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S3 revision MCQ

Total questions: 160

Worksheet time: 5hrs 49mins

Name
Class
Date
1.

"Its is a part of accounting that mainly involves recording with limited analyzing and interpretin."

What does the above statement refer to?

a)

Accounting

b)

Bookkeeping

c)

Data recording

d)

Information communicating

2.

What is the double entry for "taking goods from shop as stationery to be used by employes"?

a)

Debit : Drawings

Credit : Purchases

b)

Debit : Drawings

Credit : Stationery

c)

Debit : Purchases

Credit : Stationery

d)

Debit : Stationery

Credit : Purchases

3.

Where is the total of "Discounts Allowed" column in Cash Book posted to in General Ledger?

a)

The debit side of Discounts Allowed Account

b)

The credit side of Discounts Allowed Accoount

c)

The debit side of Discounts Control Account

d)

The credit side of Creditors Control Account

4.

How should the allowance for doubtful debts be shown in a Trial Balance?

a)

As a debit balance

b)

As a credit balance

c)

As a debit or cedit balance

d)

Not shown,as it is part of bad debts

5.

In Departmental Accounts, on what basis is the salesmen commission most probably apportioned to the respective departments?

a)

Percentage to sales

b)

Number of employees

c)

Floor area

d)

Profit margin

6.

Which of the following is a current liability in the accounts of a non-profit-making organisation?

a)

Subscription In Advance

b)

Subscription Receivable

c)

Subscription In Arrears

d)

Subscription Received

7.

Information was given as follows :

Opening Stock : RM 2,000

Purchases : RM 26,000

Sales : RM 30,000

Mark-up : 25%

What was the value of closing stock?

a)

RM 4,000

b)

RM 5,500

c)

RM 6,000

d)

RM 7,500

8.

Which of the following are recorded in Head Office Current Account of a branch's books? (Note : Transit items are to be adjusted in head office's books)

I A motor vehicle of book value was sent from head office to branch

II Goods sent by head office not yet received by branch

III Head office's credit sales was collected by branch

IV A remittance by branch not yet received by head office

a)

I,III

b)

I,IV

c)

II,III

d)

II,IV

9.

Which of the following items is credited to the Realisation Account when a partnership is dissolved?

a)

Bad Debts

b)

Discounts Allowed

c)

Realisation Expenses

d)

Assets taken over by partner

10.

Which of the following statements regarding the final ordinary dividend are correct?

I It is paid during the year

II It is declared after the profit is determined

III It is declared and paid within the same year

IV It is declared at the end of financial year and payable in the following year

a)

I,III

b)

I,IV

c)

II,III

d)

II,IV

11.

1,000 ordinary shares with a nominal value of RM 1 each are to be issued at RM 4 per share.
RM(4−1)×1,000=RM 3,000RM\left(4-1\right)\times1,000=RM\ 3,000  
Which of the following items does the above calculation of RM 3,000 refer to?

a)

Issued Share Capital

b)

Nominal Share Capital

c)

Share Discount

d)

Share Premium

12.

A limited company issued 50,000 ordinary shares of RM 1 each at RM 1.80 each to acquire an existing business which had net assets of RM 75,000. Which of the following statements was not correct?

a)

The purchase price was RM 90,000

b)

The share premium was Rm 40,000

c)

The buying company acquired a goodwill of RM 15,000

d)

The net assets of the buying company will increase by RM 75,000

13.

Which of the following statements regarding the ownership of goods consigned is true?

a)

The ownership of goods is with consignee

b)

Goods are owned by consignee until they are sold

c)

The ownership of unsold goods is with consignee

d)

The ownership of goods are not at any time with consignee

14.

When two or more business entity carrying on similar business decide to combine, a new company is formed, it is known as _____.

a)

Amalgamation

b)

Business Purchase

c)

Realisation

d)

Revaluation

15.

When a business entity decides to take over another business entity with an agreed price, it is known as _____.

a)

Amalgamation

b)

Business Purchase

c)

Realisation

d)

Revaluation

16.
Before combining two businesses, what should each business do?

I.  To sell all its assets
II.  To close its books
III.  To revalue its assets
IV. To consider its goodwill
a)
I,II
b)
III,IV
c)
I,III,IV
d)
II,III,IV
17.
Leong and Ali are two sole proprietors who are planning to amalgamate their businesses and form a partnership.  2% of Leong’s debtors are deemed to be uncollectible accounts.  Which party is going to bear the bad debt loss?
a)
Leong
b)
Ali
c)
Leong and Ali
d)
The new partnership
18.
Which of the following will not affect the purchase price when a company takes over another company?
a)
The goodwill of the vendor
b)
The liabilities to be taken over
c)
The market value of the assets taken over
d)
The book value of the assets taken over
19.
Which of the following statements regarding the Business Purchase Account are true?

