ACC406 PAST YEAR QUESTION (August 2021) PDF

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UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATIONCOURSE : INTERMEDIATE FINANCIAL ACCOUNTING AND REPORTING/FINANCIAL ACCOUNTINGCOURSE CODE : ACC406/EXAMINATION : AUGUST 2021TIME : 3 HOURSINSTRUCTIONS TO CANDIDATES This question paper consists of two (2) parts. i) PART A (Multiple Choice Questions) ii) PART...

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AC/AUG 2021/ACC406/418

UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION

COURSE

:

INTERMEDIATE FINANCIAL ACCOUNTING AND REPORTING/FINANCIAL ACCOUNTING

COURSE CODE

:

ACC406/418

EXAMINATION

:

AUGUST 2021

TIME

:

3 HOURS

INSTRUCTIONS TO CANDIDATES 1.

This question paper consists of two (2) parts.

2.

Answer ALL questions.

3.

Answer ALL questions in English.

i) PART A (Multiple Choice Questions) ii) PART B (Short Structured)

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO This examination paper consists of 12 printed pages

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PART A This part consists of 33 multiple-choice questions. Choose the most suitable answers. 1.

Which of the following is not an internal user of accounting information? A. B. C. D.

Employee Owner Supplier Manager (1 mark)

2.

The following represents the definition of bookkeeping except _________. A. B. C. D.

classifying interpreting recording summarising (1 mark)

3.

___________need the accounting information as guidance in planning, organizing, controlling and analyzing the operations of the business. A. B. C. D.

4.

Employees Customers Managers Creditors

(1 mark) Which of the following is not true about the characteristics of a partnership business? A. B. C. D.

Profit or loss is to be shared between the partners. General partners are involved in operating the business. Minimum number of partners is 2. General partnership has limited liability. (1 mark)

5.

Which of the following is a public limited company? A. B. C. D.

Mona Lisa Associates Teriak Catering Enterprise Bomca Malaysia Sdn Bhd None of the above (1 mark)

6.

Which of following statements is not true about the purposes of recording and analysing accounting information? A. B. C. D.

To measure the level of employee engagement. For easier reference in retrieving data and information. To avoid misleading of financial statements. To know the financial status of the business. (1 mark)

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A well written partnership agreement should include all of the following except ________. A. B. C. D.

capital contributed by partners drawings made by partners profit or loss sharing ratio interest on loan (1 mark)

8.

Which of the following items would be found in a partner’s current account ? i. ii. iii. iv. A. B. C. D.

Drawings Capital Interest on loan Sharing of profit or loss

i, ii and iii i, iii and iv ii, iii and iv All of the above (1 mark)

9.

A conceptual framework for financial reporting is ________________. A. B. C. D.

a set of regulations which govern financial reporting a set of principles which underpin financial reporting a set of items which make up an entity’s financial statements a set of financial reporting standard (1 mark)

10.

Which of the following is the fundamental qualitative characteristics of the conceptual framework for financial reporting ? A. B. C. D.

Relevance Verifiability Timeliness Understandability (1 mark)

11.

________________ concepts assume that a business will continue in operation indefinitely. A. B. C. D.

Materiality Prudence Going concern Neutrality (1 mark)

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The financial statements should not be prepared with the intention to influence certain decisions. This is in accordance with the __________concept. A. B. C. D.

13.

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comparability neutrality consistency materiality

(1 mark) Which of the following qualitative characteristics relates to the fact that an information is complete, neutral and free from error? A. B. C. D.

Verifiability Faithful representation Consistency Relevance (1 mark)

14.

________ characteristic requires financial information to be comprehensible. A. B. C. D.

Verifiability Comparability Understandability Timeliness (1 mark)

15. Which of the following is a revenue item? A. B. C. D.

Commission received Discount allowed Utilities Stationeries (1 mark)

16. The owner’s equity of a business entity will decrease when __________. i. ii. iii. iv. A. B. C. D.

goods are taken by the owner for personal use a non-current asset is purchased by cash owner's car is brought into the business there is a net loss for the year

i and ii i and iv ii and iii All of the above (1 mark)

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17. Which of the following items is a current asset? A. B. C. D.

Prepaid commission received Prepaid rental income Accrued utilities expense Accrued dividend income (1 mark)

18. Based on the following information, calculate the total revenues using the accounting equation. Particular RM Assets 320,000 Capital 300,000 Liabilities 60,000 Expenses 200,000 A. B. C. D.

