Bkal1013 Tutorial Q&A All Chapter

Tutorial 1: Chapter 1 & 2
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
3. Which of the following are likely to be users of financial accounting information?

A. Taxing authorities
B. Creditors
C. Potential investors
D. All of the above
4. Which of the following is NOT a characteristic of a corporation?

A. If a corporation cannot pay its debts, lenders can take the owners' personal
assets to satisfy the obligations
B. A corporation is a distinct entity in the eyes of the law
C. Corporation ownership is based on number of shares held
D. A corporation is owned by shareholders or stockholders
5. The three forms of business entities are:
A. government, cooperatives and financial institutions

B. financing, investing and operating
C. sole proprietorships, partnerships and corporations
D. wholesaler, manufacturer and retailer
6. Which of the following would be classified as external users of financial statements?
A. The management of the company

B. The controller of the company and a company's shareholders
C. The company's marketing managers
D. The creditors and shareholders of the company
7. Which one of the following groups is considered an internal user of financial statements?
A A bank reviewing a loan application from a corporation.

B. The labor union representing employees of a company that is involved in labor
negotiations.
C. The financial analysts for a brokerage firm who are preparing
recommendations.for the firms brokers on companies in a certain industry.
D. Factory managers who supervise production line workers.
8. In order for accounting information to be useful in making decisions, it must be:
A. relevant
B. reliable
C. both relevant and reliable
D. neither relevant nor reliable
9. What is the primary objective of accounting?
A. To help investors make credit decisions

B. To help management assess cash flows
C. To protect users from fraudulent financial information
D. To provide useful information for decision making
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. Obtaining capital from owners

B. Providing services to customers
C. Purchasing equipment
D. Selling land
12. The communication stage of accounting is accomplished by:
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
15. Which is an advantage of a sole proprietorship form of business?

A. There is limited personal risk
B. The business can continue indefinitely
C. The owner makes all the decisions
D. All of the above
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:
A. the Securities and Exchange Commission (SEC)

B. the Certified Public Accountant in charge of the audit of the companys
financial statements
C. the companys management
D. the shareholders of the company
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)
20. Which of the following BEST represents the characteristic of a company?

A. Once registered, a company becomes a separate legal entity
B. A public company must have a minimum of 10 members
C. Members of a company collectively and unlimitedly responsible for all the debts of
the company
D. The popularity of a company is due to the ease and low cost of organizing
CHAPTER 2
1. Faridah has three different businesses. She has only one bank account for transactions relating
to all of her various businesses and her personal account. Which of the following concepts or
principles of accounting is Faridah violating?
A. Faithful representation principle

B. Entity concept
C. Cost principle
D. Going-concern concept
2. A RM5,000 account payable is paid by the business. How is the accounting equation affected?
A. Assets decrease RM5,000; owner's equity increases RM5,000

B. Assets decrease RM5,000; liabilities decrease RM5,000
C. Assets increase RM5,000; owner's equity decreases RM5,000
D. Assets increase RM5,000; liabilities increase RM5,000
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?
A. Assets decrease; owner's equity decreases

B. Liabilities increase; owner's equity decreases
C. Assets increase; liabilities increase
D. Liabilities increase; owner's equity increases
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?
A. Assets increase RM80,000; liabilities decrease RM20,000

B. Assets increase RM20,000; liabilities decrease RM80,000
C. Assets increase RM80,000; owner's equity increases RM80,000
D. Assets increase RM80,000; liabilities increase RM80,000
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.
6. After all of the transactions, what is the amount of total assets?
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?
A. There is an increase in total assets

B. There is a decrease in both total assets and total liabilities
C. There is an increase in total assets and a decrease in total liabilities
D. There is no effect on total assets
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?
A. Net income will increase

B. Owner's equity will decrease
C. Total liabilities will decrease
D. There will be no effect on total liabilities
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. Financial Accounting Standards Board (FASB)

B. Securities and Exchange Commission (SEC)
C. Internal Revenue Service (IRS)
D. Federal Government
13. An accounting assumption is concerned with all of the following EXCEPT:
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.
17. The accounting information is comparable when:
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. only one account.

B. only two accounts.
C. two or more accounts.
D. none of the above.
20. The accounting principle that requires financial statement information to be based on costs
incurred in business transactions, and requires assets and services to be recorded initially
at the cash or cash-equivalent amount given in exchange, is the:
A. accounting equation principle.

B. historical cost principle.
C. going-concern principle.
D. business entity principle.
TUTORIAL # 2
1. The type of account with a normal credit balance is:
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. a debit to cash and a credit to accounts payable.

B. a debit to accounts receivable and a credit to cash.
C. a debit to cash and a credit to accounts receivable.
D. a debit to accounts payable and a credit to cash.
3. A trial balance is a listing of:
A. transaction in a journal.
B. the chart of accounts.
C. general ledger accounts and balances.
D. the totals from the journal pages.
4. The excess of revenue over the expenses is called:
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?
A. Debit cash and credit sales RM30,000

B. Credit inventories and debit accounts receivable RM30,000
C. Credit accounts payable and debit sales RM30,000
D. Debit accounts receivable and credit sales RM30,000
6. Paying cash to the suppliers on account would include:
A. a debit to accounts receivable and a credit to revenue.

B. a debit to cash and a credit to accounts receivable.
C. a debit to accounts payable and a credit to cash.
D. a debit to cash and a credit to capital.
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. an increase in both total assets and total equities.

B. a decrease in both total assets and total equities.
C. an increase in total assets and a decrease in total equities.
D. no effect on total assets.
10. Which of the following statements is FALSE?
A. The left side of a T-account is the credit side.

B. Entries that increase asset accounts, or decrease liability accounts are posted as
debits.
C. The left side of a T-account is the debit side.
D. Entries that decrease asset accounts and increase liability accounts are posted as
credits.
11. The recording of debit and credit parts of a transaction is:
A. checking equality.
B. double-entry accounting.
C. single-entry accounting.
D. transaction analysis.
12. When cash is paid in advance for insurance, ____.
A. the Prepaid Insurance account is decreased

B. the Prepaid Insurance account is credited
C. the Prepaid Insurance account is increased
D. none of the above
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. Purchasing car by issuing a note payable.

