CONFIDENTIAL 1 ACC117/106/TEST1/DEC2022

UNIVERSITI TEKNOLOGI MARA

TEST 1

INTRODUCTION TO FINANCIAL ACCOUNTING /

COURSE : INTRODUCTION TO FINANCIAL ACCOUNTING AND
REPORTING
COURSE CODE : ACC117 / 106
EXAMINATION : DECEMBER 2022
TIME : 1 HOUR 30 MINUTES

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of three (3) parts: Part A (10 Questions)
Part B (10 Questions)
Part C (1 Question)

2. Answer ALL questions.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 6 printed pages

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

CONFIDENTIAL 2 ACC117/106/TEST1/DEC2022

PART A
State whether each of the following statements is TRUE or FALSE.

1. The steps in the accounting process are classification, identification, interpretation and
communication.

2. The primary objective of preparing financial statements is to meet the need of managers
who run the business on a day-to-day basis only.

3. The external users of accounting information include tax authority and potential
investors.

4. The owner of sole proprietorship is not responsible for the liabilities of the business when
the business goes bankrupt.

5. Accounting principles or concepts refer to rules that must be followed to ensure

subjectivity in the preparation of financial statements.

6. Relevance and faithful representation characteristics are the fundamental qualities of

accounting information.

7. “Once a particular accounting method has been adopted, it should follow consistently in
subsequent periods.” This statement is based on money measurement concept.

8. Accrual concept requires expenses and revenues to be recorded in the accounting

period based on the amount incurred and earned respectively, not on cash involved.

9. A business equity will increase when the business acquires net profit for the reporting
year.

10. The accounting equation should remain balance since every transaction affects only one
account.

(Total: 10 marks)

PART B
Choose ONE (1) most appropriate answer.

1. Which of the following defines classifying?

A. transferring accounting data from ledger to trial balance.

B. sorting accounting data into orderly and correct accounting categories.
C. Analyzing results of financial statements.
D. Communicate the summary of business financial information to interested users.

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

CONFIDENTIAL 3 ACC117/106/TEST1/DEC2022

2. Which of the following users of accounting information are external users?

i. Shareholders and board of directors
ii. Owner of business, employees and manager
iii. Employees, creditors and product consumers
iv. Creditors, investors and product consumers

A. i and ii
B. i and iii
C. iii and iv
D. iv only

3. Which of the following business entities have NO limited liability?

i. Surya Enterprise
ii. Alisha & Humaira Associates
iii. Aqwan Sdn Bhd
iv. Bina Teguh Bhd

A. i and ii
B. i and iii
C. iii and iv
D. iv only

4. Which of the following describes the term ‘asset’?

A. Amount owed by a business to external parties

B. Property of a business that only bought for resale.
C. Funds supplied by the owner to the business for the acquisition of property for the
business.
D. Economic resources owned and controlled by a business, including non-current
and current.

5. Quality accounting information assists the users to make informed and timely decisions.
The enhancing qualitative characteristics include ________.

A. Relevance and faithful representation

B. Comparability and consistency
C. Comparability, verifiability, understandability and timeliness
D. Comparability, consistency, verifiability and understandability

6. Which of the following statements describe a going concern concept?

A. A business is assumed to operate for an indefinite life.

B. A business will ensure that only items that can be expressed in money terms are
recorded in the financial statements.
C. A business will refrain itself from changing the methods or techniques of valuation
to allow comparison of financial statements.
D. All the above
© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL
CONFIDENTIAL 4 ACC117/106/TEST1/DEC2022

7. A business has decided to report its financial statement yearly. It just started its business
on 1st January 20x1 and will complete the twelve-month reporting period by 31
December 20x1. This is in accordance with the ________________ concept.

A. Neutrality
B. Periodicity
C. Materiality
D. Consistency

8. __________ concept require business transactions is recorded and reported separately

from the owner’s personal transaction.

A. Historical cost concept

B. Money measurement concept
C. Economic entity concept
D. Going concern concept

9. Which of the following is the double entry for goods purchased by cash from Ekhlas
Enterprise?

Debit Credit
A. Purchases Ekhlas Enterprise
B. Ekhlas Enterprise Purchase
C. Purchases Cash
D. Cash Purchases

10. In double entry system, a credit is used to record __________.

A. Decrease in asset and owner’s equity, and a decrease in liability and revenue.
B. Decrease in asset and an increase in owner’s equity, revenue and expenses.
C. Decrease in asset and revenue, and increase in liability, expenses and owner’s
equity.
D. Decrease in asset and expenses, and increase in liability, revenue and owner’s
equity.

(Total: 10 marks)

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

CONFIDENTIAL 5 ACC117/106/TEST1/DEC2022

PART C

Puan Anis is a producer and distributor of dodol products under the business name of Mak
Lang Dodol Enterprise. The main ingredients used in its dodol production are glutinous rice
flour, palm sugar and coconut milk. The business was registered on 1 October 2022 in Ipoh,
Perak. During the month of October 2022, Mak Lang Dodol Enterprise performed the following
transactions:

October Transaction

Puan Anis transferred her personal cash of RM50,000 into the business’ bank
1
account.
Bought 10 cartons of glutinous rice flour and 20kg of palm sugar from Kedai
3 Kalsom, a grocery shop, amounting to RM1,200 on credit. Trade discount of
10% was obtained for this transaction.
Received cash in bank account amounting to RM50,000 for business loan
5
taken up from Bank Simpanan Nasional (BSN).
Returned 1 carton of glutinous rice flour which had expired, costing RM80, to
6
Kedai Kalsom.

8 Puan Anis brought her home’s freezer worth RM2,800 into the business.

9 Bought 20kg of coconut milk from Pak Mat Santan Frozen for RM240 in cash.

Sold 50 packs of dodol to Puan Maria in cash for RM1,000. Trade discount of
10
5% was then given to Puan Maria.
Sold 200 packs of dodol durian to Badan Kebajikan Al-Hasanah for RM5,000,
11
before trade discount of 10%, on credit.
Puan Maria dissatisfied with the quality of 10 packs of the sold dodol and
12
returned them to the business.
Received 5% cash discount upon settlement of amount due to Kedai Kalsom.
20
Payment was made by cheque.

23 Paid salaries to staffs through online banking RM12,000.

Puan Anis took 4kg of coconut milk for a family gathering with her relatives
25
amounting to RM50.
Purchased a second-hand delivery van worth RM20,000 from Lai Meng Auto
27
Sdn Bhd. Deposit paid was RM5,000 by cheque.
Received 50% payment from Badan Kebajikan Al-Hasanah which was
29
directly transferred into business’ bank account.

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

CONFIDENTIAL 6 ACC117/106/TEST1/DEC2022

Required:

a. Illustrate the effects (increase/decrease) of asset, liability, owner's equity, revenue

and expense of the above transactions.
(15 marks)

b. Show the journal entry (debit or credit) of the above transactions.

(15 marks)
(Total: 30 marks)

(Use the format given below to answer the above questions)

a. Effects b. Journal Entries
Date Increase Decrease Debit Credit

QUESTIONS END

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL