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Quiz:
Assessment Worth 20% of subject
20 August 2015
Instructions:
1. DO NOT open this test until instructed to do so.
2. There are 3 parts to this test. Attempt ALL parts.
3. For part A – multiple choice questions, select the BEST answer to each question. Answer all
twenty questions by circling the answer of your choice. If you change your mind, clearly
indicate your new choice by whiting out your original answer and circling your new choice. Do
NOT answer questions with multiple circles. Each correct answer is worth one mark for a total
of 20 marks. No penalty for an incorrect answer.
4. For part B – financial statements: to prepare the required financial statements in the space
provided. This section is worth a total of 16 marks.
5. For part C – adjusting entries: to prepare the adjusting journal entries for a company. This
section is worth a total of 14 marks.
6. Time Allowed: 90 Minutes. (No reading time)
7. The whole of this test paper will be collected at the end of the test. No part of this test is to be
taken by the student. Where part of the test paper is found MISSING, the student’s result will
be withheld subject to further investigation.
Name:________________________________
Student Number:__________________
Part A: Multiple Choice (20 marks)
4) Johnny’s Car Repairs had total assets of RM60,000 and total liabilities of RM40,000 at the
beginning of the year. During the year the business recorded RM100,000 in revenues,
RM55,000 in expenses, and dividends of RM10,000 were distributed. Equity at the end of
the year is
a. RM55,000.
b. RM35,000.
c. RM65,000.
d. RM45,000. (Assets – Liabilities = Equity at the beginning of the year + Revenues –
Expenses – Dividends)
6) The accounting principle which assumes that a business will remain in operation for the
foreseeable future is the
a. monetary principle.
b. accounting entity concept.
c. full disclosure principle.
d. going concern principle.
7) Two categories of expenses in all merchandising companies are:
a. cost of sales and financing expenses.
b. operating expenses and sales.
c. cost of sales and operating expenses.
d. sales and cost of sales.
8) The primary difference between a periodic and perpetual inventory system is that a periodic
system:
a. keeps a record showing the inventory on hand at all times.
b. provides better control over inventories.
c. records the cost of the sale on the date the sale is made.
d. determines the inventory on hand only at the end of the accounting period.
11) The Dalton Sdn Bhd purchases a new delivery truck for RM20,000. The stamp and transfer
duty is RM500. The logo of the company is painted on the side of the truck for RM600. The
truck’s annual road tax is RM60. The truck undergoes safety testing for RM110. What does
Dalton record as the cost of the new truck?
a. RM21,270.
b. RM21,210.
c. RM20,500.
d. RM20,210.
15) Obligations for which the amount of the future sacrifice is so uncertain that it cannot be
measured reliably are classified as
a. warranties.
b. contingent liabilities.
c. provisions.
d. accruals.
17) Which one of the following is not considered an advantage of the company form of
organisation?
a. limited liability of shareholders.
b. separate legal existence.
c. continuous life.
d. government regulation.
18) When a company issues new shares the impact on the accounting equation is to increase
a. equity and decrease assets.
b. equity and increase liabilities.
c. liabilities and increase assets.
d. assets and increase equity
19) The CEO of Pure Water Ltd used the company’s money to buy a car for his wife’s personal
use. The CEO has violated the
a. monetary principle.
b. accounting entity concept.
c. accounting period concept.
d. cost principle.
20) Using accrual accounting, expenses are recorded and reported only:
a. If they are paid before they are incurred
b. When they are incurred and paid at the same time
c. When they are incurred, whether or not cash is paid
d. If they are paid after they are incurred
Part B: Financial Statements (16 marks)
The balances of the accounts of VV Sdn Bhd for the year ended 31 December 2013 are as
follows:
Required:
Answer: Part B
Part C: Adjusting Entries (14 marks)
At 31 December 2013, the trial balance of Cash Sdn Bhd was as follows:
Required:
Using the following information, prepare adjusting entries for Cash Sdn Bhd. Explanations are
not required for the journal entries. Use the following accounts, if necessary: Office supplies
expense, Depreciation expense, Salaries payable, Interest expense, Interest payable.
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