ACC030: Topic 2 Tutorial 2/…1

ACC030 TOPIC 2 TUTORIAL 2

ACCOUNTING CLASSIFICATION SOLUTION

Determine the most appropriate answer for each of the following questions.

PART A: MCQ

1. Which of the following statements describes the process of classifying in accounting?

A. Sorting journals into orderly and meaningful categories.

B. Sorting and preparing purchases and sales into seven types of journals.
C. Sorting accounting transactions into orderly and meaningful categories. √
D. Classifying account statements into meaningful journals.

2. Which of the following is an INCORRECT accounting classification?

A. Copyright – non-current asset

B. Account Receivable – current liability √
C. Loan from Bank Islam – non-current liability
D. Investment – non-current asset

3. The items of non-current assets include ____________.

A. Cash in hand, inventory, and account receivables

B. Machineries, motor vehicles, and account payables
C. Freehold land, long-term investment, and patents √
D. Fixtures and fittings, capital, and stationery

4. ___________ represent the business’s financial obligations that require settlements of

more than one year.
A. Non-current assets
B. Non-current liabilities √
C. Owner’s equity
D. Expenses

5. Which of the following is INCORRECT classification?

A. Motor vehicle – non-current asset

B. Closing inventory – current asset
C. Bank overdraft – non-current liability √
D. Account payable – current liability

Pn.Azura Mohd.Noor
UiTM Perlis
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6. The following are the examples of sales transactions EXCEPT:

A. Sold goods on credit to Ali amounted to RM200.

B. Sold goods by cash to Odah RM100.
C. Sold goods to Afiq amounted to RM400, received cash RM150 immediately and
the balance will be paid next month.
D. Sold secondhand furniture on credit to Razak amounted to RM50. √

7. The following items are example of expenses EXCEPT

A. Utility bills
B. Carriage inwards
C. Commission received √
D. Wages and salaries

8. Which of the following is NOT a current asset?

A. Cash in hand
B. Account payable √
C. Account receivable
D. Inventories

9. Which of the following is a current liability?

A. Mortgage
B. Long term loan
C. Account receivable
D. Bank overdraft √

10. Which of the following is considered as revenue?

A. Carriage outward
B. Carriage inwards
C. Rent received √
D. Rent expenses

11. Which one of the following is considered as current assets?

i. Account Receivables
ii. Bank overdraft
iii. Cash at bank
iv. Cash in hand

A. i, ii, iii
B. i, ii, iv
C. i, iii, iv √
D. ii, iii, iv

Pn.Azura Mohd.Noor
UiTM Perlis
 ACC030: Topic 2 Tutorial 2/…3

12. Which of the following is NOT considered as purchases?

A. Cash purchases of goods.

B. Purchased a printer. √
C. Credit purchase of inventory from the supplier.
D. Purchased of stock.

13. _____ are the financial obligations of the business to the external parties.

A. Equity
B. Revenues
C. Liabilities √
D. Assets

14. The items of non-current assets are:

A. Equipment and investment √

B. Equipment only.
C. Investment and inventory.
D. Loan from OBC Bank and Equipment.

15. Identify the following group that shows the correct example.

A. External users → Local authority, auditor, creditors, managers

B. Intangible assets → Patents, goodwill, trademark, copyrights √
C. Internal users → Workers, customers, bankers, accounts clerk
D. Current liabilities → Unpaid utility bills, interest paid in advance

16. Which of the following are income of the business?

A. Capital, loan from SME Bank, and bank overdraft.

B. Sales, commission received, and rental received. √
C. Inventories, cash in hand, cash at bank.
D. Salary, utilities, and van maintenance.

17. Which of the following are expenses of the business?

A. Sales, commission received, and rental received.

B. Inventories, cash in hand, cash at bank.
C. Salary, utilities, and van maintenance. √
D. Computer and cashier machine

18. Capital is the item of:

A. Asset
B. Liability
C. Owner’s equity √
D. Revenue

Pn.Azura Mohd.Noor
UiTM Perlis
 ACC030: Topic 2 Tutorial 2/…4

19. Cashier machine is the item of:

A. Current asset
B. Current liability
C. Non-current asset √
D. Owner’s equity

20. All the following are classified as assets EXCEPT

A. Patent
B. Fixed deposit
C. Loan from Bank Islam √
D. Account receivable

PART B: True or False Questions

Statement True / False

1. Account payables is an example of current liability in the Statement True
of Financial Position.
2. Capital is categorized as non-current asset. False

3. Long-term investment is not a liability. True

4. Premise is considered as an intangible non-current asset. False

5. The resources owned by an entity, which provide benefit in the False

future is called revenue.
6. Salary of a worker is classified under an expense. True

7. A building that has been rented for use by the business is regarded False
as an asset.
8. Non-current liabilities are payable within more than one year. True

9. Non-current assets are resourced owned and used in the business for False
less than twelve months.
10. Liabilities are items which are owed by the business to parties True
outside of the business.

