TKPSS/ BAFS/ Pre-lesson summer exercise/ p.

Tin Ka Ping Secondary School

Business, Accounting and Financial study (BAFS)
Pre-lesson summer exercise.

Name: _________________ __ Class: _____ ____ (_____)

Session 1: MC
Business Ownership
1. Which of the following concerning sole proprietorship and partnership is correct?

A. The capital of a sole proprietorship must be less than that of partnership

B. The decision making in a partnership is more flexible than that of a sole
proprietorship.
C. The transfer of ownership is easier for a sole proprietorship than for a
partnership.
D. The number of owners of a sole proprietorship and a partnership can be the
same.

2. Jack wants to be an owner of a lawyer firm in Hong Kong. The type(s) of

business ownership that he can choose includes (include)
(1) sole proprietorship.
(2) general partnership.
(3) limited company.

A. (1) and (2) only

B. (1) and (3) only
C. (2) and (3) only
D. (1), (2) and (3)

3. Susan wants to start a new stationery shop alone. She is afraid that she may need
to sell her own flat to repay the loans of her shop. Which of the following types
of business ownership is the best choice for her?

A. sole proprietorship
B. general partnership
C. private limited company
D. public limited company
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4. A cake shop has gone bankrupt and was liquidated. It has sold out lots of cake
coupons which are worth a total of $100,000. The company had promised to
recognize these cake coupons forever. At last, the cake shop does not need to keep
the promise. What kind of business ownership does it belong to?

A. sole proprietorship
B. general partnership
C. government department
D. limited company

5. Jacky is the owner of a limited company. A limited company enjoys independent

legal status. It means that

A. Jacky cannot enjoy the profit of his company.

B. When someone sues his company, Jacky does not need to be responsible for
that.
C. Jacky does not need to disclose the account of the company to the public.
D. Jacky can get legal advice from the government at a lower cost.

6. Study the following information about firm A and firm B.

Firm A Firm B
Number of owners 2 12
Needs the consent of other
Transfer of ownership Freely transferable
owners
Liability limited unlimited

According to the above information, Firm A is a ___________ and Firm B is a

___________.

A. public limited company … private limited company

B. private limited company … general partnership
C. general partnership … private limited company
D. public limited company … general partnership
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Production and Division of Labour

7. Labour supply of Hong Kong will increase if

A. there are more places in tertiary education.

B. businesses use more machines in their production.
C. a significant proportion of married women want to be housewives after having
their own children.
D. employees in Hong Kong tend to work longer hours.

8. Division of labour

A. does not have any drawbacks.

B. reduces the amount of capital used in production.
C. always bring a net benefit to business.
D. lowers people’s living standards as fewer workers are needed in production.

9. Consider the following production data of a factory:

Year 2011 2012
Number of workers 18 20
Average number of working hours per worker 10 8
Output (units) 180,000 176,000

Compared to the year 2011, the factory has

(1) a greater labour supply in 2012.
(2) a lower labour supply in 2012.
(3) a lower labour productivity in 2012.
(4) a greater labour productivity in 2012.

A. (1) and (3) only

B. (1) and (4) only
C. (2) and (3) only
D. (2) and (4) only
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10. Which of the following can be classified as production?

(1) Mary watches television.
(2) Gary cooks a meal for his mother.
(3) Sammy cleans his flat.

A. (1) and (2) only

B. (1) and (3) only
C. (2) and (3) only
D. (1), (2) and (3)

11. Which of the following is NOT a reason for division of labour to raise
productivity?
A. time of shifting from one production stage to another is saved.
B. fewer resources are needed to use for producing capital.
C. workers become more skillful by repeating the same task.
D. the lowest cost person is assigned to do the job.

Section 2: Accounting.
1. Classify the followings items into Assets, Capital, Liabilities, Expenses and
Revenue.
Cash Capital Commission revenue
Bank Bank loan Rental income
Accounts receivable (Debtors) Bank overdraft Miscellaneous expenses
Plant Accounts payables (Creditors) Wages and salaries
Office equipment Insurance Inventory
Motor vehicles Commission Property
Fixture and furniture Electricity expenses Premises
Rent and rates
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2. Write down the double entries for each of the following transactions of Mr. Lam
business.
Transaction Double entries
e.g. Mr. Lam started business with Dr. Cash 20,000
$20,000 cash. Cr. Capital: $20,000

Bought a machine on credit from M&N

for $6,000.

Bought office equipment on credit from

Simon.com for $800.

Paid M&N the one third of the amount

owing in cash.

Sold a piece of office furniture for $600

on credit to L So.

