Bkal1013 Tutorial Q&A All Chapter
Bkal1013 Tutorial Q&A All Chapter
Bkal1013 Tutorial Q&A All Chapter
Chapter 1
1. Which of the following is the most appropriate and modern definition of accounting?
A. Electronic collection, organization, and communication of vast amounts of
information
B. The interconnected network of subsystems necessary to operate a business
C. A means of recording transactions and keeping records
D. The identifying, recording and communicating of financial information about
an identifiable economic entity
2. Which one of the following is NOT one of the three activities included in the definition of
accounting?
A. Communicating
B. Identifying
C. Recording
D. Operating
7. Which one of the following groups is considered an internal user of financial statements?
A. relevant
B. reliable
C. both relevant and reliable
D. neither relevant nor reliable
10. If an investor can use accounting information for two different companies to evaluate the
types and amounts of expenses, the information is said to have the quality of:
A. comparability
B. consistency
C. neutrality
D. understandability
11. Which of the following is an example of an operating activity for accounting firm?
A. storing data
B. reporting to decision makers
C. processing data
D. recording data
13. Which of the following concepts (or principles) would require that an item be recorded at
the amount actually paid rather than at the estimated market value?
A. Going-concern concept
B. Entity concept
C. Cost principle
D. Stable monetary unit concept
14. Financial Reporting Foundation (FRF) is differ from Malaysian Accounting Standards
Board (MASB) because:
A. it was established under the Financial Reporting Act 1997
B. it has no direct responsibility with regard to standard setting
C. it comprises representation from all relevant parties in the standard setting process
D. both are working together to make up the new framework for financial reporting in
Malaysia
16. The sources and uses of cash over a stated period of time are reflected on the:
A. profit and loss and other comprehensive income.
B. statement of owners equity
C. statement of financial position (balance sheet)
D. statement of cash flows
17. The Statement of Profit or Loss and Other Comprehensive Income reports the revenues and
expenses for a period of time based on the:
A. historical cost
B. matching principle
C. objectively principle
D. full disclosure
18. The reliability of the information in a companys financial statements is the responsibility
of:
19. ____________ works with the Financial Reporting Foundation (FRF) to make up the
new framework for financial reporting in Malaysia, with representation from all
relevant parties in the standard-setting process.
A. Malaysian Institute of Accountant (MIA)
B. Malaysian Accounting Standards Board (MASB)
C. Malaysian Institute of Certified Public Accountant (MICPA)
D. International Accounting Standard Board (IASB)
2. A RM5,000 account payable is paid by the business. How is the accounting equation affected?
3. A business receives a utility bill and intends to pay the bill next month. When the business
receives the bill, how does this event affect the accounting equation?
4. Land is purchased by a business for RM100,000. The company pays for land with a
RM20,000 cash payment and the execution of an RM80,000 promissory note payable to the
seller. How does this purchase affect the business's accounting equation?
5. Kedai Kg. Pisang started the year with total assets of RM80,000 and total liabilities of
RM40,000. During the year, the business earned revenues of RM120,000 and incurred
expenses of RM70,000. There is no capital contributions during the year, but the owner make
withdrawals of RM60,000. What is the amount of owner's equity at the end of the year?
A. RM40,000
B. RM50,000
C. RM30,000
D. RM10,000
Use the following information to answer questions 6 and 7:
Hussin starts a plumbing service named Hussin Enterprise. Selected transactions are described as
follows:
i. Hussin deposits RM7,000 into a new business account, recording the capital contribution.
ii. The business pays RM4,000 cash for equipment to be used for plumbing repairs.
iii. The business borrows RM15,000 from a local bank.
iv. The business pays RM600 rent for the first month.
v. The business pays RM400 cash for plumbing supplies to be used on various jobs in the
future.
vi. The business completes a plumbing repair project and receives RM1,300 cash.
vii. Hussin takes a cash withdrawal of RM2,500.
A. RM25,700
B. RM5,200
C. RM24,200
D. RM20,200
7. After all of the transactions, what is the amount of total owner's equity?
A. RM5,200
B. RM20,200
C. RM7,700
D. RM7,300
8. Dadidu Enterprise had the following transactions in June: Earned RM4,000 on account;
collected RM3,000 from a customer that was owed from previous month; incurred RM500
repair expense and paid cash to the repairman; paid RM1,200 to a supplier owed from the
previous month; paid out RM800 in cash drawings to the owner. What is the combined effect
on Owner's capital of the June transactions?
A. Decrease RM2,700
B. Decrease RM5,700
C. Increase RM2,700
D. Decrease RM4,500
9. Equipment is purchased for cash. Which of the following is TRUE?
10. A utility bill is received for expenses incurred. It will be paid in the following accounting
period. Which of the following would be TRUE as a result of the receipt of the utility bill?
11. Which of the following invests funds into a business and is considered an owner?
A. Shareholders
B. Creditors
C. Bankers
D. Lenders
12. Which of the following organization is primarily responsible for establishing GAAP?
A. monetary unit
B. historical cost
C. separate entity
D. time period
14. Carrying out professional responsibilities with competence and diligence is called:
A. Integrity
B. Independence
C. Objectivity
D. due care
15. Which of the following is NOT one of the broad principles underlying the accountant's
code of professional ethics?
