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3.1 STEPS IN ACCOUNTING CYCLE

Transactions 2 3
1. post to
Analysis journal records
(Document ledger
Source)

6
5 4
Adjusted
Adjustments Trial balance
trial balance

7 9
8
Statement of Post-
closing
Comprehensive Income closing
entries
& Statement of Trial Balance
Financial Position

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3.2 TYPES OF BUSINESS DOCUMENTS

 A source document is an evident used for recording purposes ,being created when a
business transaction occurs.

 Each type of such source documents should be used for different transaction.

 It is to prof the Objectivity Accounting Principle

(1) Invoice

 Used in a credit transaction

 Delivered by the seller to the buyer

 Invoice Received- Credit Purchases

 Invoice issued- Credit Sales

(2) Delivery Note

 Delivered by the seller to the buyer

together with the goods.

 To prof the stated purchasing goods

 Buyers can check these items.

(3) Debit Note

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 Delivered by the seller to the buyer

(issued) to inform that the account has
been debited
(Debt increases)

Understated sales price

(4) Credit Note

 Delivered by the seller to the buyer to

inform the buyer that the account has
been credited (reduced debt.)

 Returns outwards- overstated purchase

price

(5) Purchase Order

 Sent by the buyer to the seller that

contains information about the goods
purchased

(6) Receipts

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 Issued by the seller when received

payment from the buyer.

 as an evidence to prof that payments

have been made.

(7) Payment Voucher

 Internal documents provided by the

business owner to record any kind of
payment. ( no receipt issue)

(8) Cheques Butt

 Cheque butt used as a reference and

resource records.

 Evidence that payments has been made

by cheque

(9) Bank Slip

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 Form issued by the bank for the

transaction record for keeping or
withdraw money from customers.

(10) Bank Statement

 Issued by the bank to the account holder

at the end of the month.

Types of Business Activities

(1) Services Company

 Services business giving services

 Example Doby , Hair Salon , Cleaning Services

(2) Merchandising Company

 Purchases
- Purchase of goods for resale – cash purchases and credit purchases
 Sales
- Sale of goods - cash Sales and credit Sales

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 Discounts
- Encourage the purchase / sale – trade discount and cash discount ( purchases
discount and sales discount )

(i) Trade discount

- Discount offered for bulk buying
- Example:
Buy 100-200 units = 10%
Buy 201-300 units = 20%
- No record needed for the trade discount .Thus, a buyer or seller records
the net amount. (List price less trade discount)

(ii) Cash discount

- Cash discount obtained after payment made within discounts period and
will be recorded in the account.
- Example:
Credit Term: 2/10, n/30
2 (discount percentage) / 10 (discount period) , n/30 [ the last payment is
due (credit maturity period)]
- The discounts calculation starts from the date of invoice.

 Purchase returns – when goods are returned to the seller.

 Purchase allowances – when price changes are made due to the quality / quantity /
goods in a wrong size, defective part.
 Sales returns – when goods are returned from customers
 Sales Allowances - when price changes are made due to the quality / quantity / goods in
a wrong size, defective part.

 Freight Costs ( Transportation Costs)

- Purchase agreement state whether seller or buyer pays freight costs.

(i) Free on Board (FOB) Shipping point

Goods are place free on board the carrier by seller.

Transportation Buyer
Seller
Company

Buyer pays freight costs

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(ii) Free on Board (FOB) Destination

Goods are placed free on board to the buyer’s place of business.

Seller Transportation Buyer

Company

Seller pays freight costs

(iii) Freight-in (Transportation in)

Freight-in is the transportation cost to be paid by the buyer of merchandise

purchased. Freight-in is considered to be part of the cost of the merchandise.

(iv) Freight-out (Transportation out)

Freight-out is the transportation cost to be paid by the seller when its merchandise
is sold. This is an operating expense.

3.3 JOURNALISING PROCESS

 A journal is referred to as the book of original or prime entry , also known as the book
of first entry.
 Journal is a record that keeps accounting transactions in chronological order.
 Journal are simply debits and credits in chronological (date) order.
 The purpose of journals is to keep a day-to-day record of a business and its
transactions.
 Journal can be classified into two main categories.

3.3.2 SPECIAL JOURNAL

 A special journal is used to record similar types of transaction.

 There are four (4) types of special journals that are frequently used by merchandising
business:

Sales Journal is used to record sales of merchandise on account.

( Credit Sales )

Purchase Journal is used to record purchases of merchandise on

account. ( Credit Purchase)

Cash Receipts Journal is used to record all cash received.

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Cash Payments Journal is used to record all cash paid

SALES JOURNAL
 Sales journal is used only to record sales of merchandise on account
(Credit Sales)

Format:

Date Account Debited Terms Dr. Acc. Receivable

Cr. Sales (RM)

Total

Date of Customer’s Credit Terms Total Sales/

sales Name Designated Sales Value

Example related to the sales credit posted to sales journal :-

 Jan 10, 2020 Sold merchandise / goods on account to Sauqi Enterprise RM 10,400
terms. 2/10, n/30.
 Jan 25, 2020 Sold goods/merchandise on account to Nazierah Sdn Bhd
RM 5,200 terms 1/15 , n/30.

Solution

Date Account Debited Terms Dr. Acc. Receivable

Cr. Sales (RM)
2020
Jan 10 Sauqi Enterprise 2/10,n/30 10,400

25 Nazierah Sdn Bhd 1/15,n/30 5,200

31 Total 15,600
 Sale of goods/merchandise for cash will be recorded in the cash receipts
journal.
 Sale of assets in cash will be recorded in the cash receipts journal.
 Sale of assets or others than merchandise / goods for credit will be recorded in
the general journal.

