BKAL 1013 Business Accounting

1. The process of recording transactions has become more efficient because A. B. C. D. 2. fewer events can be quantified in financial terms. computers are used in processing business events. more people have been hired to record business transactions. business events are recorded only at the end of the year.

The primary ob ective of financial accounting is!

A. To serve the decision"ma#ing needs of internal users. B. To provide financial statements to help e$ternal users analy%e an organi%ation&s activities. C. To monitor and control company activities. D. To provide information on both the costs and benefits of loo#ing after products and services. '. The area of accounting aimed at serving the decision ma#ing needs of internal users is! A. (inancial accounting. C. *$ternal auditing. B. D. )anagerial accounting. +ecurity Commision reporting.

,. -hich of the following descriptions about a corporation is most appropriate! A. .s a legal entity separate and distinct from its owners. B. .s controlled by the )A+B. C. /as shareholders who have unlimited liability for the acts of the corporation. D. .s the same as a limited liability partnership. 0. The accounting guideline that requires financial statement information to be supported by independent1 unbiased evidence other than someone&s belief or opinion is the! A. Business entity principle. C. 2oing"concern principle. 4. B. )onetary unit principle. D. 3b ectivity principle.

The private board that currently has the authority to establish generally accepted accounting principles is the! A. )alaysian .nstitute of Certified 5ublic Accountants 6).C5A7. B. )alaysian Accounting +tandards Board 6)A+B7. C. )alaysian .nstitute of Accountants 6).A7.
1

BKAL 1013 Business Accounting

D. Chartered .nstitute of )anagement Accountants 6C.)A7. 8. The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold1 unless evidence shows that it will not continue1 is the! A. 2oing"concern principle. C. 3b ectivity principle. B. Business entity principle. D. Cost principle.

9. The broad principles that require us to do ad usting entry at the end of accounting period are! A. B. C. D. :. historical cost principle and matching principle revenue recognition principle and matching principle full disclosure principle and revenue recognition principle matching principle and full disclosure principle

According to generally accepted accounting principles1 a company&s balance sheet should show the company&s assets at!

A. The cash equivalent value of what was given up. B. The current mar#et value of the asset received in all cases. C. The cash paid only1 even if something other than cash was given in the e$change. D. The best estimate of a certified internal auditor. 1;. Creditors& claims on the assets of a company are called! A. *$penses. C. *quity. B. <evenues. D. =iabilities.

11. .f the liabilities of a business increased by <)801;;; during a period of time and the owner&s equity in the business decreased by <)';1;;; during the same period1 the assets of the business must have! A. Decreased by <)1;01;;;. C. .ncreased by <)';1;;;. B. Decreased by <),01;;;. D. .ncreased by <),01;;;.

12. The statement of owner&s equity! A. <eports how equity changes at a point in time. B. <eports how equity changes over a period of time. C. <eports on cash flows for operating1 financing1 and investing activities over a period of time.
2

BKAL 1013 Business Accounting

D. <eports on cash flows for operating1 financing1 and investing activities at a point in time. 1'. A credit entry to a general ournal may indicate a6n7! A. B. C. D. decrease in both assets and liabilities. decrease in assets and increase in liabilities. increase in both assets and liabilities. increase in assets and decrease in liabilities.

1,. The normal balance of any account is consistent with the A. B. C. D. left side. right side. side which increases that account. side which decreases that account.

10. The double"entry system requires that each transaction must be recorded A. B. C. D. in at least two different accounts. in two sets of boo#s. in a ournal and in a ledger. first as a revenue and then as an e$pense.

14. An accountant has debited an asset account for <)110;; and credited a liability account for <)0;;. -hat can be done to complete the recording of the transaction> A. ?othing further must be done. B. Debit an owner&s equity account for <)11;;;. C. Debit another asset account for <)11;;;. D. Credit a different asset account for <)11;;;. 18. David@s *$press Co. purchased equipment for <)210;;. David paid <)0;; in cash and signed a note for the balance. David debited the *quipment account1 credited Cash and A. B. C. D. nothing further must be done. debited the David1 Capital account for <)21;;;. credited another asset account for <)21;;;. credited a liability account for <)21;;;.

