AA015 Chapter 2, lecture/Nor Ismah Isa

1. Indicate whether each account listed below is a(n) asset (A), liability (L), owner’s equity (OE),
revenue (R), or expense (E) account. Next to each answer, indicate whether the account’s normal
balance is a debit (Dr) or a credit (Cr).

Item Account Normal Item Account Normal

nature balance nature balance
Accounts Payable Capital
Accounts Receivable Carriage outward
Promotion expense Cash
Bank Commission Income
Carriage inward Drawing
Fixtures and Fittings Income Tax Payable
Furniture Interest Payable
Insurance Expense Land
Miscellaneous Expense Machine
Office equipment Notes Payable
Rent Revenue Overdraft bank
Salary Expense Premises
Service Revenue Rent Expense
Office supplies Supplies expense
Bank loan Vehicles

2. State the account to be debited and the account to be credited for the following transactions.
Choose from the following list of accounts:

Debit Credit
a. Owner invests cash into the business. ___________ ___________

b. Purchased supplies for cash. ___________ ___________

c. Performed services for cash. ___________ ___________

d. Purchased equipment by issuing a note payable. ___________ ___________

e. Purchased supplies on account. ___________ ___________

f. Performed services on account. ___________ ___________

g. Received cash on account. ___________ ___________

h. Paid a creditor on account. ___________ ___________

i. Borrowed cash, signing a note payable. ___________ ___________

j. Paid employee salary by cheque. ___________ ___________

k. Paid cash for office furniture. ___________ ___________

l. Withdrew cash for personal use. ___________ ___________

m. Sold office equipment for cash. ___________ ___________

n. Paid cash for advertising expense. ___________ ___________

3. Amin started a catering service called Amina Catering. During the first month of operations, January
2017, the business completed the following selected transactions:
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 AA015 Chapter 2, lecture/Nor Ismah Isa

i. Amin began the company with an investment of RM 50,000 cash and a van valued at RM 26,000.
ii. Paid RM 8,000 cash for food service equipment.
iii. Purchased supplies on account, RM 14,800.
iv. Paid employee salary, RM 12,600 cash.
v. Received RM 4,000 cash for a catering job.
vi. Performed services at a wedding on account, RM 8,600.
vii. Paid RM 12,000 cash as a partial payment for Transaction iii.
viii. Received a RM 1,600 bill for advertising expense that will be paid in the near future.
ix. Received cash on account, RM 2,200.
x. Paid the following cash expenses: Rent RM 3,000, Insurance RM 1,600.
xi. Amin withdrew RM 12,000 cash for personal use.

Analyse of the above transactions using the following format:

No. Assets Liabilities Owner’s equity
Cash Account Supplies Vehicle equipment Accounts Accrued Capital/ Revenue/
Receivable +/- Payable Expenses Drawing Expenses
+/- +/- +/- +/- +/- +/- +/- +/-
i.

ii.

iii.

iv.

v.

vi.

vii.

viii.

ix.

x.

xi.

total

∑ total

4. Gladys Yuan is a research analyst who operates under the business title Yuan Research. During April
2017, the company engaged in the following transactions:

Apr. 1Yuan deposited RM 40,000 cash in the business bank account.

5Paid April’s rent on a shared office space with cash, RM 400.
10 Purchased supplies on account, RM 600.
19 Paid RM 100 on account for supplies purchased on April 10.
21 Paid RM 25,000 cash to purchase land for a future office location.
22 Borrowed RM 15,000 from the bank for business use. Yuan signed a note payable to the
bank in the name of the business
30 Paid cash for employee salaries of RM 3,500 and utilities of RM 350.
30 Revenues earned during the month included RM 1,300 cash and RM 2,400 on account.
30 Yuan withdrew RM 1,200 cash from the business for personal use.

April Assets Liabilities Owner’s equity

Cash Account Supplies land Accounts Note Capital/ Revenue/
Receivable Payable Payable Drawing Expenses
+/- +/- +/- +/- +/- +/- +/- +/-
1

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 AA015 Chapter 2, lecture/Nor Ismah Isa
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19

21

22

30

30

30

No. Assets Liabilities Owner’s equity

Cash Account Supplies Vehicle equipment Accounts Accrued Capital/ Revenue/
Receivable +/- Payable Expenses Drawing Expenses
+/- +/- +/- +/- +/- +/- +/- +/-
i. 50,000 26,000 76,000
ii. -8,000 8,000
iii. 14,800 14,800
iv. -12,600 -12,600
v. 4,000 4,000
vi. 8,600 8,600
vii. -12,000 -12,000
viii. 1,600 -1,600
ix. -2,200 -2,200
x. -4,600 -4,600
xi. -12,000 -12,000

April Assets Liabilities Owner’s equity

Cash Account Supplies land Accounts Note Capital/ Revenue/
Receivable Payable Payable Drawing Expenses
+/- +/- +/- +/- +/- +/- +/- +/-

1 40,000 40,000
5 -400 -400
10 600 600
19 -100 -100
21 -25,000 25,000
22 15,000 15,000
30 -3,850 -3,850
30 1,300 2,400 3,700
30 -1,200 -1,200

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 AA015 Chapter 2, lecture/Nor Ismah Isa

Suria opened a renovation business called Hias Suri Sdn Bhd on September 3, 2016. During the first month of
operations, the business completed the following transactions:

Sept. 3 Suria started the company with an investment of RM 72,000 cash and a lorry valued at RM56,000.
4 Purchased supplies, RM600, and furniture, RM4,400, on account.
5 Paid September rent expense, RM1,500 cash.
6 Performed design services for a client and received RM2,400 cash.
10 Designed a bathroom for a client, billed the client, and received her promise to pay the RM5,800
within one week.
15 Paid assistant’s salary, RM940 cash.
17 Received cash on account, RM3,400.
24 Suria withdrew RM2,600 cash for personal use.
30 Received -5,600in advance for a bathroom renovation service that will be done on July.

Analyse of the above transactions using the following format:

April Assets = Liabilities + Owner’s
Cash Account Supplies vehicle furniture Accounts Unearned equity
Receivable Payable Revenue +/-
+/- +/- +/- +/- +/- +/- +/-

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[20 marks]

April Assets Liabilities Owner’s

Cash Account Supplies vehicle furniture Accounts Unearned equity
Receivable Payable Revenue
+/- +/- +/- +/- +/- +/-

3 72,000 56,000 128,000

4 600 4,400 5,000
5 -1,500 -1,500
6 2,400 2,400
10 5,800 5,800
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 AA015 Chapter 2, lecture/Nor Ismah Isa
15 -940 -940
17 3,400 -3,400
24 -2,600 -2,600
30 5,600 5,600
78,360 2,400 600 56,000 4,400 5,000 5,600 131,160
141,760 10,600 131,160