Anonymous
timer Asked: Apr 22nd, 2020

Question Description

RON started a business on 1 July2019. He brought in the following assets:

Motor vehicle RM68,000

Cash RM50,000

Equipment and fittings RM35,000

Inventory RM42,000

On 9 August2019,Ron introduced additional cash of RM28,000.

After six months of trading,a net profit of RM25,000was earned.

During the six months, Ron withdrew RM18,000 for his personal use.

Required:

(i)What is Ron’sopening capital as at 1 July2019?

(ii)What is Ron’s capital as at 31 December2019?

Unformatted Attachment Preview

CERTIFICATE IN BUSINESS STUDIES APRIL 2020 EXAMINATION BASICS OF FINANCIAL ACCOUNTING SUBJECT CODE: 1ACC0825 INSTRUCTIONS TO CANDIDATES : 1. This is a Take Home examination and it contains THREE SECTIONS (3) and carries 50 % of the Summative Assessment 2. Submit your answers using MICROSOFT WORD format. Use news times roman, 12 font size and 1.5 spacing. DRAW the format using MICROSOFT WORD. NO COPY PASTE. 3. Ensure SUBJECT NAME, SUBJECT CODE, STUDENT ID and IDENTITY CARD NUMBER are clearly visible in your first page. Do not add your name as the paper is marked anonymously. 4. Make sure that you clearly identify which question(s) you are answering and start each answer on a new page. 5. Upload your answers in Blackboard within FIVE (5) working days, i.e. NOT LATER THAN 25 April 2020, 09.00 am. Manage your time well as no extra time will be given. 6. You will be given THREE (3) attempts to submit your answers. Failure to attempt this examination will lead to an ABSENT grade. 7. Ensure your answers have HIGH ORIGINALITY. You may check the SafeAssign Originality. Marks will be deducted for any similarity if above 20%. 8. Clearly name your file and ensure that you upload the correct file 9. There are THREE (3) SECTIONS to this paper. 10. Answer all TWENTY-FIVE (25) multiple choice questions from SECTION A. 11. Answer ALL questions in SECTION B 12. Answer ONE (1) out of TWO (2) questions in SECTION C. 1 SECTION A (Answer ALL multiple-choice questions) A1. Which of the following entity is CORRECT based on statement given below? ` The profit distributed in terms of divided among shareholders (a) (b) (c) (d) A2. Which of the following is known as non-current liabilities? (a) (b) (c) (d) A3. Loan Bank overdraft Interest on loan Accrual salaries A Furniture Enterprise selling goods by credit at RM2,450 to John. What will be the effect on the accounting equation? (a) (b) (c) (d) A4. Sole proprietor Partnership Corporation Franchise Inventory Decrease Decrease Increase Increase ASSET Trade receivables Increase Increase Decrease Increase Which of the following is known as expenses? (a) (b) (c) (d) Motor vehicles Wages and salaries Sales Discount received 2 EQUITY Capital Increase Decrease Decrease Decrease A5. Sales Journal Date Jan 29 Details Amount (RM) 250.00 X The journal above shows the sales journal. What would be the detail should record in X? (a) (b) (c) (d) A6. The entity name The name of goods sold The credit supplier’s name The credit customer’s name The following closing balances are extracted from David Mark’s book of account: Noncurrent assets Inventory Bank Loan from Alvin Loan from Bank RM60000 RM10000 RM5000 RM8000 RM20000 Calculate the capital for David Mark (a) (b) (c) (d) A7. Which of the following transactions would increase Cash and Non-Current liabilities? (a) (b) (c) (d) A8. RM63000 RM37000 RM47000 RM103000 Payment to supplier A bank loan Payment from customer Purchasing goods on credit Which of the following is classified as current assets? I. II. Accrued commissions Fixed deposits 3 A9. III. IV. Prepaid insurance Interest on fixed deposit (a) (b) (c) (d) I and II I and IV II and III III and IV The owner took goods at RM700 and did NOT record this in his book. What would be the double entry for this transaction? (a) (b) (c) (d) A10. DEBIT Drawings Drawings Purchases Sales CREDIT Sales Purchases Drawings Drawings The information below is taken