A. Objectivity
B. Integrity
C. Loyalty
D. Independence
16. The characteristic of accounting information that can provides predictive and feedback value
is:
A. relevance.
B. reliability.
C. creativity.
D. comparability.
A. it is trusted by users.
B. it is helpful in contrasting organizations.
C. it is timely presented.
D. it affects the decision of its users.
18. The Statement of Profit or Loss and Other Comprehensive Income reports the revenues
and expenses for a period of time based on the:
A. historical cost.
B. matching principle.
C. objectively principle.
D. full disclosure.
19. The accounting equation should remain in balance because every transaction affects:
A. an asset.
B. a drawing.
C. an expense.
D. a revenue.
2. The receipt of cash from customers in payment of their accounts would be recorded by:
A. transaction in a journal.
B. the chart of accounts.
C. general ledger accounts and balances.
D. the totals from the journal pages.
A. net loss.
B. gross profit.
C. gross loss.
D. net profit.
5. A company sells goods on credit for RM30,000. Which of the following entries correctly
records the transaction?
7. A company had a cash balance of RM30,000 on 1 August 2014. During August total
payments were RM384,000 and total receipts were RM357,000. What is the cash book
balance at 31 August 2014?
A. RM 1,800
B. RM 3,000
C. RM 4,500
D. RM 6,000
8. The economic resources owned; expected to benefit the business in future is:
A. liabilities.
B. owners equity.
C. assets.
D. potential investors.
9. The owner withdraws cash from the business for personal use leads to:
A. checking equality.
B. double-entry accounting.
C. single-entry accounting.
D. transaction analysis.
13. The account debited when cash is paid for supplies is ____.
A. Supplies
B. Cash
C. Supplies Expense
D. none of the above
14. Which of the following transactions would increase both assets and liabilities?
A. Cash is credited for RM8,000; Interest Expense is credited for RM1,600; and
Notes Payable is debited for RM9,600
B. Notes Payable is credited for RM8,000; Cash is credited for RM1,600; and
Interest Expense is debited for RM9,600
C. Cash is credited for RM9,600; Notes Payable is debited for RM8,000; and
Interest Expense is debited for RM1,600
D. Notes Payable is credited for RM9,600; Cash is debited for RM8,000; and
Interest Expense is debited for RM1,600
17. A business purchased an equipment by paying cash of RM36,000 and issuing a Note
Payable of RM54,000. Which of the following journal entries would be recorded?
18. How does a cash withdrawal by the owner affect the accounting equation?
A. RM5,300
B. RM6,020
C. RM9,000
D. RM12,020
20. What is the amount of total liabilities at the end of October 2015?
A. RM980
B. RM2,330
C. RM4,800
D. RM9,000
A. RM4,000
B. RM6,000
C. RM7,000
D. RM9,000
22. The following entries were made by the accountant of Ultrawoman Sdn Bhd during
its first month of operation:
After posting these entries to the general ledger, how much are total assets?
A. RM9,150
B. RM10,650
C. RM25,050
D. RM27,150
23. An office equipment is purchased for cash. Which of the following is TRUE?
24. An electricity bill is received for expenses incurred. It will be paid in the following
accounting period. The following is TRUE as a result of the receipt of the bill:
29. A company has debited an asset account for RM1,300 and credited a liability account for
RM1,100. What can be done to complete the recording of the transaction?
1.
(a) Cash ..................................................................... 15,000
Azfa Hana, Capital ......................................... 15,000
(b) Rent Expense ...................................................... 2,500
Cash................................................................ 2,500
(c) Supplies ............................................................... 850
Accounts Payable.......................................... 850
(d) Accounts Payable ............................................... 400
Cash................................................................ 400
(e) Cash ..................................................................... 15,750
Sales Commissions....................................... 15,750
(f) Automobile Expense .......................................... 2,400
Miscellaneous Expense...................................... 600
Cash................................................................ 3,000
(g) Office Salaries Expense ..................................... 3,250
Cash................................................................ 3,250
(h) Supplies Expense ............................................... 575
Supplies ......................................................... 575
(i) Azfa Hana, Drawing ............................................ 1,000
Cash................................................................ 1,000
Prob. 22 (Towering Realty)
2.
Cash Sales Commissions
(a) 15,000 (b) 2,500 (e) 15,750
(e) 15,750 (d) 400
(f) 3,000 Office Salaries Expense
(g) 3,250 (g) 3,250
(i) 1,000
Bal. 20,600
Supplies Rent Expense
(c) 850 (h) 575 (b) 2,500
Bal. 275
Bal. 450
Debit Credit
Balances Balances
4. a. RM15,750
b. RM9,325
c. RM6,425
Tutorial 3: Chapter 3 COMPLETING THE ACCOUNTING CYCLE
1. The adjusting entry to record the depreciation of Building for the accounting period
is:
A. RM72,300
B. RM73,050
C. RM75,000
D. RM75,750
A. Non-current liability
B. Non-current asset
C. Current liability
D. Current asset
4. The balance in the capital account after all closing entries have been posted is:
5. On 1 August 2013, Axia Sdn Bhd paid RM72,000 cash for six-months rent. The
balance in the prepaid rent on 31 December 2013 after adjustment would be:
A. RM12,000
B. RM18,000
C. RM24,000
D. RM36,000
6. Salaries Payable was RM7,000 at the end of October and RM5,600 at the end of
November. Wages Expense for November was RM40,000. How much cash was paid
for wages during November?
