FACULTY OF ECONOMICS & MANAGEMENT

SEMESTER 2 SESSION 2021/2022

EPPD1033 PRINCIPLES OF ACCOUNTING

Tutorial 2: Recording Process: Journalizing & Posting

SECTION A: MULTIPLE-CHOICE QUESTIONS (MCQ)

1. Which of the following events cannot be quantified into dollars and cents and recorded as
an accounting transaction?

A. The appointment of a new CPA firm to perform an audit.

B. The purchase of a new computer.
C. The sale of store equipment.
D. Payment of income taxes.

2. If total liabilities increased by $15,000 and owner’s equity increased by $5,000 during a
period of time, then total assets must change by what amount and direction during that same
period?

A. $20,000 decrease.
B. $20,000 increase.
C. $25,000 increase.
D. $30,000 increase.

3. A net loss will result during a time period when

A. liabilities exceed assets.

B. drawings exceed investments.
C. expenses exceed revenues.
D. revenues exceed expenses.

4. Jerry Company began the year with owner’s equity of $217,000. During the year, Jerry
received additional owner investments of $294,000, recorded expenses of $840,000, and
had owner drawings of $56,000. If Jerry’s ending owner’s equity was $531,000, what was
the company’s revenue for the year?
 A. $916,000
B. $860,000
C. $1,210,000
D. $1,154,000

5. Which of the following financial statements showed the changes in capital for a specific
accounting period?

A. Income Statement.
B. Balance Sheet.
C. Owner’s Equity Statement.
D. Cash Flow Statement.

6. Which of the following correctly identifies normal balances of accounts?

A. Assets Debit C. Assets Credit

Liabilities Credit Liabilities Debit
Owner's Equity Credit Owner's Equity Debit
Revenues Debit Revenues Credit
Expenses Credit Expenses Debit

B. Assets Debit D. Assets Debit

Liabilities Credit Liabilities Credit
Owner's Equity Credit Owner's Equity Credit
Revenues Credit Revenues Credit
Expenses Credit Expenses Debit

7. On January 14, Franco Industries purchased supplies of $500 on account. The entry to
record the purchase will include

A. a debit to Supplies and a credit to Accounts Payable.

B. a debit to Supplies Expense and a credit to Accounts Receivable.
C. a debit to Supplies and a credit to Cash.
D. a debit to Accounts Receivable and a credit to Supplies.
SECTION B:

QUESTION 1

Sheikh Bazar is a retail business owned by Mr. Sheikh. The followings are the summarized
business transactions in the month of November:

Nov 3 Collected RM27,000 from the debtors of the accounts receivable.

5 Paid debts of RM16,400 to the payable accounts.
8 Purchased goods worth RM22,000 on credit.
12 Goods in hand at the end of the period cost RM15,000 is sold on credit for RM23,000.
17 Paid shop rental of RM1000 for the month of November by cash.
25 Paid workers’ salaries of RM3,100 for the month of November by cash.
29 Mr. Sheikh took out cash of RM6,300 for his personal use.

Required:

Prepare journal entries for each business transaction in November.

QUESTION 2

NUR Nursery started operations on October 1, 2021. The followings are the transactions for
October 2021:

Date Transaction
Oct 1 Mrs. Nur started NUR Nursery by investing RM40,000 cash and furniture worth
RM100,000.
3 Purchased equipment worth RM24,000 on instalments of three equal payments.
The first instalment has been paid.
10 Signed a building rental contract with Mr. Raju for three years and paid rent for
three months RM2,400.
11 NUR Nursery applied for a loan of RM150,000 from Bank MIKRO. The bank
promised to inform Mrs. Nur of the result of the application after three months.
17 Received RM1,400 for nursery services provided.
19 Paid RM1,300 for premise cleaning work.
21 Received a deposit for event management services in November RM600.
24 Submitted an invoice to the Young Mums Club for the nursery services provided
RM4,100.
28 Mrs. Nur paid her phone bill using NUR Nursery’s cash of RM240.
30 Paid salaries RM1,200.
Required:

a) Prepare journal entries for the above transactions.

b) Post the journal entries in (a) to the ledger.
c) Prepare a trial balance for NUR Nursery as at October 31 2021.

QUESTION 3
QUESTION 4

Prepare an income statement, an owner's equity statement, and a balance sheet for the dental
practice of Tim Turner, DDS, from the items listed below for the month of October, 2020.

Tim Turner, Capital, October 1 $42,000

Accounts payable 7,000
Equipment 30,000
Service revenue 25,000
Tim Turner, Drawings 6,000
Dental supplies expense 3,500
Cash 6,000
Utilities expense 700
Dental supplies 2,800
Salaries expense 9,000
Accounts receivable 14,000
Rent expense 2,000