BKAL1013 / BUSINESS ACCOUNTING MATRIC NO.

:____________________

Submission date 20/10 MULTIPLE CHOICE QUESTIONS (100 MARKS: 90 MINUTES) Please choose the BEST answer. Please answer on the OMR sheet provided

1.

The purpose of a(n) __________ is to determine the increases and decreases in each of the item in the financial statement. A. B. C. D. journal account ledger posting

2.

The followings are the purpose of accounting EXCEPT: A. B. C. D. Provide useful information to users Assist users in making business decision Assist managers in evaluating employees performance Communicate firm economic condition to users

3.

Which the following is the internal user of accounting information? A. B. C. D. Tax authority Investor Finance Manager Financial Analyst

4.

A type of business that is organized as a separate legal taxable entity is: A. B. C. D. Sole proprietor Corporation Partnership A and C

5.

___________________ is the stakeholders who provide the major financing for a business. A. B. C. D. Market stakeholders Internal stakeholders Government stakeholders Capital market stakeholders

BKAL1013 / BUSINESS ACCOUNTING MATRIC NO.:____________________

6.

Which of the following is INCORECT? A. B. C. D. Merchandising and manufacturing are the only types of business operated Managers used accounting information for planning purposes Economics planner used accounting information in their forecasting activities Accounting involves recording businesses economic activities

7.

The standards that are universally accepted and practiced in accounting profession are called________________________________. A. B. C. D. Malaysian Accounting Standard Board (MASB) Financial Reporting Standard (FRS) International Federation of Accountants (IFAC) Generally Accepted Accounting Principles (GAAP)

8.

Which of these are constraints of accounting practiced? A. B. C. D. Conservatism and materiality Objectivity and matching principles Going concern and monetary unit assumptions Business entity and cost concepts

9.

The following are accounting assumption and principles EXCEPT: A. B. C. D. Economic entity and time period Monetary unit and going concern Revenue recognition and matching principles Materiality and conservatism

10.

The owners equity of a company is decreased by ____________________. A. B. C. D. Investment and Revenue Expense and Withdrawal Revenue and Expenses Liability and Withdrawal

11.

A principle which requires company to reports its economic activities based on actual price paid for is related to: A. B. C. D. Objectivity principle Going concern assumption Cost principle Monetary unit assumption 2

BKAL1013 / BUSINESS ACCOUNTING MATRIC NO.:____________________

12.

Businesses shall continue its operation to the foreseeable future The above statement is BEST described as a: A. B. C. D. Revenue recognition principle Going concern assumption Time period assumption Full disclosureprinciple

13.

Which of the following is the main concern of Matching Principles? A. B. C. D. To report expenses incurred in the same period as the revenue related to it is earn To recognized revenue earn at an appropriate period To report relevant, reliable and comparable business information for decision making To accounts only accounting items which are significant for a given business size

14.

_____________________ is a financial statement which summarized the cash receipt and payments for a specific period of time. A. B. C. D. Statement of cash flows Statement of comprehensive income Statement of financial position Statement of owners equity

15.

Preparing a business accounts with consideration that the company will be closed in a near future is NOT adhering to the ____________________. A. B. C. D. Revenue recognition principle Economic entity assumption Going concern assumption Conservatism

16.

The accounting equation can be stated as: A. B. C. D. Expenses = Liabilities Owners Equity Assets Liabilities = Owners Equity Liabilities = Revenue + Owners Equity Owners Equity = Assets + Liabilities

BKAL1013 / BUSINESS ACCOUNTING MATRIC NO.:____________________

17.

A summary of the revenuesearned and expenses incurred for a specific period of time refers to _________________________ A. B. C. D. Statement of comprehensive income Statement of cash basis Statement of cash flows Statement of financial position

18.

Fariq Enterprise sold RM45,000 of inventory by cash to Annur Company. This transaction should be recorded on the accounting records of which of the following entities based on the economic or business entity assumption? A. B. C. D. Fariq Enterprise and Annur Company Fariq Enterprise and Fariqs personal records Only Fariq Enterprise Only Annur Company

19.

Which of the following are not considered as accounting principles? i. ii. iii. iv. v. A. B. C. D. Time period Historical cost Full disclosure Going concern Monetary unit

i, ii and iii i, ii, and iv i, iv, and v i, iii, and iv

20.

On 31 March 2012, Folken & Co completed an accounting service worth of RM12,000 to hiscustomer, VRK Sdn Bhd but has yet to receive any payment from the company. The accountingprinciple that should be applied by Folken & Co to record this transaction is A. B. C. D. Matching principle Revenue recognition principle Historical cost principle Full disclosure principle

BKAL1013 / BUSINESS ACCOUNTING MATRIC NO.:____________________

21.

If total assets decreased by RM10,500 during a period of time and owners equity increased byRM3,000 during the same period, then the amount and direction of the periods change in totalliabilities is: A. B. C. D. RM13,500 increase RM7,500 decrease RM7,500 increase RM13,500 decrease

22.

How does the purchased of inventories on account affect the accounting equation? A. B. C. D. liabilities increase; owners equity decrease assets increase; owners equity increase assets decrease; owners equity increase assets increase; liabilities increase

23.

The assumption that the business will continue on a conceivable future instead of being closed or sold, unless evidence shows that it will not continue, is the: A. B. C. D. Going-concern principle Future entity principle Objectivity principle Cost principle

24.

Mr. Asyraf has started a business in May 2012. Initially, he intended to contribute RM30,000 cash to start the business. However, he managed to only give off RM5,000 cash and contributes his personal furniture worth RM7,000 for the business. Based on the transaction analysis, what would be the effect of this transaction towards the accounting equation? A. B. C. D. RM30,000 Increase in Asset, RM30,000 Increase in Owners Equity RM12,000 Increase in Asset, RM12,000 Increase in Owners Equity RM23,000 Increase in Asset, RM23,000 Increase in Liability RM42,000 Increase in Asset, RM42,000 Increase in Owners Equity

25,

Which of the following events is NOT considered as business transaction. A. B. C. D. Paid insurance premium in advance RM2,400 Purchased furniture on account RM5,000 Received bank statement which showed a credit balance of RM18,000 Received invoice from supplier for the purchase of inventories for RM3,500

BKAL1013 / BUSINESS ACCOUNTING MATRIC NO.:____________________

26.

Neeko Daud investment in her sports caf was RM100,000. The total revenues collected were RM250,000, while expenses were RM120,000. She also had withdrawn RM7,500 for personal use. The total balance of her owners equity would be: A. B. C. D. RM130,000 RM222,500 RM350,000 RM357,500

27.

Which of the following items are NOT liabilities? i. ii. iii. iv. v. A. B. C. D. Notes receivable Notes payable Owners capital Inventories Long-term loan

i, ii and iii i, ii, and iv i, iv, and v i, iii, and iv

28.

Zamir Enterprise purchases inventories at the cost of RM25,000. He did not pay full for the inventories and still owes RM20,000. Based on the transaction analysis, what would be the effect of this transaction towards the accounting equation? A. B. C. D. RM25,000 Increase in Asset, RM25,000 Increase in Owners Equity RM20,000 Increase in Asset, RM20,000 Increase in Owners Equity RM20,000 Increase in Asset, RM20,000 Increase in Liability RM25,000 Increase in Asset, RM25,000 Increase in Liability

29.

Which of the following affected managers personal ethics? A. B. C. D. Personal characteristics and development. Companys culture Laws and enforcement All the above

30.

The purpose of a(n) __________ is to determine the increases and decreases in each of the item in the financial statement. A. B. C. D. journal account ledger posting 6

BKAL1013 / BUSINESS ACCOUNTING MATRIC NO.:____________________

31.

Which of the following accounts INCREASE on the credit side? A. B. C. D. Revenues & Liabilities Assets & Liabilities Expenses & Revenues Withdrawal & Expenses

32.

Increases to the owners equity from the selling of services or products are _______ to a(n) _________ account. A. B. C. D. debited; expense debited; liability credited; revenue credited; asset

33.

It gives a complete record of each transaction in one place, and shows debits and credits for each transaction. Which of the following BEST described the above statement? A. B. C. D. Journal Posting Accounts Closing

34. The double entry accounting system is fundamental and most evidenced in the preparation of the ___________________ A. B. C. D. Trial balance Statement of the Comprehensive Income Statement of Changes in Owners Equity Statement of Cash Flows

35.

All of the following accounts have a normal debit balance, EXCEPT: A. B. C. D. Owners Equity -Withdrawals Insurance Accumulated Depreciation Salaries Expense

BKAL1013 / BUSINESS ACCOUNTING MATRIC NO.:____________________

36.

Which of the following statements is CORRECT? A. B. C. D. The left side of a T-account is the credit side. Debits decrease asset and expense accounts, and increase liability, equity, and revenue accounts. The left side of a T-account is the debit side. Credits increase asset and expense accounts, and decrease liability, equity, and revenue accounts.

37.

What is the purpose of preparing a statement of financial position at the end of an accounting period? A. B. C. D. To show a balanced debit and credit entry To show the list of accounts and their respective balances To show the financial position at a point of time To show the ending capital balances

38.

An example of an error that causes the trial balance total to be UNEQUAL: A. B. C. D. An entry of RM100 was wrongly debited to Electricity Expense instead of Insurance Expense An entry of RM100 was wrongly debited to Supplies instead of Office Equipment An entry RM100 was wrongly debited to Cash instead of Accounts Payable An entry of RM100 was wrongly credited to Sales instead of Notes Payable

39.

During the month of February, S.H. Lea Enterprise had cash receipts of RM15,000 and cash disbursements of RM17,200. The cash balance as at 29th February was RM3,600. What was the BEGINNING cash balance as at 1st February? A. B. C. D. RM1,400 RM2,200 RM5,800 RM7,200

BKAL1013 / BUSINESS ACCOUNTING MATRIC NO.:____________________

40.

Eliza Messi opens a new hair salon, Curly House by contributingRM35,000 in cash and some equipment worth RM65,000. Which of the following general journal entries will Curly House make to record this transaction? A. Cash RM35,000 Equipments RM65,000 Eliza Messi, Capital Assets RM100,000 Eliza Messi, Capital

RM100,000

B.

RM100,000

C.

Eliza Messi, Capital Cash Equipments Eliza Messi, Capital Assets

RM100,00 RM35,000 RM65,000 RM100,000 RM100,000

D.

41.

Which of the following statements is TRUE? A. B. C. D. If the trial balance is in balance, it proves that no errors have been made in recording and posting transactions. The trial balance is a book of original entry. Another name for trial balance is chart of accounts. The trial balance is a list of all accounts from the ledger with their balances at a point in time.

42. Pedro Torreh & Partners purchased machineries by paying cash of RM24,000 and issuing a note payable of RM36,000. Which of the following journal entries would be recorded? A. B. C. D. Cash is credited for RM24,000; Equipment is credited for RM60,000; and Notes payable is debited for RM36,000. Cash is credited for RM24,000; Equipment is credited for RM36,000; and Notes payable is debited for RM12,000. Cash is debited for RM24,000; Equipment is debited for RM36,000; and Notes payable is credited for RM60,000. Cash is credited for RM24,000; Equipment is debited for RM60,000; and Notes payable is credited for RM36,000.

BKAL1013 / BUSINESS ACCOUNTING MATRIC NO.:____________________

43.

On 1 April 2012, Haroon Ajih, the owner of Jihar Kite-Maker (JKM) has withdrawn RM5,000 cash from his companys account. JKM has also made TWO other cash payments on the same day: RM1,500 for Account Payable and RM3,500 for telephone bill. Which of the following journal entries BEST describe the above transactions?

A.

Haroon Ajih, Capital Cash Cash

RM5,000 RM5,000

B.

RM5,000 Withdrawal, Capital

RM5,000

C.

Cash

RM10,000 Withdrawal A/C Payable Telephone expense RM5,000 RM1,500 RM3,500

RM5,000 RM1,500 RM3,500

D.

Wihtdrawal A/C Payable Telephone Expense Cash

RM10,000

44.

Christina Beauty Salon paid immediately RM450 for an advertising streamer. This transactionshould be recorded as: A. B. C. D. Debit RM450 to Cash; Credit RM450 to Advertising Expense Debit RM450 to Advertising Expense; Credit RM450 to Cash Debit RM450 to Account Payable; Credit RM450 to Cash Debit RM450 to Advertising Expense; Credit RM450 to Accounts Payable

45

The purpose of closing entries is to enable ________________________ A. B. C. D. the termination of the business as an operating entity the transfer of operating income or loss and withdrawals to owners equity the closure of all assets, liabilities and owners equity accounts before the start of a new accounting period all of the above

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