Jabatan Pengajian Politeknik

EXAMINATION AND EVALUATION DIVISION

DEPARTMENT OF POLYTECHNIC EDUCATION
(MINISTRY OF HIGHER EDUCATION)

COMMERCE DEPARTMENT

FINAL EXAMINATION
DECEMBER 2010 SESSION

PA101: FUNDAMENTALS OF ACCOUNTING

DATE : 18 APRIL 2011 (MONDAY)
DURATION : 2 HOURS (8.30am 10.30am)

This paper consists of ELEVEN (11) pages including the front page.
Section A: Objective (25 questions answer all)
Section B: Structure (3 questions answer all)

CONFIDENTIAL UNTIL 18 APRIL 2011

DO NOT OPEN THIS QUESTION PAPER UNTIL INSTRUCTED BY THE
CHIEF INVIGILATOR

CONFIDENTIAL

PA 101: Fundamentals of Accounting

SECTION A
OBJECTIVES (25 marks)
Instruction: This section consists of 25 objective questions. Answer all questions in
the answer booklet.

Bookkeeping differs from accounting. Which part of the accounting process is

primarily involved in Bookkeeping?
A.
B.
C.
D.

2.

The following are true types of users of accounting information EXCEPT

A.
B.
C.
D.

3.

Accrual Concept
Prudence Concept
Objectivity Concept
Consistency Concept

The purchase journal is

A.
B.
C.
D.

5.

a director is an internal user

an investor is an internal user
a customer is an external user
a tax authority is an external user

The accountants have the tendency to understate rather than overstate the
profit and assets. The accounting concept which best describes the above
statement is....
A.
B.
C.
D.

4.

Recording
Measurement
Identification
Communication

used only to record credit purchases

used only to record cash purchases
used to record all purchases
all of the above.

What is the function of financial report to management in any organization?

A.
B.
C.
D.

To acquire additional capital

To make decision for company
To supervise their workers
To enable the business on going basis

Pages 2 of

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6.

PA 101: Fundamentals of Accounting

The basic sequence in the accounting process can be best described as:
A. Transaction, journal entry, source document, ledger account and trial
balance.
B. Source document, transaction, ledger account, journal entry and trial
balance.
C. Transaction, source document, journal entry, trial balance and ledger
account.
D. Transaction, source document, journal entry, ledger account and trial
balance.

7.

Which of these is an advantage of the sole proprietorship form of business?

A.
B.
C.
D.

8.

9.

Which transactions below will be recorded in the Cash Book?

i.
H.
iii.
iv.

Owner took goods from business for own use

Withdrawal of cash to pay children's school fee
Payment of salary by cheque
Customer returned damaged goods

A.
B.
C.
D.

i and ii
ii and Hi
i and iv
iii and iv

The cash sales of RM500 to Dego were banked-in. What is double entry for
this transaction?
A.
B.
C.
D.

10.

Limited liability
Difficult to establish the business
Owner makes all the decisions
The cost to form and operate the business is higher

Dego Debit and Credit Sales Account

Bank Account Debit and Credit Accounts Dego
Dego and Credit Debit Cash Account
Bank Account Debit and Credit Sales Account

The normal balance of an asset is a

is a
A.
B.
C.
D.

while the normal balance of revenue

debit, debit
credit , credit
debit, credit
credit , debit

Pages 3 of 11

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II.

Total liabilities increase by RM7,000. How is the accounting equation

affected?
A.
B.
C.
D.

12.

13.

debit utilities expense and credit utility prepaid

debit utilities expense and credit utility accrued
debit utility accrued and credit utilities expense
make no entry until the bill is paid

The insurance premium of RM600 has been paid for the period of I April
2009 to 31 March 2010. The financial year ends on 31 December 2009. The
insurance expense for the year is
A.
B.
C.
D.

is a formal financial statement.

is used to prove that there are no errors in the journal or ledger.
provides a listing of every account in the chart of accounts.
provides a listing of the balance of each account in active use.

