MA1 MANAGEMENT INFORMATION

CHAPTER 1: THE NATURE OF BUSINESS ORGANIZATION AND ACCOUNTING SYSTEMS Sunway TES

Chapter 1 Assessment

1. Capital is a Debit balance found on the Statement of Financial Position.

A. True
B. False

2. If there is to be a reduction in assets, debit the asset account.

A. True
B. False

3. In an asset account, balance carried down is on the credit side and balance brought down is on the
debit side.
A. True
B. False

4. ABC ltd purchased Inventory worth $200 from BRC Ltd on credit.
Which of the following is the correct journal entry for this transaction in ABC Ltd's accounts?

A. Dr BRC Ltd $200

Cr ABC Ltd $200

B. Dr Inventory $200
Cr ABC Ltd $200

C. Dr Inventory $200
Cr Cash $200

D. Dr Inventory $200
Cr BRC Ltd $200

E. Dr BRC Ltd $200

Cr Inventory $200

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MA1 MANAGEMENT INFORMATION
CHAPTER 1: THE NATURE OF BUSINESS ORGANIZATION AND ACCOUNTING SYSTEMS Sunway TES

5. During a week, the payroll department of a manufacturing business paid net salaries of $75,123. Total
PAYE amounted to $15,456 and NIC totalled $5,789. The company maintains an
interlocking ledger system for its accounts.

What is the double entry to record the above transactions in the Cost Ledger?

A. Debit Wages Control $96,368

Credit Cost Ledger Control $96,368

B. Debit Wages Control $96,368

Credit Bank $96,368

C. Debit Cost Ledger Control $96,368

Credit Wages Control $96,368

D. Debit Bank $96,368

Credit Wages Control $96,368

6. The cost accounts of a business are kept separate from the financial accounts but the two sets of
accounts are reconciled each period.

What accounting system is being described?

A. Cost control accounts

B. Cost ledger accounts
C. Integrated accounts
D. Interlocking accounts

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MA1 MANAGEMENT INFORMATION
CHAPTER 1: THE NATURE OF BUSINESS ORGANIZATION AND ACCOUNTING SYSTEMS Sunway TES

7. The following statements relate to batch processing or real-time processing:

1) Audit trails are easily made since the processing of data occurs at pre-determined times.
2) Customer queries can be responded to immediately.
3) Processing performed during the evening when the computer is not being used interactively.
4) The data is always up to date.

Which of the above are advantages of batch processing?

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

8. When production has been completed what double entry would be made in a cost accounting
system?

A. Debit Cost of Sales

Credit Finished Goods

B. Debit Finished Goods

Credit Work-in-progress

C. Debit Finished Goods

Credit Cost of Sales

D. Debit Work-in-progress
Credit Finished Goods

9. Which of the following statements are correct?

1) The identification component of an access control system is normally a relatively simple

mechanism based on either Username or User ID.
2) Passwords are a form of identification used by a computer system.
3) After a user is authenticated, authorisation determines what that user can do on the system.
4) Most operating systems do not contain system security control features.

A. Only 1, 3 and 4 are correct

B. Only 1 and 3 are correct
C. Only 1, 2 and 3 are correct
D. Only 2 and 3 are correct

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MA1 MANAGEMENT INFORMATION
CHAPTER 1: THE NATURE OF BUSINESS ORGANIZATION AND ACCOUNTING SYSTEMS Sunway TES

10. From a balance of $200 cash in the beginning of the period, $70 was paid to creditor XYZ Ltd. The
balance owing to XYZ at the beginning of the period was $110. No other transactions occurred during
the period.

Identify which of the following accounts correctly reflects the transactions in the account "XYZ Ltd"

A.

B.

C.

D.