BKAL1013 Tutorial Q&A All Chapter PDF

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Tutorial 1: Chapter 1 & 2 Chapter 1 1. Which of the following is the most appropriate and modern definition of accounting? A. Electronic collection, organization, and communication of vast amounts of information B. The interconnected network of subsystems necessary to operate a business C. A means of recording transactions and keeping records D. The identifying, recording and communicating of financial information about an identifiable economic entity 2.

Which one of the following is NOT one of the three activities included in the definition of accounting? A. Communicating B. Identifying C. Recording D. Operating

3. Which of the following are likely to be users of financial accounting information? A. Taxing authorities B. Creditors C. Potential investors D. All of the above 4. Which of the following is NOT a characteristic of a corporation? A. If a corporation cannot pay its debts, lenders can take the owners' personal assets to satisfy the obligations B. A corporation is a distinct entity in the eyes of the law C. Corporation ownership is based on number of shares held D. A corporation is owned by shareholders or stockholders

5. The three forms of business entities are: A. B. C. D.

government, cooperatives and financial institutions financing, investing and operating sole proprietorships, partnerships and corporations wholesaler, manufacturer and retailer

6.

Which of the following would be classified as external users of financial statements? A. B. C. D.

7.

Which one of the following groups is considered an internal user of financial statements? A B. C. D.

8.

To help investors make credit decisions To help management assess cash flows To protect users from fraudulent financial information To provide useful information for decision making

If an investor can use accounting information for two different companies to evaluate the types and amounts of expenses, the information is said to have the quality of: A. B. C. D.

11.

relevant reliable both relevant and reliable neither relevant nor reliable

What is the primary objective of accounting? A. B. C. D.

10.

A bank reviewing a loan application from a corporation. The labor union representing employees of a company that is involved in labor negotiations. The financial analysts for a brokerage firm who are preparing recommendations.for the firm’s brokers on companies in a certain industry. Factory managers who supervise production line workers.

In order for accounting information to be useful in making decisions, it must be: A. B. C. D.

9.

The management of the company The controller of the company and a company's shareholders The company's marketing managers The creditors and shareholders of the company

comparability consistency neutrality understandability

Which of the following is an example of an operating activity for accounting firm? A. B. C. D.

Obtaining capital from owners Providing services to customers Purchasing equipment Selling land

12.

The communication stage of accounting is accomplished by: A. B. C. D.

storing data reporting to decision makers processing data recording data

13.

Which of the following concepts (or principles) would require that an item be recorded at the amount actually paid rather than at the estimated market value? A. Going-concern concept B. Entity concept C. Cost principle D. Stable monetary unit concept

14.

Financial Reporting Foundation (FRF) is differ from Malaysian Accounting Standards Board (MASB) because: A. it was established under the Financial Reporting Act 1997 B. it has no direct responsibility with regard to standard setting C. it comprises representation from all relevant parties in the standard setting process D. both are working together to make up the new framework for financial reporting in Malaysia

15. Which is an advantage of a sole proprietorship form of business? A. There is limited personal risk B. The business can continue indefinitely C. The owner makes all the decisions D. All of the above 16. The sources and uses of cash over a stated period of time are reflected on the: A. profit and loss and other comprehensive income. B. statement of owner’s equity C. statement of financial position (balance sheet) D. statement of cash flows

17.

18.

The Statement of Profit or Loss and Other Comprehensive Income reports the revenues and expenses for a period of time based on the: A. historical cost B. matching principle C. objectively principle D. full disclosure

The reliability of the information in a company’s financial statements is the responsibility of:

A. B. C. D. 19.

the Securities and Exchange Commission (SEC) the Certified Public Accountant in charge of the audit of the company’s financial statements the company’s management the shareholders of the company

____________ works with the Financial Reporting Foundation (FRF) to make up the new framework for financial reporting in Malaysia, with representation from all relevant parties in the standard-setting process. A. Malaysian Institute of Accountant (MIA) B. Malaysian Accounting Standards Board (MASB) C. Malaysian Institute of Certified Public Accountant (MICPA) D. International Accounting Standard Board (IASB) .

20.

Which of the following BEST represents the characteristic of a company? A. Once registered, a company becomes a separate legal entity B. A public company must have a minimum of 10 members C. Members of a company collectively and unlimitedly responsible for all the debts of the company D. The popularity of a company is due to the ease and low cost of organizing

CHAPTER 2 1.

Faridah has three different businesses. She has only one bank account for transactions relating to all of her various businesses and her personal account. Which of the following concepts or principles of accounting is Faridah violating? A. B. C. D.

2.

A RM5,000 account payable is paid by the business. How is the accounting equation affected? A. B. C. D.

3.

Assets decrease; owner's equity decreases Liabilities increase; owner's equity decreases Assets increase; liabilities increase Liabilities increase; owner's equity increases

Land is purchased by a business for RM100,000. The company pays for land with a RM20,000 cash payment and the execution of an RM80,000 promissory note payable to the seller. How does this purchase affect the business's accounting equation? A. B. C. D.

5.

Assets decrease RM5,000; owner's equity increases RM5,000 Assets decrease RM5,000; liabilities decrease RM5,000 Assets increase RM5,000; owner's equity decreases RM5,000 Assets increase RM5,000; liabilities increase RM5,000

A business receives a utility bill and intends to pay the bill next month. When the business receives the bill, how does this event affect the accounting equation? A. B. C. D.

4.

Faithful representation principle Entity concept Cost principle Going-concern concept

Assets increase RM80,000; liabilities decrease RM20,000 Assets increase RM20,000; liabilities decrease RM80,000 Assets increase RM80,000; owner's equity increases RM80,000 Assets increase RM80,000; liabilities increase RM80,000

Kedai Kg. Pisang started the year with total assets of RM80,000 and total liabilities of RM40,000. During the year, the business earned revenues of RM120,000 and incurred expenses of RM70,000. There is no capital contributions during the year, but the owner make withdrawals of RM60,000. What is the amount of owner's equity at the end of the year? A. B. C. D.

RM40,000 RM50,000 RM30,000 RM10,000

Use the following information to answer questions 6 and 7: Hussin starts a plumbing service named Hussin Enterprise. Selected transactions are described as follows: i. Hussin deposits RM7,000 into a new business account, recording the capital contribution. ii. The business pays RM4,000 cash for equipment to be used for plumbing repairs. iii. The business borrows RM15,000 from a local bank. iv. The business pays RM600 rent for the first month. v. The business pays RM400 cash for plumbing supplies to be used on various jobs in the future. vi. The business completes a plumbing repair project and receives RM1,300 cash. vii. Hussin takes a cash withdrawal of RM2,500. 6. After all of the transactions, what is the amount of total assets? A. B. C. D.

RM25,700 RM5,200 RM24,200 RM20,200

7. After all of the transactions, what is the amount of total owner's equity? A. B. C. D. 8.

RM5,200 RM20,200 RM7,700 RM7,300

Dadidu Enterprise had the following transactions in June: Earned RM4,000 on account; collected RM3,000 from a customer that was owed from previous month; incurred RM500 repair expense and paid cash to the repairman; paid RM1,200 to a supplier owed from the previous month; paid out RM800 in cash drawings to the owner. What is the combined effect on Owner's capital of the June transactions? A. B. C. D.

Decrease RM2,700 Decrease RM5,700 Increase RM2,700 Decrease RM4,500

9.

Equipment is purchased for cash. Which of the following is TRUE? A. B. C. D.

There is an increase in total assets There is a decrease in both total assets and total liabilities There is an increase in total assets and a decrease in total liabilities There is no effect on total assets

10. A utility bill is received for expenses incurred. It will be paid in the following accounting period. Which of the following would be TRUE as a result of the receipt of the utility bill? A. B. C. D. 11.

Net income will increase Owner's equity will decrease Total liabilities will decrease There will be no effect on total liabilities Which of the following invests funds into a business and is considered an owner? A. B. C. D.

12.

Which of the following organization is primarily responsible for establishing GAAP? B. C. D.

