CONFIDENTIAL AC/DEC2021/FAR110

UNIVERSITI TEKNOLOGI MARA

COMMON TEST

COURSE : FINANCIAL ACCOUNTING 1

COURSE CODE : FAR110
EXAMINATION : DECEMBER 2021
TIME : 1 HOUR AND 30 MINUTES

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of TWO (2) parts:

SECTION A – 25 marks
SECTION B – 25 marks

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 sheets contains the followings 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 6 pages

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 CONFIDENTIAL 2 AC/DEC2021/FAR110
SECTION A
PART 1: MULTIPLE CHOICE QUESTIONS
This part consists of TEN (10) multiple choice questions. Choose the most suitable
answer.

1. The preparation of source of documents is an accounting process of

A. Identifying
B. Communicating
C. Recording
D. Interpreting

(1 mark)

2. Choose which business organization has a separate legal entity from its owners; that from a
legal point of view, owners are not personally liable for the debts of the business.

A. Ariff and Associates

B. Ariff Biz Bhd
C. Ariff Enterprise
D. Ariff, Dilla & Company
(1 mark)

3. The following is considered an external user of accounting information EXCEPT

A. Customers
B. Creditors
C. Potential Investor
D. Business Owner
(1 mark)

4. Which of the following is considered as event that should be recorded in the accounting books
of a business?

A. The appointment of board of directors with monthly allowance of RM5000 each.

B. The strategic plan of marketing the new product
C. The acquisition of a building by disposing the old premise.
D. The announcement of the CEO retirement.
(1 mark)

5. Credit notes that received from a seller will be entered in the:

A. Sales account
B. Purchase account
C. Sales Returns account
D. Purchases Returns account
(1 mark)

6. Choose which transaction will be recorded in the general journal.

A. Purchase of inventory on credit from SD Enterprise

B. Purchase of display shelves on credit from Andy Deco Co.
C. Cheque issued by the owner for personal use
D. Owner contributed additional cash of RM10,000 into business
(1 mark)
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 CONFIDENTIAL 3 AC/DEC2021/FAR110
7. Sazali sold goods worth RM4,000 to Erny Enterprise. Erny paid with cheque RM1,000 and the
balance will be paid next month. Identify the effect of the transaction for Sazali.

A. Increased revenue and increased asset

B. Decreased expense and decreased liability
C. Increase revenue, increase liability, and increase asset
D. Decreased asset, increase liability, and increased asset

8. On 5 Nov 2021, Sherry Shop bought 12 tea set. The list price was RM450 each set and the
seller gave RM400 discount whenever customer buy 12 set. Seller agreed to grant Sherry Shop
a credit term of 2/7 net 30. Calculate the total cash to be paid if Sherry paid the debt on 11 Nov
2021.

A. RM5,292
B. RM5,000
C. RM4,900
D. RM100
(1 mark)

9. Which of the following action is considered as error affecting the trial balance:

A. Recorded credit purchases from Kilang Kay in AP Kilang Kan account.

B. Depreciation expense of Equipment is debited in the Motor Vehicle account instead of
Depreciation for Equipment account.
C. Sold goods on credit to AZ Trading, only sales account had been recorded.
D. A credit note sent to AR Sarry showed RM100 but recorded in AR Sarry account and
sales return as RM1,000.
(1 mark)

10. Ilias Enterprise runs a business selling kerepek bawang. The following records made by the
business in preparing its trial balance are correct, EXCEPT:

A. The business recorded the credit balance of the bank account in the credit column of the
trial balance account.
B. The business recorded the payment for advertisement as debit column of the trial
balance account.
C. The business recorded the actual amount paid RM500 for commission in the credit
column as commission received on the trial balance.
D. The business recorded the balance of purchases returns account in the credit column of
the trial balance account.
(1 mark)

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 CONFIDENTIAL 4 AC/DEC2021/FAR110

PART 2

Radhi owned business named BRadhi Enterprise that trades travel bags and suitcases;
located in Seremban, Negeri Sembilan. The financial statement of BRadhi Enterprise was
prepared on its accounting year ended 31 December each year. Business transactions are
recorded as accurately as possible to actual event occurred. Whenever Radhi took assets or
inventory for personal use, it will be recorded as drawings.

