AA015 Chapter 2 Quiz _Nor Ismah Isa

Kolej Matrikulasi Kedah

Financial Accounting – AA015
Quiz 1, Semester 1 , 2017/2018

Answer all the questions:

1. Analyzes the following situations and identifies which principle are

applied to these. States whether the situation comply with the principle
or not.

i. Due to the high inflation rate, the replacement cost of the existing raw
material has gone up by 30%. The company ignores this inflationary
factor and records it at the value it has earlier.

ii. Mega Hijau Corporation does not disclose in a note to the financial
statements that its building was involved with the flood disaster that
affect the valuation of the building.

iii. Zanita Sdn. Bhd sales goods for RM25,000. It receives RM10,000 cash
and the balance is recorded as accounts receivable ,whereas the
revenue is recognized as RM25,000.

iv. Duanita Solution purchases a RM150 chair and records this transaction
as an asset.

v. For the December 2016 year-end close, the utilities bills have not been
received for the month of December. Tuah Jati Sdn Bhd estimates the
utilities expense as RM700 based on the previous usage of the utilities.
[10 marks]

2. Classify the following accounts either as asset, liability or owner equity.

a) Notes payable b) Rent Income

c) Cash d) Drawing
e) Vehicle f) Accounts Payable
g) fixtures and Fittings h) Carriage inward
i) Advertising expense j) Bank loan
[10 marks]

1
 AA015 Chapter 2 Quiz _Nor Ismah Isa

3. Below are the Yarrow Strategic Consulting’s business transactions

occurs on May 2016.

May Florence Yarrow opened a strategic consulting firm by investing RM

2 39,200 cash and office furniture valued at RM 16,200.
2 Paid cash for May’s rent of RM 2,500.
6 Purchased office supplies RM3,400 on account.
15 Paid employee salary, RM 4,000 cash.
19 Performed consulting service RM15,200 on cash.
20 Paid RM2,200 of the account payable from May 6.
25 Performed consulting service RM20,500. RM5,000 received by cash
and the balance will be collected later.
30 Withdrew RM 2,000 cash for personal use.
30 Incurred utilities expense RM2,200. The payment will be done on
Jun 2016.

Required:

Analyze of the above transactions using the following format:

May Assets = Liabilities + Owner

Cash Supplies Furniture Accounts Acc Payable Accrued Equity
Recievable Expense
+/- +/- +/- +/- +/- +/- +/-
2
2
[20 marks]

2
 AA015 Chapter 2 Quiz _Nor Ismah Isa

Kolej Matrikulasi Kedah

Financial Accounting – AA015
Quiz 1, Semester 1 , 2017/2018

Answer all the questions:

4. Analyzes the following situations and identifies which principle are

applied to these. States whether the situation comply with the principle
or not.

vi. Due to the high inflation rate, the replacement cost of the existing raw
material has gone up by 30%. The company ignores this inflationary
factor and records it at the value it has earlier.

vii. Mega Hijau Corporation does not disclose in a note to the financial
statements that its building was involved with the flood disaster that
affect the valuation of the building.

viii. Zanita Sdn. Bhd sales goods for RM25,000. It receives RM10,000 cash
and the balance is recorded as accounts receivable ,whereas the
revenue is recognized as RM25,000.

ix. Duanita Solution purchases a RM150 chair and records this transaction
as an asset.

x. For the December 2016 year-end close, the utilities bills have not been
received for the month of December. Tuah Jati Sdn Bhd estimates the
utilities expense as RM700 based on the previous usage of the utilities.
[10 marks]

5. Classify the following accounts either as asset, liability or owner equity.

k) Notes payable l) Rent Income

m) Cash n) Drawing
o) Vehicle p) Accounts Payable
q) fixtures and Fittings r) Carriage inward
s) Advertising expense t) Bank loan
[10 marks]

3
 AA015 Chapter 2 Quiz _Nor Ismah Isa

6. Below are the Yarrow Strategic Consulting’s business transactions

occurs on May 2016.

May Florence Yarrow opened a strategic consulting firm by investing RM

2 39,200 cash and office furniture valued at RM 16,200.
2 Paid cash for May’s rent of RM 2,500.
6 Purchased office supplies RM3,400 on account.
15 Paid employee salary, RM 4,000 cash.
19 Performed consulting service RM15,200 on cash.
20 Paid RM2,200 of the account payable from May 6.
25 Performed consulting service RM20,500. RM5,000 received by cash
and the balance will be collected later.
30 Withdrew RM 2,000 cash for personal use.
30 Incurred utilities expense RM2,200. The payment will be done on
Jun 2016.

Required:

Analyze of the above transactions using the following format:

May Assets = Liabilities + Owner

Cash Supplies Furniture Accounts Acc Payable Accrued Equity
Recievable Expense
+/- +/- +/- +/- +/- +/- +/-
2
2
[20 marks]

4
 AA015 Chapter 2 Quiz _Nor Ismah Isa

Answers:
1. (i) Historical Cost√ Comply√
(ii) Full disclosure√ Not comply√
(iii) Revenue Recognition√ Comply√
(iv) Materiality√ Not comply√
(v) Expense Recognition√ Comply√
[ 10 x 1 = 10 marks ]

2.
a) Liability√ b) Owner Equity√
c) Asset√ d) Owner Equity√
e) Asset√ f) Liability√
g) Asset√ h) Owner Equity√
i) Owner Equity√ j) Liability√
[ 10 x 1 = 10 marks ]

3.
May Assets = Liabilities + Owner
Cash Supplies Furniture Accounts Acc Accrued Equity
Recievable Payable Expense
+/- +/- +/- +/- +/- +/-
+/-
2 √39,200 √16,200 √55,400
2 √-2,500 √-2,500
6 √3,400 √3,400
15 √-4,000 √-4,000
19 √15,200 √15,200
20 √-2,200 √-2,200
25 √5,000 √15,500 √20,500
30 √-2,000 √-2,000
30 √2,200 √-2,200
total 48,700 3,400 16,200 15,500 3,400 2,200 78,200
∑total 83,800 83,800
[ 20 x 1 = 20 marks ]