19. 3n 1 Aune 2;1; Dewani .nc. reported a cash balance of <)121;;;. During Aune1 Dewani made deposits of <)'1;;; and
'

BKAL 1013 Business Accounting

made disbursements totaling <)1,1;;;. -hat is the cash balance at the end of Aune> A. <)11;;; debit balance C. <)11;;; credit balance B. <)101;;; debit balance D. <),1;;; credit balance

1:. At 1 Aanuary 2;1;1 Bibah .ndustries reported owner@s equity of <)1';1;;;. During 2;1;1 Bibah had a net loss of <)';1;;; and owner drawings of <)2;1;;;. At '1 December 2;1;1 the amount of owner@s equity is A. <)1';1;;;. C. <)1;;1;;;. B. <)1,;1;;;. D. <)9;1;;;.

2;. Abadi Company pays its employees twice a month1 on the 8 th and the 21st. 3n 21 Aune1 Abadi Company paid employee salaries of <),1;;;. This transaction would A. increases owner@s equity by <),1;;;. B. decreases the balance in +alaries *$pense by <),1;;;. C. decreases net income for the month by <),1;;;. D. be recorded by a <),1;;; debit to +alaries 5ayable and a <),1;;; credit to +alaries *$pense. 21. Dendang Company showed the following balances at the end of its first year! <) Cash 81;;; 5repaid insurance 8;; Accounts receivable '10;; Accounts payable 219;; ?otes payable ,12;; Dayang1 Capital 11,;; Dayang1 Drawing 8;; <evenues 211;;; *$penses 1810;; -hat did Dendang Company show as total credits on its trial balance> A. <)';11;; C. <)2918;; B. <)2:1,;; D. <)';19;;

22. At Aanuary '11 2;1;1 the balance in 5rieto .nc.@s supplies account was <)20;. During (ebruary1 5rieto purchased supplies of <)';; and used supplies of <),;;. At the end of (ebruary1 the balance in the supplies account should be
,

BKAL 1013 Business Accounting

A. <)20; debit. C. <):0; debit.

B. <)'0; credit. D. <)10; debit.

2'. The entire group of accounts maintained by a company is called the A. chart of accounts. C. general ledger. 2, B. general ournal. D. trial balance.

The first step in the recording process is to A. B. C. D. prepare financial statements. analy%e each transaction for its effect on the accounts. post to a ournal. prepare a trial balance.

20. (atimah Company provided consulting services and billed the client <)210;;. As a result of this event1 A. B. C. D. assets remained unchanged. assets increased by <)210;;. owner@s equity increased by <)210;;. Both b and c.

24. -hich of the following rules is INCORRECT? A. B. C. D. Credits decrease the drawing account. Debits increase the capital account. Credits increase revenue accounts. Debits decrease liability accounts.

28. -hich of the following statements is FALSE> A. B. C. D. <evenues <evenues <evenues <evenues increase owner&s equity. have normal credit balances. are a positive factor in the computation of net income. are increased by debits.

29. -hich of the following are in accordance with generally accepted accounting principles> A. B. C. D. Accrual basis accounting Cash basis accounting Both accrual basis and cash basis accounting ?either accrual basis nor cash basis accounting
0

BKAL 1013 Business Accounting

2:. The matching principle states that e$penses should be matched with revenues. Another way of stating the principle is to say that A. B. C. D. assets should be matched with liabilities efforts should be matched with accomplishments owner withdrawals should be matched with owner contributions cash payments should be matched with cash receipts

