Topic 3

Accounting Cycle

3.1 Steps in The Accounting Cycle

3.2 Types of Source Documents
3.3 Journalising Process
3.4 Posting to General Ledger
3.5 Prepare Trial Balance
3.6 Prepare Financial Statement for Merchandising
and Service Entities

1|TOPIC 3 AA015 2021/2022 KMJ

3.1 STEPS IN THE ACCOUNTING CYCLE

1. Transactions
Analysis
(source document)

9. Post-closing 2. Journal entries

trial balance

3. Post to ledger
8. Closing entries

4. Trial balance
7. Statement of
Profit or Loss &
Statement of
5. Adjustment
Financial Position

6. Adjusted
trial balance

3.2 TYPES OF SOURCE DOCUMENTS

✓ A document (source documents) is a proof (evidence) for each business transaction
that has occurred.
✓ Its provide objective and reliable evidence for useful information

1) Invoice

➢ Issued by seller to a buyer in

the event of a credit
transaction.
➢ Original invoice – credit
purchase
➢ A copy of the invoice - credit
sales

2|TOPIC 3 AA015 2021/2022 KMJ

2) Delivery Note

➢ Issued and delivered by the

seller to the buyer together
with the goods.
➢ Buyers can check the items
received.

3) Debit Note

➢ Issued by the seller to the

buyer to inform that his
account has been debited in
the seller’s books of
accounts (increase debt)

4) Credit Note

➢ Issued by the seller to the

buyer to inform the buyer
that his account has been
credited in the seller’s books
of accounts (reduced debt)

3|TOPIC 3 AA015 2021/2022 KMJ

5) Purchase Order

➢ Issued by the buyer to the

seller that contains
information about the goods
to be purchased.

6) Receipt

➢ Issued by the seller when

receive payments from the
buyer.
➢ as an evidence for receipts
and payments of items that
have been made.

7) Payment voucher

➢ Internal documents issued

by a business to record any
kind of payment.

4|TOPIC 3 AA015 2021/2022 KMJ

8) Cheque stubs / cheque butt

➢ Cheque stubs are used as

references and important
source document for cash
related items.

9) Bank Slip

➢ A form issued by the bank

for any transaction of
deposits or withdrawals of
money from customers.

9) Bank Statement

➢ Issued by the bank to the

account holder at the end of
the month.

5|TOPIC 3 AA015 2021/2022 KMJ

Types of Business Activities
1) Services business (selling a service)
➢ Business example: car wash, laundry service, barber, accounting service etc

2) Merchandising business (purchase goods and resale)

➢ Transaction include purchases, sales, discounts, returns & allowance and freight costs.
➢ i) Purchases
✓ purchase of goods/merchandises for resale
✓ cash purchases and credit purchases
✓ ii) Sales
✓ sold goods to get profit
✓ cash sales and credit sales
✓ iii) Discounts
✓ encourage the purchase or sale
✓ two (2) types of discounts: trade discount and cash discount

a) Trade discount
• Discount offered for bulk buying, the more buying, the more discount obtained
• Example: Buy 100-200 units = 10% discount
Buy 201-300 units = 20% discount
• No record needed for the trade discount
• Buyer or seller records the net amount (total price less trade discount)

b) Cash discount (purchases discount and sales discount)

• Cash discount obtained when payment made within discounts period and will
be recorded in the account
• A buyer views as a purchases discount (discount received)
• A seller views as a sales discount (discount allowed)
discount period (day)
• Example: credit term 2 /10 , n/30
discount percentage the last payment is due (credit maturity period)
❖ meaning: buyer will get 2% cash discount if payment made within 10 days
from invoice date. And buyer have 30 days to settle the bill/ invoice.
• The discounts calculation starts from the date of invoice.