RM480,000 RM520,000 RM180,000 RM160,000 (1 mark)

19. Which of the following items belong to the same group component in statement of financial position? A. B. C. D.

Accounts receivables, inventory and bad debts. Accounts payable, prepaid rental income and bank overdraft. Quoted investment, Patents and Loan. Accrued rental expenses, accounts receivable and inventory. (1 mark)

20. Which of the following equation is TRUE? A. B. C. D.

Asset + Capital = Liability Asset + Expense – Capital = Revenue + Liability Asset – Liability = Capital + Revenue + Expense Asset + Liability + Revenue = Capital + Expense (1 mark)

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21. Silvy owned a food truck business with an initial cash startup of RM150,000. She bought a food truck costing RM90,000 using a bank loan charging 6% interest per annum. How much is the total assets of her business? A. B. C. D.

RM240,000 RM150,000 RM245,400 RM95,400 (1 mark)

22. Rona Trading bought some furniture from M&M Jaya for RM14,500 cash. The double entries for this transaction in the books of Rona Trading are: A. B. C. D.

Debit Furniture, Credit M&M Jaya. Debit Purchases, Credit Cash. Debit M&M Jaya, Credit Furniture. Debit Furniture, Credit Cash. (1 mark)

23. The debit side of journal entry is used to record the following except: A. B. C. D.

Decrease in revenues. Decrease in liabilities. Increase in expenses. Increase in Owner’s equity. (1 mark)

24. Mar Bakery sold 1,500 cakes for the month of December 2020 at RM35 per cake. Out of the total sales made, 70% were paid in cash and the remaining after two months. Based on the above scenario, identify the journal entries involved? A. B. C. D.

Debit sales RM52,500, credit cash RM36,750, credit account payables RM15,750 Debit sales RM52,500, credit cash RM36,750, credit account receivables RM15,750 Debit cash RM52,500, debit account receivables RM36,750, credit sales RM15,750 Debit cash RM36,750, debit account receivables RM15,750, credit sales RM52,500 (2 marks)

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25. DDNK Bhd need to acquire additional sources of financing so as to expand its operation to another state. The total anticipated amount is RM150,000. Three quarter of the amount will be contributed by the owner and the balance by obtaining a bank loan. Based on the above scenario, identify the journal entries involved? A. B. C. D.

Debit bank RM150,000, credit capital RM112,500, credit bank loan RM37,500 Debit capital RM112,500, credit bank loan RM37,500, credit bank RM150,000 Debit bank RM150,000, credit capital RM37,500, credit bank loan RM112,500 Debit capital RM112,500, debit bank loan RM37,500, credit bank RM150,000 (2 marks)

Question 26-33. IZF Fruits Enterprise is a fruit distributor in Kangar, selling imported and local fresh fruits. You are required to identify the appropriate books of prime entry for the business transactions. 26.

Received an invoice for fruits purchased worth RM7,000 from FreshFruits Enterprise. A. B. C. D.

Sales Journal Purchases Journal Cash Receipt Journal Cash Payment Journal (1 mark)

27.

The owner took a box of fruits amounting to RM200 to be given to his friend as a gift. A. B. C. D.

Cash Receipt Journal Cash Payment Journal General Journal Purchases Journal (1 mark) -

28.

Issued an invoice to PureJus Trading worth RM3,300. A. B. C. D.

Purchases Journal Cash Payment Journal Sales Journal General Journal (1 mark)

29.

Paid electricity amounted to RM400 by cash. A. B. C. D.

Purchase Journal General Journal Cash Receipt Journal Cash Payment Journal (1 mark)

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Received a debit note RM200 from a credit customer due to goods returned. A. B. C. D.

Return Inwards Journal Return outwards Journal Sales Journal General Journal (1 mark)

31.

Bought a motor vehicle on credit from Arau Auto Sdn Bhd for RM47,000. A. B. C. D.

Cash Payment Journal Purchases Journal Sales Journal General Journal (1 mark)

32.

Received interest on investment RM800 by direct fund transfer. A. B. C. D.

Cash Receipt Journal Cash Payment Journal Sales Journal General Journal (1 mark)

33.

Paid RM600 cash for 10 boxes of melons purchased from Miyami Trading. A. B. C. D.

Purchases Journal General Journal Cash Payment Journal Cash Receipt Journal (1 mark) (Total: 35 marks)

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PART B QUESTION 1 IZF Fruits Enterprise is a fruit distributor in Kangar, selling imported and local fresh fruits. The following are the business transactions during the month of April 2020.

April 2020

Details

1

The owner brought cash RM30,000 and fruits display shelves valued at RM5,000 into the business.

3

Received an invoice for fruits purchased worth RM7,000 from FreshFruits Enterprise.

