EXERCISE CHAPTER 3

(TO BE SUBMITTESD ON 16.11.2022)

1. The normal balance of an account is consistent with the:

A. Debit side
B. Credit side
C. Side which increases that account
D. Side which decreases that account

2. A debit entry to a general journal may indicate a(n):

A. Decrease in liabilities and increase assets

B. Decrease in assets and increase in liabilities
C. Increase in both assets and liabilities
D. Decrease in both assets and liabilities

3. Surihani & Partners has credited a liability account for RM700 and debited an asset
account for RM900. What can be done to complete the recording of the transaction?

A. Nothing further must be done

B. Credit a different liability account for RM600
C. Credit another asset account for RM200 (DEBIT)
D. Debit an owner's equity account for RM600

4. Mentari Enterprise (ME) purchased a second hand lorry for RM24,500. ME paid
RM7,500 as a down-payment and signed a note for the remaining balance. ME recorded
a credit to its cash account; and the other journal entries are:

A. Credit to Lorry for RM7,500 and Debit Notes Payable for RM7,500
B. Credit to Notes Payable for RM24,500 and Debit Cash for RM7,500
C. Credit to Notes Payable for RM17,000 and Debit Lorry RM24,500
D. Credit to Lorry for RM17,000and Debit Notes Payable for RM24,500

5. The first step in the recording process is to:

A. Prepare financial statements

B. Analyze each transaction for its effect on the accounts
C. Post to a ledger
D. Prepare a trial balance

6. Which of the following rules is TRUE?

A. Debits decrease the drawing account

B. Credits increase the capital account
C. Debits increase revenue accounts
D. Credits decrease liability accounts
7. On 1 Feb 2021 Borat Enterprise (BE) reported a cash balance in the bank of RM40,000.
Throughout the month, BE made deposits of RM60,000 and disbursements totaling
RM85,000. What is the cash balance at the end of the month?

A. RM15,000 debit balance

B. RM20,000 debit balance
C. RM15,000credit balance
D. RM25,000credit balance

8. At 31 January 2021, the balance in Majeed Sdn Bhd’s supplies account was RM750.
During February, Majeed Sdn Bhd. purchased supplies of RM550 and used supplies of
RM250. At the end of February, the balance in the supplies account should be:

A. RM750 debit
B. RM1,050 credit
C. RM1,550 debit
D. RM1,050 debit

9. The entire group of accounts maintained by a company is called the:

A. Chart of accounts
B. General journal
C. General ledger
D. Trial balance

10. Which of the following statements is TRUE?

A. The left side of a T-account is the credit side

B. Debits decrease asset and expense accounts, and increase liability, equity, and
revenue accounts
C. The left side of a T-account is the debit side
D. Credits increase asset and expense accounts, and decrease liability, equity, and
revenue accounts

11. Attilia Industries received its telephone bill in the amount of RM300, and immediately
paid it. The general journal entry to record this transaction will include a:

A. Debit to Telephone Expense for RM300

B. Credit to Accounts Payable for RM300
C. Debit to Cash for RM300
D. Credit to Telephone Expense for RM300
12. Shushah Enterprise provided consulting services and billed the client RM3,250. As a
result of this event:

A. Assets remained unchanged

B. Assets increased by RM3,250
C. Owner’s equity increased by RM3,250
D. Both B and C

13. The receipt of cash RM700 from customers in payment of their accounts would be
recorded by a:

A. Debit RM700 to Cash; Credit RM700 to Accounts Receivable

B. Debit RM700 to Accounts Receivable; Credit RM700 to Cash
C. Debit RM700 to Cash; Credit RM700 to Accounts Payable
D. Debit to RM700 to Accounts Payable; Credit RM700 to Cash

14. A payment of advertising expense of RM8,500 would be recorded by:

A. Debit RM8,500 to Cash; Credit RM8,500 to Advertising Expense

B. Debit RM8,500 to Advertising Expense; Credit RM8,500 to Cash
C. Debit RM8,500 to Account Payable; Credit RM8,500 to Cash
D. Debit RM8,500 to Advertising Expense; Credit RM8,500 to Accounts Payable

15. A journal entry for a RM10,000 payment for Wage Expense was wrongly debitted to
Travelling Expense; the Cash Account was correctly credited with the same amount.
The error will cause which of the folowing conditions on the trial balance?

