1. This part consists of five (5) multiple-choice questions.

Choose ONE (1) the most

suitable answer.

1. ______________ are interested in accounting information because they want to know

the ability of the business in repaying the amount owed to them.

A. Creditors
B. Investors
C. Debtors
D. Competitors

2. The Board of Directors in a public company is appointed by ____________.

A. lenders
B. government officer
C. workers union
D. shareholders

3. The twins, Kamal and Kaisara, intend to open an apparel manufacturing business
together. They are considering a business organization that has limited liability and
unlimited number of members. Which of the following meets Kamal and Kaisara’s
expectations?

A. Sole proprietorship
B. Public company
C. Partnership
D. Private company

4. Which of the following refers to a partnership business?

A. Profit or loss is divided among partners

B. Capital contributed by way of ordinary shares
C. Income from partnership business is subjected to business tax
D. Owners have limited liability

5. Which of the following is NOT considered a purchase?

A. Cash purchase of stock

B. Purchase of a furniture
C. Credit purchase of goods from supplier
D. Purchased an inventory
 2. State whether each statement is True or False

No. Statements Answer

1. The objective of financial statement is to provide information True
about financial position and financial performance of the
business.
2. Source documents are the evidence that a transaction took place. True
3. In the accounting cycle, the next step after recording into True
appropriate journal is posting into the appropriate ledger
accounts.
4. Accounting can be best described as process involved in True
identifying documentation, recording data, analyzing and
communicating financial information for decision making.
5. The sole proprietorship has the legal obligation to keep the books False
of accounts and submit financial statements to the authority.
6. An example of internal user of financial statement is marketing True
manager.
7. Accounting information is used by shareholder to guide them in False
planning, organizing and controlling the business.
8. Ledger need to be prepared before journalizing transactions into False
journals.
9. Cash drawings made by the owner of the business will increase False
the capital.
10. Purchased goods should be recorded on the debit side of True
inventory.

3. The following are the transactions of Satu Malaysia Enterprise for the month of July
2023.

Date Transactions
July 1 Started a business with RM 23,000 cash.

July 2 Purchased goods for cash RM12,500

July 3 Purchased goods on credit RM 5000 from Mr Herdy

July 5 Bought fixtures and fittings RM 1150 on credit from Mr Rahimi

July 10 Bought equipment by cash RM4100

July 12 Sold goods for cash RM 9,800

July 14 Sold goods on credit to Mr Begga RM 700

July 19 Received cash from Mr Begga RM 350

July 20 Paid to Mr Herdy RM 5000 by cash

July 26 Paid for electricity RM 229 by cash

July 27 Paid for postage expenses by cash RM50

July 28 Receive a rental income in cash RM 138

July 29 Owner of Satu Malaysia Enterprise took cash for personal use RM 80

Required:
a. Illustrate the effects (increase or decrease) of the above transactions on the asset,
liability, owner’s equity, revenue, or expense.
b. Show the journal entry (account to be debited or credited) of the above
transactions.

Date Component of Financial statement (A, L, Journal Entry

EQ, R, EXP)
Increase Decrease Debit Kredit
July 1 Assets Cash
Owner Equity Capital
2 Expenses Purchase
Assets Cash
3 Expenses Purchase
Liability Account
Payable-Mr.
Herdy
5 Assets Fixtures and
Fittings
Liability Account
Payable-Mr
Rahimi
10 Assets Equipment
Assets Cash
12 Assets Cash
Revenue Sales
14 Assets Account
Receivable-Mr
Begga
Revenue Sales
19 Assets Cash
Assets Account
 Receivable-Mr
Begga
20 Liability Account
Payable-Mr
Herdy
Assets Cash
26 Expenses Utilities
expenses
Assets Cash
27 Expenses Postage
expenses
Assets Cash
28 Assets Cash
Revenue Rental Income
30 Owner equity Drawing
Assets Cash