A241 BKAFK1023 TUTORIAL 1

BKAFK1023: INTRODUCTION TO FINANCIAL ACCOUNTING

SEMESTER A241
TUTORIAL 1 {TOPIC 1&2}
SUBMISSION DATE: 29 OCTOBER 2024

PART A: MULTIPLE CHOICE QUESTIONS

1. ____________ is an area of accounting that mainly provides internal users with accounting
information.
a. Managerial accounting
b. Financial accounting
c. Financial reporting standard
d. Taxation

2. Accounting fields could be classified as follows:

a. Financial accounting, auditing, management accounting and corporation.
b. Financial accounting, auditing, management accounting and taxation.
c. Management accounting, taxation, auditing and sole proprietorship.
d. Auditing, financial accounting and partnership.

3. Which of the following is NOT an accounting profession?

a. Auditor
b. Tax consultant
c. Controller
d. Human resource Executive

4. Which of the following statements BEST describe accounting?

a. A platform that’s only communicates financial accounting information to the users.
b. The interconnected network of subsystems necessary to operate a business.
c. Is of no use by individuals outside of the business.
d. A process of identifying, recording and communicating financial information about an
identifiable economic entity.

5. Which of the following is NOT an external user of accounting information?

a. Lembaga Hasil Dalam Negeri (LHDN)
b. Internal auditor
c. Bank
d. Supplier

6. Which of the following represents the accounting equation:

a. Assets + Liabilities = Owners’ Equity
b. Asset = Liabilities – Owners’ Equity
c. Assets - Liabilities = Owners’ Equity
d. Assets + Owners' Equity = Liabilities
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7. Which of the following items are the fundamental qualitative characteristics of financial
information according to IASB?
a. Comparability and Objectivity
b. Relevance and Faithful representation
c. Materiality and Cost-benefits
d. Revenue and Expenses

8. The numbers and descriptions match what really existed or happened refers to ________.
a. Faithful representation
b. Matching principle
c. Relevant
d. Consistent principle

9. What would be the possible effect of net loss on the accounting equation?
a. Increases of liabilities
b. Decreases of assets
c. Decreases of owners’ equity
d. Increases of owners’ equity

10. If Maju Enterprise has RM5,000 of withdrawal, RM30,000 of expenses and an increment
of owners’ equity by RM30,000, determine the amount of REVENUE?
a. RM65,000
b. RM35,000
c. RM5,000
d. No revenues

11. Klinik Aman has a vehicle of RM45,000, inventory of RM20,000 and a building that cost
RM100,000. The Klinik also possesses RM15,000 of cash and owes RM90,000 of accounts
payable. How much are Klinik Aman’s total assets and owner’s equity?
Total assets Total Owner’s Equity
a. RM80,000 RM10,000
b. RM165,000 RM75,000
c. RM180,000 RM90,000
d. RM180,000 RM100,000

12. Information that can make a difference to the decisions made by the users is considered as
_________.
a. free from error
b. complete
c. relevant
d. timeliness

13. A liability would include an obligation to do the following EXCEPT:

a. seek for business contracts.
b. transfer assets.
c. pay cash.
d. provide services.
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14. The__________ requires personal assets and liabilities of an owner to be separated and not
shown on the business’s financial reports.
a. sole proprietorship concept
b. economic entity assumption
c. dual entity concept
d. objectivity concept

15. Information is ______________if omitting it or misstating it could influence decisions that

users make on the basis of the reported financial information.
a. free from error
b. complete
c. material
d. timeliness

16. The following transactions are examples of incomes EXCEPT:

a. Provided services on account.
b. Received payment for products sold.
c. Gain from sales of business equipment.
d. Received an advance payment from client for future services.

17. Which of the following statements is FALSE?

a. Notes receivable is an asset.
b. Liability is defined as a present obligation of the entity to transfer an economic
resource as a result of past events.
c. Income derived from a decrease in assets or increase in liabilities.
d. Assets also include present economics resource that are controlled by an entity.

