UKAF1023 Financial Accounting 1

UNIVERSITI TUNKU ABDUL RAHMAN

FACULTY OF ACCOUNTANCY AND MANAGEMENT
ACADEMIC YEAR 2023/2024

BACHELOR OF ACCOUNTING (HONS)

BACHELOR OF FINANCE (FINANCIAL TECHNOLOGY) WITH HONOURS
BACHELOR OF SCIENCE (HONS) ACTUARIAL SCIENCE
BACHELOR OF SCIENCE (HONS) FINANCIAL MATHEMATICS
BACHELOR OF SCIENCE (HONS) APPLIED MATHEMATICS
YEAR 1 TRIMESTER 1

TUTORIAL 10
TOPIC 6: SINGLE ENTRY AND INCOMPLETE RECORDS

Multiple Choice Question

1. Which of the following statement is true?

A. In single-entry system, double-entry bookkeeping principles are followed.

B. Small business owners face little difficulties to follow proper bookkeeping principles.
C. Single-entry recording is commonly practised by small businesses.
D. None of the above.

2. The two methods for finding profit or loss for a financial year using single entry or
incomplete records are:

A. Analysis method and computation method

B. Statement method and analysis method
C. Computation method and comparison method
D. Analysis method and comparison method

3. The statement of affairs lists the:

A. profit or loss of a business for a year

B. assets and liabilities of a business on a specific date of time
C. income and expenses for a period
D. the owners' personal affairs

4. The following statements are true except for:

A. Where a business has incomplete records of sales and expenses, it may still be possible
to ascertain the profit or loss for the period.
B. Profit or loss can be calculated by comparing changes in capital over time.
C. Single entry is more accurate in computing profit or loss made in a business.
D. All of the above.

5. With the analysis method, accounts receivable and accounts payable are usually used to:
1
UKAF1023 Financial Accounting 1

A. analyse customers who owe money

B. analyse potential suppliers
C. derive credit sales and credit purchases
D. total sales and total purchases

Structure Question

Question 1

Ms Fatimah Ali is a sole trader who runs a shop called Fashion Shoes. She does not keep her
books on a double-entry system of recording

The available incomplete records include the following:

Cashbook
Cash Bank Cash Bank
RM RM RM RM
Balance b/d 1,300 12,000 Accounts payable 90,000
Sales 13,000 Purchases 2,400
Accounts receivable 115,000 Sundry expenses 6,000
Rent received 5,000 Drawings 4,500
Wages 25,000
Insurance expense 3,000
Balance c/d 1,400 14,000

14,300 132,000 14,300 132,000

Balance b/d 1,400 14,000

The list of assets and liabilities are as follows:

1 Jan 2022 31 Dec 2022
RM RM
Assets
Van 60,000 58,000
Inventory 7,200 8,400
Accounts receivable 9,700 15,000
Cash 1,300 1,400
Bank 12,000 14,000
Liabilities

2
UKAF1023 Financial Accounting 1

Accounts payable 10,000 8,000

Insurance due – 2,000

Required:
Prepare the Statement of Profit or Loss and the Statement of Affairs for Fashion Shoes
Accounts Receivable Control
RM RM
Balance b/d 9,700 Bank 115,000
Sales 120,300 Balance c/d 15,000
130,000 130,000

Total sales = Credit sales + Cash sales

= 120,300 + 13,000
= 133,300

Accounts Payable Control

RM RM
Bank 90,000 Balance b/d 10,000
Balance c/d 8,000 Purchases 88,000
98,000 98,000

Total purchases = Credit purchases + Cash purchases

= 88,000 + 2,400
= 90,400

Insurance Expense A/C

RM RM
Bank 3,000 Transfer to SOPL 5,000
Accrued c/d 2,000
5,000 5,000

Depreciation exp:
Van b/d RM60,000
Less: Van c/d RM58,000
Depreciation for the year* RM 2,000

Fashion Shoes
Statement of Profit or Loss for the year ended 31 December 2022
RM RM
Sales 133,300
Less: Cost of Goods Sold
Opening Inventory 7,200
Add: Purchases 90,400
97,600
Less: Closing Inventory (8,400)