Pn.Azura Mohd.Noor
UiTM Perlis
 ACC030: Topic 2 Tutorial 2/…5

PART C: Fill in the blank

Question 1

Identify the classification of each following items whether an Asset, a Liability or Owner’s
Equity, and the related accounts involved.

Classification of Name of Account

Account
1. Owner taking goods for family use. Owner’s equity Drawings A/C

2. Computer that is used in the office. Asset Office equipment A/C

3. Loan from Bank Islam. Liability Loan – Bank Islam A/C

4. Balance of cash in bank is overdrawn. Liability Bank A/C

5. Buying of machine for business use. Asset Machinery A/C

6. Cash drawings for owner’s personal Owner’s equity Drawings A/C

use.
7. The air-conditioner that is installed in Asset Fixture and fittings A/C
the office.
8. Cash in the bank. Asset Bank A/C

9. Van used for business purposes. Asset Motor vehicles A/C

10. Receive cash from customer. Asset Cash A/C

Pn.Azura Mohd.Noor
UiTM Perlis
 ACC030: Topic 2 Tutorial 2/…6

Question 2

Identify the classification of the items below and the name of the accounts involved.

Item Classification of A/C Name of Account

1. Computer A - NCA Office Equipment A/C
2. Buildings A – NCA Buildings A/C
3. Land A – NCA Land A/C
4. Printer A – NCA Office equipment A/C
5. Account Receivables A – CA Account Receivables
6. Account Payables L -CL Account Payables
7. Bank Overdraft L -CL Bank A/C
8. Cash in hands A – CA Cash A/C
9. Cash in bank A – CA Bank A/C
10. Ceiling fan A – NCA Fixture and fittings A/C
11. Office table A – NCA Furniture A/C
12. Furniture A – NCA Furniture A/C
13. Motor vehicle A – NCA Motor vehicles A/C
14. Machinery A – NCA Machinery A/C
15. Long-term loan L – NCL Loan A/C
16. Lorry A – NCA Motor vehicles A/C
17. Air-conditioner A – NCA Fixture and fittings A/C
18. Fixed Deposit A – NCA Fixed deposit A/C
19. Unit Trust A – NCA Unit Trust A/C
20. Office Partition A – NCA Fixture and fittings A/C

Pn.Azura Mohd.Noor
UiTM Perlis
 ACC030: Topic 2 Tutorial 2/…7

Question 3

Determine the Owner’s Equity for the following businesses.

OE = A – L – R + E

(a) Zamri, a grocer:

Stock of groceries RM8,600 (A), Motor van RM30,000 (A), A/C Receivables RM9,500
(A), A/C Payables RM15,400 (L), Cash at bank RM3,750 (A), Sales revenues, RM22,000
(R), Total Expenses, RM12,000 (E).

RM
A 51,850
-L (15,400)
-R (22,000)
+E 12,000
OE 26,450

(b) Loh, a stationer:

Fixtures and fittings RM5,500 (A), Stock of stationery RM18,800 (A), Bank Overdraft
RM16,640 (L), Premises RM110,000 (A), Cash in hand RM1,700 (A), A/C Receivables
RM8,250 (A), A/C Payables RM14,000 (L), Sales revenues, RM31,100 (R), Total
Expenses, RM21,000 (E).

RM
A 144,250
-L (30,640)
-R (31,100)
+E 21,000
OE 103,510

Pn.Azura Mohd.Noor
UiTM Perlis
 ACC030: Topic 2 Tutorial 2/…8

(c) Sherry, a travel agent:

Office equipment RM12,600 (A), Premises RM80,000 (A), Mortgage loan RM50,000 (L),
A/C Receivables RM3,900 (A), A/C Payables RM26,000 (L), Fixed deposit RM10,000 (A),
Cash at bank RM9,900 (A), Cash in hand RM2,500 (A), Total revenues, RM18,000 (R),
Total Expenses, RM11,000 (E).

RM
A 118,900
-L (76,000)
-R (18,000)
+E 11,000
OE 35,900

(d) Sarah, a distributor:

Cash at bank RM29,550 (A), A/C Receivables RM5,600 (A), A/C Payables RM4,700 (L),
Stock of goods RM2,900 (A), Fixtures and fittings RM1,900 (A), Loan from bank
RM9,800 (L), Sales revenues, RM15,000 (R), Total Expenses, RM12,000 (E).

RM
A 39,950
-L (14,500)
-R (15,000)
+E 12,000
OE 22,450

Pn.Azura Mohd.Noor
UiTM Perlis