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CASH RECEIPTS JOURNAL

 Cash receipts journal is used to record all receipts by cash and cheque.
 Example of cash receipts transactions:
(i) cash sales of merchandise/goods
(ii) collections of accounts receivable ( related to the Sales Journal )
(iii) receipts of money from bank loans
(iv) additional cash capitals
(v) cash received from disposal /sales of assets

Date Accounts Credited Dr. Bank (RM) Dr.Cash (RM) Dr. Sales
Discounts (RM)

Total

Date of cash Total cash received

receipts Amount of discounts
in cheques
given and it will reduce
the cash received
Name of customers/other Total cash amounts
accounts received

Example related the cash receipts posted to cash receipts journal

 Jan 1 , invested cash RM 50,000 in the business as opening capital
 Jan 5, 2020 , Sold merchandise/ goods on cheque amounted RM 4,000 to
Syafiqah Enterprise.
 Jan 15, 2020, Received cash from Sauqi Enterprise.( refer sales journal )
 Jan 19,2020, bank loan received RM 20,000 from Kuwait Finance.
 Jan 29, 2020, Sold vehicle RM 10,500 and received cheque.

Date Accounts Credited Dr. Bank (RM) Dr.Cash (RM) Dr. Sales
Discounts (RM)
2020
Jan 1 Capital 50,000
5 Sales 4,000
15 Sauqi Enterprise 10,192 208
19 Loan- Kuwait Finance 20,000
29 Vehicle 10,500
31 Total 34,500 60,192 208

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PURCHASE JOURNAL
 Purchase journal is used only to record sales of merchandise on account
( Credit Purchases)

Format:

Date Account Credited Terms Dr. Purchases

Cr. Acc. Payable (RM)

Total

Date of Creditor’s Credit Terms Total purchase /

Purchase Name Designated Purchase Value
s
Example :-

 Jan 1 , 2020 Purchased merchandise / goods on account to Adli Enterprise RM 5,200

terms. 2/10, n/30.
 Jan 15 , 2020 Bought goods/merchandise on account to Nabila Sdn Bhd
RM 2,600 terms 1/15 , n/30.

Solution

Date Account Credited Terms Dr. Purchases

Cr. Acc. Payable (RM)
2020
Jan 1 Adli Enterprise 2/10,n/30 5,200
15 Nabila Sdn Bhd 1/15,n/30 2,600
31 Total 7,800

 Purchases of goods/merchandise for cash will be recorded in the cash payment

journal.
 Bought of assets in cash will be recorded in the cash payment journal.
 Purchase of assets or others than merchandise/goods for credit will be
recorded in the general journal.

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CASH PAYMENT JOURNAL

 Cash payments journal is used to record all payment by cash and cheque.
 Example of cash payments:
(i) cash purchases of merchandise/goods
(ii) payments of accounts payable( related to the Purchases Journal )
(iii) loan payment in cash
(iv) payment of expenses in cash.

Date Accounts Debited Cr. Bank (RM) Cr.Cash (RM) Cr. Purchase
Discounts (RM)

Total

Date of cash Total cash payment

Amount of discounts
payment in cheques
received and it will
reduce the cash
Name of creditors /other Total cash paid payment amounts
accounts

Example related the cash payment posted to cash receipts journal

 Jan 8, 2020 , Bought merchandise/ goods on cheque amounted RM 2,000 from
Isma Enterprise.
 Jan 10, 2020 Paid to Adli Enterprise.( refer purchase journal )
 Jan 23, 2020 Payment loan amounted RM1, 200 to Kuwait Finance by cheque.
 Jan 29, 2020 Paid utilities RM 2,500.
 Jan 31, 2020 Cash drawings for buy personal grocery RM 450.
Solution

Date Accounts Debited Cr. Bank (RM) Cr.Cash (RM) Cr. Purchase
Discounts (RM)
2020
Jan 8 Purchase 2,000
10 Adli Enterprise 5,096 104
23 Loan –Kuwait Finance 1,200
29 Utilities Expense 2,500
31 Drawings 450
31 Total 3,200 8,046 104

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3.3.3 GENERAL JOURNAL

 Record transactions which are not recorded in special journals , such as:
I. Sales returns and allowance
II. Purchases return and allowance
III. Drawings of goods/merchandise
IV. Purchase of assets on credit
V. Non-cash capital contribution.

Date Account Titles and Explanations Dr. Cr.

(RM) (RM)
Accounts Name XXX
Accounts Name XXX
( )

Examples related to general journal.

 Jan 4,2020 Bought furniture on credit RM 5,500 from Lazaro Furniture
 Jan 20,2020 Returned damaged merchandise to Nabila Sdn Bhd RM600.
 Jan 25,2020 Owner took the merchandise RM 500 for personal used.
 Jan 28,2020 Nazierah Sdn returned damaged merchandise RM 200.

Solution

Date Account Titles and Explanations Dr. Cr.

(RM) (RM)
2020 Furniture 5,500
Jan 4 Lazaro Furniture 5,500
( To record purchase furniture on credit )

20 Accounts Payable – Nabila Sdn Bhd 600

Purchase returned and allowance 600
(To record returned merchandise to supplier)

25 Drawings 500
Purchases 500
( To record took merchandise for own used)

28 Sales returned and allowance 200

Accounts Receivable-Nazierah Sdn Bhd 200
(To record returned merchandise from customer)

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Exercise
The following transaction a business traditional biscuits by Smartly Cookies Enterprise on
March 2020.

Date Transactions (1)

Journal
2020
March 1 Invested RM100, 000 for business capital into the bank.
2 Bought a vehicle worth RM50,000 on account from Toyota Sdn Bhd.

3 Purchased biscuits RM30,000 from Hani Enterprise and payments

are made by cheque.
4 Sold 100 boxes of cookies to Jasni Enterprise, RM 16,800 on account
with terms of 2/15, n / 30.
6 Sold 50 boxes of biscuits to Dani Enterprise, RM 10,200 on account
with terms 2/15, n/30
11 Bought biscuits of RM 52,600 from Doremi Enterprise, invoice dated
on March 11, Terms of 2/15, n/30.
12 Jasni returned damaged cookies worth RM800.

14 Jasni Enterprise settled the payment.

16 Doremi Enterprise issued credit memo RM 200, for returned of

faulty biscuits.
21 Settle all debt to Doremi Enterprise with cheque.

22 Purchased biscuits from Wali Enterprise on credit RM 41,625, with

terms 2/15, n / 30.
31 Paid salaries expense RM15,900 by cheque.