3. Narrate the transaction from interpretation of the double entries.

E.g. Dr. Bank $4,000
Cr. Account receivables $4,000
The business received $4,000 from its debtors in cheque.
E.g. Dr. Rent $4,000
Cr. Bank $4,000
The business paid $4,000 rent in cheque.

a. Dr. Office equipment $4,000

Cr. Cash $4,000

b. Dr. Premises $4,000,000

Cr. Capital $4,000,000

c. Dr. Bank $25,000

Cr. Capital $25,000

d. Dr. Bank $25,000

Cr. Cash $25,000
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4. Prepare the T-accounts for each of the following double entries as at 1 Jan 2022.

E.g. Dr. Bank $4,000

Cr. Account receivables $4,000

Office equipment
2022 $ 2022 $
Jan 1 Cash 4,000

Cash
2022 $ 2022 $
Jan 1 Office equipment 4,000

a. Dr. Rent $4,000

Cr. Bank $4,000

b. Dr. Office equipment $4,000

Cr. Cash $4,000
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c. Dr. Premises $4,000,000

Cr. Capital $4,000,000

d. Dr. Bank $25,000

Cr. Capital $25,000

e. Dr. Bank $25,000

Cr. Cash $25,000
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5. Identify the following account balance. Circle the best answer.

Debit balance: total debit balance > Total credit balance
Credit balance: total debit balance < Total credit balance
Zero balance: total debit balance = Total credit balance

Question 1
Bank
2022 $ 2022 $
Jan 1 Cash 25,000

Answer: The account has a (Debit/ Credit/ Zero) balance.

Capital
2022 $ 2022 $
Jan 1 Premises 4,000,000

Answer: The account has a (Debit/ Credit/ Zero) balance.

A. Wong
2022 $ 2022 $
Jan 1 Bank 4,000 Jan 1 Furniture 4,000

Answer: The account has a (Debit/ Credit/ Zero) balance.

Question 2

Bank
2022 $ 2022 $
Jan 1 Cash 25,000 Jan 31 Bal. c/d 25,000

Answer: The account has a (Debit/ Credit/ Zero) balance.

Capital
2022 $ 2022 $
Jan 31 Bal. c/d 4,000 Jan 1 Premises 4,000
 TKPSS/ BAFS/ Pre-lesson summer exercise/ p.9

Answer: The account has a (Debit/ Credit/ Zero) balance.

6. Green Co. Ltd.

2016
Mar 1 Started business with $20,000 cash.
Mar 9 Bought a machine on credit from M&N for $6,000.
Mar 15 Bought office equipment on credit from Simon.com for $800.
Mar 18 Return office equipment to Simon. Com for $200.
Mar 31 Paid M&N the one third of the amount owing in cash.

(i)Write up the accounts in the books of Green Co. Ltd. to record the
following transactions at the end of March 2016. (4 marks)
(ii) Balance off all the accounts at the end of March 2016. (3 marks)
(iii) Prepare a balance sheet of Green Co. Ltd. as at 31 March 2016. (3
marks)

7. F Shum started a business in Apr 2016. The following are the transactions of his
business in the first month:

2016
Apr 1 Commenced business with a $10,000 bank deposits.
" 3 Bought office equipment for $7,000 on credit from Perfect
Machinery Ltd.
" 6 Bought a van for $3,000 by cheque.
" 8 Borrowed $10,000 in and deposit into bank account from a
bank.
" 11 Shum put further capital into the firm in the form of $5,000
cash.
" 12 Deposited $3,500 cash into the firm’s bank account.
" 15 Returned some faulty office equipment costing $2,000 to
Perfect Machinery Ltd.
" 17 Bought more office equipment, paying $500 in cash from
Perfect Machinery Ltd..
" 19 Sold an unsuitable van to L Lim for $3,000, who agreed to settle
this sum in three payments later this month.
" 21 Received a $4,000 loan in cash from bank.
" 22 L Lim wrote the firm a cheque for $1,000, being the first
payment for the van sold to him.
" 23 Bought a new van for $3,600 on credit from Trendy Garages
Ltd.
" 26 L Lim wrote the firm a cheque for $1,800, being the second
payment for the van sold to him.
" 28 Paid $2,000 by cheque to Trendy Garages Ltd.
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" 30 L Lim paid the firm $200 in cash, being the final payment for
the van sold to him.
(a) Write up the accounts in the books of F Shum to record the following
transactions at the end of April 2016. (15 marks)
(b) Balance off all the accounts at the end of April 2016. (4 marks)
(c) Prepare a balance sheet of Joe Chan as at 31 April 2016. (4 marks)