TUTORIAL 2 BKAL1013

DUE DATE: 12 December 2020

Topic 3 & 4 (Recording Process & Completing Accounting Cycle)

PART A: 20 MULTIPLE CHOICE QUESTIONS

1. Which of the following groups of accounts are increased with a debit?

A. Assets, liabilities, owner’s equity 
B. Assets, drawing, expenses 
C. Assets, revenues, expenses 
D. Assets, liabilities, revenues 

2. MH Sdn. Bhd. purchases a ceramic machine for RM30,000 by paying cash of RM20,000
and the balance is on account. Which of the followings would occur?
A. Accounts Payable is debited for RM10,000 and Cash is credited for RM20,000;
ceramic machine is credited for RM30,000
B. ceramic machine is debited for RM30,000; Cash is credited for RM20,000; and
Accounts Payable is credited for RM10,000.
C. Cash is debited for RM20,000; ceramic machine is debited for RM10,000; and
Accounts Payable is credited for RM30,000.
D. Accounts Payable is debited for RM30,000; Cash is credited for RM20,000; and
ceramic machine is credited for RM10,000

3. Which of the following statements is TRUE?

A. If the trial balance is in balance, it proves that no errors have been made in recording
and posting transactions.
B. The trial balance is a book of original entry.
C. Another name for trial balance is chart of accounts.
D. The trial balance is a list of all accounts from the ledger with their balances at a point
in time.

4. Which of the following errors will cause the total debit and credit amounts in the trial
balance unequal?
A. Failure to record a transaction in the journal.
B. Recording the same transaction twice.
C. Recording the same erroneous amount for both the debit and credit parts of a
transaction.
D. Entering a debit balance as a credit balance in the trial balance.
5. The followings are included in the journal entry of a transaction EXCEPT
A. the date of transaction
B. the name of the source document
C. the dollar amounts to debit and credit
D. the titles of the accounts to be debited and credited

6. Hadief Consultant purchased land worth RM80,000 by paying RM15,500 cash and
signing a long-term note payable for the remaining money. The journal entry would be
recorded as

Debit (RM) Credit (RM)

A. Land RM80,000
Cash RM15,500
Account Receivable RM64,500
B. Land RM80,000
Cash RM15,500
Notes Payable RM64,500
C. Land RM80,000
Cash RM15,500
Accounts Payable RM64,500
D. Land RM80,000
Cash RM15,500
Owner’s Equity RM64,500

7. The effect of missing a rental expense entry will cause which of the followings?
A. an asset will be overstated, and a liability will be understated.
B. an expense will be understated, and an asset will be understated.
C. a liability will be overstated, and the owner’s equity will be overstated.
D. an expense will be understated, and the asset will be overstated.

8. An advance rental of RM4,500 for 3 months was paid on 1 February 2020. If the
accounting period ended on 31 March 2020, what should be the adjusting entry?
Debit (RM) Credit (RM)
A. Rent Expense RM1,500
Prepaid Rent RM1,500
B. Prepaid Rent RM3,000
Rent Expense RM3,000
C. Rent Expense RM3,000
Prepaid Rent RM3,000
D. Prepaid Rent RM4,500
Rent Expense RM4,500
9. Which of the followings is the adjusting entry to record an accrued revenue of RM500?
Debit (RM) Credit (RM)
A. Accounts Receivable RM500
Fees Earned RM500
B. Accounts Receivable RM500
Unearned Fees RM500
C. Accounts Payable RM500
Unearned Fees RM500
D. Accounts Payable RM500
Fees Earned RM500

10. Season Enterprise has a total monthly salary of RM45,000 that is normally paid on the fifth
(5th) of the following month. What should be the entry to record the salary expense at the
end of every month?
Debit (RM) Credit (RM)
A. Cash RM45,000
Salaries Expense RM45,000
B. Salaries Expense RM45,000
Salaries Payable RM45,000
C. Salaries Expense RM45,000
Cash RM45,000
D. Salaries Payable RM45,000
Cash RM45,000

11. Which of the following circumstances will cause an asset to be overstated if no adjusting
entry is made when the accounting year ended on 31 March 2020?
A. A rental deposit of RM900 for 3 months paid on 31 March 2020.
B. A monthly utility bills for June paid on 31 March 2020.
C. A six-month subscription fees of RM1,200 received on 1 October 2019.
D. An annual building insurance for RM2,400 paid on 1 January 2020.

