1) What is the sequence in the accounting process?

/(A) collecting data invoice, recording journals, classifying & summarizing lejar, communicating information cash flow / balance sheet (financial statement)

(B) collecting data, classifying & summarizing, communicating information

(C) recording, classifying & summarizing, communicating information

(D) none of the above

2) What is the purpose of accounting?

(A) cash budgeting

(B) to understand what the business own and owes

(C) effective financial planning

/(D) all of the above

3) Companies communicate business information to the users of accounting information using

/(A) financial statements

(B) ledger accounts

(C) source documents

(D) trial balance

4) Calculate the capital given the following: - Total assets RM10,000; total liabilities RM5,500

/(A) RM4,500 * Format : Asset - Liabilities = Capital

(B) RM15,500

(C) RM10,000

(D) None of these

5) Calculate the capital given the following: - Motor vehicles RM10,000; Fixtures RM10,000; Debtors RM2,000; Cash in hand RM200; Mortgage RM15,000; Bank overdraft RM2,000 Asset Liabilities

/(A) RM5,200

(B) RM22,200

(C) RM7,200

(D) RM9,200

6) What are non-current assets more that 1 years (long term)

(A) assets that stay long in the business

(B) assets that are not meant to be resold

(C) assets that are used in the production of revenue

/(D) all of the above

7) Which of these best describes current assets? less than 1 year (short term)

(A) Are bought to be used in the business

(B) Are items which will not wear out quickly

(C) Are expensive items bought for the business

/(D) Are of short life and are bought specifically for resale

8) Which of the following is a liability? liabilities is something that you need to pay back

(A) New warehouse

/(B) Sundry creditors for goods purchased

(C) Old warehouse

(D) Cash in the cash till

9) Which of the following is an asset?

(A) Bank overdraft liability

/(B) Property, plant & equipment PPE

(C) Short-term loan liability

(D) Long-term loan liability

10) Which of the following are correct?

Account to be debited Account to be credited

(i) Sold van for cash Cash Van

(ii) Returned faulty goods Creditor Purchases Returns

(iii) Bought van for cash Van Cash

(iv) Repaid loan by cheque Bank Loan account

1. (i) and (ii)
2. (ii) and (iii)
3. /(i), (ii) and (iii)
4. None of these

Summary double entry

Assets, Expenses, Cost, Drawings.. call debit accounts (increase debit, decrease credit)

Liabilities, Revenue, Capital.. call credit accounts (increase credit, decrease debit)

Same group item.. eg.both assets item 1 up 1 down

Different group item.. eg. 1 asset 1 liability..both up or both down

11) Which of the following should not be called Sales? sales refer stocks that you sell

/(A) Office fixtures sold

(B) Goods sold on credit

(C) Goods sold for cash

(D) Sale of item previously included in Purchases

12) Given the following, what is the amount of Capital? Assets: Premises RM20,000; Stock RM8,500; Customer owings RM100. Liabilities: Creditors RM3,000; Loan from A Adams RM4,000.

(A) RM21,100 Assets - Liability = Capital

/(B) RM21,600

(C) RM32,400

(D) RM21,400

13) A businessman wants to take cash RM1,000 out of his business for private use. How would this affect the capital of the business? (drawing)

(A) It will increase the capital by RM500

(B) It will increase the capital by RM1,000

/(C) It will reduce the capital by RM1,000

(D) It will not affect the capital

14) A sole trader introduces a filing cabinet of RM1,600 that is her own into the business for business use. What is the double entry for this transaction?

(A) Debit Purchases and Credit Bank for RM1,600

(B) Debit Filing Cabinet and Credit Capital for RM1,000

(C) Debit Purchases and Credit Cash for RM1,000

/(D) Debit Filing Cabinet and Credit Capital for RM1,600

15) A sole trader takes out goods for his own use. What is the correct double entry?

(A) Debit Drawings and Credit Goods

(B) Debit Drawings and Credit Stock

(C) Debit Drawings and Credit Capital

/(D) Debit Drawings and Credit Purchases(buy stock)

16) Profit and additional capital increases total capital, while ________ and ________ decreases total capital.

(A) losses, assets

(B) assets, liabilities

/(C) losses, drawings

(D) drawings and assets

17) Which of these are not examples of a sole traders expenses?

/(A) discounts received and rental received save money = income(other revenue)

(B) rental on building and salaries of staff

(C) wages of staff and motor expenses

(D) interest payable and commission payable

18) Which of these fulfills the accounting equation? Asset = Liability + Capital

(A) resources supplied by the owner = resources supplied by outsiders

(B) resources supplied by the owner total resources = resources supplied by outsiders

/(C) resources supplied by the owner + resources supplied by outsiders = total resources

(D) none of the above

19) Which of the following statements is incorrect?

(A) Assets Capital =Liabilities

(B) Liabilities + Capital = Assets

/(C) Liabilities + Assets = Capital

(D) Assets Liabilities = Capital

20) Which of the following statements is correct?

Effects upon

Assets Liabilities

/(A) We paid a creditor by cheque - Bank - Creditor

(B) A debtor paid us RM90 in cash + Cash + Debtors

(C) J Hall lends us RM500 by cheque + Bank - Loan

(D) Bought goods on credit + Stock + Capital

21) Which of the following best describes the meaning of Purchases?

(A) Items bought

(B) Goods bought on credit

/(C) Goods bought for resale

(D) Goods paid for