6|TOPIC 3 AA015 2021/2022 KMJ

 ✓ Step to calculate payment:
Invoice price less returns or allowance (if any) less cash discount (if any)

✓ Example:
• Aug 10: Company A buy goods on account RM8,800 from seller R with credit
term 2/10, n/30
• Aug 13: Seller R received goods return from company A due to wrong brand
for RM2,000.

❖ Situation A; Aug 18: Company A settle the invoice

Payment: Invoice 8,800
(-) return 2,000 = 6,800
(-) 2% discount 136 (2% x 6,800)
Total payment RM6,664
Explanation: Company A get cash discount because made payment on
day 9 (Aug 18), within discount period

❖ Situation B; Aug 18: Company A paid RM6000 to seller R

Refer to situation A, total after return is RM6,800, but buyer only paid
RM6,000.
Payment: 6,000
(-) 2% discount 120 (2% x 6,000)
Total payment RM5,880
Explanation: Company A get cash discount because made payment on
day 9 (Aug 18), within discount period but limited to RM6000 (actual
payment made).

❖ Situation C; Aug 20: Company A settle the invoice

Payment: Invoice 8,800
(-) return 2,000
Total payment RM6,800
Explanation: Company A didn’t get cash discount because made
payment on day 11 (Aug 20), not in discount period.

* Counting days start from August 10 (invoice date). Discount period from 10 until 19
of August only. (10 days)

7|TOPIC 3 AA015 2021/2022 KMJ

 ✓ iv) Returns & allowance
a) Purchases returns – when goods are returned to the seller.
b) Purchases allowance – when price changes are made due to the quality/
quantity goods as wrong size, wrong quantity and defective part.
c) Sales returns - when goods are returned from customers.
d) Sales allowance - when price changes are made due to the quality/ quantity
goods as wrong size, wrong quantity and defective part.

✓ v) Freight/shipping cost (Transportation costs)

✓ Purchase agreement state whether seller or buyer pays freight costs.
a) Free On Board (FOB) Shipping Point
• Goods are placed free on board the carrier by seller.
• Buyer pays the freight costs.
• Considered as freight-in for buyer. Freight-in is considered part of the
cost of the merchandise.

b) Free On Board (FOB) Destination

• Goods are placed free on board to the buyer’s place of business.
• Seller pays the freight costs.
• Considered as freight-out for seller. This is an operating expense.

8|TOPIC 3 AA015 2021/2022 KMJ

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.
✓ Record accounting transaction in chronological (date) order.
✓ The purpose is to keep a day-to-day record of a business and its transaction.
✓ Two main categories of journal : Special Journal and General Journal
✓ Step to determine the journal for transaction:

3.3.2 SPECIAL JOURNAL

✓ Consists of four types of journal:

Sales journal to record all sales of merchandise on credit/account.
Purchases journal to record all purchases of merchandise on credit/account
Cash receipts journal to record all cash receipts and cheques.
Cash payments journal to record all payments made by cash or cheques.

9|TOPIC 3 AA015 2021/2022 KMJ

EXERCISE
The following transaction were completed by Parit 18 Enterpise that runs a business selling
traditional cookies during March 2021:
2021 Transactions Journal
March 1 The owner invested RM100,000 as initial capital into the bank.
2 Bought a vehicle worth RM50,000 on credit by issuing Notes Payable,
5%, for a period of 5 years from Toyota Capital.
3 Purchased cookies RM30,000 from Hani Enterprise and paid by cheque
(no 515)
4 Sold merchandise on credit to Jasni Enterprise, invoice. KZ001,
RM16,800 . Terms of 2/15, n/30.
6 Sold cookies for RM10,200 to Dani Enterprise, invoice KZ002, terms
2/15, n/30
11 Purchased biscuits of RM52,600 from Doremi Enterprise, invoice H110,
terms of 2/15, n/30.
12 Jasni returned faulty goods worth RM800.
14 Received payment from Jasni Enterprise for sale on 4 March.
16 Returns damaged merchandise to Doremi Enterprise RM200.
21 Paid Doremi Enterprise for merchandise purchased on March 11 by
cheque.
22 Purchased cookies from Wali Enterprise on credit RM41,625, terms
2/15, n/30
31 Paid salaries expense, RM15,900. Cheque number 517
31 Total cash sales of merchandise amount to RM134 680.