I.  It is a temporary account.
II.  It is to record the transactions of the business being taken over.
III.  It is to simplify the procedures of the business being taken over.
IV. It is to record the payment of purchase price to vendor.
a)
I,II
b)
I,III
c)
II,IV
d)
III,IV
20.
Mr Song bought an existing business assets valued at: Shophouse RM89,000, Motor Van RM31,500, Inventory RM13,700 and Liabilities RM21,600. He paid RM140,000 for the business. This means that _________.
a)
he paid RM15,800 for the goodwill
b)
he paid RM27,400 for the goodwill
c)
he bore a loss of RM15,800 for the business purchase
d)
he made a profit of RM27,400 for the business purchase
21.
When a limited company takes over another limited company, if the purchase consideration is greater that the net assets of the business purchased, the excess is known as ________.
a)
Premium
b)
Goodwill
c)
Purchase Profit
d)
Capital Reserve
22.
Which of the following items will be used to calculate the goodwill when a company takes over another firm?
I. Purchase price
II. The capital of vendor
III. The liabilities taken over
IV. The value of assets taken over
a)
I,II
b)
III,IV
c)
I,II,III
d)
I,III,IV
23.
How should the goodwill on business purchase be shown in the financial statement?
a)
As an expense in Profit And Loss Account
b)
As an intangible asset in Statement Of Financial Position
c)
As a current liability in Statement Of Financial Position
d)
As a long-term loan in Statement Of Financial Position
24.
When purchasing a company, it is usual to pay an extra sum above the net assets taken over.  The extra sum refers to which of the following items?
a)
Premium
b)
Goodwill
c)
Purchase Price
d)
Capital Reserve
25.
A business, with net assets of RM90,000, was purchased at a price of RM125,000.  The purchase price was to be settled by the issuance of 100,000 ordinary shares of RM1 each.  At what unit price were the shares issued?
a)
A par value of RM1
b)
A premium of RM1.25
c)
A premium of 75 cents
d)
A premium of 25 cents
26.

Which type of business organization does the buyer involved above most probably belong to?

a)
Partnership
b)
Limited Company
c)
Sole Proprietorship
d)
Partnership or Limited Company
27.
XYZ Bhd took over the business of a partnership at a price of RM300,000.  The assets taken over were valued at RM450,000 and the liabilities at RM100,000.  Which of the following does the difference of RM50,000 refer to?
a)
Goodwill
b)
Net worth
c)
Capital Reserve (Gain On Bargain Purchase)
d)
Revenue Reserve
28.
A limited company issued 50,000 ordinary shares of RM1 each at RM1.80 each to acquire an existing business which had net assets of RM75,000.  Which of the following statements was not correct?
a)
The purchase price was RM90,000
b)
The share premium was RM40,000
c)
The buying company acquired a goodwill of RM15,000
d)
The net assets of the buying company will increase by RM75,000.
29.

In the conversion of partnership into limited company, a _____ Account is opened in the ledger of the partnership, while a _____ Account is opened in the ledger of the limited company for the purpose.

I.  Purchase Consideration

II.  Business Purchase

III.  Revaluation

IV. Realisation

a)
III…..I
b)
III…..II
c)
IV…..I
d)
IV…..II
30.

Which of the following is true in relation to the above circumstances?

a)
Goodwill will increase.
b)
Goodwill will decrease.
c)
Purchase price will increase.
d)
Capital reserve will increase.
31.
If the business of a sole proprietorship performs well before taken over by a partnership, all the assets and liabilities that have been taken over will be recorded in the books of the buyer.  What other item should also be taken into account.
a)
Goodwill
b)
Royalty
c)
Legal Fees
d)
Formation Expenses
32.
Ahmad sold his business to ABC Bhd at a price of RM50,000.  The purchase consideration was to be settled by payment of cash RM20,000 and the balance by issuing of RM1 orcianry shares at RM1.20 each.  What was the number of shares received by Ahmad?
a)
36,000
b)
30,000
c)
25,000
d)
24,000
33.
In the case of business purchase, goodwill and realization profit are calculated as shown in the accounts below.  However, the two figures (*) may not be the same amount.   Suppose all assets and liabilities are taken over entirely by buyer, the difference may be due to which of the following reasons?
a)
Buyer records the assets and liabilities taken over in book values.
b)
Seller records the assets and liabilities taken over in book values.
c)
Buyer may not record the assets and liabilities taken over in book values.
d)
Seller may not record the assets and liabilities taken over in book values.
34.

Discount Received are

a)

Deducted when we receive cash

b)

Deducted to us when we pay our accounts

c)

Given by us when we sell goods on credit

d)

None of the above

35.