31 Total cash sales for cookies and biscuit amounted RM134 680.

REQUIRED:

1. Identify appropriate journal.

2. Record the business transactions of Smartly Cookies Enterprise into the appropriate
journals.

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(Sales Journal, Cash Receipts Journal , Purchase Journal , Cash Payment Journal and
General Journal )
Sales Journal

Date Account Debited Terms Dr. Acc. Receivable

Cr. Sales (RM)

Cash Receipts Journal

Date Accounts Credited Dr. Bank Dr.Cash Dr. Sales

(RM) (RM) Discounts (RM)

Purchases Journal

Date Account Credited Terms Dr. Purchases

Cr. Acc. Payable (RM)

Cash Payments Journal

Date Accounts Debited Cr. Bank Cr.Cash Cr. Purchase

(RM) (RM) Discounts (RM)

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General Journal

Date Account Titles and Explanations Dr. Cr.

(RM) (RM)

3.3.3 SUBSIDIARY LEDGER

 There are two type of subsidiary ledger
i. Subsidiary Ledger of Accounts Receivable -records all transactions in respect of
DEBTORS with their balance.
ii. Subsidiary Ledger of Accounts Payable - record all transactions in respect of
CREDITORS and with their balance.
 There are two forms of ledger accounts.
a) T- account
(Dr) Account’s Name (Cr)

Date Explanation RM Date Explanation RM

b) Columnar Ledger
Account’s Name

Date Explanation Ref Debit Credit Balance

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Based on exercise by Smartly Cookies Enterprise on March 2020, kindly posted

appropriate journal to:-
i) Subsidiary ledger of Accounts Receivable
ii) Subsidiary ledger of Accounts Payable.

Subsidiary ledger of Accounts Receivable

Date Explanation Ref Debit Credit Balance

Date Explanation Ref Debit Credit Balance

Subsidiary ledger of Accounts Payable

Date Explanation Ref Debit Credit Balance

Date Explanation Ref Debit Credit Balance

3.4 POSTING RECORD TO GENERAL LEDGER

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 General ledger Definition: The whole group of accounts controlled by a

business. It consists of all assets, liabilities the owner's equity.
 Posting is the process of transferring records from the journal into the appropriate
ledger.

Sales Journal
Sales, Accounts Receivable

Purchases Journal Purchases, Accounts Payable

Cash Receipts Journal Cash, Sales Discounts,

Capital, Sales, Account Receivable.

Cash Payments Journal Cash, Bank, Purchase Discounts, Capital,

Purchases, Accounts Payable. Salary
expenses

General Journal Vehicle, Notes Payable, Sales Returns and

Allowances, Purchase returns and Allowances
, Accounts Receivable , Accounts Payable.

Based on the exercise Smartly Cookies Enterprise on March 2020, specify the
general ledger accounts to be prepared:-

1. Posted to the accounts receivable control account

Accounts Receivable Control Account

Date Explanation Ref Debit Credit Balance

2. Posted to the accounts payable control account.

Accounts Payable Control Account

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Date Explanation Ref Debit Credit Balance

3. Posted to others accounts

Bank

Date Explanation Ref Debit Credit Balance

Cash

Date Explanation Ref Debit Credit Balance

Purchase Discount

Date Explanation Ref Debit Credit Balance

Sales Discount

Date Explanation Ref Debit Credit Balance

Sales

Date Explanation Ref Debit Credit Balance

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Purchases

Date Explanation Ref Debit Credit Balance

Capital

Date Explanation Ref Debit Credit Balance

Salary Expense

Date Explanation Ref Debit Credit Balance

Vehicle

Date Explanation Ref Debit Credit Balance

Other Payable – Toyota Sdn Bhd

Date Explanation Ref Debit Credit Balance

Sales Returns and Allowances

Date Explanation Ref Debit Credit Balance

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PurchaseReturns and Allowances

Date Explanation Ref Debit Credit Balance

3.5 PREPARATION OF TRIAL BALANCE

 Trial Balance - list of all the general ledger account balances.

 The TOTAL on the debit side of the trial balance must be equal to the TOTAL of
credit side.
 Trial Balance is prepared to confirm/verified the balance of total debits and the
total credits at the end of an accounting period.
 In conclusion, the Trial Balance is a summary of account balances of the ledger.

Format
Company’s Name
Trial Balance
As at 31 January 2020

Account’s Debit (RM) Credit (RM)

Accounts Assets XXX
Accounts Expenses XXX
Accounts Liabilities XXX
Accounts Owner’s Equity XXX
Accounts Revenue XXX
TOTAL XXXX XXXX

Based on exercise by Smartly Cookies Enterprise on March 2020, kindly prepare a

Trial Balance as at 31March 2020.

Smartly Cookies Enterprise

Trial Balance
As at 31 March 2020

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Account’s Debit (RM) Credit (RM)

TOTAL

Additional information:
Ending Inventory as at 31 March 2017, RM 20,000
3.6 PREPARING FINANCIAL STATEMENT FOR MERCHANDISING AND SERVICE ENTITIES

i) Statement of Profit and Loss

ii) Statement of Owner’s Equity
iii) Statement of Financial Position

Definitions of merchandising and services business

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Merchandising Business Services Entities Business

 sell goods trade  sell services
 the revenue is SALES  revenue is SERVICE REVENUE
 with cost of goods sold  no cost of goods sold
 income statement with ‘multiple step’  income statement with ‘single step’
form form

Format Statement Profit and Loss for a Merchandising Business

Company’s Name
Statement of Profit and Loss
For the year ended 31 December 20XX

RM RM RM
Sales XXX

Less: Sales discount (XX)

Sales returns and allowance (XX)
Net Sales XXX
LESS: COST OF GOODS SOLD
Beginning inventory XX
Purchases XXX
Less: Purchases discount (XX)
Purchases returns and allowance (XX)
Net Purchases XXX
Add: Freight In XX
Insurance of purchase XX
Import Duty XX
Cost Of Purchase XXX
COST OF GOODS AVAILABLE FOR SALE XXXX
Less : Ending Inventory (XX)
COST OF GOODS SOLD (XXX)
GROSS PROFIT / LOSS XXX
Add : Other Revenue
Dividend received XX
Rental incomes XX
Commissions received XX XXX

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Less: Operating Expenses

Salaries expense XX
Rental expense XX
Depreciation expense XX
Interest expense XX
Stationary expense XX
Utilities expense XX
(XXX)
Insurance expense XX

NET PROFIT / NET LOSS XXX

Format Statement Profit and Loss for a Service Entities Business

Company’s Name
Statement of Profit and Loss
For the year ended 31 December 20XX

RM RM
REVENUES:
Service Revenue XXX
Interest Revenue XXX
XXXX
LESS: EXPENSES
Salaries expense XX
Rental expense XX
Depreciation expense XX
Interest expense XX
Stationary expense XX
Utilities expense XX
(XX)
Insurance expense XX

NET PROFIT / NET LOSS XXX

Based on exercise by Smartly Cookies Enterprise on March 2020, kindly prepare

Statement of Profit or Loss for the year ended 31March 2020.

