to Sasbadi Sdn Bhd and granted a 2% cash
discount.
20 Paid utilities bill by cash RM715.
23 Daud Emir took stationery worth RM250 for office used.
25 Paid Q Stationers RM3,000 by cheque.

The business uses the periodic inventory system to record the books and stationeries.

Required:

a. Prepare the three (3) column general ledger to record the above balances and
transactions.

b. Prepare a trial balance as at 31 Jan 2015.

(Total: 20 marks)
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CONFIDENTIAL 5 AC/SAMPLE/FAR110

SECTION D

On 31 Dec 2014, XYZ Trading has identified the following errors in its relevant ledger
accounts:

i. The general expense amounting to RM1,500 paid by cash had been

completely omitted in the journal and ledger.

ii. Received cash of RM720 from Ina for settlement of her account was debited
to cash and credited to Ani.

iii. A debit posting to accounts receivable for RM500 was omitted.

iv. A payment of accounts payable for RM1,600 was debited to cash and
credited to accounts payable.

v. The purchase of equipment on account for RM1,700 was recorded as a debit

to Repair Expense and a credit to Accounts Payable for RM1,700.

Required:

a. Identify the type of errors made in the books of XYZ Trading for the month of
December 2014 and indicate whether the trial balance will balance or the trial
balance is not balance for each of the errors above.
(5 marks)

b. Prepare the correcting entry (if any) that should be made in the general journal for
the above errors.
(5 marks)
(Total: 10 marks)

END OF QUESTION PAPER

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL