CHAPTER 3

Question 1

The steps in the accounting cycle are listed in random order below. List the steps in proper
sequence, assuming no worksheet is prepared, by placing numbers 1–9 in the blank spaces.

a) _____ Prepare a trial balance.

b) _____ Journalize the transactions.
c) _____ Journalize and post-closing entries.
d) _____ Prepare financial statements.
e) _____ Journalize and post adjusting entries.
f) _____ Post to ledger accounts.
g) _____ Prepare a post-closing trial balance.
h) _____ Prepare an adjusted trial balance.
i) _____ Analyze business transactions.

Question 2

Fill in the correct answer in the following boxes and state its journal to be recorded in;

Name of Journal to
source record
document entry
a) A document sent by the seller to the buyer (usually for
credit sales) requesting the buyer to pay for the amount
stated on the invoice for goods or services rendered to
him.
b) A document sent by a customer to a supplier in respect of
goods returned or an overpayment made.
c) A document sent by a customer requesting the seller to
supply certain quantities of goods of specified description
d) A document received by a buyer after the purchase on
credit occurred to request the payment.
e) a document sent to the buyer due to goods returned by the
buyer or refunds to him when the buyer has been
overcharged
f) A document sent with the goods to the buyer which
contain the quantity and specification of the items send.
g) A document issued for cash and cheques received from a
customer for goods sold or service rendered.
h) A document issue to authorise a particular expense or
service payment.

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Question 3

Lee owns a business, Lucky Star Trading that buys and sells household appliances.
Debtors' and Creditors' List on 1 March 2017:

Accounts Receivable RM Creditors RM

Saidin 3,450 Coco Wholesalers 8,250
Haidir 2,890 Pei Trading 4,500

Balance for other accounts are:

RM RM
Cash 5,610 Fixtures and fitting 36,600
Bank 56,000 Store equipments 13,200
Inventory 20,000

Transactions for March 2017;

3 Purchased merchandise, RM2,400 on credit from Yuri Store Trading by cheque.
5 Bought merchandise, RM2,550 from Coco Wholesalers with credit term 4/10, n/30.
6 The merchandise was not according to order, was returned to Coco Wholesalers,
together with a debit note for RM300. Coco Wholesalers issued a credit note no
CN56.
7 Sold goods on credit to Saidin, RM3,500 with credit term 4/10, n/30.
8 Received invoice 908 from Pei Trading for merchandise bought, RM2,470.
10 Paid wages, RM8,200 by cheque.
Paid Lee Daughter’s tuition fee RM150.00
10 Saidin claimed an allowance for damaged items, RM125. Saidin agreed to keep
the items. Issued credit note no 54 to him.
13 The owner increased his capital from RM125,000 to RM140,000 by cash.
Paid Coco Wholesalers by cheque for settlement of all debts.
14 Received a cheque from Haidir to settle her account as on 1 March 2017.
16 Issued an invoice to Haidir for goods sold to her, RM1,840 subject to credit term
4/10, n/30.
Returned defect goods, RM150 to Pei Trading, together with a debit note.
19 Issued cheque to Pei Trading to settle the amount owing to date.
Sold goods for cash to Haidir, RM6,000.
22 Purchased a new cash register on credit from Zaidin Store Sdn Bhd for RM6,500.
23 Paid transportation cost RM200.00 for transaction dated 22 March.
27 Bought merchandise on credit from Pei Trading RM2,000 with credit term 4/10,
n/30.
28 Saidin paid RM1 200 in part payment of his account.
Received a cheque from Thye network Sdn. Bhd for office space let to him for the
month. Annual rental amounts to RM36 000.
30 Haidir purchased goods to the value of RM6,800 on credit with credit term 4/10,
n/30.
Paid utilities by cheque R1,650.
31 Haidir returned damaged items, R400. Issued a credit note to her.

REQUIRED:
a) Record the above transactions in special journals and general journal.
b) Post the above journals to Accounts Receivable Subsidiaries ledger, Accounts Payable
Subsidiaries ledger and general ledger.
c) Prepare a trial balance on 31 March 2017.

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Question 4

Explain each of the following;

a) Trade discount
b) Cash discount
c) FOB Shipping Point
d) FOB Destination

Question 5

Jna Sdn Bhd (JSB) runs a business of selling books and stationeries. Below are the
accounts balances as at January 31, 2017.
Account Debit Credit
RM RM
Cash 22,700
Bank 84,200
Accounts Receivable: SMK Simpang 6,900
Inventory 39,800
Office Equipment (Net) 57,600
Capital 200,440
Accounts Payable : Pelangi Book Store 10,200
Accrued Utilities Expense 560
211,200 211,200
At the end of February 2017, all of the business transactions have been recorded in the
following journals:

Sales Journal
Dr Acc Rec
Date Accounts Debited Term
Cr Sales
Feb 10 Tadika Wahid 5/10, n/30 4,200
23 Sekolah Sri Jaya 5/10, n/30 7,800
28 Total 12,000

Purchases Journal
Cr Purchase
Date Accounts Credited Term
Cr Acc Pay
Feb 9 Pustaka Jai Hen 5/10, n/30 5,900
24 Nurudin Book Store 5/10, n/30 6,400
28 Total 12,300

Cash receipts journal

Sales
Cash Bank
Date Accounts Credited Discount
Dr Dr
Dr
Feb 4 Accounst Recievable: SMK Simpang 6,555 345
14 Sales 27,210
17 Accounst Recievable: Tadika Wahid 3,743 197
28 Sales 36,550
28 Total 27,210 46,848 542
Cash Payment Journal

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 Purchase
Cash Bank
Date Accounts Debited Discount
Cr Cr
Cr
Feb 6 Accrued Utilities Expense 560
15 Pelangi Book Store 10,200
17 Drawing 800
18 Accounts Payable : Pustaka Jai Hen 5,605 295
28 Rent expense 2,400
28 Salaries Expense 6,600
28 Total 1,360 24,805 295

General Journal
Date Accounst Title and Explanations Debit Credit
Feb 15 Sales Return and Allowance 260
Accounts Receivable – Tadika Wahid 260
(To record sales return)

Feb 27 Accounts Payable – Nurudin Book Store 600

Purchases return and Allowance 600
(To record Sales return)

28 Utilities expense 980

Accrued Utilities Expense 980
( To record utilities expense for February )

REQUIRED:

a. Post all of the above journals’ records into the appropriate accounts in a General
Ledger, Accounts Receivable Subsidiaries ledger and Accounts Payable Subsidiaries
ledger.

b. Prepare a trial balance as at 28 February 2017.