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RM RM RM

Format Statement of Owner’s Equity

Company’s Name
Statement of Profit and Loss
For the year ended 31 December 20XX

RM

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Beginning capital XXX

Add: Additional capital XX

XXX
Add : Net Profit @ Less: Net Loss XX / (XX)

XXX
Less: Drawings (XX)

Ending capital XXX

Based on exercise by Smartly Cookies Enterprise on March 2020, kindly

prepare Statement of Owner’s Equity as at 31 March 2020.

RM

Format Statement of Financial Position

Company’s Name
Statement of Financial Position
As at 31 December 20XX

RM RM RM
ASSETS

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Non-Current Assets

Properties XXX
Office equipment XXX
Less: Accumulated depreciation (XX) XXX
Office equipment
Vehicle XXX
Less: Accumulated depreciation Vehicle (XX) XXX

Total Non-Current Assets XXX

Current Assets
Cash XXX
Bank XXX
Accounts Receivable XXX
Ending Inventory XXX
Total Current Assets XXX
TOTAL ASSET XXXX

OWNER’S EQUITY & LIABILITIES

Owner’s Equity:

Beginning capital XXX

+ Additional capital XXX

+ Net Profit / - Net Loss XXX

- Drawings (XXX)

Ending Capital XXX

RM RM RM

Liabilities:

Non-Current Liabilities:

Bond payable XXX

Long term loan XXX

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Long term notes payable XXX XXX

Current Liabilities:

Accounts payable XXX

Short term loan XXX XXX

Total Liabilities XXX

TOTAL OWNER’S EQUITY & LIABILITIES XXXX

Based on exercise by Smartly Cookies Enterprise on March 2020, kindly prepare

Statement of Financial Position for the year ended 31March 2020.

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RM RM RM

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EXERCISES

Question 1

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a) Explain the accounting cycle for a business.

b) Describe the purpose of account control and what is the relationship to the
subsidiary ledger. List two common subsidiary ledger provided by trading
business.
c) For each of the transactions below, students are required to make double entries
for debit and credit.
Example:

Bought RM 4,000 worth of merchandise on credit from Syarikat Mulia.

Dt. Purchases 4,000

Ct. Accounts Payable – Syarikat Mulia 4,000

March 3 Sold of goods at a price of RM 4,500 on credit to Syarikat

Tam.

5 Bough goods at a price of RM 3,800 on credit from

Syarikat Berjaya.

6 Returned of the purchase of RM 200 to Syarikat Berjaya.

8 Bough furnitures from Hias Bestari Ent. worth RM 800 in

cash.

12 Received damaged goods of RM 150 from Syarikat Tam.

18 Sold goods at a price of RM 3,000 on credit to Syarikat

Milikku.

25 Took goods for personal use worth RM 100.

27 Received payment of RM 6,000 from the Syarikat Zami by

cheque.

Question 2

The followings are some transactions that involved Zizi Book Company Sdn. Bhd.:-

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a) Paid amount due to supplier.

b) Customers returned the damaged book.
c) Customers settled debts.
d) Sold the vehicle in cash.
e) Sold books on credit.
f) Sell goods in cash.
g) Zizi brought in cash into the company.
h) Purchased of goods on credit.
i) Bought Office equipment on credit

Required:

For each of the above transactions, state the relevant and appropriate journals.

Question 3

During the month of December 2019, Thaqifah Enterprise has done all the following
transactions:

Dec 1 Sold of goods to Kedai Lee amounting RM5, 000 provided 2/15, n/30.

4 Sold goods worth RM9, 000 in cash.

7 Received cheques for payment of debt settlement after discount from

Syarikat Lee.

12 Sold of goods to Lin Enterprise of RM2, 500 provided 1/10, n/30.

17 Sold of goods to Kedai Kim amounting RM3, 400 provided 2/15, n/30.

19 Cash taken worth RM300 for personal use.

22 Received cheque for full payment from Kedai Kim for transactions on
December 17th 2019.

28 Received December rental amounting to RM2, 000 in cash.

REQUIRED:

Record the relevant transaction to the sales journal and the cash receipts journal.

Question 4

Below is the information about Perniagaan ISMI for March 2020:

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Balance as at March 1st, 2020 to:

Subsidiary Ledger Accounts Receivable:

Pikir Sdn. Bhd. RM 2,000

Kilang Mesra RM 1,500

General Ledger:

Accounts Receivable Control Accounts RM 3,500

Transactions during the month of March 2020:

Date Transactions

Mac 2 Brought the furniture in the business worth RM 20,000 and cash of RM
10,000.

4 Sold goods worth RM 4,000 to Pikir Sdn. Bhd. (PSB) with Invoice no 007
provided 2/10, n / 30.

11 Bought RM200 of goods by cheque.

14 Received cheque as payment from PSB for transactions on March 4th,

2020.

23 Sold goods of RM1,000 in cash.

25 Bought RM150 goods in cash from Perniagaan Jejak Waja.

REQUIRED:

a) Record all the transactions in the sales journal and the cash receipts journal.
b) Prepare control accounts receivables and the accounts receivable subsidiary
ledger in the form of a column.

Question 5

Throughout the month of December 2019, Thaqifa Electrical Shop had performed all the
following transactions:

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Dec 1 Brought vehicle worth RM10,000 and RM5,000 cash into the business.