3
UKAF1023 Financial Accounting 1

(89,200)
Gross Profit 44,100
Add: Other Income
Rent Received 5,000
49,100
Less: Expenses
Sundry Expenses 6,000
Wages 25,000
Insurance Expenses 5,000
Depreciation 2,000
(38,000)
Net Profit 11,100
Capital @ 1 Jan 2022
= Total Assets (-) Total Liabilities
= (60000+7200+9700+1300+12000) – (10000)
= RM80,200

Capital @ 31 Dec 2022

= Total Assets (-) Total Liabilities
= (58000+8400+15000+1400+14000) – (8000+2000)
= RM86,800

Fashion Shoes
Statement of Affairs as at 31 December 2022
RM RM RM
Non-current Assets Cost Acc Dep NBV
Motor Vehicle 60,000 (2,000) 58,000

Current Assets
Inventory 8,400
Accounts Receivable 15,000
Bank 14,000
Cash 1,400 38,800
Total Assets 96,800
Owner's Equity
Capital at 1.1.2022 80,200
Add: Net Profit 11,100
Less: Drawings (4,500)
Capital at 31.12.2022 86,800

Current Liabilities
Accounts Payable 8,000
Insurance Payable 2,000 10,000
Total Equity and Liabilities 96,800
Question 2 : Past Exam Question September 2018

4
UKAF1023 Financial Accounting 1

Celine Kwan does not use double entry system to record her business transactions. The following
is the summary of Perniagaan CK’s Statement of Financial Position as at 1 May 2017:
RM RM
Non-current assets
Furniture and fittings 50,000
Current assets
Inventories 3,520
Trade receivables 1,760
Rent prepaid 215
Cash & bank 6,000 11,495
61,495
Equities & Liabilities
Capital 50,520
Current Liabilities
Trade payables 10,095
Advertising expenses payable 880 10,975
61,495

Celine’s bank statement for the year ended 30 April 2018 showed the following transactions:
RM
Cheques received from customers 110,000
Cash sales banked 18,150
Cheques issued to suppliers 82,400
Rent 2,640
General expense 8,230
Advertising 3,520
Drawings 8,000
Bank charges 640

Celine had used money from cash sales to pay wages to part-time employees amounting to
RM5,280.
Rent, payable one month in advance, was for 12 months ending 31 May 2018. There was a rent
increase of RM10 per month with effect from 1 December 2017.
The following items did not appear on Celine’s bank statement as at 30 April 2018:
• A cheque for RM1,500 paid to a supplier on 30 April 2018
• Cash sales of RM350 received on 30 April 2018
• Cheques from customers of RM720 received on 30 April 2018

Balances as at 30 April 2018:

RM
- Trade payables 6,400
- Advertising expenses payable 880
- Trade receivables 5,500
- Inventories 3,800
- Furniture and Fittings (net book value) 45,000

During the year ended 30 April 2018, furniture and fittings costing RM5,000 was acquired and
paid by cheque. No disposal of furniture and fittings took place during the year.

5
UKAF1023 Financial Accounting 1

Required:
(a) Calculate the total sales revenue and the total purchases for the year ended 30 April 2018.
Trade Receivables Control a/c
2017 RM 2018 RM
1-May Balance b/d 1,760 30-Apr Bank 110,000
2018 30 Bank 720
30-Apr Sales 114,460 30 Balance c/d 5,500
116,220 116,220
Cash sales=18,150+350+5,280=23,780
Total Sales=Credit sales+Cash sales=114,460+23,780=138,240

Trade Payables Control a/c

2018 RM 2017 RM
30-Apr Bank 82,400 1-May Balance b/d 10,095
30 Bank 1,500 2018
30 Balance c/d 6,400 30-Apr Purchases 80,205
90,300 90,300
Total Purchases = RM80,205

(b) Prepare the cash & bank account to show the updated balance as at 30 April 2018.
Cash and Bank
2017 RM 2018 RM
1-May Balance b/d 6,000 30-Apr Accounts Payable 82,400
2018 30 Rent 2,640
30-Apr Accounts Receivable 110,000 30 General expenses 8,230
30 Cash sales 18,150 30 Advertising 3,520
30 Cash sales 350 30 Drawings 8,000
30 Accounts Receivable 720 30 Bank charges 640
30 Accounts Payable 1,500
30 Furniture and fittings 5,000
30 Balance c/d 23,290
135,220 135,220