A. RM27,400
B. RM38,600
C. RM41,400
D. RM52,600
Pandalela Enterprise account balances as at 31st December 2013 are given as follows:
RM
Cash 800
Accounts Receivable 2,000
Prepaid Insurance 200
Supplies 600
Office Equipment 1,600
Accum. Depreciation Building 800
Accounts Payable 1,200
Salbiah, Capital 2,400
Service Revenue 2,000
Salaries Expense 400
Rent Expense 800
8. If on 31 December, 2013, supplies on hand were RM180, the adjusting entry would
contain a:
9. If as of 31 December, 2013, the rent of RM400 for December had not been recorded
or paid. This will cause:
10. A consultant firm received RM14,000 cash for services to be rendered in the future.
The full amount was credited to the liability account Unearned Consulting Fees. If the legal
services have been rendered at the end of the accounting period and no adjusting entry is
made, this would cause:
A. Expenses to be overstated
B. Net income to be overstated
C. Liabilities to be understated
D. Revenues to be understated
11. If a resource has been consumed but a bill has not been received at the end of the
accounting period, then:
12. The purpose of adjusting entries is most of the time due to the following, EXCEPT:
A. Because some earnings are realized with the passage of time and have not yet
been journalized
B. When the company's profits are below the budget
C. When expenses are recorded in the period in which they are incurred
D. When revenues are recorded in the period in which they are earned
13. Muscular Sdn Bhd, a publisher of sports magazine, collected RM135,000 for
subscription revenue in May. Each subscriber will receive a copy of the magazine for
the next 12 months, beginning with the June issue. The company uses the accrual based
accounting. By the end of December, how much subscription revenue has been earned?
A. RM45,000
B. RM78,750
C. RM90,000
D. RM135,000
14. The information below represents Long Pasia Enterprise Supplies account. How much
is the supply purchased during the period?
A. RM30,000
B. RM54,000
C. RM66,000
D. RM78,000
15. The accountant for G-Generation Services forgot to make an adjusting entry for
depreciation expense for the current year. Which of the following is one of the effects
of this mistake?
16. Running Man Enterprise is working on a six-month job for a client, starting 1 August.
They will collect RM72,000 from their customer when the job is finished. On 1
September, their Accounts Receivable account has a debit balance of RM12,000. At the end of
September, after monthly adjusting entries have been made, what will be the balance in
Accounts Receivable account?
18. Given total revenues RM15,300, total expenses RM10,950, and total withdrawals
RM3,900. What is the balance in the Income Summary account prior to closing net
income or loss to the Capital account?
19. When there is a net loss, the entry to close the Income Summary account is:
20. Which of the following account is not closed to the Income Summary?
A. Service Revenue
B. Depreciation Expense
C. Withdrawal
D. Accounts Payable
21. Structured Question:
Prob. 36
2.
Total
Net Total Total Owners
Income Assets Liabilities Equity
a) Merchandise inventory is the merchandise that have been sold during an accounting
period.
b) Merchandise inventory is the merchandise that will be bought in the next accounting
period.
c) Merchandise inventory is the merchandise that is on hand at the end of an
accounting period.
d) Merchandise inventory is the merchandise that is rotten and will be disposed.
a) Net income of service company equals to the total of fees earned during an accounting
period.
b) Gross profit of merchandise company is gained after substracting cost of merchandise
sold and operating expenses from the total sales of an accounting period.
c) Net profit of merchandise company is equals to sales deduct cost of merchandise sold.
d) Net profit of merchandise company is equals to sales deduct cost of merchandise
sold and operating expenses.
a) Expense
b) Current asset
c) Current liability
d) Equity
5) In January 2015, the cash sales for merchandise is RM123,000 and the sales on account is
RM56,000. The cost of the merchandise sold is one quarter of the total sales. Other
expenses is RM15,000. What is the amount of the gross profit for January 2015?
a) RM134,250
b) RM92,250
c) RM119,250
d) RM164,000
7) Afgan Interior Deco Company has two sales transactions in March 2015. The company
sold a set of cosy sofa to Yuna Hotel for RM6,000 on account for term 2/10, n/30. The
company also sold a set of 12 unit stylish desk lamp for RM29.00 per unit to UNI-tekno
College on cash basis. What is the net sales for Afgan Interior Deco Company if Yuna
Hotel pays within the discount period?
a) RM5880
b) RM6348
c) RM6228
d) RM5748
i. The steps in the accounting cycle for merchandising company and service company
are different from each other.
ii. Sales minus operating expenses equals gross profit.
iii. The main difference between the balance sheets of a service company and a
merchandising company is inventory.
iv. For a merchandising company, all accounts that affect the determination of income
are closed to the Income Summary.
v. Freight terms of FOB Destination means that the seller pays the freight costs.
vi. Under a perpetual inventory system, the cost of good sold is determined each time
a sale occurs.
a) i, ii and iii
b) i,ii and iv
c) iii, iv, v and vi
d) iii, iv and v
9) Sales revenue
a) Cash
Sales
b) Sales
Cash
c) Accounts receivable
Sales
d) Sales
Accounts receivable
11) Which of the following is not a true statement about multiple-step income statement?
a) RM42,000
b) RM35,000
c) RM33,000
d) RM56,000
a) RM56,000
b) RM35,000
c) RM33,000
d) RM5,000
a) RM54,000
b) RM42,000
c) RM35,000
d) RM33,000
18) The respective account balances of Sales, Sales Returns and Allowances and Sales
Discounts are:
a) Buyer will pay the cost of shipping starting from the shipping point to the
destination.
b) Seller will pay the cost of shipping starting from the shipping point to the destination.
c) Seller and buyer will pay the transportation cost.
d) There is no transportation cost incurred to both seller and buyer.