Which of the following balances is to be shown in the Statement of Financial Position as Non- Current liability?

a)

Other Payable

b)

Accounts Payable

c)

Bank Overdraft

d)

Bank Loan

36.

Which of the following is a debit balance?

a)

Accounts Payable

b)

Salaries

c)

Bank Overdraft

d)

Loan from Ali

37.

Expenses recorded in the Petty Cash Book are posted to ________________.

a)

A the debit side of Cash Book

b)

the debit side of expenses accounts in General Ledger

c)

The credit side of expenses accounts in General Ledger

d)

The credit side of personal accounts in Creditors Ledger

38.

If the owner himself supplies all the resources for the use of his business, then the accounting equation would be ___________.

a)

Capital = Assets

b)

Capital = Liabilities

c)

Capital = Assets - Liabilities

d)

Capital = Assets + Liabilities

39.

Which of the following should not be called “Sales”?

a)

Office Fixture sold

b)

Goods sold on credit

c)

Goods sold for cash

d)

Sale of item previously included in ‘Purchases’

40.

An alternative name for a Sales Journal is

a)

Sales Invoice

b)

Daily Sales

c)

Sales Ledger

d)

Sales Day Book

41.

A credit balance of RM 400 on the cash columns of the cash book would mean

a)

The book-keeper has made a mistake

b)

We have RM 400 cash in hand

c)

We have spent RM 400 more than we have received

d)

Someone has stolen RM 400 cash

42.

Which of the following is not an Accounting Transaction?

a)

Cash Sales

b)

Order accepted

c)

Cash Purchases

d)

Owner withdraws cash for own use

43.

__________ are shown in Statement of Financial Position.

a)

Revenues and Assets

b)

Assets, Liabilities and Owner’s Equity

c)

Revenues and Expenses

d)

Capital, Revenues and Expenses

44.

Enterprise usually pays its short-term debts_______.

a)

Within half year

b)

After half year

c)

Within one year

d)

After one year

45.

Which of the following is an Asset?

a)

Land

b)

Stationery

c)

Rent Received

d)

Drawings

46.

Which of the following is a liability?

a)

Trade Receivables

b)

Capital

c)

Bank overdraft

d)

Expenses

47.

___________ is used in checking on the posting to see if they are correct.

a)

Trial Balance

b)

Profit and Loss Account

c)

Trading Account

d)

Statement of Financial Position

48.

Repairs of van is a/an_________.

a)

Expenses

b)

Income

c)

Asset

d)

Liability

49.

RM50 cash taken from the cash till and banked is entered

a)

Debit cash column RM50 ; Credit bank column RM50

b)

Debit bank column RM50 ; Credit cash column RM50

c)

Debit cash column RM50 ; Credit cash column RM50

d)

Debit bank column RM50 ; Credit bank column RM50

50.

Which of the following is not a Non-Current Asset?

a)

Bank

b)

Office Equipment

c)

Freehold land

d)

Premises

51.

High Net Sales but low Gross Profit, this means_________.

a)

Low Cost of Sales

b)

High Cost of Sales

c)

Low Operating Expenses

d)

High Operating Expenses

52.

Which of the following cannot be entered into Trial Balance?

a)

Opening Inventory

b)

Closing Inventory

c)

Capital

d)

Drawings

53.

Which of the following is incorrect?

a)

Assets = 7,850 Liabilities = 1,250 Capital= 6,600

b)

Assets = 8,200 Liabilities = 2,800 Capital= 5,400

c)

Assets = 9,550 Liabilities = 1,150 Capital= 8,200

d)

Assets = 6,540 Liabilities = 1,120 Capital= 5,420

54.

Joy sold goods costing RM 579 and received cash. Please state the related accounts.

eg. dr account, cr account

(a)  

55.

Soon purchased stationery for resale on credit from Boon. What will the double entry be?

(a)  

56.

Related to No.2: What is the name for the document used by Soon to settle the liability to Boon?

4 lines
57.

Bought office furniture RM 1,500 by cheque.

4 lines
58.

Sold office machinery RM 5,000 for cash.

4 lines
59.

When a sole proprietor brings in additional cash, what will be the effect in Statement Of Financial Position?

4 lines
60.

Does cash account have a credit balance? Why?

a)

Yes

b)

No

61.

Where should debts written off as bad be recorded in?

4 lines
62.

Sales: RM 20,520

Opening Inventory: RM 5,203

Purchases: RM 9,057

Closing Inventory: ?

Gross Profit: RM 10,537


Find the Closing Inventory.

4 lines
63.

Please state out three nominal accounts.

4 lines
64.

Lands And Buildings: RM 105,340

Motor Vehicles: RM 58,920

Capital: ?

