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UNIVERSITI TEKNOLOGI MARA

FINAL EXAMINATION

COURSE • INTRODUCTION TO FINANCIAL ACCOUNTING

AND REPORTING /ACCOUNTING / FINANCIAL
ACCOUNTING I / ACCOUNTING I / INTRODUCTION
TO ACCOUNTING I / FINANCIAL ACCOUNTING /
PRINCIPLES OF ACCOUNTING I

COURSE CODE ACC 106/100/105/107/111/114/115/150

EXAMINATION DECEMBER 2019

TIME 3 HOURS

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of two (2) parts: PART A (10 Questions)
PART B (4 Questions)

2. Answer ALL questions from all two (2) parts:

i) Answer PART A in the Objective Answer Sheet.

ii) Answer PART B in the Answer Booklet. Start each answer on a new page.

3. Do not bring any material into the examination room unless permission is given by the
invigilator.

4. Please check to make sure that this examination pack consists of:

i) the Question Paper

ii) an Answer Booklet - provided by the Faculty
iii) an Objective Answer Sheet - provided by the Faculty

Answer ALL questions in English.

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

This examination paper consists of 8 printedpages
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PART A

This part consists of TEN (10) multiple-choice questions. Choose the most suitable
answer.

1. Which of the following is an internal user?

A. Finance executive
B. Inland revenue executive
C. Debtor
D. Bank officer
(1 mark)

2. The first step in accounting cycle is

A. preparing journal entries

B. posting to ledgers
C. preparing source documents
D. preparing the trial balance
(1 mark)

3. The concept which is associated with the assumption that the business will continue in
the future with no intention to liquidate is

A. Materiality concept
B. Going concern concept
C. Consistency concept
D. Business entity concept
(1 mark)

4. One of the following business organizations has the word "Sendirian Berhad" at the
end of its name. This business is known as .

A. partnership
B. private company
C. public company
D. sole proprietorship
(1 mark)

5. The following statements describe the characteristic of a sole trader EXCEPT

A. the liability is unlimited

B. it is owned by one person
C. the capital is contributed by the owner
D. the financial statements need to be audited
(1 mark)

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6. Which of the following is a tangible asset?

A. Copyright
B. Warehouse
C. Patent
D. Goodwill
(1 mark)

7. Which of the following is NOT considered as purchases?

A. Cash purchase
B. Purchased a furniture
C. Credit purchase from supplier
D. Purchased an inventory
(1 mark)

8. A purchase journal is used to record .

A. credit purchase
B. cash purchase
C. purchase return
D. cash and credit purchase
(1 mark)

9. All of the following items appear in a Statement of Financial Position EXCEPT

A. Accumulated depreciation
B. Fixed deposit
C. Interest on loan
D. Accrued expenses
(1 mark)

10. Lina Enterprise bought a lorry on credit from Edaran Sdn Bhd. The effects of this
transaction are:

A. Increase in both asset and capital

B. Decrease in both asset and liability
C. Increase in both asset and liability
D. Increase in asset and decreased in liability
(1 mark)
(Total: 10 marks)

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PARTB

QUESTION 1

On the 1st January 2018, Datuk Sapan started a business and deposited RM 100,000 into a
business bank account. Before commencing the business operation, a sufficient fund must
be raised to support the planned level of activity. Datuk Sapan estimated that a total of
RM 105,000 initial investment is required. He managed to get a bank loan amounting to
RM5.000 as at 15 January 2018.

The following are the assets and liabilities for the year ended 31 December 2018.

Particulars RM
Premises (carrying amount) 70,000
Fixtures and fittings (carrying amount) 20,000
Inventories 4,500
Accounts receivable 3,500
Accounts payable 1,500
Motor vehicle 15,000
Bank 20,500
Office equipment (carrying amount) 10,000
Additional bank loan 10,000
Cash 1,000

Required:

a. Briefly explain any TWO (2) accounting concepts that Datuk Sapan was supposed to
follow when dealing with his business.
(5 marks)

b.
i. Classify the assets of Datuk Sapan's business into Non-Current Assets and
Current Assets.
(4 marks)

ii. Identify the amount of Non-Current Assets and Current Assets as at 31

December 2018.
(8 marks)
(Total: 17 marks)

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QUESTION 2

Azri Trading is a stationery store and owned by Azrin. Below are the transactions of Azri
Trading for the month of November 2019.

November 2019 Transactions

1 Started the business with RM20,000 cash.

3 Purchased Fujixerox printer RM700 by cheque for office use.
13 Sold goods on credit to Rachel RM500.
14 Banked in cash RM3,000.
17 Paid rental of premises amounting to RM400 by cash.
21 Azrin took RM800 from the bank and RM200 goods for personal use.
24 Sales returned by Rachel amounted to RM200.
26 The business bought a motor vehicle for RM4.500 cash.
28 Paid utility bills and wages of RM100 and RM500 cash respectively.

Required:

Identify the effects (increase or decrease) on assets, liabilities, owner's equity,

revenues or expenses for the transactions dated from 1 November 2019 to 24
November 2019 and show the accounts to be debited and credited for each of the
transactions given below.

(Use the format given below to answer the above questions)

Example: November 30 Paid RM2.000 for driver's salary by cash.
Effects Journal entry
Date
Increase Decrease Debit Credit

Nov 30 Expenses Asset Salary Cash

(15 marks)

State the appropriate book of prime entry for every transaction in November 2019.

(Use the format given below to answer the above questions)

Example: November 30 Paid RM2.000 for driver's salary by cash.
Date Book of Prime Entry
Nov 30 Cash Payment Journal

(10 marks)
(Total: 25 marks)

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QUESTION 3

The following is the Trial Balance extracted from the books of Four Sons Enterprise as at 31
December 2018.

LIST OF ACCOUNTS Debit (RM) Credit (RM)

Capital 292,350
Purchases and sales 95,000 160,000
Sales return 3,800
Purchase return 4,400
Motor van (cost) 75,000
Building (cost) 160,000
Furniture and fittings (cost) 40,000
Accumulated depreciation as at 1 January 2018:
Motor van 15,000
Building 16,000
Furniture and fittings 14,400
10% Long-term investment 160,000
5% Fixed deposit 30,000
Rental received 6,000
Commission received 2,000
Repairs and maintenance 2,000
Carriage inwards 1,500
Carriage outwards 1,000
Discount allowed 1,600
Discount received 900
Water and electricity 10,800
Salaries 45,000
Insurance expense 8,500
Advertising 4,000
Bad debt recovered 1,500
Stationeries 1,800
Interest on bank loan 7,500
5% Bank loan 200,000
Allowances for doubtful debt as at 1 January 2018 2,500
Bank 28,000
Cash 8,750
Accounts receivable and accounts payable 25,000 26,200
Inventory as at 1 January 2018 30,000
Drawings 2,000
741,250 741,250

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Additional information:

1. Inventory as at 31 December 2018 is RM 26,500.

2. The insurance expense is for a one-year period, started on 1 July 2018.

3. Allowance for doubtful debts is to be increased by RM1,000.

4. Interest on loan was still accrued for 3 months on 31 December 2018.

5. Fixed deposit was made on 1 October 2018. No interest has been received.

6. Depreciations for the year are to be provided as follows:

Motor van 10% oncost

Building 10% oncost

Furniture and fittings 20% on carrying value

7. The owner has taken goods worth RM700 for personal use and no record has been
made in any books.

8. The information relating to the prepayments and accruals of the business are as
follows:
Prepayment RM Accruals RM

Salaries 2,400 Advertising 1,500

Water and electricity 600 Rental income 1,200

Required:

a. Statement of Profit or Loss for the year ended 31 December 2018.

(20 marks)

b. Statement of Financial Position as at 31 December 2018.

(13 marks)

Note: Use vertical format presentation

(Total: 33 marks)

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QUESTION 4

Lynn Herbs Enterprise sells various types of traditional herbs since December 1999. The
following information had been extracted from the financial statements of Lynn Herbs
Enterprise for the year ended 31 December 2018.

RM
Owner's equity 301,500
Current liabilities 42,500
Non-current assets 218,250
Prepaid expenses 750
Account receivable 50,750
Bank 25,000
Inventory as at 31 December 2018 50,000
Net profit 96,500
Net purchases 117,250
Total Sales 300,000

Additional information:

1. 30% of the sales are cash sales.

2. Average inventory for the year is RM 53,750.

3. Cost of goods sold for the year is RM 124,750

Required:

a. Calculate the following ratio for Lynn Herbs Enterprise for the year ended 31
December 2018.

Net profit margin

i. Current ratio
ii. Quick ratio
v. Inventory turnover
v. Average collection period (use 365 days in a year)
(8 marks)

Comment on the net profit ratio, current ratio, quick ratio and average collection period
for Lynn Herbs for the year ended 31 December 2018.
(4 marks)

List three (3) objectives of ratio analysis for the business.

(3 marks)
(Total: 15 marks)

END OF QUESTION PAPER

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