1.

Which statement about Credit Note is CORRECT

A. Credit Notes issued by suppliers
B. Credit Notes is evidence used in General Journal
C. Credit Notes is discount allowed for early payment
D. Credit Notes is related to sales of non-current asset

2. Purchases Journal is used to record

A. The purchases of non-current asset by cash
B. All cash received and cash paid
C. The purchases of goods on credit
D. The purchases of goods by cash

3. Opening balances of new accounting period was recorded in

A. Cash Book
B. General Journal
C. Subsidiary Ledger
D. Trial Balance

4. Purchased a non-current asset on credit should be recorded in

A. Cash payment Journal
B. Cash Book
C. General Journal
D. Purchases Journal

5. During the year, Saliza Sdn Bhd bought goods by cash. The journal used to record this
transaction is
A. Cash Receipts Journal
B. Cash Payment Journal
C. Sales Journal
D. Purchases Journal

6. Trade discount received by Perniagaan Aza for buying product in bulk. Trade discount
transaction is
A. recorded in subsidiary ledger
B. recorded in general ledger
C. recorded in purchases account
D. not recorded in any accounts

7. Which of the following types of business organisations have unlimited liability?

A. Private limited company and sole proprietorship.
B. Partnership and sole proprietorship.
C. Private limited company and partnership.
D. Private and public limited c

8. Which type of business organisation has the following characteristics:

▪ Owned by 2 to 20 persons
▪ Unlimited liability
 ▪ No legal obligation to prepare the financial statements
A. Sole proprietorship
B. Partnership
C. Private limited company
D. Public limited company

9. Which of the following is the external user of the accounting information?

A. Creditor
B. Employee
C. Manager
D. Business Owner

10.Which of the following accounting process is correct?

A. Source documents – ledger – journal – financial statements – trial balance
B. Journal – source document – trial balance – ledger – financial statements
C. Ledger – trial balance – journal – source document – financial statements
D. Source documents – journal – ledger – trial balance – financial statements

11.Choose the incorrect statement about the neutrality characteristic as discussed in the
conceptual framework for financial reporting.
A. It is an input to processes employed by users to predict future outcomes.
B. It is an exercise of caution when making judgements under conditions of
uncertainty.
C. Financial information is free from bias.
D. D. It does not allow misstatements.

12.The financial information provided must be capable of being tested such as falsified or
provable by observation. This is to fulfil which qualitative characteristic of financial
information?
A. Understandability
B. Verifiability
C. Neutrality
D. Timeliness

13.Three (3) characteristics of faithful representation are ______________.

A. relevance, materiality and reliability
B. uniformity, completeness and materiality
C. neutrality, relevance and confirmatory
D. completeness, neutrality and free from error

14.Jack the owner of a grocery shop paid his personal insurance policy and recorded this
expense as a business expense. This transaction violates the ______________.
A. consistency concept
B. going concern concept
C. money measurement concept
 D. business entity concept

15.In a double entry system, a credit is used to record _____________ ,

A. Increase in liability and expenses , decrease in asset, revenue and capital.
B. Increase in asset and expenses, decrease in liability, revenue and capital
C. Decrease in liability, revenue and expenses, decrease in asset and capital.
D. Decrease in asset, expenses and increase in capital, liability and revenue.

16.The following statements represent the definition of asset in financial accounting.

I. Resources controlled by the business as a result of past event.
II. Economic resources which are of value to the business.
III. Residual interest in the entity’s assets after deducting all its liabilities.
IV. Provide either present or future benefits to the business.
A. i and ii
B. i, ii and iii
C. i, ii and iv
D. i, ii, iii and iv

17.The accounting equation forms the basis upon which the double entry system is
developed. Identify the correct expanded accounting equation below.
A. Asset + Capital = Liability
B. Asset + Expense – Capital = Revenue + Liability
C. Asset – Liability = Capital + Revenue + Expense
D. Asset + Liability + Revenue = Capital + Expense

18.The owner’s equity will increase when_____________.