Bank: RM 7,985

Inventory: RM 8,967

Drawings: RM 523

Bank Loan: RM 45,678


Find the capital.

4 lines
65.

Mr.A purchased motor vehicle by cheque. The transaction recorded as below.


Dr Purchases

Cr Bank


Please verify the record of the transaction. If incorrect, please redo and state out the name of the error.

4 lines
66.

Miss A paid Mr B RM 100 and the transaction recorded as below.


Dr Cash

Cr Mr B


Please verify the record of the transaction. If incorrect, please redo and state out the name of the error.

4 lines
67.

Will Return Inwards understated or overstated reduced the net profit?

4 lines
68.

Which side of bank statement will Standing Order occur?

4 lines
69.

Mr C did his payment but not yet shown on the bank statement. What is this called?

4 lines
70.

Cr Bank RM 1580


What does this mean?

4 lines
71.

When Realisation Account should be opened?

4 lines
72.

When the total amount of credit side of Profit And Loss Appropriation is more than debit side, what balance should be transfer to Current Account?

4 lines
73.

When the value of a premise increased, which side of Revaluation Account should be recorded?

4 lines
74.

To start a partnership business, what should be the minimum number of partners?

a)

2

b)

10

c)

4

d)

20

75.

In partnership, partners liabilities are

a)

Limited

b)

Unlimited

c)

Limited to the capital invested

d)

Limited to the amount mentioned

76.

Which is/are the items included in current account?

a)

drawings

b)

interest in loan

c)

interest on capital

d)

capital

77.

Loans from partners are not part of the capital of the business and are treated the same way as any other loan.

a)

True

b)

False

78.

Interest on loan is a business expense and is not affected by the amount of profit or loss.

a)

True

b)

False

79.

The double entry of "Interest On Loan From Partner" is _______________________.

a)

Dr Profit And Loss - Interest On Loan From Partner

Cr Current

b)

Dr Current

Cr Profit And Loss - Interest On Loan From Partner

c)

Dr Profit And Loss Appropriation - Interest On Loan From Partner

Cr Current

d)

Dr Current

Cr Profit And Loss Appropration - Interest On Loan From Partner

80.

Which of the following item is recorded in Partner's Current Account?

a)

Loan From Partner

b)

Partner's Salary paid

c)

Bank Interest

d)

Drawings of goods

81.

Which of the following will be credited to Profit And Loss Appropriation account?

a)

Interest On Capital

b)

Balance Of Profit Shared

c)

Interest On Drawings

d)

Profit And Loss – Net Loss

82.

Interest on capital is calculated on the

a)

Opening Capital

b)

Closing Capital

c)

Average Capital

83.

Which of the following is/are the correct calculation of profit?

a)

closing capital - opening capital

b)

closing capital - opening capital + drawings

c)

closing capital - opening capital + drawings - capital introduced

d)

closing capital + opening capital - drawings - capital introduced

84.

If the partners were entitled to Partners's Bonus, which of the following account should be debited?

a)

Current Account

b)

Capital Account

c)

Profit And Loss Account

d)

Profit And Loss Appropriation Account

85.

"Balance of Loss Shared" should be debited to _______________.

a)

Profit And Loss Appropriation Account

b)

Profit And Loss Account

c)

Current Account

d)

Bank Account

86.

Lisa and Rose are in partnership.


Lisa drew out RM 480 on 1 September 2016, RM 1,200 on 30 November 2016 and RM 600 on 1 March 2017.


The financial year end is on 30 June 2017.


Interest on drawing is 5% per annum. Calculate the total amount of interest charged on Lisa’s drawings.

a)

RM 55.50

b)

RM 70

c)

RM 65

d)

RM 114

87.

What is a Bank Reconciliation statement?

a)

A. A statement drawn by a firm to verify cash book balance with the bank statement balance.

b)

B. A statement sent by bank when its customer’s account has a debit balance.

c)

C. A statement sent by firm when its bank has made an error.

d)

D. A statement sent by bank when its customer has made an error.

88.

2. Match the following statement with appropriate type of errors:

(i) Sales of RM300 to Gary was debited to Cash.

(ii) Depreciation of Machine RM4,000 was omitted in depreciation account.

(iii) A cash payment of RM100 to Yap was recorded as receipt.

a)

A. (i) Error of Principle

(ii) Error of Omission

(iii) Reversal Error

b)

B. (i) Error of Commission

(ii) Error of Omission

(iii) Error of Commission

c)

C. (i) Error of Principle

(ii) Error of Commission

(iii) Error of Omission

d)

D. (i) Error of Commission

(ii) Compensating Error

(iii) Reversal Error

89.

