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BKAL1013 BUSINESS ACCOUNTING

SEM A141

1.

Which of the following statements is INCORRECT?


A. Accounting is a link between business activities and decision makers.
B. Management must have a good understanding of accounting to set financial
goals and make financial decisions.
C. Management only needs to understand how accounting information is
compiled and processed.
D. Accounting information is imperfect and should be interpreted with caution.

2.

One of the objectives of Malaysian Institute of Certified Public Accountant (MICPA)


is:
A.
B.
C.
D.

3.

to develop and issue accounting and financial reporting standards in Malaysia.


to promote and regulate professional and ethical standards.
to inculcate a high sense of social responsibility.
to recruit, educate, train and assess by means of examination or otherwise a
body of members skilled in these areas.

Financial Reporting Federation (FRF) is differ from Malaysian Accounting Standards


Board (MASB) because:
A. it was established under the Financial Reporting Act 1997.
B. it has no direct responsibility with regard to standard setting.
C. it comprises representation from all relevant parties in the standard setting
process.
D. both are working together to make up the new framework for financial
reporting in Malaysia.

4.

Which is an advantage of a sole proprietorship form of business?


A.
B.
C.
D.

5.

A public accountant probably would NOT:


A.
B.
C.
D.

6.

There is limited personal risk.


The business can continue indefinitely.
The owner makes all the decisions.
All of the above.

advise on management issues.


audit financial information.
prepare tax returns.
prepare marketing analysis.

Which of the following groups use accounting information primarily to help protect
the public?
A.
B.
C.
D.

Management
Regulatory agencies
Taxing authorities
Economic planners

BKAL1013 BUSINESS ACCOUNTING


SEM A141

7.

The characteristic of accounting information that can provides predictive and


feedback value is:
A.
B.
C.
D.

8.

The accounting information is comparable when:


A.
B.
C.
D.

9.

profit and lose and other comprehensive income.


statement of owners equity.
statement of financial position (balance sheet).
statement of cash flows.

The accounting equation should remain in balance because every transaction affects:
A.
B.
C.
D.

12.

historical cost.
matching principle.
objectively principle.
full disclosure.

The sources and uses of cash over a stated period of time are reflected on the:
A.
B.
C.
D.

11.

it is trusted by users.
it is helpful in contrasting organizations.
it is timely presented.
it affects the decision of its users.

The Statement of Profit or Lose and Other Comprehensive Income reports the
revenues and expenses for a period of time based on the:
A.
B.
C.
D.

10.

relevance.
reliability.
creativity.
comparability.

only one account.


only two accounts.
two or more accounts.
none of the above.

The accounting principle that requires financial statement information to be based on


costs incurred in business transactions, and requires assets and services to be recorded
initially at the cash or cash-equivalent amount given in exchange, is the:
A.
B.
C.
D.

accounting equation principle.


historical cost principle.
going-concern principle.
business entity principle.

BKAL1013 BUSINESS ACCOUNTING


SEM A141

For question 13-14, please indicate the BEST effect of the transactions on the
accounting equation.
13.

On 28 July 2014, Crisp Laundry received cash of RM35,000 from the owner,
Cristiano Phonaldo as additional investment.
On 30 July 2014, a total cash of RM11,500 was used to pay the salary of the
employees and another RM5,000 was used to pay the bank loan. The changes caused
by these transactions may include:
A.
B.
C.
D.

14.

On 10 September 2014, Hussein Bald purchased office supplies for RM4,500, paid
RM1,000 and agreed with the supplier to pay the remaining in the following month.
A.
B.
C.
D.

15.

D.

Materiality is a matter of relative size or importance


An item must make a difference or it need not be disclosed
An item is material if its conclusion or omission would influence or change
the judgment of a reasonable person
All of these are correct statements about materiality

This concept is normally uphold by accountants to avoid from having assets and
revenues overstated and liabilities and expenses understated is known as
_____________
A.
B.
C.
D.

17.

Decrease in assets RM1,000; increase in owners equity RM3,500


Increase in assets RM3,500; increase in liabilities RM3,500
Decrease in assets RM4,500, owners equity remains unchanged
Increase in assets RM4,500; increase in owners equity RM4,500

Which of the following statement about materiality is INCORRECT?