Activities 1: Identify the appropriate journal for each transaction above. Write your
answer in column given.

SALES JOURNAL
✓ Sales journal is used only to record sales of merchandise on account (credit sales)
✓ Format: Sales journal
Date Account debited Terms Dr Acc. Receivable
Cr Sales
(RM)

Total (RM)

Date of sales Customer’s Credit terms Total sales/

name designated sales value
name
Activities 2: Prepare Sales Journal according to answer in activities 1.

10 | T O P I C 3 A A 0 1 5 2 0 2 1 / 2 0 2 2 K M J
 PURCHASES JOURNAL
✓ Purchases journal is used only to record purchases of merchandise on account (credit
purchases)
✓ Format: Purchases Journal
Date Account credited Terms Dr Purchases
Cr Acc. Payable
(RM)

Total (RM)

Date of Creditor’s Credit terms Total purchases/

purchases name designated purchases value
name
Activities 3: Prepare Purchases Journal according to answer in activities 1.

CASH RECEIPTS JOURNAL

✓ Cash receipts journal is used to record all receipts by cash and cheque.
✓ Example of cash receipts:
1) cash sales of merchandise.
2) collection of accounts receivable.
3) receipt of money from bank loan.
4) additional cash capitals.
5) cash received from disposal/sales of assets.
✓ Format: Cash Receipts Journal
Date Account credited Dr Dr Dr
Bank Cash Sales
(RM) (RM) discount
(RM)

Total

Date of cash receipts Total cash received Amount of discounts

in cheque given and it will
Name of customer/ reduce the cash
other account Total cash received received amounts

Activities 4: Prepare Cash Receipts Journal according to answer in activities 1.

11 | T O P I C 3 A A 0 1 5 2 0 2 1 / 2 0 2 2 K M J
CASH PAYMENTS JOURNAL
✓ Cash payments journal is used to record all payments by cash and cheque.
✓ Example of cash payments:
1) cash purchases of merchandise.
2) payments of accounts payable.
3) loan payment in cash.
4) cash drawings.
5) payment of expense in cash.
✓ Format: Cash Payments Journal
Date Account debited Cr Cr Cr
Bank Cash Purchases
(RM) (RM) discount
(RM)

Total

Date of cash payments Total cash paid Amount of discounts

in cheque received and it will
Name of creditor/ reduce the cash
other account Total cash paid payment amounts

Activities 5: Prepare Cash Payments Journal according to answer in activities 1.

3.3.3 GENERAL JOURNAL

✓ Record transactions which are not recorded in special journals, such as:
1) Sales returns and allowance / purchases returns and allowance.
2) Drawings of goods/assets (excluded cash/bank).
3) Purchases/sales of assets on credit.
4) non-cash capital contribution.
5) Adjustment entries.
✓ Format: General Journal
Date Account titles and explanation Dr. (RM) Cr. (RM)
Dr XXX
Cr XXX
( )

Activities 6: Prepare General Journal according to answer in activities 1.

12 | T O P I C 3 A A 0 1 5 2 0 2 1 / 2 0 2 2 K M J
 3.3.4 SUBSIDIARY LEDGER

✓ There are two types of subsidiary ledger:

1) Subsidiary of Accounts Receivable
• record all transactions related to debtors with their balances.
• prepared to post sales journal information to subsidiary ledger and show its
relationship with control account in general ledger.

2) Subsidiary of Accounts Payable

• record all transactions related to creditors with their balances.
• prepared to post purchases journal information to subsidiary ledger and show its
relationship with control account in general ledger.