8

The owner took a box of fruits amounting to RM200 to be given to his friend as a gift.

11

Issued an invoice to PureJus Trading worth RM3,300.

13

Paid electricity amounted to RM400 by cash.

14

Received a debit note RM200 from PureJus Trading due to goods returned.

19

Bought a motor vehicle on credit from Arau Auto Sdn Bhd for RM47,000.

21

Received interest on investment RM800 by direct fund transfer.

22

Paid RM600 cash for 10 boxes of melons purchased from Miyami Trading.

25

Received a cheque from PureJus Trading for the amount due after deducting a cash discount of RM150.

Required: a.

Identify the effects (increase or decrease) on assets, liabilities, revenues, expenses or owner’s equity for the above transactions. (11 marks)

b.

Show the accounts to be debited and credited for the above transactions. (11 marks) (Total: 22 marks)

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QUESTION 2 The following trial balance was extracted from the books of Hermas Trading as at 31 December 2020. Particulars

Debit (RM)

Credit (RM) 298,000 16,500

as at 1 January 2020 Salary expenses Advertisement expenses General expenses Stationary Utilities expenses Interest on loan

Allowance for doubtful debt 1 January 2020 3% loan from Bank Rahmat Accounts payable Accounts receivable Furniture and Fittings Motor vehicles Machinery Accumulated depreciation as at 1 January 2020: Motor vehicles Machinery Cash in hand Cash at bank Drawings Capital Insurance expenses Repairs and maintenance Patents

11,000 4,550 9,000 2,300 36,000 20,500 5,600 1,000 300 11,700 800

2,500

4,000 1,500 50,000 23,000 22,500 60,000 95,000 60,000 83,000 22,500 12,000 10,950 20,200 5,000 296,000 2,500 4,500 12,600 729,000

729,000

Additional information: Inventory as at 31 December 2020 was valued at RM22,000. 2. The bank loan was approved on January 2020 and part of the interest on loan was still outstanding as at 31 December 2020.

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One of the credit customers owing RM800 was declared bankrupt and the debt needs to be written off. Allowance for doubtful debt is to be adjusted to 2% on the remaining accounts receivable. 4. Depreciations for the year are to be provided as follows: Motor vehicles -20% per annum on cost, yearly basis Furniture and Fittings -15% per annum on cost, yearly basis Machinery -10% per annum on carrying amount, yearly basis 5. During the year, the owner took goods worth RM700 for his personal use. 6. The following were prepayments as at 31 December 2020: Prepaid salary expenses RM6,500 Prepaid commission received RM2,000 7. Utilities bill for the month of December 2020 of RM250 was not yet paid. Required: a. The Statement of Profit or Loss for the year ended 31 December 2020. (18 marks) b. The Statement of Financial Position as at 31 December 2020. (12 marks) Note 1: Use vertical format presentation for both statements and show all calculations. Note 2: Calculate to the nearest RM. (Total: 30 marks) QUESTION 3 David, Jacob and Noah are brothers who formed a partnership business named as DJN which ventures in fast food industry. Their production facility is located in Setia Alam, Selangor and has been established for more than a year. Below are the terms agreed by the brothers prior to the commencement of their partnership business: i. ii. iii. iv. v.

Interest on closing capital is to be allowed at 10% per annum. David and Jacob are entitled to receive an annual salary of RM30,000. Profits or lossess are to be shared between David, Jacob and Noah in the ratio of 3:2:1 respectively. Interest of 6% per annum is to charged on drawings. The partners are entitled to 8% interest per annum on any advance provided to the partnership.

Additional information: 1.

The partners’ capital accounts as at 1 January 2020: David Jacob Noah

RM100,000 RM50,000 RM50,000

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On 1 August 2020, Jacob contributed an additional capital of RM24,000 to the partnership. 2.

The partners’ current accounts as at 1 January 2020: David Jacob Noah

RM16,000 RM8,000 RM8,000

3.

Noah withdrew RM6,000 cash on 1 November 2020 for his personal consumption.

4.

On 1 July 2020, DJN received an advance from David amounted to RM15,000.

5.

The business reported a net profit of RM210,000 for the year ended 31 December 2020.

6.

Depreciation on office equipment amounted to RM50,000 is yet to be considered in the computation of the above net profit.

Required: a)

The Appropriation Statement for the year ended 31 December 2020. (8 marks)

b)

Partners’ current account for the year ended 31 December 2020. (5 marks)

Note 1: Calculate to the nearest RM. (Total: 13 marks)

END OF QUESTION PAPER

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