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TUTORIAL 1
(Topic 1 & 2)

DUE DATE: 14 MARCH 2013 (THURS)

TIME: 12:00 NOON.

1. The stakeholders listed below are categorized under product or service market
stakeholders EXCEPT:

A. Customers
B. Suppliers
C. Vendors
D. Creditors

2. There are four accounting assumptions that provide a foundation for the accounting
process. They are:

A. Objectivity, going concern, time period and revenue recognition

B. Conservatism, materiality, objectivity, economic entity
C. Monetary unit, going concern, time period, economic entity
D. Going concern, monetary unit, full disclosure, materiality

3. This concept requires a business to account only for the items that are deemed
significant for a given size of operation. Thus, an accountant can ignore and exclude
all the items or transactions which give an insignificant effect on the financial
statements.

A. Conservatism
B. Objectivity
C. Materiality
D. Full disclosure

4. Financial accounting is primarily concerned with the recording and reporting of

economic data and activities for a business. Which of the following does NOT
represent the characteristic of financial accounting?

A. Must follow the Generally Accepted Accounting Principles (GAAP) and

prescribed formats
B. Emphasis more on precision compared to timeliness in preparing the financial
statements
C. The time focus of financial accounting is more on historical perspective
D. Emphasis on the relevance of accounting information for planning and control
purposes
5. ____________ 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.
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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)

6. 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

7. Which of the following event is NOT considered as a transaction of a business?

A. Signed a contract for providing service to customers in the future

B. Received cash in advance for rendering service in the future
C. Purchased office supplies on account
D. Charged clients for services provided on account

8. _____________ enables investors, creditors and other stakeholders to know what is

happening to a businesss most liquid resource.

A. Statement of Financial Position

B. Statement of Cash Flows
C. Statement of Changes in Equity
D. Statement of Comprehensive Income

9. Information that has been measured and reported in a similar manner for different
businesses is considered as:

A. Consistent
B. Reliable
C. Comparable
D. Relevance

10. Which of the following are considered as accounting principles?

i. Revenue recognition
ii. Historical cost
iii. Full disclosure
iv. Going concern
v. Monetary unit
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A. i, ii and iii
B. i, ii, and iv
C. i, ii, and v
D. i, iii, and iv

For question 11-12, please indicate the BEST effect of the transactions on the
accounting equation.

11. On 28 July 2012, Assyifaa Enterprise received cash of RM35,000 from the owner,
Nurusyifaa Muhammad as additional investment.

On 30 July 2012, a total cash of RM11,500 was used to pay the salary of the
employees and another RM5,000 was used to pay the bank loan. The changes caused
by these transactions may include:

A. Decrease in assets RM21,500; increase in owners equity RM35,000

B. Increase in assets RM35,000; decrease in liabilities RM10,000
C. Decrease in assets RM16,500, decrease in owners equity RM11,500
D. Increase in assets RM18,500; owners equity remains unchanged

12. On 10 September 2012, Al-Amin Travel Agency purchased office supplies for
RM4,500, paid RM1,000 and agreed with the supplier to pay the remaining in the
following month.

A. Decrease in assets RM1,000; increase in owners equity RM3,500

B. Increase in assets RM3,500; increase in liabilities RM3,500
C. Decrease in assets RM4,500, owners equity remains unchanged
D. Increase in assets RM4,500; increase in owners equity RM4,500

13. Which of the following items appears in both Statement of Changes in Equity and
Statement of Financial Position?

A. Ending capital
B. Total assets
C. Total revenues
D. Net income
E.

14. Which of the following group of accounts both normally have a debit balance?

A. Assets and Expenses

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B. Revenues and Expenses

C. Liabilities and Owner's Equity
D. Assets and Liabilities

15. Which of the following statements related to expenses is CORRECT?

A. Expenses increase owner's equity, so an expense account's normal balance is a

credit balance
B. Expenses decrease owner's equity, so an expense account's normal balance is a
credit balance
C. Expenses increase owner's equity, so an expense account's normal balance is a
debit balance
D. Expenses decrease owner's equity, so an expense account's normal balance is a
debit balance

16. For Salary Payable, the category of account and its normal balance are:

A. Owner's equity and a credit balance

B. Assets and a debit balance
C. Liabilities and a credit balance
D. Assets and a credit balance

17. A business renders service to a client and sends out a sales invoice. The amount will
be collected from the customer at a later time. Which of the following would be
TRUE at the time when the invoice is sent out?

