Accounting Concepts Q1

Q.
Identify and state the relevant accounting concepts given, which is suitable for each question below:-

• Money Measurement Concept
• Historical Cost Concept
• Consistency Concept
• Entity Concept
• Going Concern Concept

1. ABC Express Sdn Bhd has traditionally depreciated its furniture and equipment using the straight line method. This year it has adopted the reducing balance method without advising its financial statement shareholders of this change. As a result it is violating the _________ concept.
2. Last year, a manufacturing company purchased a 3 storey shophouses at a cost of RM1 million. This year it is valued at RM3.5 million. However, the company continues to record in books, the value of the shophouses at RM1 million. This is in line with the _________ concept.
3. A food catering business has in recent years, experienced financial problems in its business. It has in the stage of bankruptcy. However, it has recorded all the accounts as thought it is still in good financial position. This is not following the __________ concept.
4. TZZ Bhd is a registered public company dealing with housing development. The company took a bank loan worth RM5 million for Ambank repayable within 10 years. However, after a period of 12 years this company failed to repay its loan. The bank decides to confiscate all the personal properties of the shareholders. This is against the ____________ concept.
5. A supermarket owner sells all kinds of groceries for its customers. It records all the purchases and its sales in the accounting books in terms of RM. This is in accordance with the _______ concept.

(4 marks each, 2012 Q1)

Capital Calculation Q2

Q.
a) Fahsa is setting up a new business. Before actually selling anything, she bought a van for RM5,500, a market stall for RM3,000 and a stock of goods for RM2,500. She did not pay in full for this stock of goods and still owes RM2,000 in respect of them. She borrowed RM6,000 from Ali. After the events just described, and before trading starts, she has RM500 cash in hand and RM2,100 cash at bank. Calculate the amount of her capital.

(10 marks, 2012 Q2a)

b) Draw up Aiman's Balance Sheet from the following information as at 31 December 2011.

Particulars ---------- RM

Capital ---------------10,200
Debtors ---------------4,500
Creditors -------------4,100
Equipment -----------3,400
Stock of goods ------3,600
Cash at bank ---------2,800

(10 marks, 2012 Q2b)

Trial Balance Q3

Q.
Record the following details relating to a small laundry shop for the month of May 2011. Then, balance off the accounts and extract a trial balance as at 31 May 2011.

May 2011 ------- Transactions

1 --- Started in business with capital in cash of RM1,000 and RM2,500 in the bank.
2 --- Bought goods on credit from the following persons:-
  Andy RM620
  Ricky  RM215
  Vito RM175
  Alex RM340
  Eric RM540
4 --- Sold goods on credit to:-
  Jay RM350
  Google RM850
  Fin RM1,150
6 --- Paid rent by cash RM200
9 --- Jay paid us his account by cheque RM350
10 --- Fin paid us  RM1,000 by cheque
12 --- We paid the following by cheque:-
  Vito RM175
  Andy RM620
15 --- Paid carriage by cash RM35
18 --- Bought goods on credit from:-
  Ricky  RM290
  Alex  RM920
21 --- Sold goods on credit to Google RM810
31 --- Paid rent by cheque RM230

(20 marks, 2012 Q3)

Trial Balance Q4

Q.
a) Name five (5) accounts that normally have debit balance and five accounts that normally have credit balance.

b) State five (5) errors in the trial balance.

(10 marks each, 2012 Q4)

Cash Book Q5

Q.
Enter the following in the two-column cash book of an office supply shops and balance it off as at the end of the month.

Dec 2011 --- Transactions

1 --- started in business with capital in cash RM1,000
2 --- paid rent by cash RM230
3 --- Abdul lent us RM2,000, paid by cheque
4 --- we paid Johari by cheque RM860
5 --- cash sales RM190
7 --- Fizi paid us by cheque RM34
9 --- we paid Azim in cash RM92
11 - cash sales paid direct to bank RM151
15 - Peter paid us in cash RM96
16 - we took RM100 out of cash till (peti daftar tunai) and paid it into the bank account
19 - we repaid Ravi RM500 by cheque
22 - cash sales paid direct into bank RM122
26 - paid motor expenses by cheque RM75
30 - withdraw RM200 cash from the bank for business use
31 - paid wages in cash RM320

(20 marks, 2012 Q5)

Purchase Day Book or Purchase Journal Q6

Q.

Required:

a) Enter up the purchases day book for the month.
b) Post the transactions to the suppliers' accounts.
c) Transfer the total to the purchases account.

(20 marks, 2012 Q6)

P & L and BS Account Q7

Q.
The following trial balance was extracted from the books of Tiffany & Co. at the close business on 31 December 2011.

Additional information:-

1. Inventory 31 Dec 2011 is RM2,400
2. Wages and salaries accrued RM340
3. Van running cost owing RM72
4. Rent prepaid is RM230
5. Increase the provision for doubtful debts by RM91
6. Depreciation:-
7.   Office furniture   RM380
8.   Delivery van      RM1,250

Prepare the Trading, Profit and Loss Account for the year ended 31 December 2011 and the Balance Sheet (extract) as that date.

(20 marks, 2012 Q7)

Depreciation Q8

Q.
a) A company, which makes up its financial statements annually to 31 December, provides for depreciation if its machinery at the rate of 15% per annum using the reducing balance method.

On 31 December 2011, the machinery consisted of three items purchased as shown:-

Item particulars --------------------------- (RM)

On 1 January 2009 Machine A          Cost 4,000
On 1 September 2010 Machine B     Cost 6,000
On 1 May 2011 Machine C.              Cost 5,000

Required:-

Show the calculations of the figures for depreciation provision for the year 2011.

b) Discuss five (5) causes of depreciation on fixed assets.

(10 marks each, 2012 Q8)