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Tutorial 3 Financial Accounting Framework 1

The document contains a tutorial on financial accounting frameworks with 4 questions: 1. Identifies items as fixed assets, current assets, equity, liabilities, revenue or expenses. 2. Requires indicating the nature of increases and decreases in owner's equity for transactions by a new tuition business in February. 3. Shows the effect of initial business transactions on the accounting equation for assets, capital and liabilities. 4. Requires drawing up a statement of financial position and calculating profit/loss for a business called Kit Kat as of December 31, 2016 based on given financial information.

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96 views

Tutorial 3 Financial Accounting Framework 1

The document contains a tutorial on financial accounting frameworks with 4 questions: 1. Identifies items as fixed assets, current assets, equity, liabilities, revenue or expenses. 2. Requires indicating the nature of increases and decreases in owner's equity for transactions by a new tuition business in February. 3. Shows the effect of initial business transactions on the accounting equation for assets, capital and liabilities. 4. Requires drawing up a statement of financial position and calculating profit/loss for a business called Kit Kat as of December 31, 2016 based on given financial information.

Uploaded by

吴国豪
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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UNIVERSITI TUNKU ABDUL RAHMAN

FACULTY OF ACCOUNTANCY AND MANAGEMENT


Bachelor of Economics (Hons) Global Economics

TUTORIAL 3
FINANCIAL ACCOUNTING FRAMEWORK 1

Question 1

State whether the following are fixed asset, current asset, owner’s equity, long term liability,
current liability, revenue or expenses
a. Premises
b. Long term loan
c. Insurance expense
d. Inventory
e. Cash in hand
f. Account receivables
g. Trade creditors
h. Fixtures and fittings
i. Capital
j. Machinery

Question 2

Jack Malai established a tuition centre on February 1 and competed the following transactions in
February:
(a) Opened a business a bank account with RM10,000 cash.
(b) Paid office and equipment rent for February, RM3,000.
(c) Purchased supplies on credit, RM1,850.
(d) Received cash from tuition fees earned, RM14,500.
(e) Paid utilities expenses for the month, RM1,560 and miscellaneous expenses, RM500.
(f) Paid teaches and office salaries, RM8,000.
(g) The cost of supplies used was RM1,300.
(h) Billed the students for fees earned, RM6,700.
(i) Withdrew cash for personal use, RM1,500.

Required:
With appropriate notation at the right of each transaction, indicate the nature of each increase and
decrease in the owner’s equity by following below’s example:

e.g: (a) Opened a business bank account with RM10,000 cash.


Asset: cash +10000, Capital: +10000
Question 3

Below are the transactions at the beginning of the business for Ali Enterprise. Show the effect
related to the accounting equation. Show the effect to the specific type of item under each
categories of the equation. i.e assets – fixed asset, cash, debtors, etc.

2016 Transactions Assets = Capital + Liabilities


1 Ali started a business with
RM10,000 cash in hand.
2 The business deposited
RM8,000 of the cash into
the bank account
3 Received loan by cheque
RM5,000
4 Purchased furniture worth
RM1,000 by cheque
5 The owner took cash for
his own use RM 1,000

Question 4

Draw up Kit Kat’s Statement of financial position as at 31 December 2016 from the following
and calculate how much profit or loss earned by the Kit Kat.

RM
Capital 30,000
Cash in hand 16,500
Loan from bank 15,000
Account receivable 8,000
Account payable 2,000
Inventory 8,500
Fixtures and fittings 15,000

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