B. Purchasing office supplies for cash.
C. Performing a service and receiving the cash immediately.
D. Pay money to the bank.
Use the following information for questions 15:
Cash in Bank RM32,000 Ahmed Capital RM62,000

Accounts Receivable RM??? Ahmed, Drawing RM10,000
Office Supplies RM3,000 Revenue RM18,000
Office Furniture RM12,000 Salaries Expense RM3,000
Office Equipment RM18,000 Miscellaneous Expense RM2,000
Accounts Payable RM20,000
15. What is the correct balance for the Accounts Receivable?

A. RM8,000
B. RM15,000
C. RM20,000
D. RM25,000
16. A business makes a payment of RM9,600 on a Note Payable, consisting of a

RM1,600 interest payment and a RM8,000 principal payment. Which of the following
journal entries would be recorded?
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
D. Notes Payable is credited for RM9,600; Cash is debited for RM8,000; and
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?
A. Cash is credited for RM36,000; Equipment is credited for RM90,000; and

B. Cash is credited for RM36,000; Equipment is debited for RM90,000; and
Notes Payable is credited for RM54,000
C. Cash is debited for RM36,000; Equipment is debited for RM54,000; and
Notes Payable is credited for RM90,000
D. Cash is credited for RM36,000; Equipment is credited for RM54,000; and
18. How does a cash withdrawal by the owner affect the accounting equation?
A. liabilities increase; owners equity decrease

B. assets increase; owners equity increase
C. assets decrease; owners equity decrease
D. assets increase; liabilities increase
Questions 19 to 21are based on the following transactions for the month of October 2015 of
Costa Enterprise.
i) The owner started the business with a contribution of RM23,500 cash.

ii) Purchased office furniture for RM11,500, paid RM2,500 down payment and
put the balance on a Note Payable.
iii) Paid a utility bill for RM980 cash.

iv) Paid RM2,000 cash for October rent.
v) The business had sales of RM15,000 in October. Of these sales, 60% were
cash sales, and the balance was credit sales.
vi) Paid RM9,700 cash for the purchase of a second hand car.
vii) Collected RM2,000 from credit sales.
19. How much is the net income for October 2015?
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
21. How much is the balance in Accounts Receivable?
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:
i) Ms Caprinova, the owner, deposited RM4,500 cash in the business.

ii) Ultrawoman Sdn Bhd paid the first month's rent of RM600 in cash.
iii) Ultrawoman Sdn Bhd purchased equipment by signing a Note Payable of
RM16,500.
iv) Cash sales for the month were RM6,750.

v) Ultrawoman Sdn Bhd purchased supplies for RM2,100 cash.
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?
A. There is an increase in total assets

B. There is a decrease in both total assets and total liabilities
C. There is an increase in total assets and a decrease in total liabilities
D. There is no effect on total assets
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:
A. Net income will increase

B. Owner's equity will decrease
C. Total liabilities will decrease
D. There will be no effect on total liabilities
25. Which of the following statements correctly describes a Trial Balance?
A. A Trial Balance is the first step in the accounting cycle

B. A Trial Balance is also known as a Statement of Financial Position
C. A Trial Balance is a list of all accounts with their balances
D. A Trial Balance is also known as the chart of accounts
26. En. Ramu contributed RM70,000 in cash and land worth RM130,000 to open a new
business, RH Consulting. Which of the following general journal entries will RH
Consulting make to record this transaction?
A. Debit Assets RM200,000; credit Ramu, Capital, RM200,000

B. Debit Cash and Land, RM200,000; credit Ramu, Capital, RM200,000
C. Debit Cash RM70,000; debit Land RM130,000; credit Ramu, Capital,
RM200,000
D. Debit Ramu, Capital, RM200,000; credit Cash RM70,000, credit Land, M130,000
27. Which of the following statements is TRUE?
A. Credits decrease assets and increase liabilities

B. Debits increase liabilities and increase assets
C. Debits increase assets and increase liabilities
D. Credits decrease assets and decrease liabilities
28. Which of the following statements is FALSE?
A. A trial balance is a list of all accounts with their balances

B. A trial balance provides check on the equality of debits and credits
C. A trial balance may be taken at any time the postings are up to date
D. A trial balance is the same as a statement of financial position
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?
A. Credit a different asset account for RM200

B. Debit another asset account for RM200
C. Debit an owners equity accounts for RM200
D. Debit another liability accounts for RM200
30. PR 2 2 , Page 93, Structured Question taken from main references:
Rosli,M., Junaidah,H.A., Mudzamir, M. et. Al (2011). Accounting-A Malaysian

Perspective 4E Edition (Special Adaptation from Accounting 22e by Warren, Reeves and
Duchac, 2006), Cengage, Singapore
Prob. 22 (Towering Realty)
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
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
Accounts Payable Automobile Expense

(d) 400 (c) 850 (f) 2,400
Bal. 450
Azfa Hana, Capital Supplies Expense

(a) 15,000 (h) 575
Azfa Hana, Drawing Miscellaneous Expense

(i) 1,000 (f) 600
3. TOWERING REALTY
Unadjusted Trial Balance
March 31, 2008
Debit Credit
Balances Balances
Cash .................................................................................... 20,600

Supplies .............................................................................. 275
Accounts Payable .............................................................. 450
Azfa Hana, Capital .............................................................. 15,000
Azfa Hana, Drawing ............................................................ 1,000
Sales Commissions ........................................................... 15,750
Office Salaries Expense..................................................... 3,250
Rent Expense ..................................................................... 2,500
Automobile Expense .......................................................... 2,400
Supplies Expense............................................................... 575
Miscellaneous Expense ..................................................... 600
31,200 31,200
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. Debit Depreciation Expense; credit Building

B. Debit Depreciation Expense; credit Accumulated Depreciation
C. Debit Accumulated Depreciation; credit Depreciation Expense
D. Debit Building; credit Depreciation Expense
2. The net income reported on the Statement of Comprehensive Income is RM75,000.