(c) Prepare the Statement of Profit or Loss for the year ending 30 April 2018 and the
Statement of Financial Position as at 30 April 2018 for Perniagaan CK.
Perniagaan CK
Statement of Profit or Loss for the year ended 30 April 2018
RM RM
Sales 138,240
Less: Cost of goods sold
Opening inventory 3,520
Purchases 80,205
83,725
Less: closing inventory (3,800) (79,925)
Gross profit 58,315
Less: Expenses
Rent 2,630
6
UKAF1023 Financial Accounting 1

General expenses 8,230

Advertising 3,520
Bank charges 640
Wages 5,280
Depreciation of furniture and fittings 10,000 (30,300)
Net profit 28,015

Perniagaan CK
Statement of Financial Position as at 30 April 2018
RM RM RM
Non-current assets Cost Acc. Dep. NBV
Furniture and fittings 55,000 (10,000) 45,000

Current assets
Inventory 3,800
Trade receivables 5,500
Rent prepaid 225
Cash & bank 23,290 32,815
Total Assets 77,815

Equities & Liabilities

Capital 50,520
Add: Net profit for the year 28,015
Less: Drawings (8,000)
70,535
Current liabilities
Trade payables 6,400
Advertising expenses payable 880 7,280
Total Equity and Liabilities 77,815

7
UKAF1023 Financial Accounting 1

Question 3 : Past Exam Question April 2019

Mr. Kawasaki has started a business, Mini Market on 1 January 2018. He does not keep the
account properly. The following balances were extracted from the books of Mini Market as at 31
December 2018:

1 January 2018 31 December

2018
RM RM
Building (Cost) 80,000 80,000
Account Payable 3,200 2,700
Furniture (Cost) 7,500 ?
Prepaid Insurance - 240
Cash in Hand 720 1,200
Account Receivable 4,800 5,280
Bank 630 (Cr) 4,500
Inventory 11,650 13,400
Accumulated depreciation - Furniture 1,500 ?

Additional information:
• On 1 April 2018, Mr. Kawasaki had brought in furniture RM2,600 into the
business. The depreciation rate for furniture us at 10% per annum.
• One of the debtors was declared bankruptcy and the debt amounted RM380 has
been written off and this transaction has not yet take into account.
• A provision of doubtful debts of 4% is to be provided on the trade receivable
balance at year end.
• The owner has taken goods amounted RM1,920 for his own purpose.
• Return outwards amounted RM410 has not yet recorded in the book.
• The business has entered into a van rental agreement started 1 July 2018 where the
Mini Market has to pay monthly rental RM250. However, as on financial year end,
the business has only recorded RM1,250 as the total rental payment.

Required:
(i) Calculate the capital as at 1 January 2018.
Capital as at 31 December 2018
RM RM
Assets
Building 80,000
Furniture 7,500
Acc Dep - Furniture (1,500) 6,000
Inventory 11,650
Account Receivable 4,800
Cash in Hand 720
103,170
Less: Liabilities
Account Payable 3,200
Bank (Overdraft) 630 3,380
99,340
8
UKAF1023 Financial Accounting 1

(ii) Prepare the Statement of Financial Position as at 31 December 2018.

Mini Market
Statement of Financial Position as at 31 December 2018
Acc. Net Book
Cost
Depreciation Value
RM RM RM
Non-Current Assets
Furniture 10,100 (2,445) 7,655
Building 80,000
87,655
Current Assets
Inventory 13,400
Cash in Hand 1,200
Bank 4,500
Account Receivable 4,900
Less: Provision For Doubtful Debts (196) 4,704
Prepaid Insurance 240 24,044
Total Assets 111,699

Current Liabilities
Account Payable 2,290
Accrued-Van Rental 250
2,540
Equity
Capital 99,340
Add: Capital add on 2,600
101,940
Add: Net Profit 9,139
111,079
Less: Drawings (1,920) 109,159
Total Owners Equity and Liabilities 111,699