Tutorial 4
1. Identify and describe FOUR(4) users of
accounting information.
External users outside the organization(financial accounting)
1. Investors to make decisions whether to buy, hold, or sell
their share in the company.
2. Tax authority check for companys tax compliance.
Internal users within the organization(management
accounting)
3. Marketing managers often responsible for influencing the
level, timing, and composition of customer demand accepted
definition of the term.
4. Production supervisors responsible for a variety of job
duties.
2. Describe the differences between management
accounting and financial accounting.
Management
Accounting
Financial
Accounting
1. Users
Internal
External
2. Time
dimension
More emphasis on the
future
Historical perspective
3. Report
frequency
Not specific but
frequently for planning
and control
Published annually &
as directed
4. Precision
versus
timeliness
Emphasis on relevance
and in detail
Emphasis on
precision/ accuracy
but less detail
5. Focus
Focuses on segments of
an organization
Primary focus is on the
whole organization
6. Accounting
standards
Need not follow
accounting standards or
formats
Must follow
accounting standards
and formats
7. Legal
requirements
Not mandatory
Mandatory for external
reports
3. Complete the gaps in the following table:
Assets
Liabilities
Capital
RM
RM
RM
55,000
16,900
38,100
51,600
17,200
34,400
36,100
7,600
28,500
119,500
15,400
104,100
88,000
26,000
62,000
159,000
49,000
110,000
4. Classify the following items into liabilities and assets:
Assets
Liabilities
a) Motor Vehicles
b) Premises
d) Inventory
e) Other debtors
g) Cash in hand
i) Plant and Machinery
c) Trade Creditors
f) Bank Overdraft
h) Loan from Kamal
5. Fatimah is setting up a new business. Before commencing the business, she
purchased furniture for RM1,200, a van for RM6,000 and inventory worth RM2,800.
Although she has paid in full for the fixtures and the van, she still owes RM1,600 for
some of the inventory. To finance her business, Fatimah took a loan from CIMB Bank
which amounts to RM2,500. After taking into account all of the above transaction,
Fatimah has RM200 in the business bank account and RM175 cash in hand.
Calculate the capital of Fatimah.
Total Assets = furniture (1200) + van (6000) +
inventory (2800) +
business bank (200) +
hand (175)
= RM 10375
Total Liability = owes bank (1600) + loan (2500)
= RM 4100
Capital = owners equity liability = RM6275
6. The assets and liabilities of Kok Heng
RM as at 30 Nov 2011 is as follow:
Creditors
2800
Furniture
6200
Motor vehicle
7300
Inventory
8100
Debtors
4050
Cash at Bank
9100
Cash at hand
195
During the first week of December2011:
a) He bought extra equipment on credit for RM110
b) He bought extra stock by cheque RM380
c) He paid creditors by cheque RM 1150
d) Debtors paid Kok Heng RM640 by cheque and RM90 by cash
e) He put in extra RM1500 into the business, i.e. RM1300 by cheque and RM200
in cash
Work out the amount of assets, liabilities and capital for Kok Heng as at 7 Dec
2011
7. At the beginning of the year, Micha Jewelers had RM120,000 in
liabilities. During the year, assets increased by 150,000, and at year-end
they totaled RM350,000. Liabilities decreased RM20,000 during the year.
Calculate the amount of both the beginning and ending value of capital.
Beginning
of the year
During the
year
End of the
year
Assets
200,000
150,000
350,000
Liabilities
120,000
-20,000
100,000
Capital
80,000
170,000
250,000