However, adjusting entries have not been made at the end of the period for utilities
expenses of RM750 and accrued wages of RM1,950. Adjusted net income is:
A. RM72,300
B. RM73,050
C. RM75,000
D. RM75,750
3. Advanced deposit is reported on the Statement of Financial Position as a:
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:
A. Equal to net income or loss for the period

B. The same as the balance on the Adjusted Trial Balance
C. The same as the balance on the Unadjusted Trial Balance
D. The balance that will appear on the Statement of Financial Position
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
7. How do the adjusting entries differ from other journal entries?
A. Adjusting entries always include debits or credits to at least one income

statement account and at least one balance sheet account
B. Adjusting entries are made only at the end of the period
C. Adjusting entries never affect the amount of cash
D. All of the above are true
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:
A. Credit to Supplies for RM180

B. Credit to Supplies Expense for RM420
C. Debit to Supplies Expense for RM420
D. Debit to Supplies for RM180
9. If as of 31 December, 2013, the rent of RM400 for December had not been recorded
or paid. This will cause:
A. Net income to be understated

B. Liabilities to be overstated
C. Asset to be understated
D. Owners Equity to be overstated
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:
A. An expense should be recorded when the bill is received

B. An expense should be recorded when the cash is paid out
C. An adjusting entry should be made recognizing the expense
D. It is optional whether to record the expense before the bill is received
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?
Beginning supplies RM12,000

Supplies purchased ?
Supplies expense RM48,000
Ending supplies RM18,000
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?
A. Net income is understated

B. Total assets are understated
C. Net income is overstated
D. Expenses are overstated
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?
A. Debit balance of RM18,000

B. Debit balance of RM24,000
C. Debit balance of RM48,000
D. Debit balance of RM60,000
17. Racquet Shop Enterprise received a RM940 check from a customer for the balance
due. The transaction was erroneously recorded as a debit to Cash RM490 and a credit
to Service Revenue RM490. The correcting entry is
A. debit Cash, RM940; credit Accounts Receivable, RM940

B. debit Cash, RM450 and Accounts Receivable, RM490; credit Service Revenue,
RM940
C. debit Cash, RM450 and Service Revenue, RM490; credit Accounts Receivable,
RM940
D. debit Accounts Receivable, RM940; credit Cash, RM450 and Service Revenue,
RM490
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?
A. Credit balance of RM450

B. Debit balance of RM4,350
C. Credit balance of RM4,350
D. Debit balance of RM450
19. When there is a net loss, the entry to close the Income Summary account is:
A. Debit Owner's Capital and credit Income Summary

B. Debit Income Summary and credit Owner's Capital
C. Debit Net Loss and credit Income Summary
D. Debit Income Summary and credit Net Loss
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:
PR 3.6 (pg 178)
Prob. 36
1. a. Supplies Expense ............................................... 1,800

Supplies ......................................................... 1,800
............................................... Supplies used.
b. Accounts Receivable .......................................... 11,600

Fees Earned ................................................... 11,600
.................................... Accrued fees earned.
c. Depreciation Expense ........................................ 4,950

Accumulated Depreciation ........................... 4,950
............................... Equipment depreciation.
d. Wages Expense .................................................. 2,250

Wages Payable .............................................. 2,250
............................................. Accrued wages.
2.
Total
Net Total Total Owners
Income Assets Liabilities Equity
Reported amounts $155,000 $350,000 $120,000 $230,000

Corrections:
Adjustment (a) 1,800 1,800 0 1,800
Adjustment (b) + 11,600 + 11,600 0 + 11,600
Adjustment (c) 4,950 4,950 0 4,950
Adjustment (d) 2,250 0 + 2,250 2,250
Corrected amounts $157,600 $354,850 $122,250 $232,600
Tutorial 4: Chapter 5 ACCOUNTING FOR MERCHANDISING BUSINESS
1) Which statement best describes merchandise inventory?
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.
2) Merchandise inventory is reported as
a) Current asset on the balance sheet

b) Long-term asset on the balance sheet
c) Cost of merchandise on the income statement
d) Revenue on the income statement
3) Which of the following statement is correct?
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.
4) Cost of merchandise sold is reported as:
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
6) Cost of merchandise sold is calculated by
a) Adding beginning merchandise inventory, cost of purchases and ending merchandise

inventory.
b) Adding ending merchandise inventory and cot of purchases less beginning merchandise
inventory.
c) Adding beginning merchandise inventory and cost of purchases less ending
merchandise inventory.
d) Adding beginning merchandise inventory and ending merchansise inventory less cot of
purchases.
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
8) Which of the following statements are correct?
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) is only collected after cash is received.

b) may be recorded before cash is collected.
c) only results from cash sales.
d) Only results from credit sales.
10) The journal entry to record a credit sales is
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) There is a section for cost of merchandise sold

b) Operating expenses consist of selling and administrative expenses.
c) There is a section for operating assets.
d) Sales discounts and sales returns and allowances are deducted from sales to gain net
sales.
Use the following information for question 12-15.

In 2014, Fairy Salon generates revenues of RM56,000. The cost of goods sold was RM14,000
and the operating expenses was RM7,000. The company also has a loss on sale of equipment
of RM2,000.
12) The gross profit for Fairy Salon is
a) RM42,000
b) RM35,000
c) RM33,000
d) RM56,000
13) The income from operation for Fairy Salon is
a) RM56,000
b) RM35,000
c) RM33,000
d) RM5,000
14) The net income for Fairy Salon is
a) RM54,000
b) RM42,000
c) RM35,000
d) RM33,000
15) A credit memorandum is issued when
a) customers refused to pay.

b) goods that were sold on credit are returned.
c) goods are sold on credit.
d) buyer pays on time.
16) A credit memorandum involves a journal entry that needs a debit to
a) Cash and credit to Accounts Receivable

b) Sales Returns and Allowance and credit to Accounts Receivable
c) Accounts Receivable and credit to Sales Returns and Allowance
d) Sales Returns and Allowance and credit to Sales
17) The credit terms of 3/20, n/30 means
a) customer needs to pay in full amount within 30 days.