3. Study the information below carefully:

Yong and Zuss were partners dealing fruit business. Their profit for the year ended 31 December 2020 showed RM580,000. They invested RM 300,000 and RM500,000 respectively, sharing profits and losses according to their capital ratios. Interest on Capital should be calculated at 5% per annum, and RM1,000 monthly salary was to be allocated to Yong.

What should be the profit / loss shared by Zuss?

a)

A. RM330,000

b)

B. RM183,000

c)

C. RM305,000

d)

D. RM198,000

90.

4. Guy and Helen were partners, sharing profits and losses equally. They agreed to create a goodwill amounted to RM5,000. At the end of the year, they admitted Ian as new partner, while Guy decided to retire. Their new profit and loss sharing ratio remain the same as before. What is the correct entry of goodwill account?

a)

A. Dr Capital-Ian RM2,500, Capital-Helen RM2,500; Cr Capital-Guy RM2,500, Capital-Helen RM2,500

b)

B. Dr Capital-Guy RM2,500, Capital-Helen RM2,500; Cr Capital-Guy RM1,333, Capital-Helen RM1,333, Capital-Ian RM1,334

c)

C. Dr Capital-Guy RM2,500, Capital-Helen RM2,500; Cr Capital-Helen RM2,500, Capital-Ian RM2,500

d)

D. Dr Capital-Guy RM2,500, Capital-Helen RM2,500; Cr Capital-Guy RM2,500, Capital-Helen RM2,500

91.

5. Morgan and Norris were partners, sharing profits and losses in the ratio of 1:2. They agreed to cease their business as their business did not gain any profit. If the legal fees were incurred during dissolution, what should be the relevant entry?

a)

A. Dr Realisation Expenses-Legal fees; Cr Bank

b)

B. Dr Capital-Legal fees; Cr Bank

c)

C. Dr Realisation-Legal fees; Cr Bank

d)

D. Dr Bank; Cr Capital

92.

6. Which of the following is a Direct Expenses?

i. Wages of office clerk

ii. Machine operator salaries

iii. Hire purchase of Machine

iv. Royalties

v. Cost of raw materials

a)

A. i,ii,v

b)

B. ii,iii,iv

c)

C. ii,iii,iv,v

d)

D. iii,iv

93.

7. If mark-up of 15% was to be added to production cost of finished goods, what should be the manufacturing profit, given that Production Cost of Finished Goods was RM450,000?

a)

A. RM67,500

b)

B. RM517,500

c)

C. RM225,000

d)

D. RM562,500

94.

8. Jake did not maintain proper records. His books only record the total amounts as follows:

Cash Sales: RM500

Accounts receivable balance b/d: RM800

Receipts from accounts receivable: RM1,290

Discount allowed given to accounts receivable: RM430

Bad debts totalled: RM310

Accounts receivable balance c/d: RM770

What is the amount of Jake’s total sales?

a)

A. RM2,500

b)

B. RM2,000

c)

C. RM2,060

d)

D. RM2,560

95.

9. Ken’s shop was robbed on 31 March 2019. The value of the inventory stolen was RM25,840. The following information was available: Inventory as at 1 January is RM9,600; Purchases for 3 months to March 31 is RM52,000; Sales for 3 months to March 31 is RM117,600 and mark-up is 20%. Calculate the value of the remaining inventory on 31 March 2019.

a)

A. RM62,240

b)

B. RM6,640

c)

C. RM58,320

d)

D. RM10,560

96.

10. What is the main source of income for a non-profit making organisation?

a)

A. Income from special event

b)

B. Subscriptions

c)

C. Interest of Fixed Deposit

d)

D. Rental Expenses

97.

"Its is a part of accounting that mainly involves recording with limited analyzing and interpretin."

What does the above statement refer to?

a)

Accounting

b)

Bookkeeping

c)

Data recording

d)

Information communicating

98.

What is the double entry for "taking goods from shop as stationery to be used by employes"?

a)

Debit : Drawings

Credit : Purchases

b)

Debit : Drawings

Credit : Stationery

c)

Debit : Purchases

Credit : Stationery

d)

Debit : Stationery

Credit : Purchases

99.

Where is the total of "Discounts Allowed" column in Cash Book posted to in General Ledger?

a)

The debit side of Discounts Allowed Account

b)

The credit side of Discounts Allowed Accoount

c)

The debit side of Discounts Control Account

d)

The credit side of Creditors Control Account

100.

How should the allowance for doubtful debts be shown in a Trial Balance?

a)

As a debit balance

b)

As a credit balance

c)

As a debit or cedit balance

d)

Not shown,as it is part of bad debts

101.

In Departmental Accounts, on what basis is the salesmen commission most probably apportioned to the respective departments?

a)

Percentage to sales

b)

Number of employees

c)

Floor area

d)

Profit margin

102.

