a. Explain the main purpose of a trial balance. (2 marks)
b. Explain the differences between a bad debt and a doubtful debt. Illustrate with the accounting treatment of each. (4 marks)
c. State what is meant by the term ‘accounting policies’. (2 marks)
d. Explain why both a debit entry and a credit entry are used to record each transaction. Give an example of a transaction and the entries required. (4 marks)
e. Give three reasons why there may be a difference between the assets listed on the non-current asset register and the physical presence of assets. (3 marks)
Syarikat Layang uses the FIFO (First-in, First-out) costing method for its perpetual inventory system. It had inventory on 1 July 2022 consisting of 400 articles bought at RM4 each. Its purchase during the month of July consisted of 800 at RM4.20 each purchased on 8 July, and 2,000 at RM3.80 each on 18 July. It sold 2,400 at RM5.00 each on 28 July. 40 of those purchased on 8 July were returned by the customer in perfect condition on 31 July.
Show the trading account for the month ended 31 July 2022 by means of an inventory account. (15 marks)
The following extract from the cash book of Joan for the month of July shows the company’s bank transactions:
18 July Alice
|13 July||Ben||324||28 July TNB||72|
|31 July||Lucy||186||30 July PBA||109|
|31 July Balance c/d||684|
The cheque issued to Halim in the month of June is unpresented. The company’s bank statement for the same period is as follows:
Debit (RM) Credit (RM) Balance (RM)
|31 July||Standing order||10||669|
a. Prepare a corrected cash book using the information given above. (8 marks)
b. Draw up a bank reconciliation statement. (3 marks)
c. Discuss the purpose of a bank reconciliation. (4 marks)
A company issued financial statements for the year ended December 31, but failed to include the following adjusting entries:
a. Depreciation expense of RM8,000. (3 marks)
b. Portion of office supplies (an asset) used RM3,100. (3 marks)
c. Accrued salaries of RM5,200. (3 marks)
d. Revenues of RM7,200, originally recorded as unearned, have been earned by the end of the year. (3 marks)
e. Accrued service fees earned of RM2,200. (3 marks)
Prepare the adjusting journal with narration for the above on 31 December.
Hamdan’s unadjusted trial balance is shown below.
|Trial Balance as at 31 December 2021|
|Capital as at 1 January 2021||493,078|
|Bank loan (due in 10 months)||115,000|
|Cash at Bank||116,000|
|Purchases and sales||31,000||51,649|
|Receivables and Payables||5,040||144,003|
|Inventory as at 1 January 2021||23,570|
|Cash in hand||1,600|
• A new office computer of RM4,500 was brought from home for office use unrecorded.
• Hamdan has wrongly recorded RM2,000 cheque payment into the account of bank
loan which should be payment to account payable.
• Receivables RM300 has been posted to the purchase account.
• The depreciation for building and office equipment is charged at 2% and 20% per annum using the straight line method respectively.
• The inventory as at 31 December 2021 was RM15,210.
a. Prepare General Journal for the above additional information. (6 marks)
b. Prepare the statement of comprehensive income for the year ended 31 December 2021. (22 marks)
c. Prepare the statement of financial position as at 31 December 2021. (12 marks]
Answers to Above Questions
Answer 1: a: Trial balance is prepared at the end of a financial year and the main purpose of preparing trial balance is to achieve mathematical accuracy of the business transactions that are recorded in the company’s ledger.
Content Removal Request
If you believe that the content above belongs to you, and you don’t want it to be published anymore, then request for its removal by filling the details below. It will only be removed if you can provide sufficient evidence of its ownership.