13.

Financial Accounting Standards Board (FASB) Securities and Exchange Commission (SEC) Internal Revenue Service (IRS) Federal Government

An accounting assumption is concerned with all of the following EXCEPT: A. B. C. D.

14.

Shareholders Creditors Bankers Lenders

monetary unit historical cost separate entity time period

Carrying out professional responsibilities with competence and diligence is called: A. B. C. D.

Integrity Independence Objectivity due care

15.

Which of the following is NOT one of the broad principles underlying the accountant's code of professional ethics? A. B. C. D.

16.

The characteristic of accounting information that can provides predictive and feedback value is: A. B. C. D.

17.

it is trusted by users. it is helpful in contrasting organizations. it is timely presented. it affects the decision of its users.

The Statement of Profit or Loss and Other Comprehensive Income reports the revenues and expenses for a period of time based on the: A. B. C. D.

19.

relevance. reliability. creativity. comparability.

The accounting information is comparable when: A. B. C. D.

18.

Objectivity Integrity Loyalty Independence

historical cost. matching principle. objectively principle. full disclosure.

The accounting equation should remain in balance because every transaction affects: A. B. C. D.

only one account. only two accounts. two or more accounts. none of the above.

20.

The accounting principle that requires financial statement information to be based on costs incurred in business transactions, and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange, is the: A. B. C. D.

accounting equation principle. historical cost principle. going-concern principle. business entity principle.

TUTORIAL # 2 1.

The type of account with a normal credit balance is: A. B. C. D.

2.

The receipt of cash from customers in payment of their accounts would be recorded by: A. B. C. D.

3.

net loss. gross profit. gross loss. net profit.

A company sells goods on credit for RM30,000. Which of the following entries correctly records the transaction? A. B. C. D.

6.

transaction in a journal. the chart of accounts. general ledger accounts and balances. the totals from the journal pages.

The excess of revenue over the expenses is called: A. B. C. D.

5.

a debit to cash and a credit to accounts payable. a debit to accounts receivable and a credit to cash. a debit to cash and a credit to accounts receivable. a debit to accounts payable and a credit to cash.

A trial balance is a listing of: A. B. C. D.

4.

an asset. a drawing. an expense. a revenue.

Debit cash and credit sales RM30,000 Credit inventories and debit accounts receivable RM30,000 Credit accounts payable and debit sales RM30,000 Debit accounts receivable and credit sales RM30,000

Paying cash to the suppliers on account would include: A. B. C.

a debit to accounts receivable and a credit to revenue. a debit to cash and a credit to accounts receivable. a debit to accounts payable and a credit to cash.

D.

7.

A company had a cash balance of RM30,000 on 1 August 2014. During August total payments were RM384,000 and total receipts were RM357,000. What is the cash book balance at 31 August 2014? A. B. C. D.

8.

C. D.

The left side of a T-account is the credit side. Entries that increase asset accounts, or decrease liability accounts are posted as debits. The left side of a T-account is the debit side. Entries that decrease asset accounts and increase liability accounts are posted as credits.

The recording of debit and credit parts of a transaction is: A. B. C. D.

12.

an increase in both total assets and total equities. a decrease in both total assets and total equities. an increase in total assets and a decrease in total equities. no effect on total assets.

Which of the following statements is FALSE? A. B.

11.

liabilities. owner’s equity. assets. potential investors.

The owner withdraws cash from the business for personal use leads to: A. B. C. D.

10.

RM 1,800 RM 3,000 RM 4,500 RM 6,000

The economic resources owned; expected to benefit the business in future is: A. B. C. D.

9.

a debit to cash and a credit to capital.

checking equality. double-entry accounting. single-entry accounting. transaction analysis.

When cash is paid in advance for insurance, ____.

A. B. C. D. 13.

The account debited when cash is paid for supplies is ____. A. B. C. D.

14.

the Prepaid Insurance account is decreased the Prepaid Insurance account is credited the Prepaid Insurance account is increased none of the above

Supplies Cash Supplies Expense none of the above

Which of the following transactions would increase both assets and liabilities? A. B. C. D.