✓ Two (2) forms of ledger accounts:

1) T-account
Dr. Account’s name Cr.
Date Particulars Amount (RM) Date Particulars Amount (RM)

To record the date of : • Total amounts (if posted at

• Transactions occurred the end of the month); or
• End of the month. Account’s
• Each transactions amount
• Sort by the date of name if posted at the
transaction transactions date.

2) Columnar ledger
Account’s name
Date Details Ref Debit (RM) Credit (RM) Balance (RM)

Date of transaction Record the amount

Determined after
each of transactions
Details – account’s name
Reference - journals

13 | T O P I C 3 A A 0 1 5 2 0 2 1 / 2 0 2 2 K M J
 ✓ Example in columnar ledger:
Subsidiary ledger of Accounts Receivable
Kiki Bookstore
DATE PARTICULARS REF. DEBIT CREDIT BALANCE
(RM) (RM) (RM)
2021
June 12 Sales SJ 2,400 2,400
15 Sales returns and allowance GL 60 2,340
20 Bank CRJ 2,293.20 46.80
Sales discounts CRJ 46.80 0

Lala Bookstore
DATE PARTICULARS REF. DEBIT CREDIT BALANCE
(RM) (RM) (RM)
2021
June 17 Sales SJ 6,000 6,000
23 Cash CRJ 2,940 3,060
Sales discounts CRJ 60 3,000

Control account in General Ledger

Accounts Receivable
DATE PARTICULARS REF. DEBIT CREDIT BALANCE
(RM) (RM) (RM)
2021
June 15 Sales returns and allowance GL 60 60
20 Bank CRJ 2,293.20 2,353.20
Sales discounts CRJ 46.80 2,400
23 Cash CRJ 2,940 5,340
Sales discounts CRJ 60 5,400
30 Sales SJ 8,400 3,000

Relationship between subsidiary ledger and its control account is total balance all
subsidiary ledger (RM0 + RM3,000) equal with balance in control account (RM3,000).

Activities 7:
(i) Prepare Accounts Receivable control account and subsidiary ledger.
(ii) Prepare Accounts Payable control account and subsidiary ledger.

14 | T O P I C 3 A A 0 1 5 2 0 2 1 / 2 0 2 2 K M J
3.4 POSTING TO GENERAL LEDGER

✓ General Ledger: contains all the assets, liabilities and owner’s equity accounts.
✓ Prepared to post all transactions from journal to appropriate ledger either using columnar
ledger or T-account ledger.

Activities 8: Prepare ledger for all accounts except AR and AP

3.5 PREPARATION OF TRIAL BALANCE

✓ A trial balance shows a list of all accounts in the general ledger.

✓ The total amount on the debit side of the trial balance must always be equal to the total
amount on the credit side.
✓ The trial balance is prepared to confirm / verify the balance of the total debits and the total
credits at the end of an accounting period.
✓ A trial balance may also uncover errors in journalizing and posting.
✓ A trial balance is useful in the preparation of financial statements.

15 | T O P I C 3 A A 0 1 5 2 0 2 1 / 2 0 2 2 K M J
✓ Format:
Business name
Trial Balance as at ……….
Debit (RM) Credit (RM)
Cash X
Bank X
Accounts Receivable X
Prepaid Rental X
Prepaid Insurance X
Office Equipment X
Vehicles X
Rental Expenses X
Drawings X
Purchases X
Sales X
Purchase returns & Allowances X
Sales Returns & Allowances X
Sales Discounts / Discount given X
Purchase Discounts / Discount received X
Commissions Revenue X
Accumulated Depreciations – assets name X
Depreciation Expense X
Allowance for doubtful account X
Bad Debts Expense X
Expense Payable / Accrued expense X
Unearned Revenue X
Capital X
Notes Payable X
Notes Receivable X
Accounts Payable X
Utilities Expenses X
Insurance Expense X
Bank Overdraft X
Service Revenue X
Loan X
Long Term Investment X
Freight-in X
Freight-out X
Customs Duties / Import duties X
Insurance on purchase X
Total XXX XXX

Activities 9: Prepare a Trial Balance as at 31 March 2021.

