BACHELOR OF BUSINESS YEAR 1

SAMPLE MID-SEMESTER TEST

Subject Code : ACC101

Subject Name : FINANCIAL ACCOUNTING 1

This examination carries 30% of the total assessment for this subject.

Examiner(s):

MR GOOI CHEE SAN

Day :
Time :
Date :

Time allowed : 2 HOURS

INSTRUCTION(S):

1. This examination consists of FOUR (4) questions:

Students are required to answer ALL questions in the answer book provided.

2. This is a CLOSED BOOK examination.

3. Students are NOT permitted to retain this examination paper.

(This examination paper consists of 4 questions in 5 printed pages, including cover page)
ACC101– FINANCIAL Accounting 1 (Sample 3 Mid-Semester test) Page 2

Answer ALL questions.

Question 1 30 marks

Ao Nang is a sole proprietorship business. Its financial year end is 30 June each year. An
extract of the trial balance of Ao Nang as at 30 June 2019 is shown below.

No. Ledger Accounts DR$'000 CR $'000

1 Accounts receivable 136
2 Advisory expense 6
3 Cash at bank 73
4 Discount allowed 30
5 Electricity and Telephone expense 35
6 Freight outwards expense 13
7 Interest expense 11
8 Inventory, at 1 July 2018 71
9 Land and building, at cost 400
10 Miscellaneous operating expense 8
11 Office equipment, at cost 60
12 Office supplies expense 28
13 Prepaid insurance 48
14 Purchases 400
15 Rental of motor vehicle expense 12
16 Salaries and wages expense 99
17 Sales return 10
18 Transport inwards expense 20
19 Accounts payable 98
20 Accumulated depreciation : building 60
21 Capital 240
22 Discount received 32
23 Interest income 29
24 Notes payable, due 11.11.2021 200
25 Purchase return 28
26 Sales 773
Total 1460 1460

(Ignore Goods & Services Tax)

ACC101– FINANCIAL Accounting 1 (Sample 3 Mid-Semester test) Page 3

Additional data provided:-

(i) The prepaid insurance is valid for the period 01 July 2008 to 30 June 2020.

(ii) Ao Nang conducted an inventory count on 30 June 2019. It was valued at $61,000.

(iii) An employee did not collect his June 2019 salary of $8,000. Ao Nang had not paid
and had not provided.

(iv) The depreciation charges for building $6,000 and office equipment $7,000 had not
yet been provided.

REQUIRED:

(a) Prepare a detailed Income Statement for the year ended 30 June 2019; and
(15 marks)

(b) A Statement of Owner’s Equity for the financial year and a Balance Sheet Statement
as at 30 June 2019.
(15 marks)
ACC101– FINANCIAL Accounting 1 (Sample 3 Mid-Semester test) Page 4

Question 2. 20 marks

PP is a consultancy firm and it normally updates its accounting records daily. The following
events relate to the firm. Indicate the immediate effect of the following errors on each of the
accounting elements described in the column heading below, using the following code:

O = overstated
U = understated
NE = no effect

(Copy the table below before answering)

Error Net Total Total Owner’s

Profit Assets Liability equity
Example : Received $200 cash for services
rendered to a customer, but recorded the U U NE U
transaction as $20
(a) Billed $333 for rental of photocopy
machine used in the month. Amount not paid
and not recorded, including the rental.
(b) Bought a printing machine for office use,
terms n/30. It was recorded DR Office
Expense and CR Accounts Payable.
(c) Provided consultancy service to a client and
received cash. It was recorded three times.

(d) Did not charge the depreciation of the

firm’s motor vehicle.

(e) Received $4,444 for consultancy service to

be provided next year. It was recorded DR
Cash and CR Consultancy Fee Revenue.
ACC101– FINANCIAL Accounting 1 (Sample 3 Mid-Semester test) Page 5

3. Hong Hong is a trading business. It buys inventory in large quantity and retails them in
small quantity. All receipts and payments are made through the bank account. The following
is an extract of Hong Hong’s ledger balances as at 30 April 2019. Hong Hong uses the
periodic inventory system.
Hong Hong : Ledger balances as at 30.4. 2019.

Ledger Accounts Amount

$
Cash at bank 100,000
Capital 300,000
Accounts Receivable 288,000
Accounts Payable 111,000
Inventory 23,000

In the month of May 2009, the following events took place.

2019
May 02 Hong Hong issued a cheque $88,000 to pay for the purchases made in
February 2009.

May 04 Sold some inventory for $23 000 on the following terms 2/5, n/60

May 04 Hong Hong collected a cheque from its customer for the $100,000 sales made
at the end of the previous month. Hong Hong gave 2% discount to the
customer.

May 12 Hong Hong bought some inventory from a supplier, AZB, for $50 000 on the
following terms 4/5, n/45

May 14 Hong Hong issued a cheque of $6,000 to buy a computer, a printer and a
scanner for office use.

May 15 Hong Hong issued a cheque to AZB to fully settle for the May 12 purchase.

May 19 Hong Hong bought a photocopy machine and paid by cheque $3,000.

May 27 The owner issued a cheque of $7,000 from the business bank account for his
family’s holiday.

May 31
Hong Hong received an invoice of $2,000 for electricity used in May 2009. It
issued a cheque to pay for the bill.
(IGNORE GOODS & SERVICES TAX)
REQUIRED:

(a) Show ALL the ledger accounts (T-account) and post the May 2019 transactions
(No journal entry is required) (22 marks)

(b) Prepare a trial balance as at 31 May 2019. (8 marks)

ACC101– FINANCIAL Accounting 1 (Sample 3 Mid-Semester test) Page 6

4. In relation to accounting, explain the following terms. Give an example each to

illustrate your answer.

(a) Cost assumption

(b) Period assumption

(c) Expense

(d) Going concern assumption

(20 marks)

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