Faculty of Business, Economics & Accounting

Department of Accounting and Finance

HELP Bachelor of Business (Hons) Year 1

HELP Bachelor of Management (Hons) Year 1
HELP Bachelor of Business Psychology (Hons) Year 1
HELP Bachelor of Tourism Management (Hons) Year 1

INTERNAL SUBJECT DETAILS

Semester 3, 2022

Subject: ACC 101

Financial Accounting 1

Subject Lecturer/Tutor: Mr. Gooi Chee San

Telephone: 03-2700 5000
Email: gooics@help.edu.my

Consultation: Please call or e-mail for appointment

PRE-REQUISITE(S)

No pre-requisite is required.

SYNOPSIS

The subject introduces students to the basic concepts on financial accounting. This
includes identifying, measuring, classify and recording of transactions in the journal and
ledger and the preparation of financial statements.

LEARNING OBJECTIVES

CLO 1 Post transactions to ledger using the double entry principles. (PLO1)
CLO 2 Prepare financial reports. (PLO2)
CLO 3 Interpret financial reports. (PLO2)

TOPICS

Topic 1 Role of Accounting

Topic 2 Recording transaction

Topic 3 Adjusting the accounts and preparing financial statements.

Topic 4 Completing the account cycle.

Topic 5 Accounting for merchandising

Topic 6 Accounting Systems, Control Accounts, Suspense Account.

Topic 7 Cash management, including bank reconciliation.

Topic 8 Receivables

Topic 9 Inventory

Topic 10 Non-current assets (Fixed assets)

Topic 11 Liabilities

Topic 12 The cash flow statement

Topic 13 Financial statements analysis

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PRESCRIBED TEXTBOOK

Hoggett, J., Edwards, L., Medlin, J., Chalmers, K., Hellmann, A., Beattie, C., and
Maxfield, J. (2018) Financial Accounting, 10th edn, John Wiley & Sons.

RECOMMENDED REFERENCES

Libby R, Libby P and Hodge (2020) 10th Edition Financial Accounting, McGraw Hill.

Tan Liong Tong. (2019) 7th Edition, Financial Accounting & Reporting in Malaysia,
Volume 1 & 2, Walters Kluwer

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Subject Outline / Teaching Plan

Department : Accounting & Finance Subject Code : ACC 101

Lecturer : Mr. Gooi Chee San Subject Title : Financial Accounting 1

Week Topics References

1 The role of accounting Chapter 1
- nature of accounting
- accounting defined
- users of accounting info
- accounting as a profession
2 Accounting and financial statements Chapter 2
And underlying assumptions
- the balance sheet
- the P&L statement
- the cash flow statement
- the underlying assumptions
3 Recording transactions Chapter 3
-source documents
-accounting equation
-ledger account
-journal
-trial balance
4 Adjusting the accounts and
Preparing financial statement Chapter 4
- measurement of profit
- adjusting entries
- adjusting trial balance
- preparation of financial statement
5 Completing accounting cycle Chapter 5
-closing temporary accounts
-post closing trial balance
-accrual entries in subsequent entries
-complete accounting cycle
6 Accounting for retailing Chapter 6 & 7
-merchandising operation
-accounting for sales transaction
-purchases and cost of goods sold
-end of period processes
Accounting Systems
-accounting system development
-control account and subsidiary ledgers
-suspense account

7 Cash Management Chapter 11

-control of cash
-bank account & reconciliation
-petty cash
-cash management

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 7 Receivables Chapter 12
-accounts receivables
-bad and doubtful debts
-control accounts receivables
8 Inventory Chapter 13
-determine cost of inventory
-methods of valuation
- Comparison of inventory methods
9 Mid-Term

10 Non-current assets Chapter 14 & 15

-cost determination
-depreciation & methods
-disposal
-revaluation
11 Liabilities Chapter 16
-Current liabilities
-Provision of Warranties
-Employees’ benefits
12 The cash flow statement Chapter 18
- importance of CF statement
- inflows and outflows
- preparing CF statements
- analysis of CF statement
13 Financial statement analysis Chapter 19
-liquidity
-financial flexibility
-profitability
-operating capability
14 Revision All
15 Break
16 & 17 Final Examination

Textbook:
Hoggett, J., Edwards, L., Medlin, J., Charmers, K., Hellmann, A., Beattie, C., and
Maxfield, J. (2018) Financial Accounting, 10th edition, John Wiley & Sons.

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ASSESSMENT

There are 2 assessment items for this subject.

Assessment Items Value Due Date

1. Mid Semester Examination 30% 8 to 15 October 2022

2. Final Examination 70% Examination period:

26 November to 10 December 2022

REQUIREMENTS:

To gain a pass in this subject, students must:

 Achieve a passing grade in EACH of the following assessments:

 Continuous assessments; AND
 Final assessment
 Achieve a total result of 50% or better overall
 Attempt ALL areas of assessment

ASSESSMENTS

All assignments must be completed and turned in on / before the due date respectively. It
is your responsibility in making sure the similarity index is not more than 15%. Marks will
be allocated for the originality of your report.

You will be referred to the Board of Inquiry should the originality index is more than 30%
in total per assignment (Refer to Academic Integrity at in this document).

Assignment must be substantially your own work. If you wish to report another author's
point of view you should do so in your own words, and properly footnote the reference in
accordance with the departmental style. Direct quotations should form a small part of your
work and must be placed in quotation marks and referenced. Any material taken from
other references are to be acknowledged.

6
If you are having difficulty in completing work in time due to illness or *extenuating
circumstances, you may apply for an extension through your lecturer with supporting
documentations eg. medical certificate, police report etc. Applications for extensions on
or after the due date of the assessment will not be considered. A deduction of 10% per day
from the marks awarded after the due date applies, if the piece of work is submitted late
without approved extension.

*Extenuating circumstances should primarily mean, medical conditions (both

physiological and psychological), family issues (death or illness), and personal misfortune
(accident, mugging, theft). Student should provide document proof for all of the above
and should also obtain prior approval from the examiner towards late submission.

ALL FINAL ASSESSMENTS MUST BE SUBMITTED BY THE DEADLINE AS

STIPULATED ON THE COVER PAGE OF THE QUESTION PAPER. NO LATE
SUBMISSIONS ARE ALLOWED

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 Department of Accounting &
Finance

ACADEMIC INTEGRITY

Honesty and Responsibility

Academic integrity is an important tenet for HELP University (the “University”). In
pursuit of the highest standards of academic integrity, the University holds its students to
the highest ethical standards defined by the Rules and Regulations section of the
Academic Handbook. All students studying a HELP University programme are subjected
to and are bound by the Student Academic Misconduct Rule to assure academic honesty.
Students are required to sign a pledge on the assignment cover sheet before submitting
your assignments.

What is Plagiarism?
Plagiarism is academic dishonesty or academic theft, and it is a serious academic offence.
Plagiarism includes, but is not limited to, the followings:
1. quote, paraphrase or summarise someone else’s ideas, theories or data, in whole or
in part, without appropriate acknowledgement;
2. borrow ideas, opinion or words, in whole or in part, from other sources without
properly crediting the author(s);
3. use any facts, statistics, diagrams or graphs, in whole or in part, without
acknowledging the source clearly;
4. claim or imply original authorship of someone else’s ideas, theories or data, in
whole or in part, as your own;
5. employ or allow someone to help to revise, amend or write your work and pass off
as your own original work;
6. collaborate with or allow other students to copy your work; and
7. draw on sources more than what you have acknowledged by citations.

While a student is not discouraged to discuss an assignment with his/her friends or

classmates, the work he/she submits must be done by the student alone. If a student shares
his/her assignment with other students and they plagiarise it, the student is as guilty as
those students who plagiarised his/her assignment. All parties to plagiarism are considered
equally guilty. Under no circumstances should a student be involved in collusion with
other students unless he/she is permitted to work on an assignment jointly by the
lecturer/tutor. If a student is unsure what constitutes plagiarism, he/she is obliged to
consult the lecturer/tutor on the matter before submission of his/her assignment.

When and How to Reference?

Knowing when and how to cite is a student’s responsibility. If he/she is in doubt or need
more help on this matter, the student may consult the lecturer/tutor. The following list

8
comprises some of the sources a student will need to reference. The list is by no means
exhaustive, but simply consists of the most common sources used by students to complete
their work.

1. Books
2. Chapters in books
3. Journal articles
4. Conference papers
5. Newspaper articles
6. Magazines
7. Websites
8. Study guide

Students are advised to cite in the following cases [1]:

1. When he/she quotes two or more words verbatim, or even one word if it is used in
a way that is unique to the source;
2. When he/she introduce facts that he/she have found in a source;
3. When he/she paraphrase or summarise ideas, interpretations, or conclusions that
he/she find in a source;
4. When he/she introduce information that is not common knowledge or that may be
considered common knowledge in your field, but the reader may not know it;
5. When he/she borrow the plan or structure of a larger section of a source’s
argument (for example, using a theory from a source and analysing the same three
case studies that the source uses);
6. When he/she build on another’s method found either in a source or from
collaborative work in a lab;
7. When he/she build on another’s program in writing computer code or on a not-
commonly-known algorithm; and/or
8. When he/she collaborate with others in producing knowledge.

In general, a referencing system requires two parts:

1. In-text citations
This is information about a source within the text of an assignment.
2. List of references
This is a list of all sources a student has used to research his/her assignment. It is
alphabetically arranged by author surname and appears immediately after the last
page of an assignment.
1
http://www.yale.edu/bass/writing/sources/plagiarism/warning.html, accessed May 18, 2008.

9
Different faculties or departments may have different requirement on how referencing for
an assignment should be done. The various formats used for in-text citations and list of
references are available in the following websites:
1. Harvard System
(http://www3.imperial.ac.uk/library/subjectsandsupport/referencemanagement/
harvard))
2. Chicago Style (http://www.chicagomanualofstyle.org/index.html)
3. American Psychological Association or APA Style (http://www.apastyle.org)
4. Modern Language Association of America or MLA Style
(http://www.mla.org/style)

Once a student has selected a referencing style for his/her assignment, he/she must follow
the same style consistently throughout the assignment. We strongly suggest that the
student consults the lecturer/tutor about which method to use before submission of his/her
assignment.