18. A withdrawal of business’s supplies by the owner for personal use will ___________
a. increase expense.
b. decrease liabilities.
c. not affect total assets.
d. decrease owner’s equity.

19. If the liabilities of a business increased by RM25,000 during a period and the owner's
equity in the business decreased by RM15,000 during the same period, the assets of the
business must have:
a. Decreased by RM10,000.
b. Increased by RM10,000.
c. Decreased by RM15,000.
d. Increased by RM25,000.

20. Which accounting assumption assumes that an enterprise will continue in operation long
enough to carry out its existing objectives and commitments?
a. Monetary unit assumption
b. Economic entity assumption
c. Time period assumption
d. Going concern assumption
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21. The ___________ characteristic of accounting information provides predictive and feedback
value.
a. comparability
b. relevance
c. reliability
d. creativity

22. Maria operates a laundry business. In early February, she billed customers on account for
RM3,000. What are the effects on the accounting equation elements?
a. Asset is not affected.
b. Expenses increase by RM3,000.
c. Owner’s Equity stays the same.
d. Revenue increases by RM3,000.

23. __________ was established under the Accountants Act (1967) to oversee the development
and advancement as well as regulating the accounting profession in Malaysia.
a. Financial Reporting Federation
b. Malaysian Accounting Standards Board
c. Malaysian Institute of Certified Public Accountant
d. Malaysian Institute of Accountant

24. Which of the following assumptions deliberate that accounting involves only transactions
that can be valued in the form of money.
a. Economic entity
b. Monetary Unit
c. Going concern
d. Time period

25. Financial Reporting Federation (FRF) is different from Malaysian Accounting

Standards Board (MASB) because:

a. it was established under the Financial Reporting Act 1997.

b. it comprises representation from all relevant parties in the standard setting
process.
c. it has no direct responsibility regarding standard setting.
d. both are working together to make up the new framework for financial reporting
in Malaysia.
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PART B: STRUCTURAL QUESTION

Miss Aini started her own printing and advertising business in early 2024. Aini Enterprise (AE)
has incurred the following transactions in January 2024:

a. Aini contributed her savings of RM40,000 into AE. In addition, she brought office
equipment, and a printing machine valued at RM10,500 and RM20,000 respectively
for use in the business.
b. Hired new employees with the total monthly salary of RM3,400 per month. The
employees will start their work on February 2024.
c. Paid outlet rental for RM2,200.
d. Purchased printing supplies for RM2,500 and paid in full
e. Purchased office desk and cabinets for RM6,000 on account.
f. Cash service revenue for the month was RM5,000.
g. Credit service revenue to Bright Sdn Bhd was RM6,500.
h. Cash-purchased outlet surveillance equipment for RM3,300.
i. Paid cash for utility expense of RM1,500.
j. Collected RM2,000 from Bright Sdn Bhd.
k. Fully settled account payable for transaction (e).
l. Aini paid RM300 of her home utility bill by using her own money.
m. Withdrew RM1,000 for personal use.
n. Printing supplies has a balance of RM900 at the end of the month
o. Aini also planned to extend her outlet with possible costs of RM12,000. She will
execute the plan in April 2024.

REQUIRED:

(a) Prepare an extended accounting equation table for AINI ENTERPRISE (AE) to record the
transactions for the month of January 2024. You may add the categories accordingly for
each of the accounting equation components. The format is given below:

ASSET LIABILITY OWNER’S EQUITY

Cash Supplies A/R Equipment Machine A/P Capital Drawing Revenue Expense
a
b

Total
Total = RM Total = RM

(b) Prepare the following statements for the month of January 2024:
(i) Statement of Profit or Loss and Other Comprehensive Income (SPLOCI)
(ii) Statement of Changes in Owner’s Equity
(iii) Statement of Financial Position