2 Bought goods from Kedai Lee worth RM5,000 with terms provided 2/15, n/30.

3 Paid rental for December amounting RM2,000 in cash.

4 Sold goods worth RM9,000 in cash.

7 Paid all debts to Kedai Lee after discounts.

12 Sold goods to Lin Enterprise of RM2,500 with terms 1/10, n/30.

15 Issued a credit memo to Lin Enterprise of RM100 for returned goods.

17 Sold goods to Kedai Kim worth RM3,400 with terms provided 2/15, n/30.

19 Lin Enterprise settled the debts of RM 1,000 by cheque.

20 Purchased goods from Rahat stores worth RM5,000 with terms 2/10, n/30.

22 Issued cheque worth RM 300 for the owner usage.

25 Paid by cheque for buying furniture amounting RM3,000.

REQUIRED:

Record the corresponding transaction to the sales journal, purchases journal, a cash
receipts journal, cash payments journal and the general journal.

Question 6

Below is the information about Perniagaan Rahat for the month of October 2019:

Balance as at October 1st, 2019 to:

Subsidiary Ledger Accounts Payable:

Kedai Loo RM 1, 500

Guar Bhd RM 2, 500

General Ledger:

Accounts Payable Control Accounts RM 4 000

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Transactions during the month of October 2019:

Date Transactions

Oct 2 Brought in vehicle into the business worth RM20,000 and RM10,000 cash.

4 Bought goods from Guar Bhd amounting RM1,500 on credit with terms of
2/10,n/30.

8 Bought goods from Kedai Loo of RM8,000 on credit terms 2/15, n/30.

11 Settled debts for October 4th transactions to Guar Bhd including transport
charges of RM100 by cheque.
14
Bought more inventories from Kedai Loo with the same credit term worth
RM 2,000.
22
Paid half of the debt for the October 8th transactions by cheque.
28
Paid utility expenses worth RM300 in cash.
30
Cash withdrawals of RM250 for personal use.

REQUIRED:
a) Record all the transactions that are appropriate to the purchases journal and
cash payments journal.
b) Prepare accounts payable control account and subsidiary ledger accounts
payable in the form of a column.

Question 7

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Below is the information related to Perniagaan Soleh in March 2020:

Balance March 1st, 2020 to:

Subsidiary Ledger Accounts Receivable:

Maulana Sdn. Bhd. RM 2,300

Kilang Mesra RM 1,500

General Ledger:

Accounts Receivable Control Accounts RM 3,800

Subsidiary Ledger Accounts Payable:

Kedai Istiqamah RM 1, 500

Mercu Bhd RM 2, 500

General Ledger:

Accounts Payable Control Accounts RM 4 000

Transactions during the month of March 2020:

Date Transactions

Mar 2 Bring in furniture into the business worth RM 20,000 and cash
amounting to RM 10,000.

4 Sold goods of RM 4,000 to Maulana Sdn. Bhd. (MSB) with Invoices no.
007 provided terms of 2/10, n / 30.

8 Purchased goods from Mercu Bhd worth RM 1,500 with terms 2/10, n /
30.

10 Returned goods to Mercu Bhd of RM200 for business on March 8th

which did not meet the required specifications.

11 Sold goods to Maulana Sdn Bhd (MSB) of RM 750 with terms 2/10, n /
30.

14 Bought goods from Kedai Istiqamah of RM 8,000 on credit terms 2/15,

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n / 30.

19 Settled all debts to Mercu Bhd in cash.

22 Sold goods to Kilang Mesra amounting RM3,000.

25 Purchased of office equipment Syarikat Acer worth RM4,500.

30 Bought goods from Kedai Istiqamah worth RM2,000 with terms 2/15,
n/30.

REQUIRED:

a) Record all the transactions that are appropriate to the sales journal, purchases
journal, a cash receipts journal, cash payments journal and the general journal.

b) Prepare accounts receivables control account and subsidiary ledger for accounts
receivable in the form of column.

c) Prepare accounts payable control account and subsidiary ledger for accounts
payable in the form of column.

Question 8

Mr. Hanip started his business on 1st July 2019. The following lists are the July
business transactions.

Date Transactions

July 1 Start a business with RM25, 000 cash, vehicles amounting to RM50,000
and office equipment worth RM10,000 as capital.

3 Bought merchandise from Pearl Bhd RM7,000 with credit terms of 2/15,
n / 30.

7 Sold merchandise on credit to Cinta Enterprise amounting RM2,200.

13 Paid debt to Pearl Bhd.

22 Bought office equipment from Syarikat Maju amounting RM4,000 cash.

30 Sold merchandise to Muthu for cash of RM800.

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REQUIRED :

(i) Record all transactions into the appropriate journals.

(ii) Prepare control accounts receivable and accounts receivable subsidiary ledger.

Question 9

The followings are a business transactions of Perniagaan Awan Zakir on April 2020.

Date Transactions

Apr 1 Start business with cash of RM35,000 and vehicles worth RM60,800 as
capital.

3 Bought merchandise worth RM7,800 from Perniagaan Karisma (PK) with

terms of 2/10, n/30.

8 Sold merchandise on of RM4,500 on credit to Perniagaan Madani with

terms of 2/15, n/60.

12 Paid all debts to Perniagaan Karisma.

20 Bought merchandise by cash amounting RM3,200 from Perniagaan

Luhur.

28 Paid salary of employees amounting RM2,230 and receive payments for

all the outstanding amount from Perniagaan Madani.

REQUIRED :

(i) Record all transactions into the appropriate journals.

(ii) Prepare control accounts receivable and accounts receivable subsidiary ledger.

Question 10

The followings are the business transactions of Perniagaan Zuhal for the month of
March 2020

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Date Transactions

Mar 2 Started a business with cash of RM30,000 and RM7,000 furniture.

4 Received RM20,000 bank loan to increase business capital.

7 Bought RM12,000 of goods on credit from Jupiter Sdn. Bhd. with the
terms 3/10, n/30.

12 Sold items of RM500 on credit to Perniagaan Sinar.

17 Settled half of debt from Musytari Sdn Bhd with a cheque.

23 Paid utility expenses RM40.

REQUIRED :

Record all the transactions in the purchase journal, sales journal, a cash receipts
journal, cash payments journal and the general journal.

Question 11

Perniagaan Nikki (PN) is selling and distributing kitchenware in Sungai Petani. The
following lists are the transactions that occurred in March 2020.

Date Transactions

Mar 1 Paid RM8,400 for office buildings insurance up to 31 st March 2020.