16 | T O P I C 3 A A 0 1 5 2 0 2 1 / 2 0 2 2 K M J
3.6 PREPARING FINANCIAL STATEMENT FOR MERCHANDISING & SERVICE ENTITIES
3.6.1
Merchandising business Service business
• Sell goods, revenue is sales • Provide service, revenue is service revenue
• With cost of goods sold • No cost of goods sold
• Statement profit or loss with • Statement profit or loss with ‘single step’
‘multiple step’ form form

3.6.2 Statement of Comprehensive Income [except for Sole Proprietorship: “Statement

of Profit or Loss] for merchandising business
Company Name ……..
Statement of Comprehensive Income for the year ended …………
RM RM RM
Sales X
(-) Sales returns and allowance (X)
(-) Sales discounts (X)
Net Sales XX
Less: Costs of Goods Sold
Beginning inventory X
(+) Purchases X
(-) Purchase returns and allowance (X)
Purchase discounts (X)
Net Purchases X
(+) Freight-in X
Wages on purchases X
Customs duty / import duty X
Insurance on purchases X
Costs of purchases X
Costs of goods available for sale XX
(-) Ending inventory (X) XX
Gross Profit / (Gross Loss) XXX
Add : Others Revenue
Commission Revenues X
Gain on asset Disposal X
Decrease of allowance for doubtful accounts X XX
XXX
Less: Operational Expenses
Salaries Expense X
Depreciation Expense X
Bad debt expense X (XX)
Net Profit / (Net Loss) XXX

Additional information: Ending inventory as at 31 March 2021 is RM20,000.

Activities 10: Prepare a Statement of Profit or Loss for the month ended 31 March 2021.

17 | T O P I C 3 A A 0 1 5 2 0 2 1 / 2 0 2 2 K M J
 Statement of Comprehensive Income [except for Sole Proprietorship: “Statement
of Profit or Loss] for service business

Company Name ……
Statement of Comprehensive Income for the year ended …………
RM RM
REVENUES:
Service revenue X
Interest revenue X XX
LESS EXPENSES:
Rent expense X
Depreciation expense X
Salary expense X
Utilities expense X
Tax expense X (XX)
Net profit / (Net loss) XXX

Statement of Owner’s Equity

Company Name …….

Statement of Owner’s Equity as at …………
RM
Beginning capital XX
(+) Additional capital X
XX
(+) Net profit / (-) net loss X / (X)
XX
(-) Drawings (X)
Ending capital XXX

Activities 11: Prepare a Statement of Owner’s Equity as at 31 March 2021.

18 | T O P I C 3 A A 0 1 5 2 0 2 1 / 2 0 2 2 K M J
 3.6.3 Statement of Financial Position

Company Name
Statement of Financial Position as at …….
RM RM RM
Non-Current Assets
Land XX
Premise X
(-) Accumulated Depreciation - premise (X) XX
Vehicle X
(-) Accumulated Depreciation - vehicle (X) XX
Office Equipment X
(-) Accumulated Depreciation – office equipment (X) XX XXX
Total Non-current Assets XXX
Current Assets
Cash XX
Bank XX
Inventory XX
Accounts Receivable XX
(-) Allowance for doubtful accounts) (X) XX
Prepaid Expense XX
Note Receivable XX
Total Current Assets XXX
Total Assets XXXX

Owner’s Equity
Beginning Capital XX
(+) Additional Capital X
(+) Net Profit / (-) Net Loss X / (X)
(-) Drawings (X)
Ending Capital XXX

Non-current Liabilities
Long Term Loan X
Mortgage X XX

Current Liabilities
Accounts Payable X
Note Payable X
Expenses Payable / Accrued Expenses X
Unearned Revenues X XX
Total Liabilities XXX
Total Owner’s Equity & Liabilities XXXX

Activities 11: Prepare a Statement of Financial Position as at 31 March 2021.

