CONFIDENTIAL 1 AC/JUL 2022/FAR110

UNIVERSITI TEKNOLOGI MARA

FINAL EXAMINATION

COURSE : FINANCIAL ACCOUNTING 1

COURSE CODE : FAR110
EXAMINATION : JULY 2022
TIME : 3 HOURS

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of SIX questions.

2. Answer ALL questions in ENGLISH.

3. Please submit your HANDWRITTEN answers in ONE (1) pdf file. Name the pdf file
according to the following format: name_group_subjectcode.
For example: rosmawatiharon_JAC1101A_FAR110

4. Please make sure EVERY page of your answer sheet contains the following information:
i. Name
ii. Student ID
iii. Group

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 9 printed pages
© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL
CONFIDENTIAL 2 AC/JUL 2022/FAR110

QUESTION 1

The definition of accounting shows that the accounting system may be categorized into three
basic activities. They are identifying, recording and communicating business transactions of
an organisation to interested users.

Required:

i. Describe THREE (3) basic activities of accounting.

(3 marks)

ii. A company is defined as a business entity under the Malaysian Companies Act 2016.
A company can be either a private or public limited company. Identify THREE (3)
benefits of public limited companies.
(3 marks)

iii. Puan Nina is the sole owner of Nina Hardware Enterprise. The account clerk of Nina
Hardware Enterprise recently paid a RM245 utility bill for Puan Nina's personal
residence. For credit sales, the account clerk records revenue only when customers
pay their invoice.

Required:

Explain the two accounting concepts the account clerk has violated.
(4 marks)

iv. Classify the following users into internal and external users and explain the uses of
accounting information.

Users Category Uses

Management
Suppliers
Owners
Inland Revenue
Potential Investors

(5 marks)
(Total: 15 marks)

QUESTION 2

A. Naim runs a trading business, Naim Shop sells agricultural products, flower plants,
decorative tree, soil, and gardening tool in Arau, Perlis since 2020. The business uses
the periodic system to record the inventory. The following are the opening balances for
Naim’s business book on 1 Jan 2022

Cash in hand RM 1,100

Cash at bank RM 25,000
Office equipment RM 15,000

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

CONFIDENTIAL 3 AC/JUL 2022/FAR110

The following are the transactions for the month of January 2022:-

2022
Transactions
Jan
Received an approved bank loan of RM 50,000 by cheque for business
1
purposes.
Sunny Sdn Bhd purchased floral plants and a 3 stylish tree for their
3 office decorating at a cost of RM2,300 on credit (after trade discount of
RM50). The credit term agreed at 10/15,net 30.
Sunny Sdn Bhd returned 1 unit stylish tree amounted to RM 250 due to
5
quality problems.
10 Sunny Sdn Bhd made a full payment to Naim Shop by cheque.
11 Sold organic compound fertilizer RM2,400 cash to his friend Halim.
14 Made a cash purchase of goods RM1,600.
Purchased goods from his supplier Aminah Trading RM5,000 on credit.
16
The credit term agreed at 15/10,net 30.
Due to variations in specifications, Halim returned goods worth RM300
21
and Naim has refunded Halim in cash.
Returned defective goods purchase on 16 January amounting to
23
RM500
25 Bank in salaries to the 2 staffs amounted to RM1,200 each.
31 Paid all amount owing to Aminah Trading by cheque

Required:

i. Show the difference between a sales ledger and purchases ledger

(2 marks)

ii. Journalise the above transactions in the appropriate special journals.

(8 marks)

B. Zayyan Enterprise has identified the following errors in its general journal which have
been posted to the ledger

1 Jan The purchase of office equipment for RM3,400 had been entered in the
Purchases account.

9 June A sales on credit to Dhanish Trading,RM 1,980 had been recorded in

the Sales account and in Dhanish Trading’s account as RM1,890.

12 August A RM 1,250 cheque payment to Bezza Enterprise (accounts payable)

was debited to the bank account and credited to the accounts payable’s
account.

Required:

i. Identify the type of errors made in the books of Zayyan Enterprise as stated above.
(3 marks)

ii. Prepare the correcting entry of the above error either in the ledger or journal.
(5 marks)
© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL
CONFIDENTIAL 4 AC/JUL 2022/FAR110

(Total: 18 marks)
QUESTION 3

A. The petty cashier of NQZ Enterprise paid cash for the following expenditures during
February 2022. The petty cash imprest system is used by the NQZ Enterprise with the
amount of RM250 on a monthly basis.

