DIPLOMA IN MANAGEMENT

MEI / 2020

BDAW2103

BASICS OF FINANCIAL ACCOUNTING

MATRICULATION NO : 880511235142001
IDENTITY CARD NO. : 880511235142
TELEPHONE NO. : 0177493716
E-MAIL : sobanah@oum.com.my
LEARNING CENTRE : BATU PAHAT LEARNING CENTRE
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TABLE OF CONTENTS

NO CONTENTS PAGES
1 Assignment 1 (CLO 1)
2
a) Quastion 1
b) Quastion 2 3
2 Assignment 2 (CLO 2)
4
a)Journal entries
b)Ledger T account 5
c)Trial balance as at 31 july 2019 5
d)Comprehensive income 6
e)Statement of financial 7

1. Assignment 1 (CLO 1)

a) Quastion 1
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i)                    Employees – Internal users and they are interested in knowing the
financial details of the company, as this has a direct impact on their
remuneration and job security.
ii)                  Bankers – External users and the accounting information to find
out the ability of the borrower to repay the loan, the number of assets and
liabilities of the borrower and evidence of income.
iii)                Suppliers – External user and they are responsible for providing
goods or services related to the company's branches
iv)                Managers – Internal users and they need to allocate financial,
human and capital resources to the needs through a budgeting process.
v)                  Tax agency – External user and they determine whether the
business states the correct amount of tax in the tax return. They also
conduct an audit of the tax return filed by the business to verify the
information with the underlying accounts record.
 
 
 
 
 
 
 
 
 
a)      Quastion 2
 
In accounting, the financial transactions are recording, processed and presented to
generate the financial statement. There are two types of recording systems, one is
manual which is known as bookkeeping and another one is computerized accounting
which has become vogue nowadays because it's very convenient, speed and easy.
Both manual and computerised systems are based one the same accounting principles,

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conversation and concepts.  Recording process for manual entry done throughout the
original entry book is difficult as it has to be done manually. While computerised the
data content is recorded in a custom database. The calculation processing manual, all
the calculations are done manually and it takes some time to complete. But for
computerisation we input the required data only, calculations are performed by the
computer system and it's very fast and accurate.
Other than that, the Ledger accounts, trial balance and the financial statements are
prepared manually for manual accounting. Its other way around for computerised
accounting, once the journal entries are entered, data is processed automatically and
the ledger account, trial balance and balance sheet are prepared automatically.
The duration, time and preparation of reporting for manual accounting, will take a
lot of time and the analysis of financial statements and preparation of reports are done
manually. For computerised accounting we can save a lot of time and will generate
the report within seconds and the financial statement analysis such as a ratio analysis
and it's done automatically.
It becomes difficult and time consuming to retrieve data as several books have to
be gone through for manual accounting. For computerised accounting it's easier to
retrieve data because they kept in soft copy in the database and it's done quickly.
As the number of transactions increases, it's become very difficult to manage
accounts manually because it will take time to update every single transaction. In
computerised accounting, every transaction occurs, an entry is made and its
automatically updated on all affected accounts.

2 Assigment 2

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DATE ASSET = liabilities EQUITY

ACCOUNT
CASH EQUIPMENT ARAI CAPITAL WITHDRAWAL REVENEW EXPENCES
PAYBLE
Jul-01 RM41,000.00 RM41,000.00
Jul-02 -RM 500.00 RM 500.00
Jul-05 -RM 2,500.00 RM5,000.00 RM 2,500.00
Jul-07 -RM 700.00 -RM700.00
Jul-15 -RM 200.00 -RM200.00
Jul-20 -RM 1,500.00 -RM 1,500.00
Jul-22 RM 2,300.00 RM2,300.00
RM37,900.00 RM5,500.00 RM 2,500.00 RM41,000.00 -RM 1,500.00 RM2,300.00 -RM900.00

a) Journal entries

Journal Entries arai Printing Shop

Date Accounts Ref. Debit Credit
July 1 Cash 101 RM 41,000.00
Arai Capital 301 RM 41,000.00
July 2 Equipments Fax Machine 102 RM 500.00
Cash 101 RM 500.00
July 5 Equipments 102 RM 5,000.00
Cash 101 RM 2,500.00
Accounts Payable 201 RM 2,500.00
July 7 Rental expencses 304 RM 700.00
Cash 101 RM 700.00
July 15 Telephone expenses 304 RM 200.00
Cash 101 RM 200.00
July 20 Withdrawal for personal use 302 RM 1,500.00
Cash 101 RM 1,500.00
July 22 Cash 303 RM 2,300.00
Revenue 101 RM 2,300.00
RM 51,200.00 RM 51,200.00

b) Ledger T account

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101 201 301 303

CASH ACCOUNT PAYBLE CAPITAL EXPENSES
Debit Credit Debit Credit Debit Credit Debit Credit
RM 41,000.00 - - RM 2,500.00 - RM 41,000.00 RM 700.00 -
- RM 500.00 RM 200.00 -
- RM 2,500.00
- RM 700.00
- RM 200.00
- RM 1,500.00
RM 2,300.00
RM 43,300.00 RM 43,300.00 RM 2,500.00 RM 2,500.00 RM 41,000.00 RM 41,000.00 RM 900.00 RM 900.00

RM 302.00 RM 304.00 RM 102.00

WITHDRAWAL REVENUE EQUIPMENT
Debit Credit Debit Credit Debit Credit
RM 1,500.00 - - RM 2,300.00 RM 500.00 -
RM 5,000.00 -

RM 1,500.00 RM 1,500.00 RM 2,300.00 RM 2,300.00 RM 5,500.00 RM 5,500.00

c) Trial balance as at 31 july 2019

Trial Balance for Company Arai as at 31-July-2019

Accounting Heads Debit Credit

CASH RM 37,900.00
EQUIPMENT RM 5,500.00
WITHDRAWAL RM 1,500.00
ACCOUNTS PAYABLE RM 2,500.00
CAPITAL RM 41,000.00
REVENUES RM 2,300.00
EXPENSES RM 900.00
Totals RM 45,800.00 RM 45,800.00

d) Comprehensive income
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Arai Printing Shop Income Statement for the

month ended 31 July 2019

Revenue
Service RM 2,300.00
Total revenue RM 2,300.00
Less:
Expenses
Rental expenses RM 700.00
Telephone expenses RM 200.00
Total expenses RM 900.00

Net income RM 1,400.00

e) Statement of financial

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Arai Printing Shop Statement of channges in owner's

Equity for the month ended 31 July 2019

Arai Capital
Add: Net income RM 1,400.00
Inverstment by owner RM 41,000.00 RM 42,400.00
Total RM 42,400.00

Less : Withdrawal by owner RM 1,500.00

RM 40,900.00

Arai Printing Shop Balance sheet 31 July 2019

Fixed Assets:
Equipment RM 5,500.00

Current Asset
cash RM 37,900.00
RM 37,900.00
Less : Current Liabilities
Account payble RM 2,500.00
Working Capital RM 35,400.00
RM 40,900.00
Financed by:
Owner's Equity
Arai, Capital RM 40,900.00
RM 40,900.00