Which of the following is a current liability in the accounts of a non-profit-making organisation?

a)

Subscription In Advance

b)

Subscription Receivable

c)

Subscription In Arrears

d)

Subscription Received

103.

Information was given as follows :

Opening Stock : RM 2,000

Purchases : RM 26,000

Sales : RM 30,000

Mark-up : 25%

What was the value of closing stock?

a)

RM 4,000

b)

RM 5,500

c)

RM 6,000

d)

RM 7,500

104.

Which of the following are recorded in Head Office Current Account of a branch's books? (Note : Transit items are to be adjusted in head office's books)

I A motor vehicle of book value was sent from head office to branch

II Goods sent by head office not yet received by branch

III Head office's credit sales was collected by branch

IV A remittance by branch not yet received by head office

a)

I,III

b)

I,IV

c)

II,III

d)

II,IV

105.

Which of the following items is credited to the Realisation Account when a partnership is dissolved?

a)

Bad Debts

b)

Discounts Allowed

c)

Realisation Expenses

d)

Assets taken over by partner

106.

Which of the following statements regarding the final ordinary dividend are correct?

I It is paid during the year

II It is declared after the profit is determined

III It is declared and paid within the same year

IV It is declared at the end of financial year and payable in the following year

a)

I,III

b)

I,IV

c)

II,III

d)

II,IV

107.

1,000 ordinary shares with a nominal value of RM 1 each are to be issued at RM 4 per share.
RM(4−1)×1,000=RM 3,000RM\left(4-1\right)\times1,000=RM\ 3,000  
Which of the following items does the above calculation of RM 3,000 refer to?

a)

Issued Share Capital

b)

Nominal Share Capital

c)

Share Discount

d)

Share Premium

108.

A limited company issued 50,000 ordinary shares of RM 1 each at RM 1.80 each to acquire an existing business which had net assets of RM 75,000. Which of the following statements was not correct?

a)

The purchase price was RM 90,000

b)

The share premium was Rm 40,000

c)

The buying company acquired a goodwill of RM 15,000

d)

The net assets of the buying company will increase by RM 75,000

109.

Which of the following statements regarding the ownership of goods consigned is true?

a)

The ownership of goods is with consignee

b)

Goods are owned by consignee until they are sold

c)

The ownership of unsold goods is with consignee

d)

The ownership of goods are not at any time with consignee

110.

When two or more business entity carrying on similar business decide to combine, a new company is formed, it is known as _____.

a)

Amalgamation

b)

Business Purchase

c)

Realisation

d)

Revaluation

111.

When a business entity decides to take over another business entity with an agreed price, it is known as _____.

a)

Amalgamation

b)

Business Purchase

c)

Realisation

d)

Revaluation

112.
Before combining two businesses, what should each business do?

I.  To sell all its assets
II.  To close its books
III.  To revalue its assets
IV. To consider its goodwill
a)
I,II
b)
III,IV
c)
I,III,IV
d)
II,III,IV
113.
Leong and Ali are two sole proprietors who are planning to amalgamate their businesses and form a partnership.  2% of Leong’s debtors are deemed to be uncollectible accounts.  Which party is going to bear the bad debt loss?
a)
Leong
b)
Ali
c)
Leong and Ali
d)
The new partnership
114.
Which of the following will not affect the purchase price when a company takes over another company?
a)
The goodwill of the vendor
b)
The liabilities to be taken over
c)
The market value of the assets taken over
d)
The book value of the assets taken over
115.
Which of the following statements regarding the Business Purchase Account are true?

I.  It is a temporary account.
II.  It is to record the transactions of the business being taken over.
III.  It is to simplify the procedures of the business being taken over.
IV. It is to record the payment of purchase price to vendor.
a)
I,II
b)
I,III
c)
II,IV
d)
III,IV
116.
Mr Song bought an existing business assets valued at: Shophouse RM89,000, Motor Van RM31,500, Inventory RM13,700 and Liabilities RM21,600. He paid RM140,000 for the business. This means that _________.
a)
he paid RM15,800 for the goodwill
b)
he paid RM27,400 for the goodwill
c)
he bore a loss of RM15,800 for the business purchase
d)
he made a profit of RM27,400 for the business purchase
117.
When a limited company takes over another limited company, if the purchase consideration is greater that the net assets of the business purchased, the excess is known as ________.
a)
Premium
b)
Goodwill
c)
Purchase Profit
d)
Capital Reserve
118.
Which of the following items will be used to calculate the goodwill when a company takes over another firm?
I. Purchase price
II. The capital of vendor
III. The liabilities taken over
IV. The value of assets taken over
a)
I,II
b)
III,IV
c)
I,II,III
d)
I,III,IV
119.
How should the goodwill on business purchase be shown in the financial statement?
a)
As an expense in Profit And Loss Account
b)
As an intangible asset in Statement Of Financial Position
c)
As a current liability in Statement Of Financial Position
d)
As a long-term loan in Statement Of Financial Position
120.
When purchasing a company, it is usual to pay an extra sum above the net assets taken over.  The extra sum refers to which of the following items?
a)
Premium
b)
Goodwill
c)
Purchase Price
d)
Capital Reserve
121.
A business, with net assets of RM90,000, was purchased at a price of RM125,000.  The purchase price was to be settled by the issuance of 100,000 ordinary shares of RM1 each.  At what unit price were the shares issued?
a)
A par value of RM1
b)
A premium of RM1.25
c)
A premium of 75 cents
d)
A premium of 25 cents
122.