Feb 1 Balance brought forward; petty cash RM50

Feb 1 The amount of petty expenditures for previous month RM200
reimbursed by chief cashier
Feb 5 Paid some liquid material for cleaning purpose RM25
Feb 9 Paid for van wash RM20
Feb 10 Paid stationery RM15
Feb 17 Paid donation to Rumah Sentuhan Kasih RM50
Feb 20 Paid for fuel van RM45
Feb 21 Paid postage RM20
Feb 23 Paid for refreshment of customer RM30
Feb 25 Paid postage RM13
Feb 26 Paid A4 paper for office user RM 17

Required:

Prepare the petty cash book with an analysis column for office expenses, postage, van
expenses and sundry expenses.
(8 marks)

B. Indah Perkasa's trial balance for the year ending 31 December 2021 revealed a
difference of RM3,908 on the credit side. A net profit of RM38,560 was recorded in the
final account for the year ending 31 December 2021. Following that, the following
errors were discovered:

i. The sales journal has been understated by RM2,000

ii. On the debit side, a payment of RM345 for telephone charges has been entered
as RM453.
iii. Sales of RM670 to Ahmad Enterprise have been debited to Ali Ahmad Trading.
iv. Repairs to motor vehicle amounting to RM550 have been debited to motor
vehicle account.
v. A cheque from RM1,800 from Somad Hardware for the rent received has only
been deposited into the cash account.
vi. On 31 December 2021, a purchase of RM658 was made from Mithali Trading,
however the invoice was never recorded.

Required:

i. Prepare the journal entries necessary to correct the above errors.

(4 marks)
ii. Show the suspense account.
(3 marks)
iii. Calculate the corrected net profit.
(3 marks)
(10 marks)
© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL
CONFIDENTIAL 5 AC/JUL 2022/FAR110

(Total: 18 marks)
QUESTION 4

The following is the trial balance of Sofya Enterprise for the year ended 31 December 2021:

Sofya Enterprise
Trial Balance as at 31 December 2021
Particular Debit (RM) Credit (RM)
Purchases/ Sales 65,000 205,000
Discount allowed/ discount received 3,800 2,200
Return inwards, return outwards 1,100 1,600
Carriage inwards 1,800
Carriage outwards 3,400
Inventory as at 1 January 2021 8,000
6% Loan from Bank Amanah 70,000
Building 88,000
Motor vehicles 55,000
Furniture and fittings 4,400
Accumulated depreciation as at 1 January
2021:
Building 17,600
Motor vehicles 19,800
Furniture and fittings 1,320
Trade Receivable 85,000
Trade Payable 38,000
Bank 82,000
Cash 5,000
Capital 140,080
Drawings 3,300
8% Fixed Deposit 37,500
Commission received 1,500
Interest on fixed deposit 1,000
Salaries and wages 48,000
Utilities 6,300
Stationery 500
498,100 498,100

Additional information:

1. Inventory as at 31 December 2021 was valued at RM12,000

2. Interest on loan was still accrued. The loan was taken on 1 April 2021.

3. Sofya, the owner issued a business cheque, RM200 to pay for her medical treatment.

4. Salary and wages expenses amounted to RM8,000 was paid in advance.

5. Interest on fixed deposit amount was still owing. The fixed deposit was taken on 31
May 2021.

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

CONFIDENTIAL 6 AC/JUL 2022/FAR110

6. Depreciation for the year is charged as follows:

Building 10% on cost

Motor vehicles 20% on carrying value
Furniture and fittings 15% on cost

Required:

a. Differentiate between long-term fixed deposit and long-term loan.

(2 marks)
b. Prepare the Statement of Profit or Loss for the year ended 31 December 2021 and
the Statement of Financial Position as at that date. (Round up the figures to the
nearest RM)
(20 marks)
(Total: 22 marks)

QUESTION 5

Hidayah Enterprise is in the business in selling grocery items since year 2018. Below are the
accounting data of Hidayah Enterprise for the year ended 31 December 2021.