b) customer can get purchase discounts of 3% of the purchase amount if payment is
made within 20 days from the invoice date and if no early payment is made, full
amount need to be paid within 30 days from the invoice date.
c) three sales returns can be made within 20 days from the invoice date and no returns
therafter.
d) No sales discount been offered to buyers.
18) The respective account balances of Sales, Sales Returns and Allowances and Sales
Discounts are:
a) credit, debit, debit

b) debit, credit, credit
c) credit, credit, debit
d) debit, credit, debit
19) What is the meaning of FOB shipping point?
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) Accounts receivable D-Mart Mall 636

Sales 600
Sales tax payable 36
b) Cash D-Mart 636
Sales 600
Sales receivable 36
c) Sales receivable D-Mart 636
Sales tax payable 636
d) Cash 636
Sales 636
21) How many entries involved in closing temporary accounts?
a) One
b) Two
c) Three
d) Four
22) Which of the item is not a temporary account?
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
24) Easy Dot Company has the following account balances:
Purchases RM78,300
Sales 112,000
Purchase discounts 10,000
Sales returns and allowances 15,000
Freight-in (FOB shipping point) 5,000
The cost of goods purchased for the period is
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
26) Which of the following has a normal credit account balance?
a) Purchases
b) Purchase discounts
c) Sales returns and allowances
d) Sales discounts
27) With respect to income statement
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
a) debit to Cash of RM500

b) debit to Cash of RM490
c) debit to Sales Discounts of RM10
d) debit to Accounts Receivable of RM490
29) A sales invoice is a document that
a) serves only as a customer receipt.

b) provide evidence of credit sales transactions.
c) provide evidence of cash sales transactions.
d) Provide evidence of all sales transactions.
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
31) Please refer to PR4-1 page 225 in the textbook
Prob. 41
1.
MAGIC ENTERPRISE
Income Statement
For the Year Ended March 31, 2008
Revenue from sales:

Sales ........................................................... RM1,542,000
Less: Sales returns and allowances ........ RM 27,720
Sales discounts ............................... 26,280 54,000
Net
sales .......................................................... RM1,488,000
Cost of merchandise sold .............................. 930,000
Gross
profit .......................................................... RM 558,000
Expenses:
Selling expenses:
Sales salaries expense ........................ RM207,840
Advertising expense ............................ 52,560
Depreciation expensestore
equipment ........................................ 7,680
Miscellaneous selling expense ........... 1,920
Total selling expenses .................... RM270,000
Administrative expenses:
Office salaries expense ........................ RM100,980
Rent expense ........................................ 37,620
Depreciation expenseoffice
equipment ........................................ 15,240
Insurance expense ............................... 4,680
Office supplies expense ...................... 1,560
Miscellaneous administrative
expense ............................................ 1,920
Total administrative expenses ....... 162,000
Total expenses ........................................... 432,000
Income from
operations ........................................................ RM 126,00
0
Other expense:
Interest expense......................................... 6,000
Net
income .......................................................... RM 120,000
Prob. 41
2.
MAGIC ENTERPRISE
Statement of Owners Equity
Gurmit, capital, April 1, 2007 ............................................. RM564,900

Net income for the year ..................................................... RM120,000
Less withdrawals................................................................ 42,000
Increase in owners equity ................................................ 78,000
Gurmit, capital, March 31, 2008 ......................................... RM642,900
Prob. 41
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
4. a. The multiple-step form of income statement contains various sections for

revenues and expenses, with intermediate balances, and concludes with
net income. In the single-step form, the total of all expenses is deducted
from the total of all revenues. There are no intermediate balances.
b. In the report form of balance sheet, the assets, liabilities, and owners
equity are presented in that order in a downward sequence. In the account
form, the assets are listed on the left-hand side, and the liabilities and
owners equity are listed on the right-hand side.
Prob. 42
1.
MAGIC ENTERPRISE
Income Statement
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
Gurmit, capital, April 1, 2007 ............................................. RM564,900

Net income for the year ..................................................... RM120,000
Less withdrawals................................................................ 42,000
Increase in owners equity ................................................ 78,000
Gurmit, capital, March 31, 2008 ......................................... RM642,900
Prob. 42
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
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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
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Tutorial 5: Topics 6 - COMPANIES ANNUAL REPORT &
7 - FINANCIAL STATEMENT ANALYSIS
1. Compliance to these regulatory requirements is legally enforced EXCEPT:
A. Bursa Malaysia Listing Requirements.

B. Company Act 1965.
C. Financial Reporting Act 1997.
D. Income Tax Act 1967.
2. These statements are TRUE:

i. Financial reporting provides a basis of forecasting demand and supply in the market.
ii. Annual report is a formal comprehensive published business document given to

interested
parties by public companies.
iii. Financial statements must be prepared according to the provision under Schedule Six,
Company Act 1965.
iv. One objective of financial reporting is to provide useful information in making rational
investment, credit and similar economic decisions.
A. i, ii and iii only.
B. ii, iii and iv only.
C. i and iii only.
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. Section 169 (5) Company Act 1965.

B. International Financial Reporting Standards (IFRS).
C. Income Tax Act 1967.
D. Bursa Malaysia Listing Requirement.
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4. The following items are disclosed voluntarily by companies, EXCEPT:
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
report. What does the statement is about?
A. A notice of annual general meeting.

B. A statement on following the principles and practices as outlined by the referred
code.
C. A statement discloses members in the board of directors and respective posts.
D. None from the above.
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
7. External users of financial statements ______________________________________
A. have accessed to detailed records of the business.

B. are involved in the daily operations of the business.
C. rely on the financial statements to help make informed decisions.
D. do not have any other sources for gathering information about a business.
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:
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A. statement of changes in owners equity.

B. statement of retained earnings.
C. statement of financial position.
D. statement of cash flows.
9. Information about the accounting policies adopted in preparing the financial statements are
explained in the:
A. statement of changes in owners equity.

B. notes to the financial statements.
C. statement of cash flow.
D. corporate governance statement.
10. How often is the annual report being issued?
A. Every six month.

B. Every month.
C. Once a year.
D. None of the above is correct.
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Use the following information for questions 11 to 13:
The Statement of Financial Position for Azali Bhd is given below:
Account 2013 2014

Cash RM 200,000 RM 50,000
Account receivable 1,200,000 950,000
Inventory 1,840,000 1,500,000
Total current assets 3,240,000 2,500,000
Fixed assets 3,200,000 3,000,000
Total assets RM 6,440,000 RM 5,500,000
Account payable 800,000 720,000

Bank loan 600,000 100,000
Total current liabilities 1,400,000 820,000
Bonds payable 900,000 1,000,000
Total liabilities 2,300,000 1,820,000
Common shares (130,000 units) 300,000 300,000
Retained Earnings 3,840,000 3,380,000
Total liabilities and equity RM 6,440,000 RM 5,500,000
11. The companys current ratio for 2014 is:
A. 2.31
B. 1.87
C. 2.22
D. 2.46
12. The companys debt ratio for 2014 is:
A. 3.00
B. 0.33
C. 2.8
D. 0.36
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13. The companys return on common equity for 2014 is:
A. 153.33%
B. 353.85%
C. 12.8%
D. 29.54%
14. Working capital is defined as:
A. total assets less intangible assets.
. B. current assets divided by current liabilities.
C. current assets less current liabilities.
D. total assets less current assets.
15. In financial statement analysis, ratios are:
A. the only type of analysis where industry data are available.
B. absolute numbers converted to a common base.
C. fractions usually expressed in percent or times.
D. the only indication of the financial position of the firm.
16. Return on total assets is a function of:
A. interest rates and pre-tax profits.

B. the debt-equity ratio.
C. the after-tax profit margin and the asset turnover ratio.
D. sales and fixed assets.
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17. Which of the following ratios gives information on the amount of profits reinvested in the
firm over the years?
A. Sales/total assets.
B. Debt/total assets.
C. Debt/equity.
D. Retained earnings/total assets.
18.The primary purpose of the liquidity ratios is to determine:
A. how much working capital is tied up in inventory.

B. the relative level of short-term debt.
C. how well a firm is able to pay off short-term obligations.
D. more than one of the above.
19. What type of analysis is indicated by the following?
Account Amount (RM) Percent (%)

Current assets 150,000 15
Property, plant and equipment 450,000 75
Total assets 600,000 100
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.
A. Sales increased by 80%

B. Sales increased by 20%
C. Sales increased by 125%
D. Sales increased by 25%
Use the following information for questions 21 to 23;
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;
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and a total debt of RM3 million.
21. What is Pelangi's return on assets?
A. 37.5%
B. 12.5%
C. 30.0%
D. 25.0%
22. What is Pelangi's return on equity?
A. 37.5%
B. 10.0%
C. 20.0%
D. 60.0%
23. What is Pelangi's profit margin?
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-
term debt paying ability?
A. working capital.
B. current ratio.
C. acid test.
D. cash ratio.
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25. The debt ratio indicates:
A. the ability of the firm to pay its current obligations.
B. the efficiency of the use of total assets.
C. the magnification of earnings caused by leverage.
D. a comparison of liabilities with total assets.
26. The following financial statement data are taken from Xeron Bhd's 2014 annual report:
(in millions)
Current assets RM12.6
Investments 9.4
Intangibles 6.8
Tangible assets (net) 58.1
Current liabilities 6.4
Long-term debt 39.7
Stockholders' equity 40.8
Compute the debt ratio:
A. 196.9%
B. 113.0%
C. 53.0%
D. 45.7%
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27. Total asset turnover measures the ability of a firm to:
A. generate profits on sales.
B. generate sales through the use of assets.

C. buy new assets.
D. move inventory.
28. The price/earnings ratio:
A. measures the past earning ability of the firm.
B. is a gauge of future earning power as seen by investors.
C. relates price to dividends.
D. relates price to total net income.
29. Which of the following ratios represents dividends per common share in relation to market
price per common share?
A. dividend payout.
B. dividend yield.
C. price/earnings.
D. book value per share.

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30. Smart Bhd reported the following for 2014:
Beginning market price RM20.00
Average market price 24.00
Ending market price 26.00
Earnings per share of common stock 1.60
The price earnings ratio was:
A. 16.25
B. 12.50
C. 17.00
D. 15.00
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TUTORIAL #6
DUE DATE: 30th November 2015
1. A cost unit is
A the cost per hour of operating a machine

B the cost per unit of electricity consumed
C a unit of product or service in relation to which costs are ascertained
D a measure of work output in a standard hour
2. Prime cost is
A all costs incurred in manufacturing a product

B the total of direct costs
C the material cost of a product
D the cost of operating a department
3. Which of the following costs are part of the prime cost for a manufacturing company?
A Cost of transporting raw materials from the supplier's premises

B Wages of factory workers engaged in machine maintenance
C Depreciation of lorries used for deliveries to customers
D Cost of indirect production materials
4. Which of the following are direct expenses?
(i) The cost of special designs, drawing or layouts

(ii) The hire of tools or equipment for a particular job
(iii) Salesman's wages
(iv) Rent, rates and insurance of a factory
A (i) and (ii)

B (i) and (iii)
C (i) and (iv)
D (iii) and (iv
5. Which of the following are indirect costs?
(i) The depreciation of maintenance equipment

(ii) The overtime premium incurred at the specific request of a customer
(iii) The hire of a tool for a specific job
A Item (i) only

B Items (i) and (ii) only
C Items (ii) and (iii) only
D All of them
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6. A company employs three drivers to deliver goods to its customers. The salaries paid
to these drivers are:
A a part of prime cost

B a direct production expense
C a production overhead
D a selling and distribution overhead
7. Which of the following would be classed as indirect labour?
A A trainers driver in a transport company

B Machine operators in a milk bottling plant
C A maintenance assistant in a factory maintenance department
D A committee in a firm of management consultants
8. Manufacturing costs typically consist of
A direct materials, direct labor, and manufacturing overhead

B direct materials, direct labor, and administrative costs
C direct materials, direct labor, marketing and administrative costs
D None of these
9. The salary of the vice president of finance would be considered a(n):
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?
A The amount paid to the individual who stains the table

B The commission paid to the salesperson who sold the table
C The cost of the glue used in the table
D The cost of the wood used in the 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
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12. Which of the following combinations of costs make up conversion cost?
A Direct materials cost and manufacturing overhead cost

B Direct labor cost and manufacturing overhead cost
C Marketing cost and administrative costs
D Direct materials cost and direct labor cost
13. A manufacturing company reports cost of goods manufactured as a(n):
A. component of the raw materials inventory on the Statement of Financial

Position.
B. non- current asset on the Statement of Financial Position.
C. Selling expense on the Statement of Profit or Loss and Other Comprehensive
Income.
D. component in the calculation of cost of goods sold the Statement of Profit
or Loss and Other Comprehensive Income.
14. Which of the following would NOT classified as manufacturing overhead?
A. Factory utility expense

B. Indirect labour
C. Direct materials
D. Insurance on factory machine
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.
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Use the following information for Questions16 to 17:
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
16. Direct materials used are:
A. RM980,000
B. RM1,011,000
C. RM1,034,000
D. RM957,000
17. Manufacturing overhead is:
A. RM435,000
B. RM720,000
C. RM795,000
D. RM535,000
Use the following information for Questions18 to 19:
Given below is some financial data for Syarikat MajuJaya:
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
18. Compute the total manufacturing costs:
A. RM1,405,000
B. RM1,005,000
C. RM885,000
D. RM909,000
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19. Compute the conversion cost:
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?
A. Finished goods inventory

B. Cost of goods manufactured
C. Work in process inventory
D. Factory building
21. Which of the following would NOT require the use of cost behavior analysis?
A. Transferring production costs from one department to another.

B. Projecting anticipated costs of a new project.
C. Buying an existing business.
D. Changing an existing product or service.
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
The cost of goods manufactured was:
A RM81,000
B RM76,000
C RM94,000
D RM86,000
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Use the following to answer questions 24-26.
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
24. The prime cost is:
A RM800
B RM900
C RM500
D RM400
25. The conversion cost is:
A RM700
B RM800
C RM900
D RM500
26. The cost of goods manufactured is:
A RM1,180
B RM1,120
C RM1,200
D RM1,220
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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
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
Additional information relating to the company are as follows:
1. The inventories as at 31 Decemeber 2014:

RM
Raw materials 3,100
Work in process 8,700
Finished goods 25,000
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2. The following expenses are divided to factory and office accordingly:
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.
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IF DIRECT LABOUR=6,000 & RAW MATERIAL PURCHASE=205,000 & RENT

REVENUE=216,000
Statement of Cost Of Goods Manufactured
for the year ended 31 December 2014
Direct material:
Beginning raw material 3,700
Purchases 205,000
208,700
( - ) Ending raw material (3,100)
Direct raw material used 205,600
Direct labour: 6,000
PRIME COST 211,600
Factory overhead
Insurance 12,225
Rent expense 23,625
Depreciation expense 32,400 181,250
TOTAL MANUFACTURING COST 392,850
Work in process
( + ) Beginning WIP 7,500
TOTAL WORK IN PROCESS 400,350

( - ) Ending WIP (8,700)
COST OF GOODS MANUFACTURED 391,650

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Statement of Comprehensive Income
for the year ended 31 December 2014
Sales 860,000
( - ) Cost of goods Sold:

Opening Finished goods 23,000
(+ ) Cost of good manufactured 391,650
( - ) Closing Finished good (25,000) (389,650)
GROSS PROFIT 470,350
Other Income:
Rent 216,000
686,350
( - ) Expenses:
Selling 22,000
Rent 7,875
Insurance 4,075
Administrative 67,000
Interest 23,000
Depreciation 21,600 (169,550)
NET PROFIT 516,800

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Tutorial 7: Chapter 8- COST VOLUME PROFIT
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?
Total Variable Costs Variable Costs Per unit

A. Increase Increase
B. Increase Remain constant
C. Increase Decrease
D. Remain constant Decrease
2. What is the underlying assumption for cost-volume-profit analysis?

A. Revenues and costs behave in a linear manner
B. Costs can be categorized as variable, fixed, or semi-variable
C. Worker efficiency and productivity remain constant
D. All of these are assumptions that underlie cost-volume-profit analysis
3. The break-even point is that level of activity where:

A. total revenue equals total costs
B. variable cost equals fixed costs
C. total contribution margin equals the sum of variable costs plus fixed costs
D. sales revenue equals total variable costs
4. The contribution margin per unit increases due to:

A. increase in selling price
B. decrease in selling price
C. increase in variable costs
D. decrease in fixed costs
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?
Contribution Margin Break-even Point

A. Increase Increase
B. Increase Decrease
C. Decrease Increase
D. Decrease Decrease
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
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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
The company's contribution-margin ratio is:

A. 0.33
B. 0.40
C. 0.60
D. 0.67
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:
Sales revenue RM840,000

Contribution margin RM504,000
Net income RM54,000
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
11. Cost-volume-profit analysis is based on certain general assumptions. Which of the

following underlying assumptions form(s) the basis for cost-volume-profit analysis is
TRUE?
A. Revenues and costs behave in a linear manner
B. Worker efficiency and productivity remain constant
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C. In multiproduct organizations, the sales mix remains constant

D. All of the above
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
14. If a company desires to increase its safety margin, it should:

A. increase fixed costs
B. stimulate sales volume
C. decrease selling prices
D. decrease the contribution margin
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%
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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
20. CVP analysis DOES NOT consider:

A. level of activity
B. variable cost per unit
C. fixed cost per unit
D. sales mix
21. The breakeven point is

A. where fixed and variable costs reach the upper level of the relevant range.
B. the level of activity where all fixed costs are recovered.
C. where total revenue equals total costs.
D. where fixed costs meet variable costs.
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
23. Which of the following costs is a mixed cost?

A. Salary of a factory supervisor
B. Electricity costs of RM2 per kilowatt-hour
C. Rental costs of RM5,000 per month plus RM.30 per machine hour of use
D. Straight-line depreciation on factory equipment
24. Contribution margin is

A. the excess of sales revenue over variable cost
B. another term for volume in the "cost-volume-profit" analysis
C. profit
D. the same as sales revenue
25. If sales are RM820,000, variable costs are 62% of sales, and operating income is
RM260,000, what is the contribution margin ratio?
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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
30. Which of the following is NOT an underlying assumption of CVP analysis?

A. Changes in the activity are the only factors that affect costs
B. Costs classifications are reasonably accurate
C. Beginning inventory is larger than ending inventory
D. Sales mix is constant
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Tutorial 8: Topic 10
DUE DATE: 10 DECEMBER 2015
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
2. A plan of action expressed in financial terms is a/an ______________________.

a. Strategic plan
b. Budget
c. Performance report
d. Financial reports
3. The ________________________outlines all sources and usage of cash.

a. Overhead budget
b. Selling and administrative budget
c. Cash budget
d. Capital expenditure budget
4. The _________________________________outlines planned expenditures for selling

and distribution activities.
a. Selling and marketing expenses budget
b. Administrative budget
c. Overhead budget
d. Direct labor budget
5. The _____________________________are the part of the master budget that includes

the budgeted balance sheet, statement of cash flows and the capital budget.
a. Operating budget
b. Financial budget
c. Flexible budget
d. Master budget
6. Operating budgets are:
a. A forecast of expected operating expenses
b. A forecast of operating expenses
c. A forecast of units of production
d. Concerned with the income-generating activities of a firm
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7. Which of the following is not an advantage of budgeting?

a. If forces managers to plan
b. It provides resource information that can be used to improve decision making.
c. It improve communication and coordination
d. It provides organizational independence
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
Use the following information to answer question 10 and 11:

Hu Guilan Company is a merchandising company. It has the following historical pattern for
its credit sales and purchase of inventory:
70% collected in the month of sales

15% collected in the first month after sales
10% collected in the second month after sales
4% collected in the third month after sales
1% uncollectible
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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
Questions 12 and 13 are based on the following information:
Liu Zhaoyang SdnBhd is a merchandising company. Data from companys 2014 budgeted
sales for the third quarter of the year are as follows:
Month Budgeted Sales (RM)

July 80,000
August 90,000
September 70,000
Cost of goods sold equals to 65% of sales.

Liu Zhaoyang SdnBhd maintains a monthly ending inventory at 80% of the cost of goods
sold for the following month.
Beginning inventory in July is RM50,000
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The company is now preparing a Merchandise Purchase Budget.
12. What is the budgeted purchase for July?

A. RM63,050
B. RM65,650
C. RM48,800
D. RM75,050
13. What is the beginning inventory for September?

A. RM19,050
B. RM36,400
C. RM56,000
D. RM45,500
14. The operating budget process usually ends with:
A. sales budget
B. selling and administrative budget
C. income statement budget
D. balance sheet budget
Use the following information to answer question 15 and 16:
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.
15. What is the companys budgeted purchase for June?

a. RM294,000
b. RM234,000
c. RM206,000
d. RM224,000
16. What is the companys cash disbursement in August?

a. RM260,000
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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:
Budgeted sales for the first four months are as follow:

Months Budgeted Sales (RM)
January 400,000
February 600,000
March 300,000
April 200,000
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
18. What is Hang Jia budgeted inventory purchase in February?

a. RM150,000
b. RM315,000
c. RM215,000
d. RM495,000
19. What is Hang Jia budgeted cash payment in March?
a. RM165,000
b. RM135,000
c. RM240,000
d. RM300,000
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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:
July August September

Budgeted Sales RM105,000 RM211,000 RM134,000
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
23. Continuous budgeting requires managers to

a. add a future month as the current month expires
b. constantly update the budget to include new information
c. continuously refer to the budget when making decisions
d. assign budgeting responsibilities to a defined group of employees
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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
25. A budget prepared for a particular level of activity is a(n)

a. static budget
b. flexible budget
c. operational budget
d. financial 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
30. Which of the following is considered an operating budget?

a. budgeted balance sheet
b. sales budget
c. cash budget
d. capital budge
END OF QUESTIONS
SEM A151
TUTORIAL 9: VARIANCE ANALYSIS
1. is included in the calculation of variable overhead variance for a company

producing arts and crafts like bags, purse and belts?
A. Leather
B. Threads
C. Production managers salary
D. Insurance on factory building
2. Positive or favourable variance is described as follows EXCEPT:

A. Cost higher or revenue lower than expected
B. Cost lower or revenue higher than expected
C. A better than expected results
D. Leads to a higher than expected profit
Use the following information for questions 3 and 4:
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:
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
6. would NOT be considered in the calculation of material price variance?

A. Actual quantity
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B. Actual price
C. Standard quantity
D.Standard price
Question 7 and 8 are based on the following information:
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.
Items Actual price Actual Standard price Standard quantity

quantity
Cocoa RM0.30 per kg 400 kg RM0.35 per kg 390 kg
Sugar RM0.40 per kg 300 kg RM0.35 per kg 310 kg
Milk RM1.80 per 100 litre RM2.00 per 85 litre
litre litre
7. The direct material price variance is:

A. RM25 (favourable)
B. RM21 (favourable)
C. RM25 (unfavourable)
D. RM21 (unfavourable)
8. The direct material usage variance is:

A. 26 (favourable)
B. 26 (unfavourable)
C. 30 (favourable)
D. 30 (unfavourable)
Use the following data for Question 9 to 10.

Standard Actual
Direct Labor 5,625 @ RM12.50/unit 5,850 @ RM12.25/unit

Direct Material 37,500 @ RM13/unit 37,125 @ RM12.60/unit
9. The direct labor rate variance is:

A. RM1,462.50 Favorable
B. RM1,462.50 Unfavorable
C. RM1,406.25 Unfavorable
D. RM1,406.25 Favorable
10. The direct labor time variance is:

A. RM2,756.25 Favorable
B. RM2,756.20 Unfavorable
C. RM2,812.50 Unfavorable
D. RM2,812.50 Favorable
11. The direct material price variance is:

C. RM15,000 Unfavorable
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D. RM15,000 Favorable
12. The direct material quantity variance is:

C. RM4,875 Unfavorable
D. RM4,875 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
14. Which of the following is CORRECT:

i. The standard price per unit of materials is used to calculate a materials price
variance
ii. The standard price per unit of materials is used to calculate a materials quantity
variance
iii. The standard price per unit of materials cannot be determined until the end of the
period
A. I only
B. II only
C. III only
D. I and II
15. Which of the following is NOT a cause of a favourable variance?

A. Paid a lower price than expected for direct materials
B. Used less time to produce the product than projected
C. Paid a higher rate than expected for direct labour
D. Used less direct material than expected
16. The direct materials quantity variance is:

A. the difference between the actual price and the standard price for direct materials,
multiplied by the actual quantity of direct materials purchased
B. the difference between the actual quantity and the standard quantity for
direct materials, multiplied by the standard price
C. favourable when actual direct material used is greater than the standard
D. favourable when the actual price for material is less than the standard unit price
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17. Overhead cost variance is the difference between:
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.
Q18. EX 10-7 on your book Page number 436
Q19 EX10-8 on your book page number 436

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Ex. 10-7 PAGE 436

A B C D
Kilang Papan Maju Sdn Bhd

Factory Overhead Cost BudgetPress Department
For the Month Ended March 31, 2008
1 Direct labor hours 8,000 10,000 12,000 1

2 Variable overhead cost: 2
3 Indirect factory labor RM22,4001 RM28,000 RM33,600 3
4 Power and light 3,6002 4,500 5,400 4
5 Indirect materials 17,6003 22,000 26,400 5
6 Total variable factory overhead RM43,600 RM54,500 RM65,400 6
7 Fixed factory overhead cost: 7
8 Supervisory salaries RM36,000 RM36,000 RM36,000 8
9 Depreciation of plant and equipment 30,000 30,000 30,000 9
10 Insurance and property taxes 8,000 8,000 8,000 10
11 Total fixed factory overhead RM74,000 RM74,000 RM74,000 11
12 Total factory overhead RM117,600 RM128,500 RM139,400 12
1
13 RM8,000 (RM28,000/10,000) 13
2
14 RM8,000 (RM4,500/10,000) 14
3
15 RM8,000 (RM22,000/10,000) 15
SEM A151
Ex. 108 PAGE 436
Variable factory overhead controllable variance:

Actual variable factory overhead cost incurred ...... RM650,000
Budgeted variable factory overhead for 32,000 hrs.
.................................. [32,000 (RM21.00 RM1.56)] 622,080
.............................................. Varianceunfavorable RM
27,920
Fixed factory overhead volume variance:
Productive capacity at 100% ..................................... 50,000 hours
Standard for amount produced ................................ 32,000 hours
Productive capacity not used ................................... 18,000 hours
Standard fixed factory overhead rate....................... RM1.56
.............................................. Varianceunfavorable
28,080
Total factory overhead cost varianceunfavorable .... RM 56,000*
*Proof: (RM650,000 + RM78,000) RM672,000
Alternative Computation of Overhead Variances
Factory Overhead
Actual costs 728,000 Applied costs 672,000

Balance
(underapplied) 56,000
Actual Factory Budgeted Factory Applied Factory

Overhead Overhead for Amount Overhead
Produced
RM728,000 Variable cost [32,000 (RM21.00 RM1.56)] RM622,080 RM672,000
Fixed cost 78,000
Total RM700,080
RM27,920 U RM28,080 U
Controllable Volume
Variance Variance
RM56,000 U
Total Factory Overhead

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Tutorial 1: Chapter 1 & 2

3. Which of the following are likely to be users of financial accounting information?

4. Which of the following is NOT a characteristic of a corporation?

5. The three forms of business entities are:

A. government, cooperatives and financial institutions

A. The management of the company

A A bank reviewing a loan application from a corporation.

8. In order for accounting information to be useful in making decisions, it must be:

9. What is the primary objective of accounting?

A. To help investors make credit decisions

A. Obtaining capital from owners

15. Which is an advantage of a sole proprietorship form of business?

A. the Securities and Exchange Commission (SEC)

20. Which of the following BEST represents the characteristic of a company?

A. Faithful representation principle

A. Assets decrease RM5,000; owner's equity increases RM5,000

A. Assets decrease; owner's equity decreases

A. Assets increase RM80,000; liabilities decrease RM20,000

6. After all of the transactions, what is the amount of total assets?

A. There is an increase in total assets

A. Net income will increase

A. Financial Accounting Standards Board (FASB)

13. An accounting assumption is concerned with all of the following EXCEPT:

17. The accounting information is comparable when:

A. only one account.

A. accounting equation principle.

1. The type of account with a normal credit balance is:

A. a debit to cash and a credit to accounts payable.

3. A trial balance is a listing of:

4. The excess of revenue over the expenses is called:

A. Debit cash and credit sales RM30,000

A. a debit to accounts receivable and a credit to revenue.

A. an increase in both total assets and total equities.

10. Which of the following statements is FALSE?

A. The left side of a T-account is the credit side.

12. When cash is paid in advance for insurance, ____.

A. the Prepaid Insurance account is decreased

A. Purchasing car by issuing a note payable.

Use the following information for questions 15:

Cash in Bank RM32,000 Ahmed Capital RM62,000

15. What is the correct balance for the Accounts Receivable?

16. A business makes a payment of RM9,600 on a Note Payable, consisting of a

A. Cash is credited for RM36,000; Equipment is credited for RM90,000; and

A. liabilities increase; owners equity decrease

i) The owner started the business with a contribution of RM23,500 cash.

iii) Paid a utility bill for RM980 cash.

19. How much is the net income for October 2015?

21. How much is the balance in Accounts Receivable?

i) Ms Caprinova, the owner, deposited RM4,500 cash in the business.

iv) Cash sales for the month were RM6,750.

A. There is an increase in total assets

A. Net income will increase

25. Which of the following statements correctly describes a Trial Balance?

A. A Trial Balance is the first step in the accounting cycle

A. Debit Assets RM200,000; credit Ramu, Capital, RM200,000

27. Which of the following statements is TRUE?

A. Credits decrease assets and increase liabilities

28. Which of the following statements is FALSE?

A. A trial balance is a list of all accounts with their balances

A. Credit a different asset account for RM200

30. PR 2 2 , Page 93, Structured Question taken from main references:

Rosli,M., Junaidah,H.A., Mudzamir, M. et. Al (2011). Accounting-A Malaysian

Accounts Payable Automobile Expense

Bkal1013 Tutorial Q&A All Chapter

Bkal1013 Tutorial Q&A All Chapter