Penalties for Plagiarism

The Turnitin Similarity Index for all programmes offered should be not more than 15%.

Penalties for plagiarism ranges from mark reduction for the assignment to expulsion from
the University. If plagiarism has been found to have occurred, the action(s) taken will be
determined by the forms of plagiarism implicated:

1. Complete plagiarism
Verbatim copying another person’s work without acknowledgement
- To be referred to a panel 2 for further investigation. If the student is found to
be guilty, a grade “FL” is to be awarded for the subject.

2. Substantial plagiarism (Turnitin Similarity Index ≥ 30%)

Near-verbatim copying another person’s work by simply altering the order of the
sentences or the format of presentation or by changing a few words or phrases
without acknowledgement.
- Based on a report submitted by the lecturer in charge of the subject, a Zero
mark will be awarded for the said assessment.

3. Minimal plagiarism (Turnitin Similarity Index ≥ 15%)

Paraphrasing by changing and/or eliminating some words without proper
acknowledgement.
- Based on a report submitted by the lecturer in charge, a deduction of up to
50% of marks the student is entitled to receive for the said assessment.
2
The panel consists of the HoD as the Chair and 2 to 3 senior academic staff.

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Pleading ignorance or unintentional plagiarism does not constitute valid reasons for
plagiarism and will not avoid the penalties from being imposed. Excuses for acts of
plagiarism such as the following, but not limited to, will not be entertained:
1. I don’t have time to do the assignment
2. I have too many assignments due on the same day
3. I don’t know, I really didn’t do it
4. I am not aware
5. I don’t understand what plagiarism means
6. I have no intention to plagiarize
7. I forgot to cite the reference
8. I forgot to include the bibliography
9. My English is not good
10. My lecturer/tutor did not explain to me
11. In my country, it is alright to copy someone else’s work
12. My friend copied my assignment when I let him/her to look at my assignment
13. My friend copied my assignment when I allow him/her to use my laptop
14. I did my assignment in the computer lab, someone must have copied my work
15. I asked my friend to submit my assignment and he/she copied my work
16. I discussed my assignment with my friends, so our answers are the same/similar
17. Even though I do not have in-text citation but I have bibliography/reference list

Students should be reminded that it is their responsibilities to take due care throughout
their written work to effectively reference or cite when they use others’ ideas from any
source.

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 Faculty of Business, Economics and Accounting
Department of Business Studies
Department of Accounting and Finance
School of Hospitality and Tourism

Sample

Mid-Semester Test

Subject Code : ACC101

Subject Name : FINANCIAL ACCOUNTING 1

This examination carries 30% of the total assessment for this subject.

Examiner(s):

GOOI CHEE SAN

K CHANDRAN KARUPPAN

Date : Time :

Time allowed : 2 HOURS

INSTRUCTION(S):

1. This examination consists of FOUR (4) questions:

Students are required to answer ALL questions in the answer book provided.

2. This is a CLOSED BOOK examination.

3. Students are NOT permitted to retain this examination paper.

(This examination paper consists in 5 printed pages, including cover page)

12
Answer ALL questions.

Question 1 (30 marks)

KG KOH ENTERPRISE is a trading business. Its financial year end is 31 March each
year. It uses the periodic inventory system. The trial balance of KG KOH ENTERPRISE
as at 31 March 2022 is shown below.

No. ACCOUNT TITLE DEBIT CREDIT

$’000 $’000
1 Accommodation expense 24
2 Accounts receivable 321
3 Advertisement expense 26
4 Cash at bank 47
5 Discount allowed 18
6 Drawings 23
7 Employees' wage and salary expenses 246
8 Insurance expense 22
9 Interest expense 13
10 Inventory, at 01 April 2021 360
11 Miscellaneous operating expense 5
12 Motor vehicle, at cost 100
13 Office equipment, at cost 80
14 Power and lighting expenses 32
15 Premises rental expense 55
16 Prepaid premises rental 15
17 Purchases 1,885
18 Sales return 22
19 Accounts payable 309
20 Accumulated depreciation: office equipment 20
21 Capital 188
22 Interest Income 6
23 Purchase return 10
24 Sales 2,757
25 Sundry revenue 4
3,294 3,294

(Ignore Goods & Services Tax)

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Other relevant data are provided:

(i) The prepaid premises rental is valid for the period 01 March 2022 to 31 May
2022.

(ii) An inventory count was carried out on 31 March 2022. It was valued at
$370,000.

(iii) An interest charge of $2,000 for the month of March 2022 has not been paid
and
neither has it been adjusted.

(iv) The depreciation charges for motor vehicle $25,000 and office equipment
$15,000
have not yet been provided.

REQUIRED:

(a) Prepare a detailed Income Statement for the year ended 31 March 2022 and
(15 marks)

(b) A Statement of Owner’s Equity for the financial year and a Balance Sheet
Statement as at 31 March 2022.
(15 marks)

QUESTION 2 (20 MARKS)

With reference to accounting, explain the similarities and the differences between the
following terms. Give an example each to illustrate your answer.

(a) Prepaid Insurance and Insurance Expense (6 marks)

(b) Unearned Fee and Fee Revenue (7 marks)

(c) A Trial Balance and a Balance Sheet (7 marks)

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Question 3 (20 marks)

KKH is a law consultancy firm. It usually updates its accounting records daily. The
following events relate to the firm. Indicate the immediate effect of the following errors on
each of the accounting elements described in the column heading below, using the
following code:

O = overstated
U = understated
NE = no effect

Copy the boxes below before answering. Do not copy the questions.

Error Net Total Total Owner’s

Profit Assets Liabilit equity
y
Example: Received $200 cash for
services rendered to a customer, but U U NE U
recorded the transaction as $20
(a) KKH has provided consultancy service
for a fee of $890 to a corporate client. The
credit term was n/30. Nothing was
recorded for this job done. The client also
has not paid.

(b) Bought a set of recording equipment

for the firm’s use. It was paid in cash
$10,000 and recorded as DR Equipment
Expense $10,000 and CR Cash $10,000.

(c) Purchased stationery two months ago.

It was recorded as DR Office Supplies
$7,000 and CR Accounts Payable $7,000.
Paid the supplier now. There was no entry
for this payment of $7,000.
(d) The owner of KKH took out $5,000
cash from the business to celebrate his
wife’s birthday. It was recorded as DR
Birthday Expense $5,000 and CR Cash
$5,000.

(e) Two months ago, KKH has collected

the full amount of $2,000 from a client for
a legal case to be carried out later. This
cash received was correctly recorded.
Now KKH has done the job, but no
accounting entry was made.

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Question 4 (30 marks)
TNY is a trading business. It uses the periodic inventory system. All its receipts and
payments are made through the bank account. An extract of its ledger balances as at 31
March 2022 is shown below. It updates its ledger daily.
TNY: Ledger balances as at 31 March 2022.

Ledger Accounts Amount

$
Cash at Bank A/C 200,000
Accounts Payable A/C 250,000
Accounts Receivable A/C 290,000
Capital A/C 750,000
Inventory A/C 130,000
Office Equipment A/C 80,000
Land and Building A/C 300,000

In the month of April 2022, the following events took place.

April Events / Transactions

2022
02 Bought a computer for $20,000 cash. It was for the sales manager use.

04 Bought printing paper and ink $5,000 cash for future office use.

16 Bought $100,000 inventory. The terms of the purchase were 2/5, n/40.
TNY paid $3,000 by cheque to transport the inventory to its warehouse.
19 Sold some inventory for $190,000. The terms of the sale were 3/10, n/30.
The transport charges were paid by the customer.
20 TNY fully settled the amount owed for the 16 April purchase transaction.

30 TNY used $2,000 worth of printing paper and ink. These were bought on
4 April.
30 TNY paid $9,000 for the utilities used in the month.

30 TNY paid $ 7,000 to its workers for the April 2022 salary.

(IGNORE GOODS & SERVICES TAX)

REQUIRED:

(a) Show ALL the ledger accounts (T-account) and post all the April 2022
transactions. (No journal entry is required). (22 marks)

(b) Prepare a trial balance as at 30 April 2022. (8 marks)

*** END OF PAPER ***

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 Faculty of Business, Economics and Accounting
Department of Business Studies
Department of Accounting and Finance
School of Hospitality and Tourism

Sample

Final examination
Subject Code : ACC101

Subject Name : FINANCIAL ACCOUNTING 1

This examination carries 70% of the total assessment for this subject.

Examiner(s): Moderator:

MR GOOI CHEE SAN

MR CHANDRAN KARUPPAN

Date : Time :

Time allowed : 3 HOURS

INSTRUCTION(S):
1. This examination consists of TWO (2) sections:
SECTION A consists of TWENTY (20) multiple-choice questions. Answer ALL questions
in the multiple choice answer sheet provided.
SECTION B consists of FOUR (4) questions. Answer ALL questions in the answer book
provided.

2. Writing on the examination answer book is NOT permitted during reading time.

3. This is a CLOSED BOOK examination.

4. Students are NOT permitted to retain this examination paper.

5. Students MUST pass this examination in order to pass the subject.

(This examination paper consists of 14 printed pages, including cover page)

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 SECTION A – Multiple Choice Questions (20 Marks)

Answer ALL questions. Each question carries 1 mark.

1. Which of the following is the correct order of the accounting cycle?

No Activities

1 Record transactions

2 Adjust accounts

3 Prepare statements

4 Close temporary accounts

A. 1,2,3,4.
B. 2,1,4,3.
C. 3,1,4,2.
D. 2,3,1,4.

2. The purpose of the accrual basis of accounting is to:

A. Charge expense when paid.
B. Match revenues and expenses in the proper period.
C. Report revenue when cash is received.
D. Reduce tax liability of the business.

3. Which of the following financial statement element is not closed at the end of
an accounting cycle?
A. Expenses
B. Revenues
C. Drawings
D. Capital

4. On May 1, 2022, LMS Company paid $600 in advance for an insurance policy
that covered the company for 3 months. LMS Company recorded this
purchase as an asset. The adjusting entry required on June 30, 2022, would
include:
A. debit to Prepaid Insurance for $600.
B. credit to Prepaid Insurance for $600.
C. debit to Insurance Expense for $400.

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 D. credit to Insurance Expense for $400.

5. Effective internal controls for cash and cash at bank include

A. Pay by cheque if the amount is big.
B. Do not keep too much cash in the business premises.
C. Issue receipts to customers as evidence of money received.
D. All of these.

Question 6 & 7 refer to the following:

On January 1, 2021, the beginning of its financial year, KKK Company's
Accounts Receivable and the Allowance for Doubtful Accounts carried
balances of $80,000 and $2,000, respectively. During the year KKK Company
reported $900,000 of credit sales. KKK Company wrote off $1,000 of
receivables as uncollectible in 2021. Cash collections of receivables amounted
to $700,000. KKK estimates that it will be unable to collect one percent (1%)
of credit sales.
6. The amount of bad debts expense recognized in the 2021 income statement
will be:
A. $1,000
B. $2,000
C. $9,000
D. $0

7. The net realizable value of receivables appearing on KKK Company's balance

sheet as at 31 December 2021 will amount to:
A. $269,000
B. $270,000
C. $279,000
D. $280,000

8. Which one of the following is not an accurate description of the Allowance for
Doubtful Accounts?
A. The account appears in the balance sheet.
B. The account is a contra account.
C. The amount of the Allowance for Doubtful Accounts decreases the net
realizable value of a company's receivables.
D. The amount can easily be determined accurately.

9. Which of the following is not true of current ratio analysis?

A. It is calculated with current assets dividing by current liabilities.
B. It is used to estimate the liquidity of the business.
C. It is used to gauge the next 5 years risk of business environment.

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 D. It is used to determine the ability of the business to pay its short-term
obligations.

10. Which of the following is not included in the computation of the quick ratio?
A. Inventory
B. Cash on hand
C. Accounts receivable
D. Cash at bank

11. Which of the following statement about a balance sheet is correct?

A. It is classified into operating, investing, and financing activities
B. The total asset must always be greater than the total liability.
C. It shows revenue minus expenses is equal to profit for the period.
D. Lists assets, liabilities, and equity at a specific point in time

12. If there are no drawings and no contributions of capital, a profit could be

earned in any accounting period if and only if:
A. Total assets exceed total liabilities
B. Total assets increase during the period
C. Net assets increase during the period
D. Total liabilities increase during the period

13. ZQQ Enterprise reports the following balance sheet information for 2021:

ELEMENTS 1 January 2021 31 December 2021

Assets $80 000 $90 000
Liabilities $30 000 $30 000
Assuming the capital contribution made by the owner during 2021 was $5,000
and withdrawals were $6,000, the profit for the year 2021 must have been:
A. $5 000
B. $6 000
C. $10 000
D. $11 000

14. Which of these events would not be recorded by accountants?

A. The owner bought a diamond ring for his wife and paid $300,000 from the
business bank account.
B. The business ordered goods to be delivered next month. The term was cash on
delivery.
C. Credit sale of $20,000. The terms were 2/10, n/30.
D. Depreciation on motor vehicles calculated at the end of the firm’s financial
year was $45,000.

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15. The life of ABC Enterprise is divided into equal time intervals for reporting
purpose. What accounting concept is it applying?
A. Accrual concept.
B. Period assumption concept.
C. Accounting entity concept.
D. Going concern concept.

16. A deposit received in advance by Jolene Enterprise for services not yet
supplied can be initially recorded by Jolene Enterprise in a liability account
called:
A. Sales revenue
B. Mortgage
C. Unearned income
D. Accounts payable

17. The accounting entry to record the payment of a liability is:

A. Debit an asset account and credit a liability account.
B. Debit a liability account and credit an equity account.
C. Debit an equity account and credit a liability account.
D. Debit a liability account and credit an asset account.

18. On 01 June 2022, the KXT Enterprise rented out part of its building and
collected $6,000 in advance for a six-month period. The receipt was credited
to a liability account. At 30 June 2022, Pepper Diner's year-end, which of the
following adjusting journal entries should be made?
A. Dr. Cash, $6,000; Cr. Rent Income, $6,000
B. Dr. Rent Income, $1,000; Cr Unearned Rent Income, $1,000
C. Dr. Unearned Rent Income, $1,000; Cr. Rent Income, $1,000
D. Dr. Rent Receivable, $6,000; Cr. Rent Income, $6,000

19. On the first day of the year TTW Enterprise purchased a motor vehicle for
$55,000 which has a useful life of 5 years and a residual value of $5,000.
Applying the Straight-Line Method, at the end of the second year, which of the
following is true?
A. Depreciation expense in the income statement for the second year is $10,000.
B. The carrying value of the motor vehicle in the balance sheet is $45,000.
C. Accumulated depreciation in the balance sheet is $10,000.

21
 D. All the three statements in the above are not true

20. The capital account of a sole trader was credited with $9,000. Which of these
items would not give rise to such a credit?
A. The business earned a profit of $9,000
B. The owner withdrew $9,000 to pay for his domestic groceries.
C. The owner introduced $9,000 new capital.
D. None of the above

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 SECTION B (80 Marks)

Answer ALL questions.

Question 1

SITIAWAN Enterprise is a trading business. Its financial year end is 30 June each year.
Below is an extract of its trial balance as at 30 June 2022.

No. Account Title Debit Credit

$’000 $’000
1 Accounts payable 350
2 Accounts receivable 400
3 Accumulated depreciation, office building, 1.7.2021 50
4 Accumulated depreciation, office equipment, 1.7.2021 50
5 Allowance for doubtful debts 8
6 Bank loan, due 31.12.2030 200
7 Capital 500
8 Cash at bank 130
9 Consultancy expense 15
10 Discount allowed 22
11 Discount received 22
12 Drawings 30
13 Interest expense 16
14 Interest revenue 3
15 Inventory at 1.7.2021 280
16 Office building, at cost 400
17 Office equipment, at cost 400
18 Miscellaneous operating expense 4
19 Prepaid insurance 30
20 Purchases 1,000
21 Rental of motor vehicle expense 26
22 Salaries and wages expenses 330
23 Sales return 14
24 Sales revenue 1,999
25 Staff superannuation expense 33
26 Transport outwards expense 23
27 Upkeep and maintenance expense 29
3,182 3,182
(Ignore Goods & Services Tax.)

You are provided the following additional data:

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(i) SITIAWAN did an inventory count and valuation on the last day of the financial
year. It was valued at $300,000
(ii) The prepaid insurance in the above is valid from 01 July 2021 to 30 June 2023.
(iii) The depreciation charges for office building $8,000 and for office equipment
$60,000 for the financial year had not yet been adjusted.
(iv) The Allowance for Doubtful Debts is required to increase to $19,000.
(v) SITIAWAN has not yet paid and not charged $5,000, the June 2022 rental of
motor vehicle.

(vi) SITIAWAN issued a “Letter of Appointment” to a new employee who will start
work on 01 July 2022. His salary will be $16,000 per month.

REQUIRED:

(a) Prepare a detailed Income Statement for the year ended 30 June 2022 and
(10 marks)

(b) A Statement of Owner’s Equity for the year and a detailed Balance Sheet as at 30
June 2022.
(10 marks)

Question 2

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Below is the Income Statement of LAGENDA TI Enterprise for the financial year ended
30 June 2022.

LAGENDA TI Enterprise
Income Statement for the year ended 30 June 2022.

Sales $2,400,000
Less: Cost of goods sold 1,200,000
Gross Profit 1,200,000
Profit on sale of office equipment 2,000
1,202,000
Less: Expenses
Depreciation expense 90,000
Insurance expense 30,000
Interest expense 10,000
Rent expense 105,000
Salary expense 300,000
Sundry operating expense 7,000
542,000
Net income 660,000

During the financial year, the following changes were noted:

Accounts As at As at
30 June 2021 30 June 2022
Cash at bank $90,000 Amount Not Given
Accounts receivable $210,000 $250,000
Inventory $110,000 $140,000
Prepaid insurance $3,000 $11,000
Accounts payable $150,000 $200,000
Salary payable $0 $16,000
Rent payable $12,000 $0

Additional data were given below:

LAGENDA TI Enterprise bought and paid cash two brand new motor vehicles for $70,000
each. An old motor vehicle was sold for $4,000 cash, which it had a carrying value of
$4,000 at the time of sale. A fully depreciated computer was sold for $2,000 cash.
LAGENDA TI has paid $900,000 cash to buy a piece of land and building.

LAGENDA TI Enterprise issued a batch of notes payable for $500,000 on 01 February

2022. During the year, the owner invested a fresh capital of $400,000 cash in LAGENDA
TI Enterprise. The interest and sundry operating expenses were paid as they arose.

REQUIRED:

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(a) Prepare a detailed Cash Flow Statement of LAGENDA TI Enterprise for the year
ended 30 June 2022.
(16 marks)

(b) The owner of LAGENDA TI Enterprise could not understand the cash flow
statement that you have prepared. Explain the cash flow statement to the owner.

(4 marks)

26
Question 3 (A)
GZW is a consultancy firm. It updates its accounts daily.

Indicate the immediate effect of the following errors on each of the accounting
elements described in the column headings below, using the following code:

O = overstated
U = understated
NE = no effect

Copy the boxes below before answering. Do not copy the questions.

Net Total Total Owner’s

Error Profit Assets Liabilities Equity

For Example: Received $500 cash for

advice given to a customer but U U NE U
recorded the transaction as $50.

(i) GZW bought an office equipment for

$1,200 cash. It was wrongly recorded as
$12,000.

(ii) GZW paid for the salary expense for

the month, $14,000 cash. It was wrongly
recorded as Dr. Electricity Expense
$41,000 and Cr. Cash $41,000.

(iii) The owner of GZW withdrew $1,000

cash for personal use. It was not
recorded. The reason given was that the
owner and the business were one and the
same.
(iv) A $7,000 consultancy work done in
the last financial year was given a credit
period of 60 days. Now, GZW received
the $7,000. It was recorded as Dr. $7,000
Cash and Cr. $7,000 Revenue.
(v) GZW bought $16,700 worth of office
supplies for future use on credit term of
60 days. It was not recorded at all for this
purchase.

(10 marks)

27
Question 3 (B)

The following information is provided by LUMUT Enterprise:

On 01 June 2022, it was noted that the following cheques were still outstanding.
Cheque no 7731 $3,000
Cheque no 7732 $9,000
Cheque no 7733 $10,000

The following information is extracted from the books of LUMUT Enterprise.

Cash at Bank Account

Date Particulars $ Date Particulars $
1/6 Balance b/d 50,000 4/6 Cheque no 7734 10,000
5/6 Deposit 17,000 9/6 Cheque no 7735 11,000
8/6 Deposit 4,000 14/6 Cheque no 7736 20,000
27/6 Deposit 1,111 24/6 Cheque no 7738 1,000
30/6 Deposit 7,000 30/6 Cheque no 7739 6,000
30/6 Deposit 28,000 30/6 Balance c/d 59,11
107,111 1
107,111

The Bank Statement below was issued by ACE BANK (LUMUT Enterprise’s banker.)

LUMUT Enterprise: Bank Statement as at 30 June 2022

Date Particulars Debit Credit Balance

$ $ $
1/6 Balance b/d 72,000 CR
4/6 Cheque no 7733 10,000 62,000 CR
4/6 Cheque no 7731 3,000 59,000 CR
5/6 Deposit 17,000 76,000 CR
8/6 Deposit 4,000 80,000 CR
9/6 Cheque no 7735 11,000 69,000 CR
11/6 Cheque no 7734 10,000 59,000 CR
12/6 Bank Commission 70 58,930 CR
18/6 Cheque no 7736 20,000 38,930 CR
24/6 Cheque no 7738 1,000 37,930 CR
29/6 Cheque no 2222 930 37,000 CR
30/6 Service charge 100 36,900 CR
30/6 Deposit 28,000 64,900 CR
30/6 Interest 50 64,950 CR
30/6 Cheque no 7737 4,950 60,000 CR

Notes:

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 (i) On 27 May, LUMUT Enterprise received a cheque of $1,111 from BAD
Company (a customer) and banked it in on the same day. The following day,
the bank called and issued a statement to LUMUT Enterprise to inform it that
the cheque was dishonoured. BAD Company has insufficient funds.

(ii) The cheque no 2222 was issued by LUTUT Company Ltd., not LUMUT
Enterprise.

(iii) LUMUT Enterprise has inadvertently left out the entry of cheque number
7737.

REQUIRED:
(a) Update the Cash at Bank Account of LUMUT Enterprise. (4 marks)

(b) Prepare a Bank Reconciliation of LUMUT Enterprise as of 30/6. (4 marks)

(c) Discuss what are the next steps the management of LUMUT Enterprise must do
after completing the above two tasks (a) and (b).
(2 marks)

29
QUESTION 4

PANGKOR Enterprise is a retailer. All purchases and sales are on cash basis. The
business uses the perpetual inventory system. The following is a summary of its purchases
and sales for the month of June 2022. On 1 June 2022, PANGKOR Enterprise’s
opening inventory was 600 units, costing $40 each.

Purchases of Inventory in June 2022

Date of Purchase Number of units Cost price per unit

Purchased $
6 June 500 40
19 June 400 45
30 June 300 50

Sales of Inventory in June 2022

Date of Sales Number of units Sales price per unit

Sold $
5 June 500 100
11 June 400 105
25 June 200 110

(Ignore Goods & Services Tax)

REQUIRED:

(a) Use the First-in, First-out, valuation method (FIFO), prepare the inventory record
showing the purchase, the cost of goods sold and the balance on hand columns. (8
marks)

(b) Prepare the journal entries for the transaction on 5 June 2022. (3
marks)

(c) If in June 2022, the Administration expenses were $25,000 and Selling expenses
$18,000, calculate the Net Profit of the business for the month. (3 marks)

(d) On 1 July 2022, the company discovered 1 unit of the inventory was missing. There
was no chance of recovering or claim from the insurance company. Show the journal entry
for this item. (3
marks)

(e) By inspection of the data given, without further calculation, if PANGKOR Enterprise
were to adopt the “Last-in, First-out valuation method (LIFO)”, what will happen to the
profit for the month of June 2022? Will it be higher or lower? Explain.
(3 marks)

30
 *** END OF EXAMINATION PAPER ***

Allocation of marks by CLO in Rubrics for Mid-Term Test, Sample.

QUESTIONS POOR SATISFACTORY GOOD

0 To 49.5 % 50 to 69 % 70 to 100 %

Question 1 Students who Scoring between 15 to A score of 20.8 to

It tests preparation scored between 0 20.7 marks are those 30 marks are those
of Income to 14.9 marks who know the formats who were able to
Statement and have not got the of Income Statement prepare the Income
Balance Sheet. formats of and Balance Sheet but Statements and
CLO2 Income were not accurate in Balance Sheet with
Statement and their adjustments of sufficiently good
Balance Sheet accounts. adjustments of
right. accounts.
Question 2 0 to 9.9 marks Scoring between 10 to A score of 14
This question are for students 13.9 marks are those marks and above
covers accounting who cannot who were able to are for those who
theories and discuss the discuss accounting are good in
concepts. accounting theories and concepts discussing
CLO1 & 2 theories and sufficiently. accounting theories
concepts and concepts and
adequately. giving examples to
demonstrate their
understanding.
Question 3 0 to 14.9 marks 15 to 20.7 marks are A score of 20.8 to
This question are for students for those students who 30 marks is for
covers double who do not have are able but not those students who
entries and adequate thorough in carrying are more than
preparation of trial knowledge to out double entries, post sufficiently able to
balance. pass double them to ledgers and carry out double
CLO1 entries and preparing the trial entries, post them
preparing the balance. to ledgers and
trial balance. preparing the trial
balance.
Question 4 0 to 9.9 marks They can relate the They are good in
This question seeks are for students effects of wrong entries identifying the
to test the effects of who cannot relate but not thorough on the effects of wrong
wrong accounting the effects of accounting elements. accounting entries
entries on the wrong entries on on the profit, assets,
profit, assets, the various liabilities, and
liabilities, and accounting equity.
equity. elements
CLO1

31
 Allocation of marks by CLO in Rubrics for Final Exam, Sample.
QUESTIONS POOR SATISFACTORY GOOD
0 To 49.5 % 50 to 69 % 70 to 100 %
0 to 9.9 marks 10 to 13.9 marks 14 to 20 marks
Section A: 20 Those who scored Those who scored Those who scored 14
Multiple Choice below 10 marks in between 10 marks to marks or more have
Questions. Each this area have not 13.9 marks have gained a good basic
question carries sufficiently gained acquired sufficient knowledge covering
one mark. Total 20 adequate basic knowledge across the the whole syllabus.
marks. They cover knowledge across syllabus but not in-
basic accounting the syllabus. depth.
concepts. CLO1
Section B: Students who scored Scoring between 10 to A score of 14 marks
Question 1 between 0 to 9.9 13.9 marks are those and above are those
It tests preparation marks have not got who know the formats who were able to
of Income the formats of of Income Statement prepare the Income
Statement and Income Statement and Balance Sheet but Statements and
Balance Sheet. and Balance Sheet were not accurate in Balance Sheet with
CLO2 right. their adjustments of sufficiently good
accounts. adjustments of
accounts.
Section B: Students who scored Scoring between 10 to A score of 14 marks
Question 2 between 0 to 9.9 13.9 marks are those and above are those
This question marks have not got who know the format who were able to
covers preparation the format of Cash of Cash Flow prepare the Cash Flow
and interpretation Flow Statement right Statement but are not Statement with
of Cash Flow and were not able to accurate in their sufficiently good
Statement. interpret what they adjustments of interpretation.
CLO2 have prepared. accounts. Their
interpretation of the
Cash Flow statement
is sketchy.
Section B: 0 to 9.9 marks are Scoring between 10 to A score of 14 marks
Question 3 for students who 13.9 marks are those or more would have
One part covers cannot present bank who have sufficient been able to do most
bank reconciliation reconciliation knowledge but not of the work on bank
statement and statement and thorough on bank reconciliation,
preparation of updating the Cash at reconciliation, updating the Cash at
journal entries on Bank Account and updating the Cash at Bank Account and
updating the Cash the related journal Bank Account and updating journal
at Bank Account. entries. updating journal entries.
The other part They also cannot entries. They are also good in
seeks to test the relate the effects of They also can relate identifying the effects
effects of wrong wrong entries on the the effects of wrong of wrong accounting
accounting entries various accounting entries on the entries on the various
on the profit, elements accounting elements accounting elements.

32
assets, liabilities, sufficiently but not in-
and equity. CLO2 depth knowledge.
Section B:
Question 4 0 to 9.9 marks are Scoring between 10 to A score of 14 marks
This question for students who 13.9 marks are those or more would have
covers inventory cannot keep who have attained been able to do most
valuation methods, inventory records, enough knowledge in of the task in relation
keeping inventory cannot differentiate keeping inventory to inventory record
records, and impact the inventory records adequately keeping, good in
on the profits. valuation methods and may be able to see accessing and quantify
CLO1 and their impact on the effect of different the effect of different
profits. methods on the profit. methods of valuation
on the profit.

33