In July 2021, business bought few luxury suitcases from Vietnam and paid USD1,000. The
purchase was recorded in USD since Radhi predicted the USD value will decreased at the
end of the year. The purchase will be translated into RM before the preparation of financial
statement. In the same month, Radhi won the bid for a set of point of sales system in open
bidding that was paid by business cheque RM1,000. Radhi recorded the asset at RM1, 000
instead of its market value RM2,500.

Radhi decided to prepare financial statement ended 30 June 2021 to show that the business
is booming due to a significant increase of online sales. Radhi assumed that the bank shall
approve his application for loan by using that financial statement. Some of its customers are
Radhi’s close friends and families. Radhi never issued invoice to them even they delayed
payment for more than a week. Radhi only issued cash bill when they paid for the goods.

Required:

1. Explain the THREE (3) accounting concepts that are violated by the business.
(3 marks)

2. Suggest TWO (2) accounting concepts or measurement principles applied as

explained in the above scenario. (2 marks)

(Total: 15 marks)

SECTION B

Biru Enterprise trades water filter products and uses the periodic inventory system to record
the inventories. The following are transaction in June 2021:

Date Transaction
1 The owner deposited RM10,000 cash into the business bank account.
2 The owner bought display shelves valued at RM3,000 by cheque.
4 Purchased goods worth RM5,000 on credit from Titan LLP.
8 The business received a computer set worth RM5,000 from owner.
11 Sold goods worth RM2,150 to Arbie Trading on credit.
15 A cheque of RM300 issued to pay utilities.
19 Sold RM750 goods to SK 2 and SK 2 paid by cash
21 Purchased goods by cheque worth RM3,000 from Reefa Sdn Bhd.
25 Owner took RM1,500 from bank for office use.
29 Owner took RM500 worth of goods for his mother.

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 CONFIDENTIAL 5 AC/DEC2021/FAR110

Required:

Analyse the effects for the above business transactions on asset, liability, owner’s equity,
revenue, and expense.
(10 marks)
Note: Use the format given below to answer the above questions.
Example: On August 1, business received RM100,000 cash for initial capital.

Date Effects
Aug Increase Decrease
1 Asset: Cash
Owner Equity: Capital

SECTION C

On 1 October 2021, Cik Yati decided to register Yatie Enterprise, a handbag shop in her
hometown, Ipoh, Perak. As at 1 November 2021, the business has the following balances:

RM
Capital 107,850
Account Receivable - Yan & Co 3,850
Fixtures & Fittings 58,500
Bank 45,500

For the month of November 2021, the following transactions took place:

Date Transactions

2 Four cash bills totaled of RM4,000 was issued for sales of by cash. Yatie
deposited money from the sales into the business bank account once the
business closed for the day.
6 Invoice received with amount of RM9,500 from EasyLeather Factory for
purchasing varieties of handbags. A credit term of 5/14, n30 was given.
8 Yatie Enterprise purchased 5 units of air conditioners costed RM10,000 from
PolElectric. Paid RM3,000 by cheque and the remaining balance will be paid
next month.
9 Yatie used her own money amounting of RM500 to buy stationeries.
10 An invoice with a value of RM3,500 was issued to MasIndah Bridal for sale 5
units of handbags. The credit term granted was 2/15, n30.
11 The business sent an invoice amounted to RM5,000 (after trade discount of
5%) to VerTrading with a credit term, 5/7, net 30.
12 MasIndah Bridal returned a handbag worth of RM500 due to faulty.
18 A cheque of RM9,025 was issued to EasyLeather Factory .
20 Yatie took a handbag that cost RM800 for her personal use.

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 CONFIDENTIAL 6 AC/DEC2021/FAR110

23 An official receipt written RM2,940 was issued to MasIndah Bridal for cash
settlement received.
26 Yatie bought 2 units of handbags through online sales costing RM1,000 using
business cash. She planned to resell the handbags at 45% mark-up.
28 VerTrading settled its account by cheque.

Required:
a. Prepare the THREE (3) column ledger to record the above transactions.
b. Prepare a Trial Balance as at 30 November 2021.
(Total: 25 marks)

(TOTAL: 50 MARKS)

END OF QUESTION PAPER

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