A. The sum of the debits will exceed the sum of the credits by RM10,000
B. The sum of the debits will exceed the sum of the credits by RM20,000
C. The sum of the credits will exceed the sum of the debits by RM10,000
D. The sum of the credits will equal the sum of the debits

16. The type of account with a normal credit balance is:

A. An asset
B. Drawings
C. A revenue
D. An expense

17. Which of the following will cause the trial balance totals to be unequal?

A. Recording the same transcation twice

B. Posting a part of a transaction correctly as a debit or credit but to the wrong
account
C. Recording only once either on the debit or credit side
D. Recording the same erroneous amount for both the debit and credit parts of a
transaction
Question 18 & 19 are based on the following information

The following transactions have been journalized and posted to the proper accounts

1. Donaldo invested RM14,000 cash in his new hand phone accessories outlet, Aldo
Link Enterprise (ALE).
2. ALE paid the first month’s rent RM1,400.
3. ALE purchased office equipment by paying cash RM4,000 while the balance on
account through a note payable for RM9,000.
4. ALE purchased supplies for RM1,700 cash.
5. ALE issued an invoice to a client for RM8,000 for the sales of accessories on
account.
6. ALE received partial payment RM6,000 for its earlier credit sales.

18. What is the Cash balance?

A. RM12,900
B. RM15,700
C. RM16,300
D. RM16,900

19. What is the Accounts Receivable balance?

A. RM2,000
B. RM8,000
C. RM14,000
D. RM17,000

20. The form listing the titles and balances of the accounts in the ledger on a given date is
known as the :

A. Statement of Comprehensive Income

B. Statement of Financial Position
C. Statement of Owner’s equity
D. Trial Balance
Structured Question
On 1st November 2022, Encik Kasim established a cleaning services business, called Khidmad Bersih
Jabatan. The following transactions were occurred on the first month of his business operation:

Nov. 1 Transferred cash from a personal bank amounted RM12,000 and vehicles
valued RM32,000, to be used for business.

2 Paid cash for supplies, RM1,500.

5 Purchased cleaning accessories on account, RM3,500.

10 Received telephone called from Security Department to clean the office.

Estimated cost on the job, RM1,750.

15 Withdrew cash for personal use, RM400.

17 Received payment from customers on services provided, RM1,700.

20 Paid telephone bill, RM350

25 Billed a customer for job completed amounted RM2,000.

28 Fully paid creditor for cleaning accessories purchased on November 5.

30 Paid wages of employees, RM550.

REQUIRED:

(a) Journalize the transactions for November 2022 in a general journal. (Journal entry
explanations may be omitted)
(b) Post to the ledger, extending the account balance to the balance columns after each
posting.
(c) Prepare a trial balance as of 30 November 2022.
 KHIDMAD BERSIH JABATAN

a. General Journal
GENERAL JOURNAL
Debit Credit
Date Description RM RM
2022
November 1 Cash 12,000
Vehicles Expenses 32,000
Capital 44,000
Contributed capital into business

2 Supplies 1,500
Cash 1,500
Paid cash for supplies

5 Cleaning accessories 3,500

Account Payable 3,500
Purchased cleaning accessories

15 Drawing 400
Cash 400
Withdrew for personal use

17 Cash 1,700
Income 1,700
Received payment from customers

20 Telephone Expenses 350

Cash 350
Paid telephone bill

25 Account Receivale 2,000

Income 2,000
Billed a customer for job completed

28 Account Payable 3,500

Cash 3,500
Fully paid creditor for cleaning accessories

30 Wages Expenses 550

Cash 550
Paid wages of employee
b. General Ledger

ACCOUNT Cash
Date Item Debit Credit Balance
2022 1 12,000 12,000
November 2 1,500 10,500
15 400 10,100
17 1,700 11800
20 350 11,450
28 3,500 7,950
30 550 7,400

ACCOUNT Accounts Receivable

Date Item Debit Credit Balance
2022 25 2,000 2,000
November

ACCOUNT Supplies
Date Item Debit Credit Balance
2022 2 1,500 1,500
November

ACCOUNT Accounts Payable

Date Item Debit Credit Balance
2022 5 3,500 3,500
November 28 3,500 0

ACCOUNT Encik Kasim, Capital

Date Item Debit Credit Balance
2022 1 44,000 44,000
November

ACCOUNT Encik Kasim, Drawing

Date Item Debit Credit Balance
2022 15 400 400
November

ACCOUNT Cleaning Accessories

Date Item Debit Credit Balance
2022 5 3,500 3,500
November

ACCOUNT Income
Date Item Debit Credit Balance
2022 17 1,700 1,700
November 25 2,000 3,700
ACCOUNT Telephone Expenses
Date Item Debit Credit Balance
2022 20 350 350
November

ACCOUNT Wages Expenses

Date Item Debit Credit Balance
2022 30 550 550
November

ACCOUNT Motor Vehicles

Date Item Debit Credit Balance
2022 1 32,000 32,000
November

c. Trial Balance

Khidmad Bersih Jabatan

Trial Balance
30 Novemberr 2022
Debit Credit
RM RM
Cash 7,400
Accounts Receivable 2,000
Supplies 1,500
Encik Kasim, Capital 44,000
Encik Kasim, Drawing 400
Cleaning Accessories 3,500
Income 3,700
Telephone Expenses 350
Wages Expenses 550
Motor Vehicles 32,000
TOTAL 47,700 47,700