6 Cash sales of RM6,500.

9 Bought merchandise amounting RM5,400 from Sejati Enterprise.

10 Sold merchandise to Peralatan Dapur Saleha amounting RM3,500 with

credit terms of 2/10 , n/30.

14 Received order amounting RM21,300 of electrical goods for the Silver

Jubilee celebration of Sungai Petani Council which will be held in June
2020 at Padang Mahkota.

19 Received payment from Peralatan Dapur Saleha for business transaction

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on March 10th, 2020.

22 Credit sales to Hong Dong Enterprise for RM8,500.

24 Received deposit of RM1,000 from Puan Indah for groceries set to be

delivered to her new home in May 2020.

25 Mr. Nikki, Nikki Business owner have taken a RM650 kitchen utensils and
gave to his mother as gift in conjunction with Mother's Day this year.

26 Hong Dong Enterprise returned the kitchenware worth RM1,550 as

damaged.

27 Paid RM9,500 to Sejati Enterprise.

REQUIRED :

Record all the business transactions in March in the purchase journal, sales journal, a
cash receipts journal, cash payments journal and the general journal.

Question 12

Thaqifah Haifa starts the business selling electrical appliances such as television, radio,
minicompo and video recorder on January 1 st, 2020. All the following transactions had
occurred on January 2020:

Jan 1 Banked-in RM10,000 as start-up capital for the business to the bank.

4 Bought furniture worth RM1,500 from Cahaya Bhd on credit.

5 Bought electrical goods on credit from Maju Jaya Bhd valued at RM30,500
with terms 2/15, n / 60.

10 Returned goods worth RM500 to Maju Jaya Bhd for sending the wrong
items.

13 Sold electrical goods worth RM5,300 in cash.

14 Sold RM28,000 of electrical goods on credit to Chong Studio with credit

terms of 5/10, n / 30.

16 Pay 1/3 of the total debt to Maju Jaya Bhd with cheque.

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17 Chong Studio returned damaged goods worth RM400.

18 Bought electrical goods worth RM3,400 on cash.

19 Took a television worth RM1,600 from the store for family use.

23 Chong Studio settled some of the debts worth RM10,000 by cheque.

29 Paid employee salaries amounting RM500 cash.

REQUIRED:

a) Record all the transactions above into the appropriate journals.

b) Post the related subsidiary ledger.
c) Prepare a trial balance on 31st January 2020.

Question 13

Along Sdn Bhd (ASB) commenced a business selling carpets and furnitures on 1st July
2019. The following transactions took place in July.

July 1 Invest in business with cash of RM500,000 and RM50,000 vehicle.

3 Bought shop fittings from Lan Sdn Bhd for RM25,000 in cash.

9 Bought carpets and furniture valued at RM45,000 and RM82,000 on

conditional credit terms for 2/15, n / 60 from Han Seng Sdn Bhd.

10 Sold two units carpets worth RM7,500 per unit in cash to Intan Indah
Sdn Bhd.

15 Gave a debit note to Han Seng Sdn Bhd on the returned of damaged
furniture worth RM12,000.

19 Sold four units of furniture amounting RM14,500 per unit to Perniagaan

Endah Consultant where two units were paid in cash while two units on
credit.
23 Bought 10 units of carpets worth RM2,000 per unit. Of these, six units
were purchased in cash and the remainder on credit with terms of 2/10,
n / 60 from Husin Sdn Bhd.

24 Telephone and electricity bills paid RM1,200.

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25 Paid wages above the wage rate for two workers amounting RM35 per
day (assuming the number of working days is 20 days).
26 Sold three units of furniture on credit to Architects Sdn Bhd for
RM45,000.

27 Send a credit note to the Alam Arkitek Sdn Bhd for the returned of
RM13,200 furniture.

28 Settle debts to Husin Sdn Bhd snd paid half (1/2) of debt to Han Seng
Sdn Bhd.

29 Perniagaan Endah Konsultan Sdn Bhd settled their debts.

REQUIRED :

(i) Record the transactions in journal entries accordingly.

(ii) Transfer the record to the general ledger and related subsidiary ledgers.
(iii) Prepare a trial balance as at July 31st, 2019.

Question 14

The followings are the account balances of Perniagaan Kristal on December 31st, 2019.

RM RM

Cash 14,000 Furniture 15,000

Accounts Receivables 5,000 ADV – furniture 1,500

Accounts Payables 6,000 Inventories 6,000

Equipment 3,000 Capital 35,500

The following information was obtained during the month of January:

Date Transactions

Jan 1 Bought additional furniture for businesses worth RM3,000 in cash from

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Julisa Sdn. Bhd.

5 Sold merchandise amounting RM20,000 to Opel Company with terms of

2/15, n/30.

9 Purchased merchandise from Granite Company valued at RM18,000 with

terms of 2/10, n / 30.

10 Opel company returned defects merchandise valued at RM1,000.

15 Paid half of the debt for the purchase of Granite Company bought on
January 9.

17 Opel company settled all its debts.

23 Cash withdraw to pay for traffic summonses of RM200 for owner's wife.

REQUIRED :

(i) Record all transactions in the sales journal, purchases journal, a cash receipts
journal, cash payments journal and the general journal.
(ii) Prepare a trial balance as at 31st January 2020

Question 15

Perniagaan Tukang Bina (PTB) is handling the business of selling household

appliances. The list is an excerpt of PTB account balance as at July 1 st, 2019.

Accounts RM

Cash 18,000

Accounts Receivable – Syarikat Tukul Sdn. Bhd 9,500

Office equipment 11,500

Accounts Payable – Perniagaan Jati 3,000

Capital 30,000

Loan 6,000

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The following transactions occurred in July 2019.

Date Transactions

July 2 Sold merchandise worth RM12,000 to Perniagaan Belati with payment

terms of 2/10, n / 30.

4 Tukul Company Sdn. Bhd settled payments for all their debts.

6 Purchased merchandise on credit from Syarikat Mukmin worth RM8,000

with payment terms of 2/10, n / 30.

9 Paid transportation costs RM700 for sales on July 2nd, 2019.

10 Paid all the debts to Perniagaan Jati.

11 Received payment from Perniagaan Belati for sales on July 2 nd, 2019.

13 Bought RM3,800 for office furniture on credit from D'Cantek Furniture

stores.

