CONFIDENTIAL AC/JAN2022/FAR110

UNIVERSITI TEKNOLOGI MARA

QUIZ 1
11.00am – 11.40am (40 MINUTES)

1. Naeem Trading is a business that sells groceries. The account clerk, Iqbal is trying to
record the business inventory by using perpetual inventory system. However, he is not
quite sure on the benefits of using the system. As an accounting graduate, you have
suggested to Iqbal to proceed with idea in recording the movement of the inventories.

a. Distinguish TWO (2) differences between periodic inventory system and perpetual
inventory system.
(4 marks)

b. Assuming that the business adopts the perpetual inventory system, prepare the
General Journal to record the following transactions.

Dec Transactions

1 Purchased with cash 50 sacks of rice at RM20 each from Bernas Beras
Sdn Bhd.

3 Paid freight of RM400 by cash to transport the rice from Bernas Beras
Sdn Bhd to the business premise.

10 Returned 2 sacks of rice to Bernas Beras Sdn Bhd for RM56 (including
freight) due to damage.

15 Sold 10 carton of sardines costing RM18 for RM28 each to Sekolah Seri
Kenangan with the credit term 5/10, net 30.

17 Issued credit note worth RM28 to Sekolah Seri Kenangan for the return
of goods that was not ordered.

(6 marks)
2. The draft Trial Balance of Sentiasa Untung Enterprise at 30 September 2021 could not
be balanced by RM2,150, the debit side being greater than the credit side. The
difference has been entered in a suspense account. The business proceeded with the
preparation of the draft final accounts and these showed a net profit of RM12,500.
Subsequently, the following matters were revealed:

a. Credit purchases of RM8,500 had been correctly debited to the purchases

account but had been credited to the supplier's account as RM5,800.
b. The purchase ledger was undercast by RM1,800.
c. Discounts received of RM500 have been debited to the discount allowed
account.
d. It was discovered that bank charges of RM250 had not been entered in the cash
account.
e. Repairs on building amounting to RM1,000 has been incorrectly posted to the
building account.

Required:

a) Prepare the journal entries necessary to correct the above errors for a ,b, c and d

(4 marks)

b) Show the suspense account.

(3 marks)

c) Calculate the corrected net profit.

(3 marks)

(Total: 20 marks)