20) August 2015 All Green Enterprise sold 4 units of environmental-friendly garbage bin to
D-Mart Mall on account. The cost for each bin is RM150. 6% of tax are chargable to the
selling transaction. What is the journal entry for the selling transaction?
a) One
b) Two
c) Three
d) Four
a) Revenue
b) Telephone expenses
c) Income summary
d) Capital
23) Which of the following transaction is recorded with the same journal entry for both
perpetuan and periodic inventiry system?
i) Sales discounts
ii) Cash sales
iii) Cash received on account with a discount
iv) Return of merchandise sold
v) Credit sales
a) i and iii
b) iii only
c) i, ii and iii
d) none of the above
Purchases RM78,300
Sales 112,000
Purchase discounts 10,000
Sales returns and allowances 15,000
Freight-in (FOB shipping point) 5,000
a) RM33,700
b) RM23,700
c) RM73,300
d) RM97,000
25) Go-Go Bike Accessories Enterprise has a beginning merchandise inventory of RM45,000.
During the period, new purchases were RM13,000, purchase discounts were RM1,500,
sales discounts were RM2,500, freight-in RM850. A physical count of inventory at the end
of period revelated that RM24,300 was still on hand. What is the cost of goods available
for sale and cost of good sold, respectively?
a) RM54,850; RM30,550
b) RM55,650; RM31,350
c) RM58,000; RM28,850
d) RM56,850; RM32,550
a) Purchases
b) Purchase discounts
c) Sales returns and allowances
d) Sales discounts
a) Sales discounts and sales returns and allowances increase the amount of sales.
b) Sales discounts are included in the calculation of gross profit.
c) The capital account balance are included in the calculation of net income.
d) Sales discounts and purchase discounts are included in the calculation of gross profit.
28) The collection of RM500 account after the 2 percent discount period will result in a
30) A customer received a product which she ordered from a seller. There is however a slight
defect to the product. After making a complaint to the seller, the customer willing to retain
the product after the seller agrees to give a price reduction. This transaction is known as a
sales
a) discount
b) return
c) allowances
d) tax
Prob. 41
1.
MAGIC ENTERPRISE
Income Statement
For the Year Ended March 31, 2008
2.
MAGIC ENTERPRISE
Statement of Owners Equity
For the Year Ended March 31, 2008
3.
MAGIC ENTERPRISE
Balance Sheet
March 31, 2008
Assets
Current assets:
Cash ............................................................ RM184,500
Accounts receivable .................................. 145,200
Merchandise inventory .............................. 210,000
Office supplies ........................................... 6,720
Prepaid insurance ...................................... 4,080
Total current assets ................................ RM550,500
Property, plant, and equipment:
Office equipment........................................ RM102,000
Less accumulated depreciation ............. 15,360 RM86,640
Store equipment......................................... RM183,600
Less accumulated depreciation ............. 41,040 142,560
Total property, plant, and
equipment ........................................ 229,200
Total assets ..................................................... RM779,700
Liabilities
Current liabilities:
Accounts payable ...................................... RM66,720
Note payable (current portion).................. 9,000
Salaries payable ......................................... 2,880
Total current
liabilities ........................................................... RM 78,60
0
Long-term liabilities:
Note payable (final payment due 2018) .... 58,200
Total liabilities ................................................. RM136,800
Owners Equity
Gurmit, capital ................................................. 642,900
Total liabilities and owners equity ................ RM779,700
Prob. 41
1.
MAGIC ENTERPRISE
Income Statement
For the Year Ended March 31, 2008
Revenues:
Net sales ...................................................................... RM1,488,000
Expenses:
Cost of merchandise sold .......................................... RM930,000
Selling expenses ......................................................... 270,000
Administrative expenses ............................................ 162,000
Interest expense .......................................................... 6,000
............................................................ Total expenses 1,368,000
Net income .......................................................................... RM 120,000
2.
MAGIC ENTERPRISE
Statement of Owners Equity
For the Year Ended March 31, 2008
3.
MAGIC ENTERPRISE
Balance Sheet
March 31, 2008
Assets Liabilities
Current assets: ......................... Current liabilities:
Cash ...................................... RM184,500 Accounts payable ........... RM66,720
Accounts receivable ............ 145,200 Note payable
Merchandise inventory ........ 210,000 (current portion) ........... 9,000
Office supplies ..................... 6,720 Salaries payable .............. 2,880
Prepaid insurance ................ 4,080 Total current
Total current assets .......... RM550,500 liabilities ........................ RM
78,600
Property, plant, and equipment: Long-term liabilities:
Office equipment RM102,000 Note payable (final
Less accumulated payment due 2018) ....... 58,200
depreciation .................... 15,360 RM86,640 Total liabilities .................... RM136,800
Store equipment ................... RM183,600 Owners Equity
Less accumulated Gurmit, capital.................... 642,900
depreciation ....................... 41,040 142,560
Total property, plant,
and equipment.............. 229,200 Total liabilities and
Total assets .............................. RM779,700 owners equity ................. RM779,700
BKAL1013 BUSINESS ACCOUNTING
SEM A151
Prob. 42
4.