15 Returned damaged merchandise worth RM900 purchased from the Syarikat

Mukmin.

17 Settled the debts to the Syarikat Mukmin.

20 Bought merchandise amounting RM5,400 in cash from Maju Indah

supermarket.

23 Sold merchandise worth RM3,500 to Kedai Runcit Salina.

25 Paid salaries of RM1,800.

27 Buought merchandise from Perniagaan Berkat worth RM9,500.

30 Paid shop rental monthly amounting RM1,500 for July 2019.

REQUIRED:

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(i) Record all transactions for the month of July 2019 in the sales journal, purchases
journal, a cash receipts journal, cash payments journal and the general journal
(please ignore description).
(ii) Prepare a trial balance at July 31, 2019.

Question 16

The following lists are part of the account balances for Perniagaan Mesra (PM) as at
July 1st, 2019.

Account RM

Cash 16,000

Accounts Receivables – Makmor Sdn Bhd 18,500

Accounts Payables – Aminah Enterprise 4,870

Capital 29,630

The lists below are the July 2019 monthly transactions occurred for PM.

Date Transactions

July 2 Makmor Sdn Bhd settled all their debts.

3 Paid all the outstanding balance to Aminah Enterprise.

4 Purchased merchandise worth RM4,000 on credit from Segar Sdn Bhd

with terms of 3/15, n/30.

5 Owners brought in furniture worth RM15,000 for business use.

7 Sold RM12,000 of merchandise to Amzar Sdn Bhd on credit with terms of

2/10, n/30. The cost of merchandise is RM5,500.

9 Paid transportation costs of RM570 for sales on July 7th.

11 Sold of goods for cash RM6,000.

12 Returned of goods purchased from Segar Sdn Bhd's worth RM700.

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Date Transactions

14 Settled all debts of Segar Sdn Bhd.

16 Receive all payments from Amzar Sdn Bhd.

18 Bought goods worth RM7,500 on credit from Adnan Enterprise.

20 Paid employees salary and bonus of RM6,400.

23 Sold goods to Sulhi Enterprise amounting RM4,800.

26 Paid all debts to Adnan Enterprise and receive a discount of RM420.

28 Bought merchandise on credit from Perniagaan Syafiq worth RM5,400.

29 Paid office rent of RM1,200 for August 2019.

REQUIRED :

(i) Record all transactions for the month of July 2019 in the sales journal, purchases
journal, a cash receipts journal, cash payments journal and the general journal
(please ignore description).
(ii) Prepare a trial balance at July 31, 2019.

Question 17

Abu started his business selling electrical products such as television, radio, minicompo
and video recorder on january 1st, 2020. All the following transactions had occurred in
January 2020.

Jan. Submit of RM10,000 as business start-up capital to the bank.

1
4 Bought office furniture from Cahaya Bhd worth RM1,500 in cash.

5 Bought electrical goods on credit from Maju Jaya Bhd valued at RM30,500
with terms of 2/15, n / 60.

10 Returned goods worth RM500 to Maju Jaya Bhd for sending the wrong
goods

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13 Sold electrical goods worth RM5,300 in cash.

14 Sold RM28,000 of electrical goods on credit to Chong Studio with terms of

5/10, n / 30.

16 Pay one-third (1/3) of the total debt to Maju Jaya Bhd.

17 Chong Studio return goods worth RM400 found to be damaged.

18 Bought electrical goods worth RM3,400 in cash.

19 Took a television worth RM1,600 from the store for family use.

20 Sold electrical goods on credit to RM9,900 Strategies Ltd. With terms of

2/10, n / 30.

24 Bought electrical goods on credit from Sentosa Bhd valued at RM5,600 with
terms of 2/10, n / 30.

26 Jitu Bhd settled all its debts.

29 Pay the salaries of employees with RM500 cash.

REQUIRED :

(i) Record the above transactions in the Purchase Journal, Sales Journal, Cash
Receipts Journal, Cash Payments Journal and General Journal.

(ii) Prepare control account for Account Receivable and Account Payable.

(iii) Prepare a trial balance at Jan 31, 2020.

Question 18

The following accounts balances are taken from the accounting book of FAFI

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Pvt. Ltd. as at 30 November 2019.

Particulars RM

Motor vehicles 40,000

Fixtures and fittings 30,000

Cash in hand 10,000

Cash at bank 50,000

Account receivable - Imad 20,000

Accounts payable – Sahaba Enterprise 15,000

During December 2019, the following transactions occurred;

Date Particulars

Dec 1 Purchased new vehicle costing RM25,000. 90% of the price is paid by
cheque and the remainder by cash.

3 Paid telephone bill of RM150, water bill RM100 and electricity bill of
RM200 with cash.

9 Sold goods on credit (2/15,n/30) of RM7,000 to Imad.

10 Paid to Sahaba Enterprise by cash of RM3,000 and received discount of

10%.

15 Imad returned low quality goods worth RM700.

17 Cash sales of RM300.

23 Paid rent of his house children of RM700 with company cheque.

29 Imad paid half of the debt by cheque.

31 Paid Sahaba Enterprise debt of RM5,000 by cheque.

31 Purchased goods on credit (2/10,n/30) of RM6,000 from Kayangan Sdn

Bhd.

Required :

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I. Record the transactions into special journal and general journal.

II. Posted the record to the general ledger and related subsidiary ledgers
III. Prepare the trial balance as at 31 December 2019.

Question 19

The following list is the account balance extracted from Aqil Qisya Book of Accounts on
December 31st, 2019.

Account RM
Capital 17,075
Cash in hand 629
Inventories as at January 1, 2019 500
Purchases 3,500
Sales 6,000
Salary Expense 1,800
Sales Returned and Allowance 25
Purchase Returned and Allowance 20
Sales Discount 100
Purchases Discount 80
Rental expense 1,138
Printing and stationery expenses 162
Carriage inward 120
Groceries expense 812
Accounts Receivable 2,050
Accounts Payable 1,080
Office furniture 2,840
Van 3,000
Cash at bank 7,579
Inventories at December 31st, 2019 700

REQUIRED :

a) Prepare a trial balance as at December 31st, 2019.

b) Prepare a Statement of Profit or Loss for the year ended December 31 st, 2019.

