CONFIDENTIAL ACIJUN 2019/ACC106/100/105/107/ 49411141115/150 UNIVERSITI TEKNOLOGI! MARA FINAL EXAMINATION COURSE : INTRODUCTION TO FINANCIAL ACCOUNTING AND REPORTING / ACCOUNTING / FINANCIAL ACCOUNTING | / ACCOUNTING I/ INTRODUCTION TO ACCOUNTING | / FINANCIAL ACCOUNTING / PRINCIPLES OF ACCOUNTING 1 COURSE CODE : ACC106/100/105/107/111/114/115/150 EXAMINATION : JUNE 2019 TIME : 3 HOURS INSTRUCTIONS TO CANDIDATES 1 This question paper consists of two (2) parts: PART A(10 Questions) PART B (4 Questions) 2 Answer ALL questions from all two (2) parts: i) Answer PART A in the Objective Answer Sheet. ji) Answer PART B in the Answer Booklet. Start each answer on a new page. 3. Do not bring any material into the examination room unless permission is given by the invigilator. 4 Please check to make sure that this examination pack consists of i) the Question Paper ii) an Answer Booklet ~ provided by the Faculty ii) an Objective Answer Sheet — provided by the Faculty 5 ‘Answer ALL questions in English. DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO This examination paper consists of 70 printed pages (© Hak Cipta Universit Teknologi MARA CONFIDENTIALCONFIDENTIAL, 2 ACIJUN 2019/ACC106/100/105/107/ 4911114/115/150 PARTA This part consists of ten (10) multiple-choice questions. Choose the most suitable answer. 1 From the legal point of view, which type of business organisation has separate legal entity from its owner? Sole proprietorship Partnership Limited company None of the above pom> (1: mark) The accounting process involves all of the following EXCEPT ‘A. analysing and interpreting financial reports B. _ identifying economic transactions that are relevant to the business C. recording non-quantifiable economic events D. communicating financial information to users by preparing financial reports (1 mark) The motor van purchased by the owner of a business for his private use, was not recorded in the books of the business. Which accounting concept did it follow? Money measurement concept Consistency concept Business entity concept Materiality concept gsom> (1 mark) Which of the following statements about the users of accounting information is CORRECT? A. Employees are external users B. _ Inland Revenues Board is external user C. Labor Unions are internal users D. Managers are external users (1 mark) Which of the following users depends on accounting information for decision making? Potential investor ‘Suppliers Management All of the above com> (1 mark) (© Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL, 3 ACIJUN 2019/ACC106/100/105/107/ 111/114/1151150, 6. Calculate the REVENUES for the accounting equation below: pomp Items RM Assets 91,440 Liabilities 40,675 | Capital 50,300 [Expenses 76,980 RM76,515 RM132,115 RM105,435 RM77,445 (1 mark) 7. Which of the following is classified as tangible assets? A B c. D. Mortgage on premises Patent Plant and machinery Fixtures and fittings Motor vehicles i, ii and iv iviii andiv ii, iand v ii, ivandv (1 mark) 8. _ Which of the following transactions should be recorded in the General Journal? pom> The business purchases machineries on credit from a supplier The business purchases inventories using cash The business pays utilities bills using cheques The business returns damaged goods to its suppliers (1 mark) 9. Ifa revenue was earned but not yet received, which of the following is NOT TRUE? pop> ‘The accrued revenue account needs to be debited. Revenue accounts need to be credited. Revenue accounts need to be debited. None of the above (1: mark) (© Hak Cipta Universiti Teknolog! MARA, CONFIDENTIALCONFIDENTIAL, 4 ACIJUN 2019/ACC106/100/105/107/ 111411151150 10. The inventory of a business increases when there are A. Purchases and returns outwards B. Purchases and returns inwards C. Sales and returns inwards D. Sales and returns