19 | T O P I C 3 A A 0 1 5 2 0 2 1 / 2 0 2 2 K M J
EXERCISE 2
Sehati Sejiwa Enterprise (SSE) provides event consultation services. SSE financial year
ended on 31 May every year. These are the accounts balance as at 31 May 2021:

Accounts Debit (RM) Credit (RM)

Cash 12,120
Bank 30,330
Accounts Receivable 10,110
Long Term Investment 40,000
Vehicles 60,000
Accumulated Depreciations – Vehicles 6,000
Office Equipment 35,550
Accumulated Depreciations – Office Equipment 7,110
Long Term Loan (4% per annum) 30,000
Service Revenues 55,500
Capital 95,960
Drawings 2,220
Advertising Expense 1,330
Utilities expense 1,020
Salaries Expense 3,450
Insurance Expense 1,660
Others Expense 1,340
Unearned Service Revenue 4,560
Total 199,130 199,130

Required:
a) Prepare Statement Profit or Loss for the year ended 31 May 2021.
b) Prepared Statement of Financial Position as at 31 May 2021.

20 | T O P I C 3 A A 0 1 5 2 0 2 1 / 2 0 2 2 K M J
3.6.4 Limitation of Financial Position Statement
1) Dependence on historical costs.
Transactions are initially recorded at their cost. This is concern when reviewing the
financial position, where the values of assets and liabilities may change over time. Thus,
the financial position could be misleading if a large part of the amount presented is based
on historical costs.

2) Based on specific time period.

A user of financial statements can gain an incorrect view of the financial results or cash
flows of the business by only looking at one reporting period. Any one period may vary
from the normal operating results of the business, perhaps due to a sudden spike in
sales or seasonality effects.

3) Not always comparable across companies

If a user wants to compare the results of different companies, their financial statements
are not always comparable, because the entities use different accounting practices.

4) Not verified
If the financial statements have not been audited, this means that no one has examined
the accounting policies, practices and controls of the issuer to ensure that it has created
accurate financial statements.

21 | T O P I C 3 A A 0 1 5 2 0 2 1 / 2 0 2 2 K M J
 TUTORIAL

QUESTION 1
The following transactions were completed by Perniagaan Awan Zakir during April 2021.
Date Transactions
April 1 The owner invested cash RM35,000 and vehicles RM60,800 in the business as
an opening capital.
3 Purchased merchandise on account from Perniagaan Karisma, RM7,800, terms
2/10, n/30.
8 Sold merchandise on account to Perniagaan Madani, RM4,500, terms 2/15, n/60.
12 Paid to Perniagaan Karisma in full.
20 Purchased merchandise for cash from Syarikat Luhur, RM3,200.
28 Paid RM2,230 cash for salaries expense and received cash for amount due from
Perniagaan Madani.

INSTRUCTIONS:
(i) Show all the transactions in the appropriate journal.
(ii) Prepare the accounts payable control and subsidiary accounts.

QUESTION 2
En. Hanip started a business on 1 July. The transactions were completed during July.
Date Transactions
July 1 The owner invested cash RM25,000, vehicles RM50,000 and office equipment
RM10,000 in the business as an opening capital.
3 Purchased merchandise on account from Pearl Bhd, RM7,000, terms 2/15, n/30.
7 Sold merchandise on account to Cinta Enterprise, RM2,200.
13 Paid to Pearl Bhd in full.
22 Purchased office equipment by cash from Syarikat Maju, RM4,000.
30 Sold merchandise for cash to Muthu, RM800.

INSTRUCTIONS:
(i) Show all the transactions in the appropriate journal.
(ii) Prepare the accounts receivable control and subsidiary accounts.