2008
Mar.31Sales ........................................................ 1,542,000
Income Summary ................................................ 1,542,000
31Income Summary....................................................... 1,422,000
Sales Returns and Allowances .......................... 27,720
Sales Discounts .................................................. 26,280
Cost of Merchandise Sold .................................. 930,000
Sales Salaries Expense ...................................... 207,840
Advertising Expense .......................................... 52,560
Depreciation ExpenseStore Equipment ........ 7,680
Miscellaneous Selling Expense ......................... 1,920
Office Salaries Expense ..................................... 100,980
Rent Expense ...................................................... 37,620
Depreciation ExpenseOffice Equipment ....... 15,240
Insurance Expense ............................................. 4,680
Office Supplies Expense .................................... 1,560
Miscellaneous Administrative Expense ............ 1,920
Interest Expense ................................................. 6,000
31Income Summary....................................................... 120,000
Gurmit, Capital .................................................... 120,000
31Gurmit, Capital ........................................................... 42,000
Gurmit, Drawing .................................................. 42,000
BKAL1013 BUSINESS ACCOUNTING
SEM A151
iii. Financial statements must be prepared according to the provision under Schedule Six,
iv. One objective of financial reporting is to provide useful information in making rational
D. ii and iv only.
3. Company directors are required to include in the annual report the companys and its
subsidiaries financial statements as made mandatory in the:
A. Chairmans statement.
B. Corporate information.
C. Notice of annual general meeting.
D. Important events calendar and corporate activities.
5. Listed companies are required to have statement on corporate governance in their annual
6. ______________ must include their opinion on the sufficiency of financial records kept by
the company, that the companys account are prepared and complied with approved
accounting standards for public assurance.
A. Directors report
B. Internal auditors report
C. Audit committees report
D. Independent (external) auditors report
8. If you were analyzing a corporations shareholders equity, and you wanted to determine
how many units of common share were issued during the current year, the best financial
statement to review would be the:
BKAL1013 BUSINESS ACCOUNTING
SEM A151
9. Information about the accounting policies adopted in preparing the financial statements are
explained in the:
A. 2.31
B. 1.87
C. 2.22
D. 2.46
A. 3.00
B. 0.33
C. 2.8
D. 0.36
BKAL1013 BUSINESS ACCOUNTING
SEM A151
A. 153.33%
B. 353.85%
C. 12.8%
D. 29.54%
17. Which of the following ratios gives information on the amount of profits reinvested in the
A. Sales/total assets.
B. Debt/total assets.
C. Debt/equity.
D. Retained earnings/total assets.
A. Vertical analysis
B. Horizontal analysis
C. Liquidity analysis
D. Profitability analysis
20. Use the following information and horizontal analysis to compute the percentage
increase in sales: 2013 sales were RM200,000 and 2014 sales were RM250,000.
Pelangi Sdn Bhd had sales of RM10 million; operating income of RM3 million;
after
tax income of RM1 million; assets of RM8 million; owners equity of RM5 million;
BKAL1013 BUSINESS ACCOUNTING
SEM A151
A. 37.5%
B. 12.5%
C. 30.0%
D. 25.0%
A. 37.5%
B. 10.0%
C. 20.0%
D. 60.0%
A. 10.0%
B. 20.0%
C. 30.0%
D. 33.0%
24. Typically, which of the following would be considered to be the most indicative of a
firm's short-
A. working capital.
B. current ratio.
C. acid test.
D. cash ratio.
BKAL1013 BUSINESS ACCOUNTING
SEM A151
26. The following financial statement data are taken from Xeron Bhd's 2014 annual report:
(in millions)
Investments 9.4
Intangibles 6.8
A. 196.9%
B. 113.0%
C. 53.0%
D. 45.7%
BKAL1013 BUSINESS ACCOUNTING
SEM A151
29. Which of the following ratios represents dividends per common share in relation to market
A. dividend payout.
B. dividend yield.
C. price/earnings.
A. 16.25
B. 12.50
C. 17.00
D. 15.00
BKAL1013 BUSINESS ACCOUNTING
SEM A151
TUTORIAL #6
1. A cost unit is
2. Prime cost is
3. Which of the following costs are part of the prime cost for a manufacturing company?
6. A company employs three drivers to deliver goods to its customers. The salaries paid
to these drivers are:
A manufacturing cost
B product cost
C administrative cost
D selling expense
10. Which of the following would most likely be included as part of manufacturing
overhead in the production of a wooden table?