from book of Seri Ceria on 31 Mei 2019: Closing inventory Accrued rental received Accrued interest on loan Accounts payable Bank RM5,900 RM35 RM250 RM2,100 RM2,500 Calculate the capital on date above. (a) (b) (c) (d) A11. What is the reason for the bank reconciliation? (a) (b) (c) (d) A12. RM6,085 RM6,805 RM6,508 RM6,580 To verify the mistakes in cash book To identify the cheques not credit To verify the accuracy of bank statement To reconcile the balance of cash book with bank statement. Which of the following would NOT be entered into the purchases daybook? (a) Goods bought for resale but not paid for 4 (b) (c) (d) A13. Which of the following is NOT a reason for maintaining day books in addition to the ledgers? (a) (b) (c) (d) A14. Day books and ledgers act as a backup for each other in case information is lost More time is spent on entering the transactions in both books and ledgers Transactions can be more easily verified Having a dual system allows tighter to controls to prevent fraud and theft within the firm The returns inwards day book would contain: (a) (b) (c) (d) A15. Credit purchases Goods bought for resale for cash Stock purchases on credit Inventories that customer have returned Goods purchased on credit Goods purchased on credit that are returned to the original supplier Assets purchased for the business use What would be the double entry if Mr. Albert introduces RM100, 000 cash in the business? (a) (b) (c) (d) Debit Capital account, Credit Cash account Dr Cash account , Cr Capital account Dr Cash account , Cr Investment account Dr Cash account , Cr Owner’s account 5 A16. What would be the double entry if the owner brought cash of RM2, 500 into business: (a) Cash Capital RM2,500 (b) RM2,500 Cash Capital RM 2,500 (c) RM2,500 Purchases Capital RM2,500 (d) RM2,500 Capital Purchases RM2,500 A17. RM2,500 The company issued cheques RM 6,000 for purchased office equipment. The recording appears as follows: (a) Cash Inventories RM 6000 (b) RM 6000 Bank Office equipment RM 6000 (c) RM 6000 Bank Office equipment RM 6000 (d) RM 6000 Bank Inventories RM 6000 RM 6000 6 A18. The owner of the business has paid in additional capital amounting RM50,000 in cash. Which of the following statement is true? (a) (b) (c) (d) A19. Debit entries would result in: (a) (b) (c) (d) A20. decrease assets and decreased liabilities decreased owner’s capital and increased assets increased assets and increase liabilities increase owner’s capital and increase assets Which of the following statement is MOST CORRECT on trail balance? (a) (b) (c) (d) A22. increase in both assets and liabilities. Decrease in both assets and liabilities. increased assets and decreased liabilities. decreased assets and increased liabilities. The owner of a business transferred her private car into the business. The effect of this transaction would be: (a) (b) (c) (d) A21. The liabilities will be increased The assets will be decreased The liabilities will be increased The owner’s equity will be increased Lists of all entries made for accounting for business transactions Is prepared by a business on the last day of its accounting period Lists the balances in all the accounts maintained on double entry basis Proves the accuracy of the accounting records The profit of a business during an accounting period is equal to (a) (b) (c) (d) Total cash receipts less total expenses Total revenues less total expenses Total cash receipts less total cash payments Total revenues less total cash payments 7 A23. Which of the following is not a step in the book-keeping process? (a) (b) (c) (d) A24. The income statement shows (a) (b) (c) (d) A25. Identification Recording Verification Communication The financial position of the business The financial performances and the financial position of the business The financial performances of the business The cash flow of the business The purpose of a bank reconciliation is: (a) (b) (c) (d) to find any errors that results from the