CONFIDENTIAL 1 AC/DECEMBER 2022/ACC106/117

UNIVERSITI TEKNOLOGI MARA

TEST 1

COURSE : INTRODUCTION TO FINANCIAL ACCOUNTING

AND REPORTING
COURSE CODE : ACC106/117
EXAMINATION : DECEMBER 2022
TIME : 1 HOUR 30 MINUTES

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of THREE (3) Parts: Answer ALL questions
PART A: 10 True or False Questions
PART B: 10 Multiple-choice questions
PART C: 1 Short Essay

2. Answer ALL questions in the Answer Booklet.

i) Show your workings (If any) for each of the questions
ii) Start each answer on a new page

3. Do not bring any material into the examination room unless permission is given by
invigilator.

4. Please check to make sure that this examination pack consists of:
i. The Question Paper.
ii. The Answer Booklet – Provided by the Faculty.

5 Answer ALL questions in English

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

This examination paper consists of 5 printed pages

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CONFIDENTIAL 2 AC/DECEMBER 2022/ACC106/117

PART A

This part consists of 10 True or False questions. Choose whether the statement is
True or False.

No Statements
1. Bookkeeping involves in interpreting and analyzing the result of business
operation.
2. Sole proprietorships and private companies have no legal obligation to keep and
prepare book of accounts
3. Limited liabilities mean the liabilities of the shareholders a limited to their assets
invested in the companies
4. Managers need accounting information so that corrective action can be taken if
business fails to achieve its target.
5. Comparability is one of the fundamental qualitative characteristics of Financial
Statements.
6. Accounting information are verifiable when they are supported by the relevant
documents.
7. When the business is going concern, assets and liabilities normally valued at
historical costs
8. Business entity requires business transaction to be measured in term of money
9. Purchased goods on credit will both increase expenses and liabilities
10. Drawing of cash will reduced owner’s equity and assets, thus drawing account
must be debited and cash account must be credited

(10 marks)

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CONFIDENTIAL 3 AC/DECEMBER 2022/ACC106/117

PART B

This part consists of 10 Multiple-choice questions. Choose the most suitable answer.

1. Which of the following statement is INCORRECT?

A. Bookkeeping is part of accounting

B. Accounting includes bookkeeping, summarizing, and communicating the
information to users for decision making.
C. Accounting information is communicated to users through Financial Statements.
D. Accounting processes start with summarizing business transactions in Financial
Statements

2. The followings are Private Companies, except:

A. Legally is a separate entity status

B. Shares are not publicly traded
C. Liabilities of the shareholders are limited
D. End of the business names usually has word Berhad

3. Which of the following statement best described sole proprietorship and partnership?

A. Have limited liabilities

B. Have obligation to prepare and keep book of accounts
C. Pay tax under personal income tax
D. Need to submit annual Financial Statements to Company Commission of
Malaysia

4. The following statements about users of accounting information is true, EXCEPT:

A. Managers and Partners are internal users

B. Debtors and Creditors are external users
C. Lenders and owners are external users
D. Inland revenues boards and potential investor are external users

5. The Financial Statement should not contain error and must include all important and
material information. This is in accordance to which qualitative characteristics:

A. Relevant
B. Faithful representation
C. Understandability
D. Timeliness

6. MM Enterprise is continuing in business and does not has any intentions nor needs to
liquidate it operation. However, the owner treats the assets as though the company is
liquidating. This violates:

A. Going concern concept

B. Consistency concept
C. Business entity concept
D. Money measurement concept

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CONFIDENTIAL 4 AC/DECEMBER 2022/ACC106/117

7. Azy Sdn Bhd recorded the purchased of machine from Singapura in its book of
accounts in term of Ringgit Malaysia (RM). This is in accordance with:
A. Going concern concept
B. Consistency concept
C. Business entity concept
D. Money measurement concept

8. Ami the owner of Cee Scarf Enterprise recorded the scarf taken by her daughter as
drawings. This is in accordance to:

A. Going concern concept

B. Consistency concept
C. Business entity concept
D. Money measurement concept

9. The following are current liabilities, EXCEPT:

A. Bank overdraft
B. Account payable
C. Account receivable
D. Short-term loan

10. The double entry for obtaining loan worth RM100,000 and the money were transferred
into the business’s bank account is:

A. Debit Bank, Credit Loan

B. Debit Loan, Credit Bank
C. Debit Cash, Credit Loan
D. Debit Loan, Credit Cash

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CONFIDENTIAL 5 AC/DECEMBER 2022/ACC106/117

PART C

QUESTION 1

AZ Enterprise owns by Azie is in a business selling home appliances. The following are
transactions of AZ Enterprise for the month of December 2022.

2022, Transactions
December
1 Azie invested additional RM500,000 into business’s bank account.
3 Purchased televisions and air-conditioners worth RM35,000 from Meme
Enterprise on credit
5 Sold washing machine on cash valued RM500 to En Sasa
7 Purchased motor van worth RM70,000 from Abby Motor on credit
9 Azie took microwave worth RM500 from business for personal use.
10 Sold air-conditioner worth RM7,000 to Zaza Enterprise on credit
12 Paid utility bill RM500 using online banking.
15 Received rental income RM2,000 by cheque
17 Paid Meme Enterprise RM10,000 using online banking to settle part of the
amount owing.
23 Azie brought her own motor van worth RM50,000 into the business to be
used for deliveries of goods.
25 Purchased microwaves and rice cookers worth RM8,000 from ABC Electric
on cash
27 Returned damage television to Meme Enterprise worth RM2,000
28 Zaza Enterprise returned an air-conditioner valued RM1,500 to the business
30 Paid salary RM10,000 through online transfer.
31 Zaza Enterprise settled the amount due by cheque.

Required:

a. Illustrate the effects (increase or decrease) on assets, liabilities, owner’s equities,

revenues, or expenses for 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.

Example:

1 November 2022: Purchased motor van valued RM200,000 using loan from bank.

DATE a. EFFECTS b. JOURNAL ENTRIES

1/11/22 Increase assets Dr Motor van
Increase liabilities Cr Loan from Bank

END OF QUESTION PAPER

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