I. a business incurred net loss
II. the owner brought his personal laptop for business use
III. a business obtained net profit
IV. the owner paid a supplier with his own cash
A. i and ii
B. ii and iv
C. ii,iii,and iv
D. i,ii and iii

19.Which of the following is a private limited company?

A. Ham & Ton Associates.
B. Tenang Catering
C. Mantop Berhad
D. None of the above

20.All of the following statements are true about the functions of financial statementsexcept
A. Helps users to obtain the importance of financial information of an entity thatcould
help them in decision making.
B. Help users to understand about entity’s assets, liabilities, and equities so that users
can primarily assess the financial health of the entity.
C. Measure the efficiency of management, source of sales and purchase, relationship
of the employees to the management.
 D. Provides the users about how much the entity generates the sales revenues for the
reporting period.

21.Financial information to be provided to decision makers in time to be capable of

influencing their decisions.
Based on the above statement, which qualitative characteristics should be best applied
for?
A. Consistency
B. Prudence
C. Timeliness
D. Neutrality

22.Which of the following statements is correct about the materiality concept?

A. that accounting methods once adopted must be applied consistently in the future.
B. accountants should assume that the businesses will continuously operate for the
foreseeable future.
C. To record only the accounting transactions that can be expressed in monetary
terms.
D. The accounting information is significant to influence the decision of users

23.According to ______ concept, businesses must record their assets at their purchase or
acquisition price.
A. money measurement
B. historical cost
C. economic entity
D. going concern

24.Which of the following is not included as one of enhancing qualitative characteristics of the
conceptual framework for financial reporting?
A. Consistency
B. Materiality
C. Understandability
D. Verifiability

25.The credit side of the journal entry is to record the following except
A. Increase in revenues
B. Increase in liabilities
C. Decrease in assets
D. Increase in expenses

26.Which of the following will increase the entity’s assets?

I. Owner's car is brought into the business.
II. Owner took goods for personal use.
III. Purchase goods on credit.
IV. Owner acquired loan for the business
A. i, ii and iii
B. ii, iii and iv
 C. i and iv
D. iii and iv

27.Owner withdraws goods from the business for personal use. This transaction should be
recorded as
A. Debit Capital, Credit Purchases
B. Debit Drawings, Credit Purchases
C. Debit Drawings, Credit Capital
D. Debit Purchases, Credit Drawings

28.Which of the following is true about the rules of debit and credit?
A. Increases in asset, liability, and owners’ equity accounts are recorded as debits.
B. Decreases in asset and liability accounts are recorded as credits.
C. Increases in asset and owners equity accounts are recorded as debits.
D. Decreases in liability and owners’ equity accounts are recorded as debits

29.Which of the following type of transactions are recorded in a purchase journal?

A. Goods returned to suppliers
B. Goods returned by customers
C. All goods bought on credit
D. All sales of goods on credit

30.A transaction of an owner withdraws cash from the business for personal use is to be
recorded in the ___.
A. cash payment journal
B. cash receipt journal
C. general journal
D. purchase journal

31.Which of the following is correct relating to accumulated depreciation?

A. Accumulated depreciation account will be shown on the statement of profit or loss
as an expense.
B. Accumulated depreciation account will be shown on the debit side of a trial balance.
C. Accumulated depreciation is created to provide an allowance related to the net
account receivable.
D. Accumulated depreciation is a reduction from a value of non-current asset.

32.Which of the following is true about revenue expenditure?

A. It will increase the revenues.
B. It will increase the expenses.
C. It is an expenditure that improves the asset’s working condition.
D. It is an expenditure that does not involve cash movement.

33.FDG Trading purchased a machine worth RM45,000 on 1 January 2021. The business
adopts reducing balance method at the rate of 10% for its depreciation policy.
Depreciation to be charged for the year ended 31 December 2022 would be____________.
A. RM4,500
B. RM4,050
C. RM8,050
 D. RM9,000

34.Accrued rental received would be shown on the statement of financial position as

a___________ .
A. current asset
B. current liability
C. revenue
D. non-current liability

35.Which of the following statements is incorrect?