When a company receives a utility bill but will not pay it right away, it should
A.
B.
C.
D.

14.

Assets must have increased by RM7,000 or equity must have

decreased by RM7000
Assets must have decreased by RM7, 000
Assets and equity must have each decreased by R1\43, 500
Owners' equity must have increased by RM7,000

The trial balance

A.
B.
C.
D.

PA 101: Fundamentals of Accounting

15.
Debtor

RM450
RMI50
RM600
RM400

Trial balance as at 31 December 2010

RM10 000
Provision for doubtful debt RM 500

Additional information :
i.
Bad debt of RM 300 is not yet written off
Provision for doubtful debt is 3% of the debtor account
Refering to the above information, how much is the provision for doubtful
debt for year 2005?
A.
B.
C.
D.

RM 209
RM 291
RM 300
RM 285
Pages 4 of 1 I

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16.

PA 101: Fundamentals of Accounting

Below is an extracted balance of Trial Balance as at 31 December 2010:

Debtors
Provision for doubtful debt
Bad Debt

RM 23,000
RM 1,200
RM 500

Additional Information:
a) Additional bad debt is RM 800
b) Provision for doubtful debt to be maintained at 5 % on debtors.
What amount will be recorded in Income Statement?
A.
B.
C.
D.

17.

Below are capital expenditures, except after...

A.
B.
C.
D.

18.

Operating expenses; bad debts of RM 800 and other income; Decrease

RM 90
Other Income; bad debts of RM 800 and operating expenses; Increase
RM 1,150
Operating expenses; bad debt of RM 1,300 and other income; Decrease
RM 90
Other Income; bad debts of RM 1,300 and other income; Decrease RM
1,150

buying a furniture
buying an office equipment
buying an office door
buying a motor vehicle

Calculate the depreciation for motor vehicles and how much the accumulated
depreciation for the motor vehicles for 3 years. The information is as follow:
Motor vehicles cost
Method of depreciation
Useful life
Scrap value
A.
B.
C.
D.

RM 65,000
Straight Line Method
6 years
RM 5,000

Depreciation per year is RM 10,000

Accumulated Depreciation is RM 30,000
Depreciation per year is RM 10,833.33
Accumulated Depreciation is RM 30,000
Depreciation per year is RM 6,000
Accumulated Depreciation is RM 18,000
Depreciation per year is RM 5,000
Accumulated Depreciation is RM 55,000

Pages 5 of I 1

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19.

Which of the following is the purpose of preparing control account?

A.
B.
C.
D.

20.

PA 101: Fundamentals of Accounting

To total up the amount of sales and purchases

To prepare income statement and balance sheet
To check the accuracy of entries in the sales and purchase ledger
To trace the sales and purchase transactions

The particulars recorded in the debit side of debtors control account

include
i.
ii.
iii.
iv.
A.
B.
C.
D.

21.

Credit Sales
Cash sales
Bad debts written off
Amounts received from credit customer

An unpresented cheque is a cheque which has ...

A.
B.
C.
D.

23.

All the above

i & iv
ii & iii
ii & iv

Which of the following will not appear in the Debtors Control account?
A.
B.
C.
D.

22.

cash sales
credit sales
bad debts
bank (dishonoured cheque)

been entered in a cash book, but has not yet been deducted from a
bank account.
not yet been entered in a cash book, but has been added to a bank
account.
been entered in a cash book, but has not yet been added to a bank
account.
not yet been entered in a cash book, but has been deducted from a bank
account.

When will the Bank Statement be submitted to the customer bank?

A.
B.
C.
D.

After the preparation of the Final Account

At the end of accounting period
At the end of the year
At the end of every month

Pages 6 of 11

CONFIDENTIAL

24.

A company wrote a cheque for RM76 and it was cleared by the bank for
RM76. However, the company recorded the check in its Cash account as
RM67. How is the difference of RM9 being handled?
A.
B.
C.
D.

25.

