TEST

(SEPTEMBER 2023 SESSION)

Principles of Accounting (BAC20103 /CAC20203/FAC20103 /EAC20103)

Basic Accounting for Health Care (LAC20103)
Basic Accountancy and Public Relations (OAC20102), Accounting Principles (FAC20303)

LECTURER :……………………………………………………………………..

MATRIC NO : ………………………... PROGRAMME : …………

VENUE : ………………………………………….

OCTOBER 2023 DURATION : 2 HOURS

INSTRUCTIONS:

1. Candidates must read all questions carefully.

2. The examination script consists of the followings:

Part Types of Questions Instruction

ONE 20 MCQ Answer ALL questions

TWO 3 Extended Structures Answer ALL questions

 THIS EXAMINATION SCRIPT CONTAINS 7 PAGES INCLUDING THE FRONT COVER
DO NOT OPEN THE EXAMINATION SCRIPT UNTIL FURTHER INSTRUCTION

PART ONE
(20 marks)
Time: 20 Minutes

INSTRUCTION
This part consists of TEN (10) Multiple Choice Questions. Answer ALL questions.

1. What is the fundamental principle of double-entry accounting?

a) Assets = Liabilities
b) Debits = Credits
c) Income > Expenses
d) Revenue - Expenses = Profit

2. A trial balance is used to:

a) Calculate net income
b) Verify the accuracy of accounting entries
c) Prepare financial statements
d) Record daily transactions

3. If the trial balance does not balance, what does it indicate?

a) There is an error in the financial statements
b) The business is in financial trouble
c) The books are accurate
d) There is an error in the accounting records

4. Which financial statement provides a snapshot of a company's financial position

at a specific point in time?
a) Income statement
b) Statement of cash flows
c) Balance sheet
d) Retained earnings statement

5. The accounting equation (Assets = Liabilities + Owner's Equity) must always be

in balance:
a) At the end of the fiscal year
b) At the end of the accounting period
c) Only in a profitable business
d) It doesn't need to be in balance

6. Which financial statement shows a company's revenues and expenses over a

period of time?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of owner's equity

7. What is the purpose of the income statement?

a) To report a company's financial position
 b) To provide information on cash flows
c) To calculate the book value of assets
d) To show the company's profitability

8. Which account would be debited when recording a sale of goods on credit?

a) Accounts Receivable
b) Cash
c) Accounts Payable
d) Owner's Equity

9. If a company pays off a portion of its outstanding loans, what happens to the
balance sheet?
a) Total assets increase
b) Total assets decrease
c) Total liabilities increase
d) Total owner's equity increases

10. Which of the following is an asset on the balance sheet?

a) Accounts Payable
b) Accounts Receivable
c) Common Stock
d) Retained Earnings

11. The owner's equity section of the balance sheet includes:

a) Assets
b) Liabilities
c) Revenues
d) Capital contributions and retained earnings

12. When expenses exceed revenues, what is the result on the income statement?
a) Net income
b) Net loss
c) No effect
d) Revenue increase

13. Which financial statement typically lists assets and liabilities in order of their
liquidity?
a) Income statement
b) Statement of owner's equity
c) Balance sheet
d) Statement of cash flows

14. If a company's owner invests additional capital, how does it affect the accounting
equation?
a) Increases assets and liabilities
b) Increases assets and owner's equity
c) Decreases assets and liabilities
d) Decreases owner's equity

15. If total assets are $100,000 and total liabilities are $40,000, what is the owner's
equity?
a) $60,000
b) $40,000
 c) $100,000
d) $140,000

16. Which account represents the resources owned by the business entity?
a) Liability account
b) Revenue account
c) Asset account
d) Expense account

17. The total of the credit column of a trial balance exceeds the total of the debit
column. What does this indicate?
a) The trial balance is not accurate.
b) There is an error in the accounting records.
c) The company is making a profit.
d) The company is incurring losses.

18. In which book of original entry are the financial transactions initially recorded?
a) Ledger
b) Journal
c) Trial balance
d) Financial statements

19. In the context of ledger accounts, what is the purpose of a "T-account" format?
a) To record transactions in a chronological order
b) To summarize the balances of all accounts
c) To show the flow of cash in and out of the business
d) To provide a visual representation of an individual account's transactions

20. When a company records a $200 payment for rent in its rent expense account,
which side of the T-account is affected?
a) Debit side
b) Credit side
c) Both debit and credit sides
d) Neither debit nor credit side
 PART TWO
(80 marks)
Time: 100 Minutes

INSTRUCTION
This part consists of THREE (3) Structured Questions. Answer ALL questions.

1. For the following transactions, state which account is to be debited and which is
to be credited.

Transactions Account Account

debited credited
a) Sold goods on credit to Ameenah
b) Paid wages by cash
c) Received rent by cheque
d) Paid machine by cheque
e) Proprietor withdrew cash from his business
for personal use
f) Bought goods on credit from Quickie
(supplier)
g) Bought Motor Van by cheque
h) Aliff paid his house rent using his company’s
cheque
i) Farahanim brings in cash as additional
capital for her business
j) Received cash from Mimi for amount due
(10 marks)

2. Nicky’s Enterprise has been established to sell kitchenware. Below are the
transactions for Donny’s Enterprise for the month of November 2022.

Date Transactions
November
1 Nick invested RM80,000 cash in the bank.
3 Purchased utensils from Vantage Sdn Bhd worth RM10,000 on credit.
4 Paid rent by cheque for RM1,500.
10 Sold utensils worth RM2,000 to Kedai Kita on credit.
12 Returned a dozens of utensils worth RM2,500 to Vantage Sdn Bhd.
17 Paid amount owed of RM5,000 to Vantage Sdn Bhd by cheque.
21 Nick withdrew RM2,000 cash in bank for his personal use.
28 Received a cheque amounting RM1,500 from Kedai Kita.
 30 Paid employees salary RM1,200 by cheque.

You are required to:

(a) i. Show the double entry transactions.

(18 marks)

ii. Post the above transactions into the ledgers and balance off all
the accounts.
(20 marks)

(b) Prepare a Trial Balance as at 30 November 2022.

(7 marks)

3. The following trial balance has been extracted from the ledger of Mika Enterprise:
Debit Credit
RM RM
Capital 90,560
Sales 289,50
0
Accounts payable 14,500
Return outwards 2,000
Discount allowed 3,150
Purchases 125,680
Return inwards 5,800
Carriage outwards 2,650
Drawings 14,350
Rent 35,200
Heating and lighting 12,200
Postage 1,890
Advertising 4,200
Salaries and wages 45,650
Cash in hand 6000
Cash at bank 9,000
Inventory as at 1 January 2022 14,560
Account receivable 25,600
Shop lot 120,500
Loan from JKBB Finance 66,670
Interest on loan 1200
Machinery 58,000
Accumulated depreciation on shop lot 25,400
Discount received 2,000
Travelling expenses 5,000
 490,63
490,630 0

Additional information:

(i) Closing inventory as at 31 December 2022 was valued at RM18,500.

Required:
(a) Prepare a statement of profit or loss for the year ended 31 December
2022
(11 marks)

Mika Enterprise.
Statement of Profit or Loss for the year ended 31 December
2022
RM RM RM

(b) Prepare a statement of financial position as at 31 December 2022.

(14 marks)

Mika Enterprise.
Statement of Financial Position as at 31 December 2022
RM RM

END OF QUESTION