22 | T O P I C 3 A A 0 1 5 2 0 2 1 / 2 0 2 2 K M J
QUESTION 3
Perniagaan Pelita Ilmu (PPI) located in Bertam Indah, uses periodic inventory system. PPI
closes its accounts at the end of each year. Accounts balance on 30 November 2020 are as
follows:
Accounts RM
Cash 14,000
Accounts Receivable- Lili Sdn Bhd 27,600
Inventories 27,500
Equipment 42,000
Accumulated Depreciation - Equipment 9,000
Accounts Payable- Mawar Tulip Enterprise 31,200
Capital 45,700
Drawing 5,000
Sales 244.500
Sales Returns and Allowances 4,600
Sales Discount 3,900
Cost of goods sold 172,000
Salary paid 27,700
Utilities Expenses 6,100

Here are the transactions that have been carried out by PPI during the month of December
2020:
Dec 1 Purchase of goods on credit from Perniagaan Cerdik,
RM10,500, terms FOB destination, 1/10, n / 30.
2 Sold goods on credit to Celik Ilmu RM4,500; terms FOB shipping point, 2/15, n
/ 30. Cost of good sold was RM2,250. The cost of transport is RM150.
5 Returning of goods purchased from Perniagaan Cerdik on December 1 RM400.
9 Received returns of goods RM350 from Celik Ilmu for sale on December 2.
The cost of goods that are returned is RM 175.
11 Receiving a cheque from Celik Ilmu for sale on December 2.
16 Paid to Perniagaan Cerdik for purchase made on 1 December by cheque.
26 PPI took a book , to give to her daughter. Cost of the book is RM90.
30 PPI paid electricity amounting to RM250 in cash.
30 PPI paid employees salaries RM1,200 by cash.

INSTRUCTIONS:
(i) Prepare journal entries to record the transactions in December 2020.
(ii) Prepare a subsidiary ledgers, accounts receivable control and accounts payable control,
cash accounts and bank accounts.

23 | T O P I C 3 A A 0 1 5 2 0 2 1 / 2 0 2 2 K M J
QUESTION 4
Juwita Sdn. Bhd. runs a business selling supplies for mask and sanitizer. The following balances
are obtained as at 1 May 2021.
Accounts RM
Cash 9,670
Accounts receivable:
Abu Bakar 5,000
Hussein 3,650
Inventory 5,230
Accounts payable:
Perniagaan Teoh 1,500
Perniagaan Samy 2,480
Notes payable 6,370
Capital 10,000

The following transactions were completed during May 2021.

Date Transactions
May 3 Purchased merchandise on account from Perniagaan Teoh, RM2,200, terms 5/7,
n/45.
5 Purchased merchandise on account from Perniagaan Samy, RM1,500, terms 5/10,
n/45.
6 Received cheque from Abu Bakar, RM5,000.
7 Paid Perniagaan Teoh and all the debts for the purchased of merchandise on 3 May..
10 Sold merchandise to Suzana for cash RM1,000 and on credit to Zaidin RM1,500,
term 10/3, n/15.
11 Paid notes payable RM4,000 and interest RM80 with cheque.
12 Sold merchandise on account to Halimah, RM1,800, terms 10/3, n/15.
17 Sold merchandise on account to Maslina, RM2,500, terms 10/4, n/15.
20 Received payment by cash from Maslina.
23 Received payment by cash from Zaidin.
25 Paid salaries expense RM1,500 by cash.
27 Paid utilities bill RM200 by cash.
28 Paid rental expense RM3,200 by cash.

INSTRUCTIONS:
(i) Show all the transactions in sales journal, purchases journal, cash receipts journal, cash
payments journal and general journal.
(ii) Show a trial balance as at 30 May 2021.