outwards (1 mark) (Total: 10 marks) © Hak Cipta Universit Teknologi MARA CONFIDENTIALCONFIDENTIAL, 5 ACIJUN 2019/ACC106/100/105/107/ 44141114/115/150, PARTB QUESTION 1 ‘Accounting concepts are basic standards that act as a foundation for the preparation of a business financial statements. The concepts are important so that all businesses have a standardised methodology in preparing their financial reports. Required: a. _ Identify the appropriate accounting concepts for the situations below: A business financial performance is recorded and reported separately from the ‘owner's personal financial matters. ii, In.accounting, a business is expected to continue for a foreseeable future. It is. assumed that the business has neither the intention nor the need to liquidate. ji, Only business transactions that can be expressed in terms of money are recorded in accounting, though records of other types of transactions may be kept separately. iv, Revenues are recognised when they are earned and not when they are received in cash. v. Purchases of items like pen, stapler, and punching machine for business use is not recorded as assets, but treated as expenses. (5 marks) b. _ Saiful and Amri opened a saloon named Rega Barber Shop in Sungai Petani, Kedah on 1 January 2018, An extract of their business records in 31 December 2018 showed the following balances: Debit (RM) | Credit (RM)_ 32,000 ir dryers and other equipment Inventories Cash at bank ‘40,000 Cash in hand z : ~ 6,600 ‘Salary - _ Utilities i Sales — oe 50,000 ‘Commission Received 3,000 Bank overdraft 2,000 Loan from AgroBank 20,000 Capital 60,000 (© Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL 6 ACIJUN 2019/ACC106/100/105/107/ 19911141115/150 Required: i Identify any TWO (2) revenues and TWO (2) expenses from the records above. (4 marks) fi Classify the asset, liability and the owner's equity with their respective amounts. (8 marks) (Total: 17 marks) QUESTION 2 Susan Boutique is a wedding dress boutique and is owned by Suzana. Below are the transactions of Susan Boutique for the month of May 2019, May - ; 2019 Transactions 2__| Started business with cash in bank account which amounted to RM40,000. 6 | Purchased computer RM1,500 by cheque for office use 11__| Sold goods on credit to Ramona RM80O. - 15 | The business brought in a personal motor vehicle for use in the business amounting to RM14,500. - - 16 __| Paid rental expenses amounting to RM1,400 by cash. 20 _| Suzana took RM300 from the bank and RM200 goc 23 | Sales returned by Ramona which amounted to RM100. _ 27 | Banked in cash RM3,000. — _ Required: a. Identify the effects (increase or decrease) of asset, liability, owner's equity, revenue and expense and the journal entries (debit/credit) of the above transactions dated from 2 May 2019 to 23 May 2019 using the following format. (Use the format given below to answer the above questions) Example: May 34 P. M200 for telephone bill by cash. Date Effects Journal entry Increase Decrease Debit Credit May 31 Expenses Asset Telephone bill Cash (15 marks) b. Identify the appropriate book of prime entry for each of the transactions given above, from 2 May to 27 May 2019, (10 marks) (Total: 25 marks) (© Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL, 7 ACIJUN 2019/ACC106/100/105/107/ 4111114/115/150 QUESTION 3 Electro Enterprise sells electrical products including washing machines, air conditioners, water heaters and televisions. The following balances were extracted from the books of Electro Enterprise as at 31 December 2018. List of Accounts ca ‘aM Capital | _ 363,600 Inventories as at 1 January 2018 22,500, Freehold Land 250,000 — Motor Vehicles 96,000 | a Office Equipment 25,000 | ‘Accumulated depreciation as at 1 January 2018: Motor Vehicles 38,400 Office Equipment 5,890 | 5% Fixed Deposit 50,000 Bank _ _ 