Which type of business organization does the buyer involved above most probably belong to?

a)
Partnership
b)
Limited Company
c)
Sole Proprietorship
d)
Partnership or Limited Company
123.
XYZ Bhd took over the business of a partnership at a price of RM300,000.  The assets taken over were valued at RM450,000 and the liabilities at RM100,000.  Which of the following does the difference of RM50,000 refer to?
a)
Goodwill
b)
Net worth
c)
Capital Reserve (Gain On Bargain Purchase)
d)
Revenue Reserve
124.
A limited company issued 50,000 ordinary shares of RM1 each at RM1.80 each to acquire an existing business which had net assets of RM75,000.  Which of the following statements was not correct?
a)
The purchase price was RM90,000
b)
The share premium was RM40,000
c)
The buying company acquired a goodwill of RM15,000
d)
The net assets of the buying company will increase by RM75,000.
125.

In the conversion of partnership into limited company, a _____ Account is opened in the ledger of the partnership, while a _____ Account is opened in the ledger of the limited company for the purpose.

I.  Purchase Consideration

II.  Business Purchase

III.  Revaluation

IV. Realisation

a)
III…..I
b)
III…..II
c)
IV…..I
d)
IV…..II
126.

Which of the following is true in relation to the above circumstances?

a)
Goodwill will increase.
b)
Goodwill will decrease.
c)
Purchase price will increase.
d)
Capital reserve will increase.
127.
If the business of a sole proprietorship performs well before taken over by a partnership, all the assets and liabilities that have been taken over will be recorded in the books of the buyer.  What other item should also be taken into account.
a)
Goodwill
b)
Royalty
c)
Legal Fees
d)
Formation Expenses
128.
Ahmad sold his business to ABC Bhd at a price of RM50,000.  The purchase consideration was to be settled by payment of cash RM20,000 and the balance by issuing of RM1 orcianry shares at RM1.20 each.  What was the number of shares received by Ahmad?
a)
36,000
b)
30,000
c)
25,000
d)
24,000
129.
In the case of business purchase, goodwill and realization profit are calculated as shown in the accounts below.  However, the two figures (*) may not be the same amount.   Suppose all assets and liabilities are taken over entirely by buyer, the difference may be due to which of the following reasons?
a)
Buyer records the assets and liabilities taken over in book values.
b)
Seller records the assets and liabilities taken over in book values.
c)
Buyer may not record the assets and liabilities taken over in book values.
d)
Seller may not record the assets and liabilities taken over in book values.
130.

To start a partnership business, what should be the minimum number of partners?

a)

2

b)

10

c)

4

d)

20

131.

In partnership, partners liabilities are

a)

Limited

b)

Unlimited

c)

Limited to the capital invested

d)

Limited to the amount mentioned

132.

Which is/are the items included in current account?

a)

drawings

b)

interest in loan

c)

interest on capital

d)

capital

133.

Loans from partners are not part of the capital of the business and are treated the same way as any other loan.

a)

True

b)

False

134.

Interest on loan is a business expense and is not affected by the amount of profit or loss.

a)

True

b)

False

135.

The double entry of "Interest On Loan From Partner" is _______________________.

a)

Dr Profit And Loss - Interest On Loan From Partner

Cr Current

b)

Dr Current

Cr Profit And Loss - Interest On Loan From Partner

c)

Dr Profit And Loss Appropriation - Interest On Loan From Partner

Cr Current

d)

Dr Current

Cr Profit And Loss Appropration - Interest On Loan From Partner

136.

Which of the following item is recorded in Partner's Current Account?

a)

Loan From Partner

b)

Partner's Salary paid

c)

Bank Interest

d)

Drawings of goods

137.

Which of the following will be credited to Profit And Loss Appropriation account?

a)

Interest On Capital

b)

Balance Of Profit Shared

c)

Interest On Drawings

d)

Profit And Loss – Net Loss

138.

