tutorial 1

FAR 100

TUTORIALS

1. Mark the true statement with (T) and false statements with (F).

TRUE FALSE1. Accounting is an information system that identifies, records and analyze

the economic events of an organisation to interested users

2. The purpose of accounting is to provide the useful information in

effective, relevant, and reliable way for a wide variety of decision.

3. Owners of business firms are the only people who need the accounting

information.

4. Management of business enterprise is major external user of accounting

information.

5. Bookkeeping and accounting are one end the same because the

bookkeeping function includes the accounting process.

6. Private accountants are accountants who are employees of business

enterprise.

7. Accounting communicates financial information about a business

enterprise to both internal and external users.

8. All accounting entries must be supported by the source document

2. Aina Company performs the following accounting tasks during the year. Indicate the tasks below as being either identifies, records or communicating.

______ Summarizing economic events.

______ Selecting economic activities relevant to the company.

______ Reporting information in a standard format.

______ Preparing accounting reports.

______ Measuring events in dollars and cents.

______ Classifying economic events.

______ Analyzing and interpreting information.

3. Accounting is “an information system that identifies, records, and communicates the economic

events of an organization to interested users.”

a. Explain briefly and give TWO (2) of the external user of accounting information

b. Explain briefly and give TWO (2) of the internal user of accounting information

/tt/file_convert/577cce3b1a28ab9e788d9d8d/document.doc 1

FAR 100

c. Differentiate between bookkeeping and accounting.

4. Differentiate between sole proprietorship, partnership and company in term of its ownership, capital and books and accounts.

5. The following are users of financial statements.

______ Customers

______ Securities and Exchange Commission

______ Internal Revenue Service

______ Investors

______ Labor unions

______ Suppliers

______ Factory manager

______Human resource worker

______ Vice-president of Finance

Required:

Identify the users as being either external users or internal users.

6. Indicate the assumption, principles or constraint that describes by each situation below:

i. Natasha buys a dress for RM 1,500 on 11 January 2008. She pays the store on 14 February

2008. The store records sale on 11 January 2008 not on 14 February 2008 when cash is

received.

__________________________________________________________________

ii. A bill for repairs of Samad’s private car was recorded separately from his business financial

information.

__________________________________________________________________

iii. Business premises is shown on the balance sheet as RM 50,000, its original cost 20 years

ago, although its current value RM 500,000.

__________________________________________________________________

iv. Each transaction described by a business document that proves that the transaction did take

place.

__________________________________________________________________


FAR 100

Multiple Choice Questions

1. The list below is representing the internal users of accounting information, EXCEPT:

A. Supervisors

B. Owner’s

C. Managers

D. Business contact group

2. What is the relationship between bookkeeping and accounting?

A. Bookkeeping only records the economic event and it is part of accounting.

B. Bookkeeping is also called accounting

C. Bookkeeping will communicates the accounting to interested users.

D. Bookkeeping does not have any relationship with accounting

3. The following describes the process of identifying the economic events of an organization:

A. Keeping a chronological diary of particular events in an orderly and systematic

manner.

B. Selecting the economic activities relevant to a particular organization.

C. Preparing accounting reports, including financial statements.

D. Quantifying events in dollars and cents.

4. Limited liability is NOT enjoyed by the owner(s) of a

A. Corporation.

B. Partnership.

C. Proprietorship.

D. Both B and C above.

5. Which of the following is the step of accounting process?

A. Identification – Recording – Communication – Verification

B. Identification – Planning – Recording - Communication

C. Identification – Recording –Communication

D. Identification – Recording –Verification


FAR 100

6. For accounting purposes, the proprietor of an enterprise has always considered to be separate

and distinct from the business which he controls or owns. In accounting term this is referred

to as

A. Historical Cost Principle

B. Separate Business Entity

C. Time period/accounting period

D. Matching Principle

7. The process of communicates in Accounting process best describe as

A. Classify and summarize and classifying data as to be useful to the business

B. To tell their result to the owner of the business or to others allowed to receive accounting

information

C. To record and business activities

D. To help the owner of the business to plan for the future

8. Which of the following statement about user of information is INCORRECT?

A. Government are considered as internal users

B. Shareholders are consider as internal users

C. Investor are consider as external users

D. Creditors are consider as external user

9. Business events include both internal and external activities. The following consider

Business events except?

A. Bought furniture and fitting on cheque worth by Ali Sdn Bhd

B. Transfer of the land title from owner of the land to the sole proprietor

C. Payment of water bill for Ali’s house

D. Received interest from Fixed deposit

10. Which of the following is INCORRECT about Partnership?

A. Unlimited Liability

B. Register under Business act 1957

C. No legal obligation to keep the books and prepare the account

D. Ownership by 2 – 50 person


FAR 100

11. Accounting is only concerned with the recording of facts that can be expressed in monetary

terms, as opposed to using physical or time units of measurement.

A. Going Concern

B. Monetary Unit Assumption

C. Time period/accounting period

D. Matching Principle

12. Communication of economic events is the part of the accounting process that involves

A. Identifying economic events

B. Quantifying transactions into dollars and cents

C. Preparing accounting reports

D. Recording and classifying information

13. The accounting process involves all of the following EXCEPT

A. Identifying economic transactions that are relevant to the business

B. Communicating financial information to users by preparing financial reports.

C. Recording non-quantifiable economic events.

D. Analyzing and interpreting financial report.

14. Which of the following would NOT be considered an internal user of accounting data for the

XYZ Company?

A. President of the company

B. Production manager

C. Merchandise inventory clerk

D. President of the employee’s’ labor union

15. Amar Company owns land which cost is RM 100, 000. If a "quick sale" of the land was

necessary to generate cash, the company feels it would receive only RM 80,000. The

company continues to report the asset on the balance sheet at RM 100, 000. This is justified

under which of the following concepts?

A. Historical-cost principle

B. Matching principle

C. Revenue recognition principle

D. Full disclosure principle


FAR 100


tutorial 1

Documents