A.
B.
C.

16.

Decrease in assets RM21,500; increase in owners equity RM35,000


Increase in assets RM35,000; decrease in liabilities RM10,000
Decrease in assets RM16,500, decrease in owners equity RM11,500
Increase in assets RM18,500; owners equity remains unchanged

industry practices constraint


materiality constraint
substance over form principle
conservatism constraint

Revenue generally should be recognized _____________


A. when at the time of cash collection
B. at the end of production

BKAL1013 BUSINESS ACCOUNTING


SEM A141

C. when realized
D. when realized or realizable and earned
18.

____________ works with the Financial Reporting Foundation (FRF) to make up the
new framework for financial reporting in Malaysia, with representation from all
relevant parties in the standard-setting process.
A.
B.
C.
D.

19.

Which of the following BEST represents the characteristic of a company?


A.
B.
C.
D.

20.

Assets decrease RM10,000; owner's equity increases RM10,000


Assets decrease RM10,000; liabilities decrease RM10,000
Assets increase RM10,000; owner's equity decreases RM10,000
Assets increase RM10,000; liabilities increase RM10,000

A business receives a utility bill and intends to pay the bill next month. When the
business receives the bill, how does this event affect the accounting equation?
A.
B.
C.
D.

23.

Signed a contract for providing service to customers in the future


Received cash in advance for rendering service in the future
Purchased office supplies on account
Charged clients for services provided on account

A RM10,000 account payable is paid by the business. How is the accounting equation
affected?
A.
B.
C.
D.

22.

Once registered, a company becomes a separate legal entity


A public company must have a minimum of 10 members
Members of a company collectively and unlimitedly responsible for all the
debts of the company
The popularity of a company is due to the ease and low cost of organizing

Which of the following event is NOT considered as a transaction of a business?


A.
B.
C.
D.

21.

Malaysian Institute of Accountant (MIA)


Malaysian Accounting Standards Board (MASB)
Malaysian Institute of Certified Public Accountant (MICPA)
International Accounting Standard Board (IASB)

Assets decrease; owner's equity decreases


Liabilities increase; owner's equity decreases
Assets increase; liabilities increase
Liabilities increase; owner's equity increases

A shop-house is purchased by a business for RM300,000. The company pays for the
shop-house with a RM60,000 cash payment and the execution of an RM240,000
promissory note payable to the seller. How does this purchase affect the business's
accounting equation?

BKAL1013 BUSINESS ACCOUNTING


SEM A141

A.
B.
C.
D.
24.

Jasmine Bakery started the year with total assets of RM120,000 and total liabilities of
RM60,000. During the year, the business earned revenues of RM180,000 and incurred
expenses of RM105,000. There is no capital contributions during the year, but the
owner make withdrawals of RM90,000. What is the amount of owner's equity at the
end of the year?
A.
B.
C.
D.

25.

RM60,000
RM75,000
RM45,000
RM15,000

Equipment is purchased for cash. Which of the following is TRUE?


A.
B.
C.
D.

26.

Assets increase RM240,000; liabilities decrease RM60,000


Assets increase RM60,000; liabilities decrease RM240,000
Assets increase RM240,000; owner's equity increases RM240,000
Assets increase RM240,000; liabilities increase RM240,000

There is an increase in total assets


There is a decrease in both total assets and total liabilities
There is an increase in total assets and a decrease in total liabilities
There is no effect on total assets

A utility bill is received for expenses incurred. It will be paid in the following
accounting period. Which of the following would be TRUE as a result of the receipt
of the utility bill?
A.
B.
C.
D.

Net income will increase


Owner's equity will decrease
Total liabilities will decrease
There will be no effect on total liabilities

END OF QUESTION

BKAL1013 BUSINESS ACCOUNTING


SEM A141

MATRIC NO: _____________


NAME:

GROUP: _____

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POSITION NO: ______

BKAL1013 BUSINESS ACCOUNTING


SEM A141

BKAL 1013 A141


TUTORIAL # 1