TUTORIAL 4 | A191

TUTORIAL 4 (Topic 6 & 7)

DUE DATE: 28 Nov 2019
1. Which of the following is (are) the objective (objectives) of financial reporting?

A. To provide information to comply with laws and other regulations

B. To provide information to all users, including meeting the social needs of society
C. To provide information to specific groups of users
D. All of the above

2. ___________ is the primary means of communicating important financial and non-

financial accounting information to users in helping them to make economic decisions.
A. Accountant Report
B. Audit Committee Report
C. Corporate Governance Report
D. Annual Report

3. The financial statements are usually compiled in compliance with the

A. Malaysian Financial Recording Standards.
B. Malaysian Fundamental Reporting Systems.
C. Malaysian Financial Reporting Standards.
D. Malaysian Federal Recording Standards.

4. Who is ultimately responsible to disclose all the relevant information to internal and
external users?
A. Accountant
B. Board of directors
C. Chairman
D. Debtor

5. A typical annual report will include the following information EXCEPT:

A. Corporate information
B. Controller proclamation
C. Chairman’s report
D. Corporate governance statement

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6. ______________ begins with the overall company’s performance followed by current

year’s financial performance.
A. Chairman’s statement
B. Corporate Information and structure
C. Important financial information
D. Statement on corporate governance

7. The Company Act 2016 requires the financial statements must be __________ before
being presented in the annual general meeting.
A. verified
B. audited
C. reviewed
D. approved

8. __________ contains rules which require a company to maintain high standards of

disclosure.
A. Additional Disclosure
B. Corporate Disclosure Policy
C. Post-listing Obligations
D. Accounting Standards

9. ___________ discloses information regarding members of the board of directors.

A. Director’s report
B. Statement by Directors
C. Statutory Declaration
D. Corporate Information

10. In preparing and presenting financial statements, companies in Malaysia are to comply
with the following EXCEPT:

A. Bursa Malaysia Listing Requirement

B. Financial Reporting Act 1997
C. Securities Commission Revamped Requirement 1995
D. Code of Ethic for Professional Accountant

11. Which characteristic is generally NOT evaluated by the analysis of the financial
statements?

A. Liquidity
B. Profitability
C. Marketability

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D. Solvency
12. The primary purpose of the liquidity ratios is to determine:

A. how much working capital is tied up in inventory

B. the relative level of short-term debt
C. how well a company is able to pay off short-term obligations
D. more than one of the above

13. Inventory turnover is calculated by dividing:

A. cost of goods sold by the ending inventory

B. cost of goods sold by the beginning inventory
C. cost of goods sold by the average inventory
D. average inventory by cost of goods sold

14. Bee Boo Sdn Bhd had a balance in the Accounts Receivable account of RM700,000 at the
beginning of the year and a balance of RM1,000,000 at the end of the year. Net sales
during the year amounted to RM5,120,000. The Accounts Receivable turnover ratio was:

A. 7.31 times
B. 6.02 times
C. 5.12 times
D. 0.14 times

15. If a company has acid-test ratio (quick ratio) of 1.2:1, what will be the effect of accounts
receivable collection has on the ratio?

A. No effect
B. Increase
C. Cannot be determined
D. Decrease

16. What type of analysis is indicated by the following?

Amount Percent
Account (RM) (%)
Current assets 150,000 25
Property, plant and equipment 450,000 75
Total assets 600,000 100

A. Vertical analysis
B. Horizontal analysis
C. Liquidity analysis
D. Profitability analysis

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17. Use the following information and horizontal analysis to compute the percentage
increase in sales: 2016 sales were RM200,000 and 2017 sales were RM250,000.

A. Sales increased by 80%

B. Sales increased by 20%
C. Sales increased by 125%
D. Sales increased by 25%

Use the following information to answer question 18 to 20

Arisha Sdn Bhd reports the following financial results for the end of financial year 2017:

RM
Net Sales 10,000,000
Net Income 1,000,000
Assets 8,000,000
Owner’s Equity 5,000,000
Total Debt 3,000,000

18. What is Arisha's Return on Assets?

A. 25.0%
B. 30.0%
C. 12.5%
D. 37.5%

19. What is Arisha's Return on Equity?

A. 37.5%
B. 10.0%
C. 20.0%
D. 60.0%

20. What is Arisha's profit margin?

A. 10.0%
B. 20.0%
C. 30.0%
D. 33.0%

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Use the following information to answer question 21 to 24:

The following is financial data for the year ended 31 October 2018:
Items RM
Cash 2,480
Bank 2,310
Accounts Receivable 25,980
Inventory 8,755
Accounts Payable 787,094
Properties, Plant and Equipment (net) 1,150,000
Sales 1,263,000
Cost of Goods Sold 567,000
Sales and Administrative Expense 394,000

21. The amount of working capital is:

A. (RM782,304)
B. RM39,525
C. RM30,770
D. (RM747,569)

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22. The current ratio is:

A. 1.46
B. 0.03
C. 0.05
D. 1.09

23. The percentage of net profit margin:

A. 44.9%
B. 31.1%
C. 26.8%
D. 23.9%

24. What is the debt ratio?

A. 0.66
B. 1.46
C. 1.51
D. 0.81

25. The above financial data indicates that the firm is:
A. having poor inventory management.
B. experiencing high credit sales.
C. highly dependent on creditors.
D. giving financial supports to customers.

26. A tool to measure the effectiveness of the management in utilizing the firm’s assets is:
A. Profit margin.
B. Gross profit margin.
C. Inventory turnover.
D. Ratio of sales to assets.

27. Which of the following profitability analysis is important to investors?

A. Dividends per share.
B. Debt ratio.
C. Inventory turnover.
D. Ratio of liabilities to stockholders’ equity.

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28. Which of the following analysis helps to determine a firm’s financial solvency?
A. Earnings per share.
B. Profit margin.
C. Dividend yield.
D. Working capital.

29. Firm with higher debt structure compared to its equity indicates that _______.
A. the management is very efficient in getting credits from investors .
B. the firm is exposed to higher risk of takeover by debtors.
C. the customers are willing to provide credit to the firm.
D. the firm has limited internal financial resources.

30. ________ measures the percentage of assets being financed by owner’s equity.
A. Debt ratio
B. Equity ratio
C. Long-term fixed asset ratio
D. Rate earned on stockholder’s equity

Part B

Question PR 6-7, page 317 (Rosli et. al . 2019, Accounting A Malaysian Perspective,
Fourth Edition, Cengage Learning Asia Pte Ltd)

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TUTORIAL 4 ANSWER SHEET

DUE DATE: 28 November 2019

Group: ____F___

Matric No: __270407__ Name: _YAP MAN YEE___________________________

PART A: 30 MULTIPLE CHOICE QUESTIONS

1. B 16. A
2. D 17. D
3. C 18. C
4. A 19. C
5. B 20. A
6. A 21. D
7. B 22. C
8. D 23. D
9. A 24. A
10. D 25. C
11. C 26. D
12. C 27. A
13. C 28. D
14. B 29. B
15. A 30. B

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PART B

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