recording. to check the amount in the bank account. to reconcile the amount of differences between bank account and the bank statement balances. to report any missing cheque to the management of the company and bank. (Total: 50 marks) 8 SECTION B (Answer ALL the questions) Question a) RON started a business on 1 July 2019. He brought in the following assets: Motor vehicle Cash Equipment and fittings Inventory RM68,000 RM50,000 RM35,000 RM42,000 On 9 August 2019, Ron introduced additional cash of RM28,000. After six months of trading, a net profit of RM25,000 was earned. During the six months, Ron withdrew RM18,000 for his personal use. Required: (i) What is Ron’s opening capital as at 1 July 2019? (ii) What is Ron’s capital as at 31 December 2019? (10 marks) (a) State whether the following statements are ‘TRUE’ or ‘FALSE’. (i) Goods withdraw by the owner for personal use will reduce the net profit of the owner. TRUE / FALSE (ii) Cash book three column consist of discount received and discount allowed. TRUE / FALSE (iii) Cash discount need to record in the book of account as discount received or discount allowed. TRUE / FALSE (iv) The goods that returned on purchases by the business is record as return outwards. TRUE / FALSE (v) The owner’s investment to the business is known as capital. 9 TRUE / FALSE (5 marks) ( c) Insert the missing figure in the following table: (a) (b) (c) (d) (e) ASSETS (RM) 12,750 ? 45,000 ? 52,000 LIABILITY (RM) + EQUITY (RM) 5,800 25,700 ? 15,400 ? ? 39,200 25,780 22,500 39,520 (5 marks) (Total: 20 marks) 10 SECTION C (Answer ONE (1) out of TWO (2) questions) Question 3 (a) Details of transactions of Michelle for the month of March 2019 are given below: March 2 RM Purchased goods from Rose on credit 3,000 15 Purchased goods from Jasmine on credit 2,000 17 Sold goods on credit to Lily 1,000 20 Sold goods on credit to Lotus 3,000 22 Purchased goods from Lavender on credit – trade discount 20% 4,000 25 Sold goods on credit to Melton 5,000 28 Purchased goods from Michael on credit – trade discount 20% 2,000 (list price) 29 Sold goods on credit to Iris - trade discount 10% 5,000 (list price) (list price) Required: (i) Show the entries for the above transactions in the Sales Journal and the Purchases Journal. (10 marks) (ii) Discounts plays an important role for businesses, customer and supplier. Discuss the type of discounts and the purposes of those discounts given. explain how this discount appear in ledgers. (10 marks) (Sub-Total : 20 marks) 11 (b) State the double entry for the followings transactions: Transactions Account to be debit Account to be credit a) Bought tables and chairs by cash from Cantik Furniture shop b) Took goods for business marketing c) Paid rental by cheque d) Sold goods by credit to Shami e) Bought office equipment by cheque from Zami Sdn Bhd. (Sub-total : 10 marks) (Total: 30 marks) 12 Question 4 The following balances are extracted from Maleek Trading ‘s book of ledger as at 31 Mac 2019 Details Capital Purchases Sales Salaries Loan from MSB Interest on loan MSB Drawings Stationery Trade receivables Trade payables Carriage outwards Return inwards Return outwards Bank overdraft Discount allowed Allowances of bad debts Insurance Cash in hand Furniture Premises Accumulated depreciation for furniture 1 April 2018 Inventories at 1 April 2018 Maintenance Utilities Rent received Advertisement Commission received 13 RM 45,440 71095 151040 32400 20000 250 4510 350 24034 35440 1050 587 654 1593 203 110 1080 564 10500 52000 3500 45550 12570 2084 3000 2700 750 (a) Required: Prepare the trial balance as at 31 Mac 2019 (Sub-Total: 20 marks) (b) “A trail balances should be balanced, but sometimes it is happened whereby the trial balance not balanced as well” Discuss the common mistakes made by the accountants during preparing the book-keeping or trial balance. (10 marks) (Total: 30 marks) END OF EXAMINATION QUESTION PAPER 14 ...
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