12. The record for office supplies was not adjusted at the end of an accounting period. This
will cause which of the followings?
A. A liability is overstated; an expense is understated.
B. An asset is overstated; an expense is understated.
C. An asset is understated; a liability is understated.
D. A liability is understated; an asset is overstated.

13. A journal entry was wrongly debited to an asset account instead of the accumulated
depreciation account. This will cause which of the followings?
A. Total depreciation will be overstated.
B. Total expenses will be understated.
C. Total assets will be overstated.
D. Total liabilities will be overstated
14. A net income from an operation will be shown in which of the following statements?
I. Statement of Profit or Loss and Other Comprehensive Income
II. Statement of Changes in Equity
III. Statement of Financial Position

A. I & II.
B. I & III.
C. II & III.
D. All the above.

15. _______________ is a process that will always include debits or credits to at least one
statement of profit or loss and other comprehensive income account and at least one
statement of financial position account.”

Which of the followings BEST describe the statement above?

A. Journalising.
B. Posting.
C. Adjusting.
D. Closing.

16. “This financial statement shows the ending balances of accounts on a specific date.”
The above statement is most applicable to which of the followings?
A. Statement of Profit or Loss and Other Comprehensive Income
B. Statement of Changes in Equity
C. Statement of Cash Flows
D. Statement of Financial Position

17. Which of the following accounts will be closed prior to the preparation of the financial
statements?
I. Rental Revenue
II. Wages Expense
III. Notes Payable
IV. Drawings

A. I, II & III.
B. I, II & IV.
C. II, III & IV.
D. All the above.
18. A truck was acquired for RM96,000 on 1 Jan 2020. The truck is expected to be replaced
with a newer model at the end of its fifth year with a trade-in value estimated to be around
RM21,000. The value of the truck and its accumulated depreciation at the end of the third
year, are shown as:
A. Truck RM57,600; Accumulated Depreciation RM57,500
B. Truck RM75,000; Accumulated Depreciation RM75,000
C. Truck RM45,000; Accumulated Depreciation RM51,000
D. Truck RM51,000; Accumulated Depreciation RM45,000

19. An office building with an acquisition cost of RM960,000 on 1 April 2019 is depreciated at
10% per annum. The necessary adjusting entry for the period ended at 31 December 2019
is
Debit (RM) Credit (RM)
A. Depreciation Expense RM72,000
Accumulated Depreciation RM72,000
B. Depreciation Expense RM96,000
Accumulated Depreciation RM96,000
C. Accumulated Depreciation RM72,000
Depreciation Expense
RM72,000
D. Accumulated Depreciation RM96,000
Depreciation Expense
RM96,000

20. The balance in the Office Supplies account before adjustment at 31 December 2019 was
RM48,000. A physical check on office supplies has indicated an available balance of
RM8,000. The adjusting entry necessary is:
Debit (RM) Credit (RM)
A. Office Supplies Expense RM8,000
Office Supplies RM8,000
B. Office Supplies RM40,000
Office Supplies Expense RM40,000
C. Office Supplies Expense RM40,000
Office Supplies
RM40,000
D. Office Supplies Expense RM48,000
Office Supplies
RM48,000
PART B: 1 STRUCTURED QUESTION

On 1 January 2020, Mrs. Marissa established Faster Enterprise in providing courier services for
the Jitra Valley. The following transactions had taken place during the first month of its
operation.

January  

1  RJ had invested RM100,000 cash and RM35,000 office equipment to the business as
a means of capital.  
6  Purchased office supplies RM10,000 on credit. 
8  Purchased a second-hand van for RM35,000 in cash.
17  Completed services to customers for RM40,000 in cash. 
20  Paid creditors RM5,000 for the office supplies purchased on 6 January. 
25  Completed services for customer amounting RM25,000 and billed to the account.
29  Paid RM5,000 for employee salaries. 
29  Paid electric and miscellaneous expenses for the month RM2,000 and RM2,500
respectively. 
29  RJ withdrew cash RM10,000 for personal use.
30  Customer paid his bill in full amount for the services rendered on 25 January.

REQUIRED:

(a) Journalise the transactions for the month of January 2020. (Explanation is not required).

(b) Prepare Cash Account and determine the account balance.

END OF QUESTIONS