A. Owner's equity will decrease

B. Total liabilities will increase
C. Total assets will decrease
D. Net income will increase

18. A business makes a payment of RM2,400 on a Note Payable, consisting of a RM400

interest payment and a RM2,000 principal payment. Which of the following journal
entries would be recorded?

A. Cash is credited for RM2,000; Interest Expense is credited for RM400; and Notes
Payable is debited for RM2,400
B. Notes Payable is credited for RM2,000; Cash is credited for RM400; and Interest
Expense is debited for RM2,400
C. Cash is credited for RM2,400; Notes Payable is debited for RM2,000; and Interest
Expense is debited for RM400
D. Notes Payable is credited for RM2,400; Cash is debited for RM2,000; and Interest
Expense is debited for RM400
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19. A business purchased an equipment by paying cash of RM12,000 and issuing a Note
Payable of RM18,000. Which of the following journal entries would be recorded?

A. Cash is credited for RM12,000; Equipment is credited for RM30,000; and Notes
Payable is debited for RM18,000
B. Cash is credited for RM12,000; Equipment is debited for RM30,000; and Notes
Payable is credited for RM18,000
C. Cash is debited for RM12,000; Equipment is debited for RM18,000; and Notes
Payable is credited for RM30,000
D. Cash is credited for RM12,000; Equipment is credited for RM18,000; and Notes
Payable is debited for RM6,000

20. How does a cash withdrawal by the owner affect the accounting equation?

A. liabilities increase; owners equity decrease

B. assets increase; owners equity increase
C. assets decrease; owners equity decrease
D. assets increase; liabilities increase

Questions 21 to 23 are based on the following transactions for the month of

October 2012 of Dekka Enterprise.

i The owner started the business with a contribution of RM23,500 cash.

ii Purchased office furniture for RM11,500, paid RM2,500 down payment and
put the balance on a Note Payable.
iii) Paid a utility bill for RM980 cash.
iv) Paid RM2,000 cash for October rent.
v) The business had sales of RM15,000 in October. Of these sales, 60% were
cash sales, and the balance was credit sales.
vi) Paid RM9,700 cash for second hand car.
vii) Collected RM2,000 from credit sales.

21. How much is the net income for October, 2012?

A. RM12,020
B. RM 9,000
C. RM 6,020
D. RM 5,300

22. What is the amount of total liabilities at the end of October, 2012?

A. RM980
B. RM2,330
C. RM9,000
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D. RM4,800

23. How much is the balance in Accounts Receivable?

A. RM9,000
B. RM4,000
C. RM7,000
D. RM6,000
24. The following entries were made by the accountant of Putik Enterprise during its first
month of operation:

i) En. Dani, the owner, deposited RM4,500 cash in the business.

ii) Putik Enterprise paid the first month's rent of RM600 in cash.
iii) Putik Enterprise purchased equipment by signing a Note Payable of RM16,500.
iv) Cash sales for the month were RM6,750.
v) Putik Enterprise purchased supplies for RM2,100 cash.

After posting these entries to the general ledger, how much are total assets?

A. RM25,050
B. RM27,150
C. RM10,650
D. RM9,150

25. A motor van is purchased for cash. Which of the following is TRUE?

A. There is an increase in total assets

B. There is a decrease in both total assets and total liabilities
C. There is an increase in total assets and a decrease in total liabilities
D. There is no effect on total assets

26. 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. Net income will increase

B. Owner's equity will decrease
C. Total liabilities will decrease
D. There will be no effect on total liabilities

27. Which of the following statements correctly describes a Trial Balance?

A. A Trial Balance is the first step in the accounting cycle

B. A Trial Balance is also known as a Statement of Financial Position
C. A Trial Balance is a list of all accounts with their balances
D. A Trial Balance is also known as the chart of accounts

28. If a company uses cash-basis accounting, when is revenue recorded?

A. When services are rendered, even though cash may be received at a later date
B. When cash is received, prior to the services being rendered
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C. When cash is received, at a time after the services were rendered

D. When cash is received, either prior to the services being rendered or at a time after
the services were rendered

29. Which of the following is TRUE?

A. Accrual accounting is required by Generally Accepted Accounting Principles

B. Accrual accounting records expenses when incurred. Cash-basis accounting
records expenses when cash is paid
C. Accrual accounting records revenue when services are rendered. Cash-basis
accounting records revenue when cash is received
D. All of the above are true

30. Which of the following situations would result in an increase in income under the
accrual based accounting, but would not result in an increase in income under the
cash-basis accounting?

A. Purchase of supplies for cash

B. Rendering of services on account
C. Use of supplies purchased earlier
D. Receipt of cash for services that were rendered earlier on account
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END OF QUESTION