11. In a manufacturing company, direct labor costs combined with direct materials costs
are known as:
A period costs
B conversion costs
C prime costs
D opportunity costs
BKAL1013 BUSINESS ACCOUNTING
SEM A151
15. A manufacturing process requires a small amount of paint. The paint used in the
production process is classified as:
A. a prime cost.
B. miscellaneous expense.
C. an indirect material.
D. a direct material.
BKAL1013 BUSINESS ACCOUNTING
SEM A151
RM
Raw materials inventory, 1 January 31,000
Raw materials inventory, 31 December 54,000
Work in process, 1 January 18,000
Work in process, 31 December 12,000
Finished goods, 1 January 40,000
Finished goods, 31 December 32,000
Raw materials purchases 980,000
Direct labour 360,000
Factory insurance 128,000
Indirect labour 47,000
Factory machine depreciation 260,000
Selling and administrative expenses 285,000
A. RM980,000
B. RM1,011,000
C. RM1,034,000
D. RM957,000
A. RM435,000
B. RM720,000
C. RM795,000
D. RM535,000
RM RM
Direct materials used 310,000 Beginning work in process 68,000
Direct labor 175,000 Ending work in process 44,000
Manufacturing overhead 400,000 Beginning finished goods 62,000
Operating expenses 520,000 Ending finished goods 57,000
A. RM1,405,000
B. RM1,005,000
C. RM885,000
D. RM909,000
BKAL1013 BUSINESS ACCOUNTING
SEM A151
A. RM1,095,000
B. RM710,000
C. RM485,000
D. RM575,000
20. Which one of the following items does NOT appear on the Statement of Financial
Position of a manufacturing company?
21. Which of the following would NOT require the use of cost behavior analysis?
22. BIBI Inc. is a merchandising company. Last month the companys merchandise
purchases totaled RM70,000. The companys beginning merchandise inventory was
RM15,000 and its ending merchandise inventory was RM22,000. What was the
companys cost of goods sold for the month?
A RM63,000
B RM77,000
C RM107,000
D RM70,000
23. Using the following data for April, calculate the cost of goods manufactured:
RM
Direct materials ........................................................................................ 23,00
Direct labor .............................................................................................. 21,000
Manufacturing overhead........................................................................... 37,000
Beginning work in process inventory....................................................... 13,000
Ending work in process inventory ........................................................... 18,000
A RM81,000
B RM76,000
C RM94,000
D RM86,000
BKAL1013 BUSINESS ACCOUNTING
SEM A151
Haman Corp. reported the following data for the last year:
RM
Work in process inventory, beginning .............................. 100
Work in process inventory, ending.................................... 80
Finished goods inventory, beginning ................................ 150
Finished goods inventory, ending...................................... 200
Direct labor cost................................................................. 400
Direct material cost............................................................ 500
Manufacturing overhead cost............................................. 300
A RM800
B RM900
C RM500
D RM400
A RM700
B RM800
C RM900
D RM500
A RM1,180
B RM1,120
C RM1,200
D RM1,220
BKAL1013 BUSINESS ACCOUNTING
SEM A151
The trial balance of Hang Jia Yi MANUFACTURING SDN BHD as at 31 December 2014 is
peresented as below:
Hang Jia Yi MANUFACTURING SDN BHD
Trial Balance as at 31 December 2014
Dt (RM) Ct (RM)
Cash at Bank 14,700
Accounts receivable 33,000
Inventory:
Finished goods, 1/1/2014 23,000
Work in process, 1/1/2014 7,500
Raw materials, 1/1/2014 3,700
Machinery and equipment 196,000
Accumulated depreciation 35,000
Accounts payable 18,000
Bills payable 75,000
Share capital 40,000
Retained profits 37,000
Sales 860,000
Rent revenue 216000
Direct labour 6,000
Raw material purchase 205,000
Indirect labour 71,000
Factory supplies 18,000
Light & power 56,000
Insurance expenses 16,300
Selling expenses 32,000
Adminiatrative expenses 67,000
Interest expenses 23,000
Rent expenses 31,500
Depreciation expenses 54,000
1,067,700 1,067,700
Factory Office
Light & power expenses 75% 25%
Rent Expenses 75% 25%
Insurance expenses 75% 25%
3. The depreciation expense allocates for factory is 60% and the balance is for office portion.
REQUIRED:
(a) Prepare the statement of cost of goods manufactured for the year ended 31 December
2014.
(b) Prepare the statement of comprehensive income for the year ended 31 December
2014.
BKAL1013 BUSINESS ACCOUNTING
SEM A151
Direct material:
Beginning raw material 3,700
Purchases 205,000
208,700
( - ) Ending raw material (3,100)
Factory overhead
Insurance 12,225
Light & power 42,000
Rent expense 23,625
Indirect labour 71,000
Depreciation expense 32,400 181,250
Work in process
( + ) Beginning WIP 7,500
Sales 860,000
Other Income:
Rent 216,000
686,350
( - ) Expenses:
Selling 22,000
Light & power 14,000
Rent 7,875
Insurance 4,075
Administrative 67,000
Interest 23,000
Depreciation 21,600 (169,550)
1. Hang Jia Yi Sdn Bhd has variable selling costs. If sales volume increases, how will
the total variable costs and the variable costs per unit behave?
5. What will be the impact on the companys contribution margin and break-even point, if
a company able to reduce its variable costs per unit?
6. A company has fixed costs of RM900 and contribution margin per unit of RM3.
Which of the following statement is (are) TRUE?
A. Each unit contributes RM3 toward covering the fixed costs of RM900
B. The situation described is not possible and there must be an error
C. Once the break-even point is reached, the company will make money at the rate of
RM3
per unit
D. Statements A and C are true
BKAL1013 BUSINESS ACCOUNTING
SEM A151
7. At a volume of 20,000 units, Heng Shin Jie reported sales revenues of RM1,000,000,
variable costs of RM300,000, and fixed costs of RM260,000. The company's
contribution margin per unit is:
A. RM22
B. RM28
C. RM35
D. RM37
8. At a volume level of 500,000 units, Guo Shuting reported the following information:
Sales price RM60
Variable cost per unit RM20
Fixed cost per unit RM4
9. A recent Statement of Profit or Loss and Other Comprehensive Income of Liu Zhaoyang
Furniture Sdn Bhd reported the following data:
Unit sold 8,000
Sales revenue RM9,600,000
Variable costs RM6,000,000
Fixed cost RM2,600,000
If the company desired to earn a target net profit of RM1,270,000, it would have to sell:
A. 5,778 units
B. 8,600 units
C. 10,160 units
D. 11,908 units
10. Kerh's budget for the upcoming year revealed the following figures:
If the company's break-even sales total RM750,000, Kerh's safety margin would be:
A. ( RM90,000)
B. RM90,000
C. RM246,000
D. RM336,000
12. A company that desires to lower its break-even point should strive to:
A. sell more units
B. increase fixed costs
C. decrease selling prices
D. reduce variable costs
13. Which of the following expressions can be used to calculate the break-even point with the
contribution-margin ratio (CMR)?
A. (Sales revenue - variable costs) CMR
B. Fixed costs CMR
C. CMR fixed costs
D. (Fixed costs + variable costs) CMR
15. All other things being equal, a company that sells multiple products should ensure that it
increase the sales volume of these product of highest:
A. contribution margin
B. selling price
C. variable cost
D. fixed cost
16. Calculate the break-even point (in RM) if fixed costs are RM285,000, the sales price per
unit is RM80 per unit, and the variable cost per unit is RM20.
A. RM380,000
B. RM95,000
C. RM14,250
D. RM4,750
17. If sales, variable costs and operating income are RM400,000, RM200,000 and
RM100,000 respectively, what is the contribution margin ratio?
A. 75%
B. 50%
C. 25%
D. 0%
BKAL1013 BUSINESS ACCOUNTING
SEM A151
18. Hoo Kam Productions has fixed costs of RM200,000 and variable costs are 30% of sales.
What are the required sales (in RM) if the company desires net income of RM10,000?
A. RM700,000
B. RM525,000
C. RM350,000
D. RM300,000
19. If a company had a contribution margin of RM300,000 and a contribution margin ratio
of 20%, what is the total variable costs?
A. RM1,500,000
B. RM1,200,000
C. RM240,000
D. RM60,000
22. Which of the following is an example of a cost that varies in total as the number of
units produced changes?
A. Salary of a production supervisor
B. Direct materials cost
C. Property taxes on factory buildings
D. Straight-line depreciation on factory equipment
25. If sales are RM820,000, variable costs are 62% of sales, and operating income is
RM260,000, what is the contribution margin ratio?
BKAL1013 BUSINESS ACCOUNTING
SEM A151
A. 53.1% B. 38%
C. 62% D. 32%
26. When fixed costs are RM41,500, the variable cost is RM12 per unit, and the product
sells for RM22 per unit, the breakeven point is
A. 4,150 units. B. 8,300 units
C. 2,075 units. D. 6,225 units.
27. If fixed costs are RM500,000 and the unit contribution margin is RM12, what amount
of units must be sold in order to realize an operating income of RM100,000?
A. 5,000 B. 41,667
C. 50,000 D. 58,333
28. If fixed costs are RM500,000 and the unit contribution margin is RM40, what is the
break-even point if fixed costs are increased by RM80,000?
A. 14,500 B. 12,500
C. 8,333 D. 9,667
29. Costs that change in total dollar amount as the level of activity changes are called:
A. fixed costs B. mixed costs
C. opportunity costs D. variable costs
Tutorial 8: Topic 10
1. The budget that shows how many units must be produced to meet sales needs and satisfy
ending inventory requirements is the _________________________.
a. financial budget
b. direct labor budget
c. master budget
d. production budget
8. Shown below is the sales forecast for Koed Jiaxin Inc. for the first four months of the
coming year.
Jan Feb Mar Apr
Cash sales RM15,000 RM24,000 RM18,000 RM14,000
Credit sales RM100,000 RM120,000 RM90,000 RM70,000
On average, 50% of credit sales are paid for in the month of the sale, 30% in the month
following sale, and the remainder is paid two months after the month of the sale.
Assuming that there are no bad debts, the expected cash inflow in March is:
a. RM138,000
b. RM122,000
c. RM119,000
d. RM108,000
9. Lim Wei Company has observed its accounts receivable collection pattern to be as
follows: 40% in the month of the sale, 45% in the month following the sale, 13% in
the second month following the sale and 2% is uncollectible. Sales for the last three
months of the year were as follows: October- RM300,000; November- RM450,000;
and December- RM625,000. Sales for January are budgeted to be RM375,000. What
are the budgeted cash collections for January?
a. RM375,000
b. RM489,750
c. RM495,000
d. RM625,000
Credit sales have been budgeted for the last six months of the year are as below:
July RM60,000
August RM70,000
September RM80,000
October RM90,000
November RM100,000
December RM85,000
Purchase of inventory are 80% of its next months credit sales. All purchase of inventory is on
account. 50% of the purchase is paid in the month of purchase and another 50% is paid in the
following month of the purchase.