Question 20

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The following information are quoted from the book of Perniagaan Kamal at 31 st
December 2019.

Accounts RM

Capital 17,075

Cash in hand 629

Inventoriy as at 1st Jan 2019 500

Purchases 3,500

Sales 6,000

Salary expenses 1,800

Sales return 25

Purchases return 20

Sales discount 100

Purchases discount 80

Rental expenses 1,138

Printing and stationery expenses 162

Carriage inwards 120

General expenses 812

Accounts receivable 2,050

Accounts Payable 1,080

Office furniture 2,840

Vans 3,000

Cash at bank 7,579

Inventory as at 31st December 2019 700

REQUIRED:

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a) Prepare a trial balance at December 31st, 2019.

b) Prepare a Statement of Profit or Loss for the year ended December 31 st, 2019.
c) Prepare a Statement of owner's equity as at December 31 st, 2019.
d) Statement of Financial Position as at December 31 st, 2019

Question 21

Harun has a bookstore named Perniagaan Harun Sdn. Bhd. Here is the trial balance for
the month ended March 31st, 2020.

Accounts Debit Credit

RM RM
Accounts payable 2,360

Accounts receivable 3,500

Drawings 600

Carriage inwards 60

Buildings 50,000

General expenses 560

Electric expenses 400

Bad debt expenses 180

Buildings depreciation expenses 450

Vehicle depreciation expenses 340

Purchases 5,800

Purchases discount 50

Sales discount 40

Insurance 200

Inventory as at 1st April 2019 1,000

Sales 12,290

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Accounts Debit Credit

RM RM
Vehicles 34,000

Capital 72,000

Provision for Doubtful Debts  300

Loan – Azmir 20,000

Purchases return 200

Sales return 250

Accumulated depreciation – Buildings 1,000

Accumulated depreciation – Vehicles 680

Cash 11,500

189,880 189,880

Additional information:

1. Inventory as at 31st March 2020 is RM1,500.

REQUIRED:

a) Prepare a Statement of Profit or Loss for the year ended March 31 st, 2020.
b) Prepare the Statement of Financial Position as at March 31 st, 2020.

Question 22

Haaraas own a bookstore named Perniagaan Hebat Sdn. Bhd. The following is the trial
balance for the month ended March 31st, 2020.

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Debit Credit
Account
RM RM
Accounts payable 2,360
Accounts receivable 3,500
Drawings 600
Carriage inward 60
Buildings 50,000
General expenses 560
Utility expense 400
Bad debt expense 180
Buildings depreciation expense 450
Vehicles depreciation expense 340
Purchases 5,800
Purchases discount 50
Sales discount 40
Insurance 200
Inventories as at April 1st, 2019 1,000
Sales 12,290
Vehicles 34,000
Capital 72,000
Allowance for doubtful debts  300
Loans – Azmir 20,000
Purchases returns and Allowance 200
Sales returns and Allowance 250
Accumulated depreciation - 1,000
Buildings
Accumulated depreciation - 680
Vehicles
Cash 11,500
189,880 189,880

Additional information:

2. Inventories as at March 31st, 2019 was RM1,500.

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3. Loans made by Azmir on July 1st, 2019 must be settled before June 30th, 2020.

REQUIRED:

a) Prepare a Statement for Profit or Loss the year ended March 31 st, 2020.

b) Prepare the Statement for Financial Position as at March 31 st, 2020.

Question 23

The following information is derived from Perniagaan Vanila Hazel (PVH) on 30 th June
2019.

Account RM
Purchases 234,670
Sales 398,780
Opening Inventories 32,890
Purchase return 1,280
Return on sales 1,870
Carriage outwards 1,670
Carriage inwards 1,327
Sales discount 1,450
Purchase discount 1,760
Salary expense 27,825
Customs duties 1,124
Insurance expenses 3,450
Rental income 6,230
Interest expense 1,200
Maintenance expense 8,165
Drawings 709
Cash 14,930
Accounts Receivable 13,450
Accounts Payable 18,380
Long terms loans 20,000
Capital 148,000
Vehicles 160,800
Office equipment 88,900

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Additional information: Closing Inventories amounting RM31,890.

REQUIRED :

a) Prepare a Statement for Profit or Loss the year ended 30 th June 2019.

b) Prepare a Statement of Financial Position as at 30 th June 2019.

Question 24

The lists are Mentari Business Trial Balance at the end of the accounting period.

Perniagaan Mentari
Trial Balance
As at December 31st, 2019

Account Debit (RM) Credit (RM)

Bank 26,800
Inventories as at 1st January 2019 8,000
Purchases 58,500
Accounts payable 5,000
Accounts receivable 7,000
Buildings 100,000
Accumulated Depreciation – Buildings 3,000
Sales 95,300
Salary expense 30,000
Advertisement expense 10,000
Insurance expense 12,000
Utility expense 24,000
Long term loans 100,000
Capital 78,000
Drawings 5,000
TOTAL 281,300 281,300

Additional information:
Closing Inventories as at 31st December 2019 is RM15,000.

REQUIRED:

a) Prepare a Statement for Profit or Loss for the year ended 31st December 2019.

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b) Prepare a Statement for Financial Position as at 31st December 2019.

Question 25

The following is extracted from the Trial Balance of Perniagaan Solekan Uwhite (PSU)
on 30th June 2019.
RM RM
(Debit) (Credit)
Cash 64,000
Accounts Receivable 10,300
Accounts Payable 9,000
Insurance expense 2,200
Advertisement expense 1,400
Salary Expense 7,100
Utility Expense 300
Supply expenses 2,300
Depreciation expense 6,000
Interest expense 4,000
Land 45,000
Buildings 80,000
Machines and Equipment 69,000
Accumulated depreciation -Machine and Equipment 14,000
Unearned Revenue Income receivables 6,000
Rental Income 10,200
Capital 74,100
Loan 90,000
Drawings 400
Revenue Income 88,700
292,000 292,000

REQUIRED:

a) Prepare a Statement for Profit or Loss the year ended 30 th June 2019.

b) Prepare a Statement for Financial Position as at 30 th June 2019.

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