Purchasing car by issuing a note payable. Purchasing office supplies for cash. Performing a service and receiving the cash immediately. Pay money to the bank.

Use the following information for questions 15: Cash in Bank Accounts Receivable Office Supplies Office Furniture Office Equipment Accounts Payable 15.

Ahmed Capital Ahmed, Drawing Revenue Salaries Expense Miscellaneous Expense

RM62,000 RM10,000 RM18,000 RM3,000 RM2,000

What is the correct balance for the Accounts Receivable? A. B. C. D.

16.

RM32,000 RM??? RM3,000 RM12,000 RM18,000 RM20,000

RM8,000 RM15,000 RM20,000 RM25,000

A business makes a payment of RM9,600 on a Note Payable, consisting of a RM1,600 interest payment and a RM8,000 principal payment. Which of the following journal entries would be recorded? A. B.

Cash is credited for RM8,000; Interest Expense is credited for RM1,600; and Notes Payable is debited for RM9,600 Notes Payable is credited for RM8,000; Cash is credited for RM1,600; and Interest Expense is debited for RM9,600

C. D.

17.

A business purchased an equipment by paying cash of RM36,000 and issuing a Note Payable of RM54,000. Which of the following journal entries would be recorded? A. B. C. D.

18.

Cash is credited for RM9,600; Notes Payable is debited for RM8,000; and Interest Expense is debited for RM1,600 Notes Payable is credited for RM9,600; Cash is debited for RM8,000; and Interest Expense is debited for RM1,600

Cash is credited for RM36,000; Equipment is credited for RM90,000; and Notes Payable is debited for RM54,000 Cash is credited for RM36,000; Equipment is debited for RM90,000; and Notes Payable is credited for RM54,000 Cash is debited for RM36,000; Equipment is debited for RM54,000; and Notes Payable is credited for RM90,000 Cash is credited for RM36,000; Equipment is credited for RM54,000; and Notes Payable is debited for RM18,000

How does a cash withdrawal by the owner affect the accounting equation? A. B. C. D.

liabilities increase; owner’s equity decrease assets increase; owner’s equity increase assets decrease; owner’s equity decrease assets increase; liabilities increase

Questions 19 to 21are based on the following transactions for the month of October 2015 of Costa Enterprise. i) ii)

The owner started the business with a contribution of RM23,500 cash. Purchased office furniture for RM11,500, paid RM2,500 down payment and put the balance on a Note Payable.

iii) iv) v)

Paid a utility bill for RM980 cash. Paid RM2,000 cash for October rent. The business had sales of RM15,000 in October. Of these sales, 60% were cash sales, and the balance was credit sales. Paid RM9,700 cash for the purchase of a second hand car. Collected RM2,000 from credit sales.

vi) vii) 19.

How much is the net income for October 2015?

A. B. C. D.

20.

What is the amount of total liabilities at the end of October 2015? A. B. C. D.

21.

RM980 RM2,330 RM4,800 RM9,000

How much is the balance in Accounts Receivable? A. B. C. D.

22.

RM5,300 RM6,020 RM9,000 RM12,020

RM4,000 RM6,000 RM7,000 RM9,000

The following entries were made by the accountant of Ultrawoman Sdn Bhd during its first month of operation: i) Ms Caprinova, the owner, deposited RM4,500 cash in the business. ii) Ultrawoman Sdn Bhd paid the first month's rent of RM600 in cash. iii) Ultrawoman Sdn Bhd purchased equipment by signing a Note Payable of RM16,500. iv) Cash sales for the month were RM6,750. v) Ultrawoman Sdn Bhd purchased supplies for RM2,100 cash. After posting these entries to the general ledger, how much are total assets? A. B. C. D.

RM9,150 RM10,650 RM25,050 RM27,150

23.

An office equipment is purchased for cash. Which of the following is TRUE? A. B. C. D.

24.

An electricity bill is received for expenses incurred. It will be paid in the following accounting period. The following is TRUE as a result of the receipt of the bill: A. B. C. D.
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