PA 101: Fundamentals of Accounting

Add to Cash book balance

Deduct from Cash book balance
Add to Bank Reconciliation balance
Deduct from Bank Reconciliation balance

Which of the items below is recorded in the credit column of the Bank
Statement:
A.
B.
C.
D.

Bank service charges

Standing orders
Direct deposit
Dishonored cheque

Pages 7 of 11

CONFIDENTIAL

PA 101: Fundamentals of Accounting

SECTION B
STRUCTURE (75 marks)
Instruction: This section consists of THREE (3) structured questions. Answer all
questions.

QUESTION I

KC and Jojo started a business, Perniagaan KC & Jojo on March 2010. Below is their
transactions for the month of March 2010.

March 1

Started a business with cash in hand RM 500 and bank RM 10,000.

Bought goods for RM 8,000 from Jaja Enterprise

10

Sold goods to Cumi Sdn Bhd for RM 15,000

15

Bought goods for RM 1,500 by cheque

20

Paid rental for RM 550 with cash

25

Jojo brought his motor vehicle into their business to be used in the
business valued at RM 11,700.

You are required to ..

a) record the transactions in the Book of First Entry (Journal)

(10 marks)

b) post to ledger

(10 marks)

c) prepare the Trial Balance as at 31 March 2010

(5 marks)

Pages 8 of 11

CONFIDENTIAL

PA 101: Fundamentals of Accounting

QUESTION 2

The following Trial Balance is extracted from the books of Free Trade Bhd as at 31
December 2010:
Debit RA

Credit(RM)
155,000

Capital
Building

100,000

Office equipment

45,000

Bank

35,000

Purchases and Sales

96,655

159,350

Return Inwards and Return outwards

5,400

3,400

Bad debts

5,500

Opening stock

45,690

Carriage outwards

3,000

Carriage inwards

2,500

Insurance

5,000

Salary

33,055
60,000

Loan
Debtors and Creditors

44,000

52,000
4,000

Provision for Doubtful Debt

I Discount Allowed and Discount received

2,330

Motor expenses

2,550

rash

9.500
435,180

1,430

435,180

Pages 9 of 11

CONFIDENTIAL

PA 101: Fundamentals of Accounting

Additional information for the year ending 31 December 2010:

1. Stock as at 31 December 2010 is RM23, 000.
2. Insurance is paid in advance of RM1,250.
3. The outstanding bills of water & electricity which amounted to RM 2,000.
4. Provision for Doubtful Debt needs to be adjusted at 10%.
5. Provision for depreciation needs to be created based on the straight line
method:
Building

10 years of useful life

Office Equipment

5 years of useful life

Required:

a)

Income Statement for the year ended 31 December 2010

(15 marks)

b)

Balance Sheet as at 31 December 2010

(10 marks)

Pages 10 of 11

CONFIDENTIAL

PA 101: Fundamentals of Accounting

QUESTION 3
The financial year for Darbi Enterprise ended on 31 July 2009. Below is the
transactions for the month of July 2009.
2009
July

RM
1

31

Debit balance as per Sales ledger

33,560

Credit balance as per Sales Ledger

200

Debit balance as per Purchases Ledger

210

Credit balance as per Purchases Ledger

21,400

Total cash sales

48,900

Total cash purchases

7,600

Total credit sales

52,800

Total credit purchases

34,700

Total cash and cheques received from debtors 66,950

including RM350 for bad debt recovered
Total payments to suppliers by cheques

37,700

Sales returns

490

Purchases returns

640

Discount allowed

360

Discount received

510

Bad debt written off

520

Dishonoured cheques

420

Provision for doubtful debt

480

Carriage of goods charged by creditors

280

Discount allowed withdrawn

100

Transfer from Sales Ledger to Purchases Ledger

960

Balance as at 31 July 2009:

Sales Ledger (Cr)

250

Purchases Ledger (Dr)

300

You are required to prepare :

a) Debtors Control Account
b) Creditors Control Account for the year ended 31 July 2009:
(25 marks)
Pages I I of 1 I