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Tutorial 2 Financial Accounting Framework 1

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24 views2 pages

Tutorial 2 Financial Accounting Framework 1

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水墨墨
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© © 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

ACADEMIC YEAR 2021/2022

Bachelor of Economics (Hons) Global Economics

TUTORIAL 2
FINANCIAL ACCOUNTING FRAMEWORK 1

1. Discuss the qualitative characteristic of reporting.

2. Explain the three types of business entities by highlighting their main characteristics

3. Discuss types of companies

4. For each of the following independent situations, some concepts and assumptions
have been violated. State the concept or assumption that has been violated and explain
the correct procedure that should be used.

(a) Encik Ali Abu, the owner of AA Shop, included his family’s vacation trip to Disneyland
and Gold Coast as expenses of the business.

(b) The record of the credit sales is done by referring to the receipt issued to the customers.

(c) Aini owns two businesses, Munirah Trading and Ariana Services. While preparing the
financial statement, the accounts officer has mixed up the expenses for Munirah
Trading and Ariana Trading.

(d) The shareholder of Gembira Company Sdn Bhd requested that the quality of services
and the morale of the employees should be reported in the financial statements.

5. State the qualitative characteristics, assumptions or principles that best reflect the following
description:

(a) Every business is accounted separately from its business owner(s).

(b) Financial information in the financial statements should be free from bias, error
and complete.

(c) A company will record its assets based on actual cost incurred.

(d) The business will continue to operate in the future and the financial statement
reflects the assumption.

(e) Any expenses incurred is to generate the revenue reported.

(f) A company must present timely information to its users.

(g) Financial information in the financial statement should ensure that users able to make
decisions.
(h) All transactions recorded in the financial statement are recorded in Malaysian Ringgit.

6. Discuss the strength and weaknesses of the following forms of entity:

Sole proprietorship
Partnership
Company

7. Explain the meaning of accounting

8. The accounting assumption which states that a business exists independently of its owner’s
personal holdings is known as .
a. Accounting period
b. Business entity
c. Going concern
d. Matching

9. Recording expenses in the fiscal period in which the expenses contribute to earning
revenue is an application of the accounting concept
a. Money measurement.
b. Duality
c. Matching Concept
d. Historical Cost.

10. Going concern concept can only be applied to a business organization when it:
a. Will never be wound up
b. Is not expected to be able to continue operating
c. Is not expected incur losses in the foreseeable future
d. Is expected to continue in operational existence for the foreseeable future at a level of
activity not significantly less than its current level of activity.

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