A. Prepaid revenues are payments received for services rendered in the previous
accounting period.
B. Accrued expenses are expenses incurred but not yet paid.
C. Accrued revenues are revenues earned but not yet received.
D. Prepaid expenses are expenses paid in advance.

36.Unpaid salaries and wages are recorded on the statement of financial position as________.
A. accrued expenses
B. prepaid expenses
C. accrued revenues
D. prepaid revenues

37.KK Enterprise spends RM700 a month for a five-year insurance plan starting from 1 st
September 2022. The trial balance for the year ended 31 December 2022 shows that the
amount of RM4,200 was paid for the insurance. What will appear on the statement of
financial position as at 31 December 2022?
A. RM2,800 prepaid insurance
B. RM4,200 prepaid insurance
C. RM1,400 prepaid insurance
D. RM1,400 accrued insurance

38.An increase in allowance for doubtful debts will result in ____________.

A. an increase in assets
B. a decrease in net profit
C. a decrease in revenues
D. a decrease in expenses

39.The accounting process involves all the following EXCEPT:

A. Analysing and interpreting financial reports.
B. Recording non quantifiable economics events.
C. Identifying economics transactions that are relevant to the business.
D. Communicating financial information to the users by preparing financial report.

40.From the legal point of view, the type of business organisation that has a separate legal
entity from its owners and where the owners are not personally liable for debts of business
is
A. Limited company
B. Sole proprietorship
C. Partnership
 D. None of the above

41.Which of the following is FALSE in explaining the users of accounting information:

A. Bankers need accounting information to evaluate the business ability to pay debts
on time.
B. Investors use the accounting information for planning, controlling and organising
the business.
C. Government needs accounting information for tax purposes.
D. Employees needs accounting information to ensure steady employment.

42.Which of the following is NOT an internal user of accounting information?

A. Owners
B. Managers
C. Accounts payable
D. Employees

43.Business organisations could be classified into sole proprietorship, partnership and, limited
company. Which of the following business organisation has the word “Berhad” at the end
of its name?
A. Partnership
B. Sole proprietorship
C. Public limited company
D. Private limited company

44.All of the following characteristics are suitable for limited companies EXCEPT:
A. Managed and controlled by one owner.
B. Registered with the Commissioner of Companies under the Companies Act 1965.
C. Shareholders contribute capital to the business.
D. A maximum of fifty (50) persons could own a private company.

45.Klinik Abu and Rakan Rakan has the following characteristics EXCEPT :
A. The members are between 2 to 50 persons.
B. Registered under the Partnership Act 1961.
C. The capitals are in the form of ordinary shares.
D. The financial reports are not required to be published.

46.Which of the following is INCORRECT in explaining the users of accounting information:

A. Accounts payable need accounting information to evaluate the business ability to
pay debts on time.
B. Investors use the accounting information for planning, controlling and organising
the business.
C. Government needs accounting statements and reports for tax purposes.
D. Employees are interested to know the business progress to ensure steady
employment and career enhancement.

47.Which of the following accounting cycle is CORRECT ?

A. Source document → ledger → journal → financial statements → trial balance
B. Journal → source document → trial balance → ledger → financial statements
C. Ledger → trial balance → journal → source document → financial statements
 D. Source document → journal → ledger → trial balance → financial statements

48.Which of the following is INCORRECT in explaining the users of accounting information:

A. Accounts payable need accounting information to evaluate the business ability to
pay debts on time.
B. Investors use the accounting information for planning, controlling and organising
the business.
C. Government needs accounting statements and reports for tax purposes.
D. Employees are interested to know the business progress to ensure steady
employment and career enhancement.

