AGR323 - CHAPTER 2

An accounting system is a system of _________ financial and accounting data that are used by decision makers

• collecting, storing and processing

• collecting, storing and distributing

• collecting, checking and processing

• allocating, storing and processing

An accounting system allows a business to keep track of all types of financial transactions, including purchases, sales and liabilities. Example of liabilities (2 answers)

• prepaid expense

• account payable

• funding

• account receivable

How to decide whether a company should use calendar year or fiscal year accounting period?

• Based on other company

• Based on decision of management

• Based on the economy situation

• Based on production cycle

Calendar year accounting period start on

Below are disadvantages of double entry system EXCEPT (2 answers)

• Missing some transaction record

• Complicated to understand

• Costly

• Easier to commit theft

Choose ALL advantages of accrual accounting

• Easy to implement

• Reduce income instability

• Reduce tax due to delay on growing inventory

• Give more precise profit

April 2021: Purchased and charged to account, seed for RM2,000

June 2021: Paid seed for RM2,000

Under __________ accounting, the transaction is recorded on June 2021.

Large firm normally opt to use......

• Accrual, cash and basic system

• Double entry, cash and accrual accounting

• Complete, single entry and accrual accounting

• Basic, double entry and cash accounting

On 15th October, you paid bill for crops invoiced last month, RM1,000. Choose the correct entry under double entry system.

• Acc payable: Credit

  Cash: Debit

• Acc receivable: Credit

  Cash: Debit

• Acc payable: Debit

  Cash: Credit

• Acc receivable: Debit

  Cash: Credit

Which of the following will NOT be found under cash accounting?

• Sale

• Inventory

• Fertilizer

• Fuel