24 | T O P I C 3 A A 0 1 5 2 0 2 1 / 2 0 2 2 K M J
QUESTION 5
Perniagaan Kittiey Cutie runs a business selling cages, shelves and cat care accessories at
Masjid Tanah. The following balances are obtained as at 1 November 2020:
Account RM
Bank 80,000
Cash 30,000
Accounts receivable-Moritz Trading 17,000
Office equipment 6,400
Accounts payable-Minka Enterprise 12,600
Capital 80,800
Loan 40,000

The following transactions were completed during November.

Date Transactions
Nov. 4 Purchased 10 units of cat’s cage on account from Fluffy Enterprise, RM1,000
perunit, term 2/10, n/30.
5 Paid to Minka Enterprise with cheque to settle all its debt.
7 Owner brought in teak wood shelf for business use, RM3,000.
8 Returned damaged cage to Fluffy Enterprise, RM1,000.
9 Received cheque from Moritz Trading for settlement of all its debt.
11 Sold merchandise to Kedai Muschi, RM14,400, term 2/10, n/30.
12 Paid RM840 transportation expense for merchandise sold on 11 November with
cheque.
13 Paid half (1/2) of amount owed to Fluffy Enterprise.
15 Purchased lorry on account RM55,000 from Syarikat Alfie Bhd.
17 Purchased accessories set for cash from Perniagaan Tee-gher, RM3,600.
20 The owner gave his son’s a cage worth RM3,400 as a birthday gift.
22 Sold cat accessories shelf for cash to Perniagaan Smudge RM6,400 and give
trade discounts RM320.
25 Purchased office supplies for cash from Missy Enterprise, RM3,000.
30 Paid rental expense RM800.

INSTRUCTIONS:
(i) Show all the transactions in purchases journal, sales journal, cash receipts journal, cash
payments journal and general journal.
(ii) Show a trial balance as at 30 November 2020.

25 | T O P I C 3 A A 0 1 5 2 0 2 1 / 2 0 2 2 K M J
QUESTION 6
The following balances are obtained from Perniagaan Vanila Hazel as at 31 July 2021.
Accounts RM
Purchases 234,670
Sales 398,780
Beginning inventory 32,890
Purchases return and allowance 1,280
Sales return and allowance 1,870
Freight-out 1,670
Freight-in 1,327
Sales discounts 1,450
Purchases discounts 1,760
Salaries expense 27,825
Custom duty 1,124
Insurance expense 3,450
Rent revenue 6,230
Interest expense 1,200
Maintenance expense 8,165
Drawings 709
Cash 14,930
Account receivable 13,450
Accounts payable 18,380
Long term loans 20,000
Beginning capital 148,000
Vehicles 160,800
Office equipment 88,900

Additional information:
Ending inventory, RM31,890

INSTRUCTIONS:
(i) Show a Statement of Profit or Loss for the year ended 31 July 2021.
(ii) Show a Statement of Financial Position as at 31 July 2021.

26 | T O P I C 3 A A 0 1 5 2 0 2 1 / 2 0 2 2 K M J
QUESTION 7
Presented is the Perniagaan Solekan Puteri Ayu trial balance on 31 August 2020.
Perniagaan Solekan Puteri Ayu
Trial Balance as at 31 August 2020
Accounts Debit (RM) Credit (RM)

Cash 64,000
Account receivable 10,300
Accounts payable 9,000
Insurance expense 2,200
Advertising expense 1,400
Salaries expense 7,100
Utilities expense 300
Supplies expense 2,300
Depreciation expense 6,000
Interest expense 4,000
Land 45,000
Building 80,000
Machine and equipment 69,000
Accumulated depreciation- Machine and equipment 14,000
Unearned revenue 6,000
Rent revenue 10,200
Capital 74,100
Loan 90,000
Drawings 400
Service revenue 88,700
Total 292,000 292,000

INSTRUCTIONS:
(i) Show a Statement of Profit or Loss for the year ended 31 August 2020.
(ii) Show a Statement of Financial Position as at 31 August 2020.

27 | T O P I C 3 A A 0 1 5 2 0 2 1 / 2 0 2 2 K M J