49.Which of the following is the proper way to date a statement of financial position at the
end of financial year?
A. As at 31 December 2014
B. For the year ended 31 December 2014
C. Neither A or B
D. Either A or B

50.Which of the followings are the purposes of preparing the financial statements:
I. To find the net profit as shown in the statement of profit or loss statement
II. To find the net profit as shown in the statement of financial position
III. To show the financial performance of a business
IV. To show the financial position of a business
A. All of the above
B. i, ii, iii only
C. i, ii, iv only
D. i, iii, iv only

51.The internal users of financial statement seek the following information except:
A. Employees - Career enhancement and promotions
B. Management teams - Planning and budgeting purposes
C. Owner - business growth and profit performances
D. Government - economic planning and taxation purposes

52.Which accounting concept below is the most suitable to be applied for the above
statements
A. Money measurement concept
B. Currency measurement concept
C. Kuala Lumpur Stock Exchange concept
D. Business entity concept

53.Two different business entity owned by different owners: Abu MiniMart and Klinik Abu and
Bakar
What is the similarity possess by the business above:
A. Unlimited liabilities
B. Separate legal entity
 C. Audited financial statement
D. Published financial statement

54.Which of the following refers to a partnership business?

A. Limited liability.
B. Capital contributed by way of ordinary shares.
C. Income from business is not subject to tax.
D. Profit or loss is divided among owners and members.

55.What is the main objective of preparing the financial statement?

A. to show the value of the shares in the company.
B. to provide information on financial performance and financial position of a business.
C. to help management hiring additional work forces.
D. to show managers the results of their departments

56.The concept that concerns with the significance of currency used when dealing with
economics events and agreeable by both parties is
A. going concern concept
B. monetary concept
C. consistency concept
D. entity concept

57.Which business refer to the characteristics of a type of business?

I. Widely scattered in Malaysia
II. Solely owned business
III. Profit gained or loss suffered by own self
A. Public limited company
B. Sole proprietorship
C. Private limited company
D. Partnership

58.The process of accounting can be described as:

A. Classifying, recording, summarising and interpreting
B. Classifying, interpreting, recording and summarising
C. Recording, summarising, interpreting and classifying
D. Recording, classifying, summarising and interpreting

59.Which of the following is the first step in the accounting cycle?

A. Journal entries are made
B. Source documents are prepared
C. A trial balance is prepared
D. Postings made to the ledger
60.Bookkeeping differs from accounting. Bookkeeping primarily involves which part of the
accounting process?
A. Measurement
B. Identification
C. Communication
D. Recording
61.The following steps in the accounting cycle have not been listed in the correct order.
Rearrange the following steps to show the correct sequence in the accounting cycle.
I. Trial balance
II. Journalising
III. Business transaction
IV. Source document
V. Posting
VI. Financial statements
A. vi, i, v, ii, iii and iv
B. iii, iv, ii, v, i and vi
C. iv, iii, ii, i, v and vi
D. ii, iv, v, iii, i and vi

62.Which of the following refers to a sole proprietorship business?

A. Limited liability.
B. Capital contributed solely by the owner.
C. Income from business is not subject to tax.
D. Profit or loss is divided among owners and members.

63.What is the main objective of accounting?

A. to show the value of the shares in the company
B. to provide information on business activities to interested users
C. to help management to plan its business’s activities
D. to show managers the results of their departments

64.Which of the following is not an internal user of accounting information?

A. Employee
B. Owner
C. Supplier
D. Manager

65.The following represents the definition of bookkeeping except _________.

A. classifying
B. interpreting
C. recording
D. summarising

66.___________need the accounting information as guidance in planning, organizing,

controlling and analyzing the operations of the business.
A. Employees
B. Customers
C. Managers
D. Creditors

67.Which of the following is not true about the characteristics of a partnership business?
A. Profit or loss is to be shared between the partners.
B. General partners are involved in operating the business.
 C. Minimum number of partners is 2.
D. General partnership has limited liability.

68.Which of the following is a public limited company?

A. Mona Lisa Associates
B. Teriak Catering Enterprise
C. Bomca Malaysia Sdn Bhd
D. None of the above

69.Which of following statements is not true about the purposes of recording and analysing
accounting information?
A. To measure the level of employee engagement.
B. For easier reference in retrieving data and information.
C. To avoid misleading of financial statements.
D. To know the financial status of the business.

70.A well written partnership agreement should include all of the following except________.
A. capital contributed by partners
B. drawings made by partners
C. profit or loss sharing ratio
D. interest on loan

71.Which of the following is the fundamental qualitative characteristics of the conceptual

framework for financial reporting ?
A. