MCQ AA015 fr KMP

1. In preparing its bank reconciliation for the month of June 2020, Fighter Inc. has the
following information.

Balance per bank statement, 30 June 2020 RM80,800

NSF check returned with 30 June 2020 bank statement RM1,940
Deposits in transit, 30 June 2020 RM12,000
Outstanding checks, 30 June 2020 RM9,300
Bank service charges for June RM50

What should be the adjusted cash balance at June 30, 2020?

A) RM78,100
B) RM78,810
C) RM75,920
D) RM83,500

2. A company wrote a cheque for RM191 and it cleared by the bank for RM191. However, the
company recorded the cheque in its Cash account as RM119. How is the difference of RM72
handled on the bank reconciliation?

A) Added RM72 to the cash book balance.

B) Deducted RM72 from the cash book balance.
C) Added RM72 to the bank balance.
D) Deducted RM72 from the bank balance.

3. The bank collected a payment of Notes Receivable for the company and credited the
company’s bank account for RM3,000. Choose the correct action that should be taken while
preparing the bank reconciliation.

A) Add RM3,000 to cash book balance.

B) Deduct RM3,000 from cash book balance.
C) Add RM3,000 to bank balance.
D) Deduct RM3,000 from bank balance.

4. Laila Company gathered the following reconciling information in preparing its October bank
reconciliation:
Cash balance per books, October 31 RM25,800
Deposits in transit RM18,800
Notes Receivable and interest collected by bank RM5,500
Bank charges RM150
Outstanding cheque RM17,000
“NSF” cheque RM1,280
The adjusted cash balance per books on October 31 is:

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 A) RM29,870
B) RM30,050
C) RM29,820
D) RM18,870

5. Haji & Co. recorded a receipt on its books as RM98. However, the receipts were actually
RM89. What adjustment is needed to the Cash balance per books?

A) Deduct RM9 from cash book balance.

B) Increase RM9 from cash book balance.
C) Deduct RM89 from cash book balance.
D) Increase RM89 from cash book balance.

6. Wanna computes bad debts as a percent of Accounts Receivable. The Allowance for
Doubtful Debts account has a credit balance of RM900 and RM700 uncollectible Accounts
Receivable were written off.

If Allowance for Doubtful Debts account is estimated at RM3,000, the bad debts adjustment
should be in the amount of:

A. RM2,800
B. RM3,900
C. RM3,000
D. None of these

7. Finies Commerce computes bad debt based on the allowance method. They determine their
current year’s of Allowance for Doubtful Accounts amounting RM45,000. The previous
period had a credit balance in Allowance for Doubtful Accounts of RM12,000. What should
be the reported figure in the adjusting entry for the current period?

A. RM12,000
B. RM45,000
C. RM33,000
D. RM57,000

8. Danny Company reports year-end credit sales in the amount of RM390,000 and accounts
receivable of RM85,500. Danny uses the percentage on credit sales (income statement)
method to report bad debt estimation. The estimation percentage is 3.5%. What is the
estimated balance uncollectible using the income statement method?

A. RM13,650
B. RM2,992.50
C. RM136,500
D. RM29,925

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9. Hafiz has Accounts Receivable of RM200,000 and Allowance for Doubtful Accounts of
RM10,000; its sales this year were RM600,000. The cash realizable value of the receivables
is:

A. RM400,000
B. RM200,000
C. RM190,000
D. None of these

10. Kenny reports year-end credit sales in the amount of RM567,000 and accounts receivable of
RM134,000. Kenny uses the percentage on accounts receivables (balance sheet) method to
report bad debt estimation. The estimation percentage is 4.6%. What is the estimated balance
uncollectible using the percentage on account receivables (balance sheet) method?

A. RM26,082
B. RM6,164
C. RM260,820
D. RM61,640

11. The accounting records of Shumway show the following data.

Beginning inventory 4,000 units at RM3

Purchases 6,000 units at RM4
Sales 7,000 units at RM12

Determine the cost of goods sold during the period under a periodic inventory system
using the FIFO method.

a) RM24,000
b) RM36,000
c) RM27,000
d) RM25,200

12. The accounting records of Shumway show the following data.

Beginning inventory 4,000 units at RM3

Purchases 6,000 units at RM4
Sales 7,000 units at RM12

Determine the cost of goods sold during the period under a periodic inventory system
using the average-cost method.

a) RM24,000
b) RM36,000
c) RM27,000
d) RM25,200
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13. Poppins Company has the following:

Units Unit Cost (RM)

Inventory, Jan. 1 8,000 11
Purchase, June 19 13,000 12
Purchase, Nov. 8 5,000 13

If Poppins has 9,000 units on hand at December 31, the cost of the ending inventory
under FIFO periodic inventory system is:

a) RM99,000.
b) RM108,000.
c) RM113,000.
d) RM117,000.

14. Poppins Company has the following:

Units Unit Cost (RM)

Inventory, Jan. 1 8,000 11
Purchase, June 19 13,000 12
Purchase, Nov. 8 5,000 13

If Poppins has 9,000 units on hand at December 31, the cost of the ending inventory
under the weighted-average cost method is (round up costs per unit to two decimal
places).

a) RM106,960.
b) RM106,920.
c) RM106,900.
d) RM107,000.

15. Hansel Electronics has the following:

Units Unit Cost (RM)

Inventory, Jan. 1 5,000 8
Purchase, April 2 15,000 10
Purchase, Aug. 28 20,000 12

If Hansel has 7,000 units on hand at December 31, the cost of ending inventory under
the average-cost method is:

a) RM84,000.
b) RM70,000.
c) RM56,000.
d) RM75,250.
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16. A new machine at the price of RM45,000 and was given the trade discount of 10%. The
transportation cost of RM1,000 and installation cost of RM1,500 were also paid. What is the
cost of the machine?

A. RM38,000
B. RM40,500
C. RM43,000
D. RM52,200

17. The cost of equipment is RM23,000 and is expected to have a residual value of RM3,000
after 10 years. Using the straight-line method, what is the depreciation expenses each year?

A. RM1,000
B. RM1,500
C. RM2,000
D. RM2,300

18. What is the gain or loss arising from disposal of a machine bought at the cost of RM20,000,
with accumulated depreciation of RM5,600 and trade in value of RM12,000?

A. Gain RM1,500
B. Gain RM2,400
C. Loss RM1,500
D. Loss RM2,400

19. A car at cost of RM20,000 and residual value of RM2,000 is expected to be used for five
years. What is the accumulated depreciation for year 5, if straight-line method is used?

A. RM3,600
B. RM4,000
C. RM18,000
D. RM20,000

20. A machine was purchased at the cost of RM50,000 on 1 September 2019, residual value
RM2,000 and was depreciated at 12% per annum using straight line method and monthly
basis. What is the depreciation expenses for the year ended 31 December 2019?

A. RM5,760
B. RM6,000
C. RM2,000
D. RM1,920

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21. Rikki Company received RM200,000 on 10-year, 6% bonds issued on January 1, 2017. The
interest will be paid annually on December 31.
What is the amount of interest Rikki must pay the bondholders in 2017?

A RM20,000
B. RM12,000
C. RM13,200
D. RM10,800

22. Autumn Company purchased a building on January 2 by signing a long-term RM630,000

mortgage with monthly payments of RM5,400. The mortgage carries an interest rate of 10
%. The entry to record the first monthly payment will include a:

A. debit to the Cash account for RM5,400.

B. credit to the Cash account for RM5,250.
C. debit to the Interest Expense account for RM5,250.
D. credit to the Mortgage Payable account for RM5,400.

23. The Coldon Company issued RM300,000 of 10% bonds on January 1, 2019. The bonds
are due January 1, 2024, with interest payable each July 1 and January 1. The bonds are
issued at face value. The adjusting journal entries for December 31, 2019 would be:

A. dr. Interest Expense 30,000

cr. Bank 30,000

B. dr. Interest Expense 30,000

cr. Interest Payable 30,000

C. dr. Interest Expense 15,000

cr. Bank 15,000

D. dr. Interest Expense 15,000

cr. Interest Payable 15,000

24. Landfall Navigation began operations in 2017 and provide a one-year warranty on the
products sold. They estimate that 20,000 of the 400,000 units sold in 2017 will be
returned for repairs and that these repairs will cost RM8 per unit. The cost of repairing
16,000 units presented for service in 2017 was RM128,000. Landfall Navigation should
report:

A. warranty expense of RM32,000 for 2017.

B. warranty expense of RM160,000 for 2017.

C. warranty liability of RM160,000 on December 31, 2017.

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 D. no warranty obligation on Dec. 31, 2017, since this is only a contingent liability.

25. A company receives RM396, of which RM36 is for sales tax. The journal entry to record the
sales would include a:

A. debit to Sales Tax Expense for RM36.

B. credit to Sales Taxes Payable for RM36.
C. debit to Sales Revenue for RM396.
D. debit to Cash for RM360.

26. The following information given below relating to transactions of MAJU Enterprise. The
accounting period for the company is from 1 January 2021 to 31 January 2021.
1 January 2020 Prepaid Insurance RM10,000
Cash paid in the year Insurance transactions RM9,000
31 January 2020 Prepaid Insurance RM7,000

Compute the insurance expense that is reported in the Statement of Profit or Loss.
A. RM9,000
B. RM12,000
C. RM6,000
D. RM3,000

27. The information below shows the transactions of Rohani Enterprise for the month of June
2021.
Opening balance Account Payables 1/6/2021 RM6,000
Purchase on accounts (credit purchase) RM5,000
Goods Returned to supplier RM300
Discount received from supplier RM200
Ending balance Account Payable 30/6/2021 RM3,000

Calculate the amount cash paid to the supplier during month of June 2021.
A. RM2,500
B. RM8,500
C. RM4,500
D. RM7,500
28. Payments to suppliers during the year to 31 December 2020 were RM490,000, taking
advantage of 2% cash discount offered by suppliers. Taking note of the information in the
table below, identify the amount of purchases in the year.

As at 31 Dec 2019 2020

Accounts Payable RM54,500 RM65,900
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 A. RM511,400
B. RM501,400
C. RM990,000
D. RM478,600

29. In addition to its trading activities a business earns substantial amounts as rent. Rent
received during 2020 was RM26,400. Identify the rent revenue it should report in the
Statement of Profit or Loss for the year 2020.

As at 31 December 2019 2020

Unearned Rent Revenue - RM4,800
Rent Receivable RM2,400 -

A. RM 19,200
B. RM 28,800
C. RM 33,600
D. RM 24,000

30. Accounts Receivable for Rubby Ent. has a normal balance of RM30,000. There have been
total receipts from customers of RM55,000 of which RM15,000 relates to cash sales and
RM40,000 relates to receipts from Accounts Receivable. Discounts allowed in the current
year is RM3,000 and the ending balance for Accounts Receivable is RM23,000.

How much is the total sales for the current year?

A. RM 51,000
B. RM 36,000
C. RM 47,000
D. RM 62,000

ANSWER:

1 D 11 A 21 B
2 B 12 D 22 C
3 A 13 C 23 D
4 A 14 B 24 B
5 A 15 D 25 B
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6 A 16 C 26 B
7 C 17 C 72 D
8 A 18 D 28 A
9 C 19 C 29 A
10 B 20 D 30 A