ACT 3112-2112- Tutorial Questions/MAT/ Sem 1-2019
ACT 2112-3112- INTRODUCTION TO ACCOUNTING
Semester 1-2019
Tutorial Topic 1- Introduction and Topic 2-Business and Environment
1.“Accounting is ingrained in our society and it is vital to our economic system.” Do you agree?
Explain.
2. Identify and describe the steps in the accounting process.
3.Who are users of accounting data? How does accounting provide relevant data to these users?
4. What uses of financial accounting information are made by (a) investors; (b) creditors; (c)
marketing manager; (d) production manager? Briefly give examples for each user.
5. “Bookkeeping and accounting are the same.” Do you agree? Explain.
6. Benton Travel Agency purchased land for RM90,000 cash on December 10, 2020. At
December 31, 2020, the land's value has increased to RM92,000. What amount should be
reported for land on Benton's balance sheet at December 31, 2020? Briefly explain .
7. What is the basic accounting equation?
8. Are the following events recorded in the accounting records? Explain your answer in each
case.
(a) The owner of the company dies.
(b) Supplies are purchased on account.
(c) An employee is fired.
(d) The owner of the business withdraws cash from the business for personal use.
9. Distinguish (at least 4 characteristics) financial accounting from managerial accounting.
Briefly explain.
10.Indicate whether each of the following items is an asset (A), liability (L), or part of owner's
equity (OE) and indicate in which financial statements (balance sheet or income statement) to be
reported?
(a) Accounts receivable; (b) Accounts payable; (c) Equipment; (d) Supplies expense;
(e) Owner's capital ; (f) Service revenue
11. The following situations involve accounting principles and assumptions.
(a) Anggun Enterprise projects that it will only stay in business for not more than 12 months.
Therefore, the owner decides that all non-current assets and liabilities to be reclassified as
current assets and liabilities.
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ACT 3112-2112- Tutorial Questions/MAT/ Sem 1-2019
(b) Mays Consultancy business includes in its accounting records only transaction data that
can be expressed in terms of money.
(c) Curt Russell, owner of Curt's Photography, records his personal living costs as expenses
of the business.
(d) Since Gerakhati Bhd starts its business in 2015, this business applies straight line method
to calculate its depreciation expenses on office equipment. However, for fiscal year 2017,
Gerakhati business decides to change its policy on office equipment depreciation method
into unit of production method so as to present a better business profits.
(e) Suci Bersih Enterprise delivered RM500 goods on 24/9/2018 to Raju BookStore. Raju
BookStore promised to pay on 15/10/2018. This transaction is recorded as sales revenue
in Suci Bersih business book in the month of September 2018.
Required: For each situation, state if the accounting method used is correct or incorrect. If
correct, identify which principle or assumption supports the method used. If incorrect, identify
which principle or assumption has been violated. Briefly justify your answer.
12. What are the three basic forms of business organizations for profit-oriented enterprises? List
down and explain the characteristics (at least four) that distinguish theses three forms of
businesses.
13. Helen Rupp is the owner of a successful printing shop, Excellent Printing. Recently, her
business has been increasing, and Helen has been thinking about changing the organization of
her business from a proprietorship to a company.
(a)Discuss some of the advantages Helen would enjoy if she were to incorporate her business.
(b)Excellent Printing (EP) operates what type of business activities?
(c) Assuming, EP decides to expand its business and include selling stationeries to schools in
bulk, EP operates what type of business activities then?