';. -hich of the following is NOT an e$ample of revenue recognition> A1 <ecording revenue as an ad usting entry on the last day of the accounting period. B. Accepting cash from a customer for services to be performed over the ne$t three months. C. Billing customers on '1 Aanuary for services completed during Aanuary. D. <eceiving cash immediately after repair services has been performed. '1. Ad usting entries are required A. because some costs e$pire with the passage of time and have not yet been ournali%ed. B. when the company&s profits are below the budget. C. when e$penses are recorded in the period in which they are incurred. D. when revenues are recorded in the period in which they are earned. '2. Bnearned revenues are A. received and recorded as liabilities before they are earned B. earned and recorded as liabilities before they are received C. earned but not yet received or recorded D. earned and already received and recorded ''. .f a resource has been consumed but a bill has not been received at the end of the accounting period1 then A. an e$pense should be recorded when the bill is received. B. an e$pense should be recorded when the cash is paid out. C. an ad usting entry should be made recogni%ing the e$pense. D. it is optional whether to record the e$pense before the bill is received. ',. -hich of the following best describe the situations when no ad ustments are made to reali%ed accrued revenues> A. Both assets and revenues are understated.
4

BKAL 1013 Business Accounting

B. Assets are overstated and revenues are understated. C. Both assets and revenues are overstated. D. Assets are understated and revenues are overstated. '0. Aasa *nterprise purchased office supplies costing <)91;;; and debited 3ffice +upplies for the full amount. At the end of the accounting period1 a physical count of office supplies revealed <),1,;; still on hand. The appropriate ad usting ournal entry to be made at the end of the period would be A. Debit <),1,;; B. Debit <)'14;; C. Debit <)'14;; D. Debit <),1,;; 3ffice +upplies *$pense <),1,;;1 Credit 3ffice +upplies 3ffice +upplies <)'14;;1 Credit 3ffice +upplies *$pense 3ffice +upplies *$pense <)'14;;1 Credit 3ffice +upplies 3ffice +upplies <),1,;;1 Credit 3ffice +upplies *$pense

'4. <ealty +ervices received a payment for <)191;;; on 1 Auly 2;1; which represents a 4 month advance payment of rent on a building it rents to a client. Bnearned <ent was credited for the full <)191;;;. (inancial statements were prepared on '1 Auly every year. <ealty +ervices should ma#e the following ad usting entry on '1 Auly 2;1;! A. B. C. D. Debit Debit Debit Debit Bnearned <ent <)'1;;;1 Credit <ental <evenue <)'1;;; <ental <evenue <)'1;;;1 Credit Bnearned <ent <)'1;;; Bnearned <ent <)101;;;1 Credit <ental <evenue <)101;;; <ental <evenue <)101;;;1 Credit <ental <evenue <)101;;;

'8. 3n 1 Aanuary 2;111 Daniel <epair +ervices purchased an insurance policy for <)21,;; for coverage of one year. The entire <)21,;; was charged to .nsurance *$pense on the same day. .f the firm prepares monthly financial statements1 the proper ad usting entry on '1 Aanuary 2;11 will be A. Debit <)212;; B. Debit <)212;; C. Debit D. Debit .nsurance *$pense <)212;;1 Credit 5repaid .nsurance 5repaid .nsurance <)212;;1 Credit .nsurance *$pense .nsurance *$pense <)2;;1 Credit 5repaid .nsurance <)2;; 5repaid .nsurance <)2;;1 Credit .nsurance *$pense <)2;;
8

BKAL 1013 Business Accounting

'9. -hich of the following statements related to the ad usted trial balance is INCORRECT? A. .t shows the balances of all accounts at the end of the accounting period B. .t is prepared before ad usting entries have been made C. .t proves the equality of the total debit balances and the total credit balances in the ledger D. (inancial statements can be prepared directly from the ad usted trial balance ':. .t is NOT true that current assets are assets that a company e$pects to A. B. C. D. reali%e in cash within one year. sell within one year. use up within one year. acquire within one year.

,;. Closing entries are made A. in order to terminate the business as an operating entity. B. so that all assets1 liabilities1 and owner&s capital accounts will have %ero balances when the ne$t accounting period starts. C. in order to transfer net income 6or loss7 and owner&s drawing to the owner&s capital account. D. so that financial statements can be prepared. ,1. .f .ncome +ummary has a credit balance after revenues and e$penses have been closed into it1 the closing entry for .ncome +ummary will include a A. B. C. D. debit to the owner&s capital account debit to the owner&s drawing account credit to the owner&s drawing account credit to the owner&s capital account

BKAL 1013 Business Accounting

END OF QUESTIONS