55,800 Cash’ 2,470 — Account Receivables ~ 24,500 | ‘Account Payables 36,400 10% Bank Mewah a 40,000 Purchases and sales _— 145,600 265,000 Return inwards and outwards 150 | 800 Discounts __ | 570 1,960 Insurance on purchase - 350 Bank charges — 7,000 |Rentalexpense 9,600 Stationeries 800 Carriage expenses 4,800 Salaries 78,000 Utilities 8,460 General expenses 8280; ‘Advertising expenses 70,200 ‘Commission received Drawings 580 Allowances for Doubtful Debt as at 1 January 2018 _— l _|761,660 761,660 Additional information 1. Inventories as at 31 December 2018 were valued at RM28,500. 2. The Fixed Deposit account was opened on 1 July 2018 and interest is at 5% per annum. No interest has been received during the year. 3. The owner took cash RM1,000 and goods worth RM8,000 for personal use. (© Hak Cipta Universiti Teknologl MARA, CONFIDENTIAL,CONFIDENTIAL, 8 ACIJUN 2019/ACC106/100/105/107/ 144/114/115/150 4. The loan from Bank Mewah was taken on 1 January 2018. No interest has been paid on this loan at the end of accounting period, 5. Allowances for doubtful debt were to be adjusted to RM645. 6. 25% of carriage expenses were carriage inwards and the remainder were carriage outwards expenses. 7. Depreciation is to be provided as follows: Motor vehicles 10% on straight line method Office equipment 7% on reducing balance method 8. The following adjustments are to be considered for the period, Prepayments RM Accruals RM Commission received 2,000 Salaries 2,500 Stationeries 100 Utilities 500 Required: a, Prepare a Statement of Profit or Loss for the year ended 31 December 2018. (20 marks) b. Prepare a Statement of Financial Position as at 31 December 2018. (13 marks) Note: Use vertical format presentation (Total: 33 marks) (© Hak Cipta Universit Teknologi MARA CONFIDENTIAL,CONFIDENTIAL, 9 QUESTION 4 ACIJUN 2019/ACC106/100/105/107/ 1111114/115/150, Pink Beaute Enterprise sells various type of beauty and healthcare products in Kulim. The following information was extracted from the financial statement of Pink Beaute Enterprise for the year ended 31 December 2018. Statement of Profit or Loss for the year ended 31 December 2018 Statement of Profit or Loss for idisiiDecamber2018) RM RM RM Sales 610,000) Less: Return Inwards (800) Net Sales 609,200) Less: Cost of Goods Sold Opening Inventory 33,540 Purchases 124,660 Less: Return Outwards (4,510) 120,150 153,690 ‘Closing Inventory (28,738) | (124,952) Gross Profit (484,248 Less: Expenses | Total expenses (305,446) Net Profit 178,802) Statement of Financial Po: [ Non-Current Assets Motor van Fixtures and fittings Investment Current Assets Cash in hand Cash in bank Closing Inventory Accounts receivable Prepaid expense (© Hak Cipta Universiti Teknologi MARA nas at 31 December 2018 RM 60,000 94,392 200,000_ 6,000 8,910 28,738 17,176 4,000 419,216 RM 354,392 64,824 CONFIDENTIAL,CONFIDENTIAL, 10 ACIJUN 2019/ACC106/100/105/107/ 4991114/115/150 | Financed by; Owner's Equity Capital 121,090 Add: Net Profit 178,802 Less: Drawings (7,332) 292,560 Non-Current Liabi Long term loan 90,000 Current Li Accounts payable 31,518 Accrued expense 5,138 36,656 419,216 | Note: Credit sales is 35% from total sales during the year. Required: a. Calculate the following ratios for Pink Beaute Enterprise for the year ended 31 December 2018. i Inventory tumover ratio ii. Current ratio il, Quick ratio iv. Gross profit margin v. Net profit margin vi. Receivable collection period (use 365 days in a year) (9 marks) b. Explain on the inventory turnover ratio, quick ratio, net profit margin and receivable collection period for Pink Beaute Enterprise for the year ended 31 December 2018. (4 marks) c. Explain briefly TWO (2) importance of a financial statement analysis. (2 marks) (Total: 15 marks) END OF QUESTION PAPER (© Hak Cipta Universiti Teknolog! MARA CONFIDENTIAL,