Interest on capital is calculated on the

a)

Opening Capital

b)

Closing Capital

c)

Average Capital

139.

Which of the following is/are the correct calculation of profit?

a)

closing capital - opening capital

b)

closing capital - opening capital + drawings

c)

closing capital - opening capital + drawings - capital introduced

d)

closing capital + opening capital - drawings - capital introduced

140.

If the partners were entitled to Partners's Bonus, which of the following account should be debited?

a)

Current Account

b)

Capital Account

c)

Profit And Loss Account

d)

Profit And Loss Appropriation Account

141.

"Balance of Loss Shared" should be debited to _______________.

a)

Profit And Loss Appropriation Account

b)

Profit And Loss Account

c)

Current Account

d)

Bank Account

142.

Lisa and Rose are in partnership.


Lisa drew out RM 480 on 1 September 2016, RM 1,200 on 30 November 2016 and RM 600 on 1 March 2017.


The financial year end is on 30 June 2017.


Interest on drawing is 5% per annum. Calculate the total amount of interest charged on Lisa’s drawings.

a)

RM 55.50

b)

RM 70

c)

RM 65

d)

RM 114

143.

A business in which two or more persons combine their assets and skills

a)

partnership

b)

partnership agreement

c)

partner

d)

owner's equity

144.

Cash received from the sale of assets during liquidation of a partnership

a)

distribution of net income

b)

realization

c)

liquidation of a partnership

d)

owner's equity

145.

A partnership financial statement showing net income or loss distribution to partners

a)

distribution of net income statement

b)

realization

c)

partnership agreement

d)

owner's equity

146.

A written agreement setting forth the conditions under which a partnership is to operate

a)

partner

b)

realization

c)

partnership agreement

d)

owner's equity

147.

When a partner invests in office equipment, the entry includes

a)

debit to the partner's capital account

b)

debit to Office Equpment

c)

credit to Cash

d)

credit to Office Equipment

148.

Partnership earnings are divided

a)

equally

b)

according to howlong the partner has been in the business

c)

according to the age of each partner

d)

according to the partnership agreement

149.

A partner's drawing account

a)

has a normal debit balance

b)

has a normal credit balance

c)

can have a normal balance of either a debit or a credit

d)

increases on the credit side

150.

When noncash assets are liquidated and the amount received is less than the book value of the asset liquidated, there is a

a)

net income

b)

net loss

c)

gain on the realization

d)

loss on the realization

151.

Sumit does not maintain a full set of accounting records.

What does Sumit not need to calculate his credit sales?

a)

customer’s dishonoured cheque

b)

discounts allowed

c)

discounts received

d)

returns from credit customers

152.
a)

$1000 loss

b)

$1000 profit

c)

$7000 loss

d)

$7000 profit

153.

What are advantages of keeping a full set of accounting records?

1 Financial statements will be free from errors.

2 It is impossible to make fraudulent entries.

3 More informed decision-making is possible.

4 The calculation of profit is more accurate.

a)

1 and 2

b)

1 and 3

c)

2 and 4

d)

3 and 4

154.

Roshan’s sales for his first year of trading were $55 000. His gross profit margin was 20%. The closing inventory was $3200.

What were the purchases for the year?

a)

$41 250

b)

$44 000

c)

$44 450

d)

$47 200

155.

Jamal did not maintain double entry records during his first year of trading.

Which item is not required in order to calculate his credit sales using a total trade receivables account?

a)

bad debts

b)

discount allowed

c)

provision for doubtful debts

d)

receipts from credit customers

156.

Sally provided the following information at the end of her financial year.

Revenue 44000

Opening inventory 3000

Closing inventory 1000

Purchases 32000

Expenses 6000

What was Sally’s percentage of gross profit to revenue (gross profit margin)?

a)

9.09%

b)

11.76%

c)

22.73%

d)

29.41%

157.

A business provided the following information.

opening inventory 36 000

closing inventory 24 000

purchases 360 000

revenue 480 000

What was the rate of inventory turnover?

a)

12.0 times

b)

12.4 times

c)

15.5 times

d)

16.0 times

158.
a)

$12000 loss

b)

$12000 profit

c)

$26000 loss

d)

$26000 profit

159.

How is mark-up calculated?

a)

cost of sales / gross profit

b)

gross profit / cost of sales

c)

gross profit / revenue

d)

revenue / gross profit

160.

On 1 May 2018 Ben’s capital was $47600.

During the year ended 30 April 2019 he introduced his personal motor vehicle, $12500, into the business. His drawings during the year ended 30 April 2019 were $7500.

On 30 April 2019 Ben’s capital was $51250.

What was Ben’s profit or loss for the year?

a)

loss $1350

b)

loss $8650

c)

profit $1350

d)

profit $8650