Hidayah Enterprise
Statement of Financial Position as at 31 December 2021
RM
Total Non-Current Assets 225,000

Current Assets:
Inventory 12,500
Account Receivable 25,000
Cash at bank 11,250
Prepayments 1,500
275,250

Capital 175,500
Net Profit 35,000

Total Non-Current Liabilities 34,750

Total Current Liabilities 30,000

275,250

Additional information:

1. Inventory as at 1 January 2021 was RM7,500.

2. Net sales of the business were RM125,000.

3. Cost of sales was 25% of sales.

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

CONFIDENTIAL 7 AC/JUL 2022/FAR110

Required:

a. Discuss FOUR (4) importance of accounting ratio to internal users.

(4 marks)

b. Calculate the following ratios for the year ended 31 December 2021 for Hidayah
Enterprise.

i. Current ratio
ii. Acid test ratio
iii. Inventory turnover ratio
iv. Gross profit margin
v. Net profit margin
(10 marks)
(Total: 14 marks)

QUESTION 6

A. State THREE (3) reasons for the differences between the balance of the bank
statement and the bank column of the cash book?
(3 marks)

B. The following is the bank account of Aryanie Grandy, a convenience store located in
Tuaran, Sabah, for the month of February 2022.

Bank Account
Date Particulars Debit (RM) Credit (RM) Balance (RM)
3/2/2022 Beginning balance 21,500
4/2/2022 Sales 3,500 25,000
6/2/2022 Cheque - 220011 7,500 17,500
10/2/2022 Cheque - 220012 4,050 21,550
11/2/2022 Cheque deposit - Mike Jack 500 22,050
13/2/2022 Cheque deposit - Thomas 750 22,800
14/2/2022 Cheque - 220013 1,200 21,600
17/2/2022 Cheque - 220014 500 21,100
19/2/2022 Cheque deposit - Mulan 450 21,550
19/2/2022 Sales 1,000 22,550
21/2/2022 Cheque - 220015 900 21,650
24/2/2022 Cheque - 220016 1,300 20,350
25/2/2022 Cheque deposit - Wong 1,750 22,100
26/2/2022 Cheque deposit - Mamat 2,500 24,600
27/2/2022 Cheque - 220017 4,200 20,400

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

CONFIDENTIAL 8 AC/JUL 2022/FAR110

On 28 February 2022, the bank statement sent to the business showed the followings:

Hong Luang Bank

Lot 72, Jalan Raja Udang, 88900 Kota Kinabalu, Sabah.
Bank Statement for the month of February 2021
Client: Aryanie Grandy
Account no: 1-100-22200000-1
Type of
Current Account
account:
Statement
28/2/2022
date:

Date Particulars Dr Cr Balance

3/2/2022 Beginning balance 21,500
5/2/2022 Credit transfer - Lumina Sdn Bhd 500 22,000
5/2/2022 Bank charges 150 21,850
6/2/2022 Cash deposit 3,500 25,350
11/2/2022 Cheque - 220011 7,500 17,850
14/2/2022 Cash deposit 3,600 21,450
15/2/2022 Cheque - 220012 4,500 16,950
16/2/2022 Cheque - 220013 1,200 15,750
Standing instruction - Hire purchase
17/2/2022 1,500 14,250
instalment
19/2/2022 Cheque - 220014 500 13,750
21/2/2022 Credit transfer - Lumina Sdn Bhd 1,350 12,400
22/2/2022 Cash deposit 500 12,900
23/2/2022 Cheque - 220015 900 12,000
24/2/2022 Dishonoured cheque - Siti 2,300 9,700
25/2/2022 Commission - Sue Li 350 10,050
26/2/2022 Cash deposit 750 10,800
26/2/2022 Cheque - 750110 5,000 15,800

Additional information:

i. The bookkeeper had wrongly debited the cheque no.220012 amounted RM4,500 as
RM4,050.

ii. The cheque received from Siti was rejected by the bank due to insufficient fund.

iii. The bank had wrongly recorded the amount received from Lumina Sdn Bhd as
payment.

iv. The bank had wrongly credited the cheque no.750110 which did not belong to Aryanie
Grandy in the business’s bank account.

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

CONFIDENTIAL 9 AC/JUL 2022/FAR110

Required:

Prepare the Bank Reconciliation Statement as at 28 February 2022.

(10 marks)
(Total: 13 marks)

END OF QUESTION PAPER

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL