1. The term accounting can best defined as ____________________________________ a. A document that reports on an organizations financial position b.

A system that measures business activities, processes financial information into reports and communicates the findings c. A business plan d. A method of recording business transaction 2. Statement of financial position also no!n as ___________________________ a. b. c. d. "alance sheet #ncome Statement Statement of cash flo!s $inancial Statement

%. &hich of the follo!ing statement is incorrect' a. b. c. d. A sole proprietor and partners have unlimited liability (ompanies pay corporate ta) A private company is usually controlled by a family Sole proprietorship is control by partners.

*. &hich of the follo!ing group is correct' a. b. c. d. +)ternal users , -overnment, Accountant, (reditors, .anagers #ntangible Assets , /atents, -ood!ill, "an , (opyrights #nternal users , &or ers, (ustomers, "an ers, Accounts (ler (urrent liabilities , overdraft ban , creditor, short term loan 01 1 year2

3. The financial statement that reports the revenues and e)penses for a period of time such as a year or a month is the___________________ a. Statement of $inancial /osition b. Statement of (omprehensive #ncome c. Statement of cash flo!s d. 4otes to the financial statement 5. _____________is the e)cess of a company6s revenues over e)penses for a given time period. a. 4et 7oss b. Statement of (omprehensive #ncome c. 4et /rofit d. Statement of $inancial /osition 8. &hich of the follo!ing !ill cause o!ner6s e9uity to decrease' 1

a. 4et 7oss b. :evenue c. 4et /rofit d. ;ividend <. (hilli +nterprise had liabilities of :.*==, === and o!ners e9uity of :.1==, ===. #t purchased goods on credit for :.3=, === and collected :.%=, === from its debtors by che9ue. The firms total assets !ould no! be ______________________ a. b. c. d. :.3==, === :.3%=, === :.33=, === :.3<=, ===

>. Syari at ?aya sells goods on credit to Syari at .e!ah ?aya. The Statement of $inancial /osition effect in the boo of Syari at ?aya is________________________ a. #ncrease asset, increase liabilities b. #ncrease assets, decrease liabilities c. #ncrease assets, increase revenue d. ;ecrease liabilities, increase revenues 1=. &hich of the follo!ing changes !ill not occur as a result of a business transaction in the boo eeping records' a. b. c. d. #ncrease asset and increase liability #ncrease asset and increase capital #ncrease capital and increase liability #ncrease capital and decrease liability

11. &hich of the follo!ing events is not considered as a business transaction' a. b. c. d. /aid salary :.2=== to the o!ner as the manager of the business. @rdered a computer costing :.23== and payment !ill be made on delivery ne)t month. /ay shop rental :.%=== by che9ue. The o!ner too goods !orth :.1=== from the business for o!n use.

12. &hich of the follo!ing entries !ould cause an imbalance in the accounting e9uation' a. b. c. d. #ncrease in asset by :.3== and increase in o!ners e9uity by :.3== ;ecrease in liabilities by :.%== and decrease in asset by :.%==. #ncrease in asset by :.8== and decrease in another asset by :.8==. ;ecrease in liabilities by :.12== and decrease in o!ners e9uity by :.12==. 2

1%. The follo!ing function is 4@T a boo eeping functionA a. b. c. d. #nterpreting the results to guide decisionBma ing. #dentifying financial transactions and events. Summarizing the accounting data periodically. :ecording transactions in orderly and systematic manner.

1*. A company is characterized by the follo!ingA a. .embers for public company are limited to 3=. b. /rofit !ill be distributed in form of shares. c. The financial statements should not be audited. d. /rofits are subCected to corporate ta). 13. 7iabilities areA a. .oneys invested by the o!ner. b. Amounts yet to be received from customers. c. ;ebts or obligations to pay money or provide service to others. d. :esources of the firm necessary to carry on business operations. 15. &hich of the follo!ing is 4@T true about partnership' a. /artners have unlimited liability. b. The ma)imum number for nonBprofessional partnership is 23 members. c. The financial statements are not re9uired to be disclosed and audited. d. /artnership has a limited life. 18. The statement of financial position sho!s the follo!ingA a. (apital invested by the business o!ner at a particular date. b. The amount of profit and loss of a business. c. Total current and nonBcurrent assets of a business. d. The assets, liabilities and o!ners e9uity at a particular time. 1<. The assets and liabilities of +na9 Trading as at %= ?une 2=12 !ereA (reditors :.23==D @ffice furniture :.3===D #nventory :.%===D (ash in hand :.*3==D "an overdraft :.13==, (omputer :.23==D ShortBterm loan :.*===. The amount of capital !as' a. :.1=, === b. :.8, === c. :.13, === d. :.12, ===

1>.

The e)ternal users of the financial information primarily need the information for the follo!ing reasons, +E(+/TA 3

a. b. c. d.

To assess the ability of the business to pay loan. To evaluate the ris and return of their investment in the firm. To plan, control, organize and evaluate possibility of business e)pansion. To determine the ta)able income for ta) purposes.

2=. 4onBcurrent assets areA a. Assets bought for resale to generate income to the business. b. Assets that can be converted into cash !ithin a year. c. Amounts invested by the o!ner in the business. d. Assets !ith useful life of more than one year. 22. The motor car purchased by the o!ner of a business for his private use, did not record in the boo s of the business. &hich of the accounting concept is follo!ed' a. "usiness entity concept b. .oney measurement concept c. Fistorical cost concept d. -oing concern concept 2%. (onsider the follo!ing statements. 012 A partnership is regarded as a separate legal entity. 022 The partners of a business usually have unlimited liability. &hat is the validity of each statement' Statement 012 022 a. b. c. d. True True $alse $alse True $alse True $alse

2*. &hich of the follo!ing e9uations properly represents a derivation of the fundamental accounting e9uation' a. b. c. d. 23. a. b. c. d. 25. Assets G liabilities H o!ner6s e9uity. Assets H o!ner6s e9uity. (ash H assets. Assets B liabilities H o!ner6s e9uity. &hich of the follo!ing !ould not be included on a Statement of $inancial /osition' Accounts receivable. Accounts payable. Sales. (ash.

&hich of the follo!ing is incorrect' Assets 0:. 2 a. 8,<3= b. <,2== c. >,33= d. 5,3*= 7iabilities 0:.2 1,23= 2,<== 1,13= 1,12= (apital 0:.2 5,5== 3,*== <,2== 3,*2=

28. &hich of these items !ould be accounted for as an e)pense' a. b. c. d. :epayment of a ban loan. ;ividends to stoc holders. The purchase of land. /ayment of the current period6s rent.

2<. Aina sold the furniture for :.2, === to Aiman. Aiman paid the amount by che9ue. Fo! !ill it affect Ainas Statement of $inancial /osition' a. $i)ed assets decreases and ban increases b. @nly ban increases c. "an decreases and fi)ed assets increases d. (urrent assets decreases and fi)ed assets increases

2>. &hich of the follo!ing represents the e)panded basic accounting e9uation' a. b. c. d. Assets H 7iabilities G (apital G ;ra!ing , :evenue , +)penses Assets G ;ra!ing G+)penses H 7iabilities G (apital G :evenue Assets B 7iabilities ,;ra!ing H (apital G :evenue , +)penses Assets H :evenue G +)penses , 7iability

%=. "oo eeping differs from accounting. "oo eeping primarily involves !hich part of the accounting process' a. b. c. d. #dentification .easurement :ecording (ommunication

%1. A current asset is a. An asset !hich is currently being used to produced a product or service b. The latest asset purchased by a business c. +)pected to be realized in cash, sold or consumed !ithin one year of the balance sheet or the companys operating cycle, !hichever is longer d. Isually found as a separate classification in the Statement of (omprehensive #ncome %2. Azri +nterprise bought a van on credit from -ala .oto Sdn. "hd. &hat is the effect of this transaction' a. #ncrease in both asset and liability b. #ncrease in asset and decrease in liability c. #ncrease in liability and decrease in asset d. ;ecrease in both asset and liability %%. &hich of the follo!ing best describes the meaning of J/urchasesK' a. b. c. d. #tems bought -oods bought on credit -oods bought for resale -oods paid for

%*. :amli provided the follo!ing information about its Statement of $inancial /ositionA :. (ash Accounts receivable Stoc holders6 e9uity Accounts payable "an loans 1== 3== 8== 2== 1,===

%3. "ased on the information provided, ho! much are :amli6s liabilities'

a. :.2==. b. :.>==. c. :.1, 2==. d. :.1, 8==. %5. @n %= .ay 2==3, A ram Statement of $inancial /osition sho!s the follo!ing balances. :. "uildings (ash at ban (apital (reditors 13,=== 3,=== *,=== 3==

@n the same day, he buys a building for L %,=== paying by che9ue. &hat !ill be the value of total assets' a. :.2=,=== b. :.1<,=== c. :.18,=== d. :.2%,===

Part B Muestion 1 @ne of the main functions of accounting is to provide information to various user groups. #dentify any % main users and ho! each of them uses the accounting information. Muestion 2 .at is carrying a small scale business in "aling. Fe does not maintain any accounting records because of time constraint. "esides, he is also lac in accounting s ill. As an accounting student e)plain to him the importance of maintaining accounting records. Muestion % Nou are planning to set up a business but have not decided on the type of business. +)plain the different types of business that you may set up including the characteristics. Muestion * +)plain the differences bet!een boo eeping and accounting.