10. The estimated total cash collection during October from accounts receivable would be:
a. RM63,000
b. RM84,400
c. RM89,100
d. RM83,556
11. The estimated total cash disbursement during October from purchase of inventory would be:
a. RM63,000
b. RM152,000
c. RM76,000
d. RM95,000
Liu Zhaoyang SdnBhd is a merchandising company. Data from companys 2014 budgeted
sales for the third quarter of the year are as follows:
A. sales budget
B. selling and administrative budget
C. income statement budget
D. balance sheet budget
Quantrill Furniture Mart plans inventory level at the end of each month as follows:
May RM250,000; Jun-RM220,000; July-RM270,000 and August RM240,000.
Sales are expected to be: June- RM440,000; July RM350,000; August RM400,000. Cost
of goods sold is 60% of sales.
Purchases in April were RM250,000; May- RM180,000. A given months purchases are paid
as follows: 10% during the month of purchase; 80% the next month and 10% in the next month.
b. RM210,000
c. RM252,400
d. RM270,000
Use the following information to answer question 17, 18, 19 and 20:
Hang Jia Yi Company is an office supplies specialty store, the following data have been
assembled to assist the preparation of purchase, cash collection, cash disbursement and sales
and administrative budget:
Additional information:
i. Sales are 20% cash and 80% on credit. All credit sales are collected in the following
month of sales.
ii. Monthly budgeted expenses are: Salaries and Wages RM27,000; advertising
RM70,000; shipping 5% of sales; other expenses 3% of sales.
iii. At the end of each month, inventory in hand is expected to be 25% of the following
month sales needs.
iv. The company cost of goods sold is 60% of its sales.
v. 50% of the monthly inventory purchase is paid in the month of purchase; another 50%
is paid in the following month.
17. What is Hang Jia budgeted cash collection in March?
a. RM540,000
b. RM360,000
c. RM450,000
d. RM900,000
20. What is Hang Jia budgeted selling and administrative expenses in April?
a. RM125,000
b. RM113,000
c. RM150,000
d. RM131,000
21. Noor Nadhirah Company has the following sales budget:
Credit sales represent 80 percent of budgeted sales. Of the credit sales, 20 percent is
collected in the month of the sale, 60 percent in the month after the sale, and the
remaining 15 percent is collected two months after the sale. Five percent of all sales
are uncollectible and written-off. Cash receipts from sales in September amounted to
a. RM169,150
b. RM135,320
c. RM107,200
d. RM162,120
22. A moving twelve-month budget where a future month is added as the current month
expires is called a(n)
a. zero-base budget
b. incremental budget
c. revolving budget
d. continuous budget
24. A merchandising firm does NOT prepare which of the following budgets?
a. cash receipts budget
b. production budget
c. sales budget
d. cash payments budget
26. Which budget should be used to determine how efficiently managers controlled
costs?
a. master budget
b. flexible budget
c. static budget
d. cash budget
27. Which of the following is NOT a key feature of a budgetary system that promotes
positive managerial performance?
a. frequent feedback on performance
b. a single measure of performance
c. monetary and nonmonetary incentives
d. participative budgeting
28. The budget that is a comprehensive financial plan for the organization as a whole is
called a
a. capital budget
b. master budget
c. comprehensive budget
d. continuous budget
29. Which of the following budgets concerns the income-generating activities of the
firm?
a. operating budget
b. financial budget
c. capital budget
d. all of the above
END OF QUESTIONS
BKAL1013 BUSINESS ACCOUNTING
SEM A151
During a recent accounting period, Koed Jiaxin Sdn Bhd produced 1,600 units of chopping
knives. The standard direct labor is 4 hours for each unit of knife. The standard cost for one
hour of direct labor is RM20 per hour. The actual direct labor for the accounting period was
6,500 hours at RM19 per hour.
3. The direct labor efficiency variance for the accounting period was:
A. RM2,000 Favorable
B. RM2,000 Unfavorable
C. RM1,900 Favorable
D. RM1,900 Unfavorable
4. The direct labor rate variance for the accounting period was:
A. RM6,400 Favorable
B. RM6,500 Unfavorable
C. RM6,500 Favorable
D. RM6,400 Unvaforable
5. Guo Shuting Sdn Bhd manufactures plastic storage container. The direct material
included in one container is 2 kilogram at the standard cost of RM3 per kilogram. The
company produced 1,000 storage containers and used 2,100 kilograms of material. The
material's actual cost was RM3.40 per kilogram. The direct materials usage or quantity
variance is:
A. RM300 Favorable
B. RM300 Unfavorable
C. RM340 Favorable
D. RM340 Unfavorable
B. Actual price
C. Standard quantity
D.Standard price
The followings are the actual/standard price and the actual/standard quantity for direct
material used by the Hang Jia Yi Sdn Bhd in producing a batch of 1,400 bar of chocolates.
D. RM15,000 Favorable
13. Most companies base the calculation of the raw material price variance on the:
A. number of units purchased
B. number of units spoiled
C. number of units that should have been used
D. number of units actually used
A. the overhead costs actually incurred and the overhead budgeted at the actual operating
level
B. the actual overhead incurred during a period and the standard overhead applied
C. actual and budgeted cost caused by the difference between the actual price per unit
and the budgeted price per unit
D. the cost that should be incurred under normal conditions to produce a specific product.
Factory Overhead
RM27,920 U RM28,080 U
Controllable Volume
Variance Variance
RM56,000 U
Total Factory Overhead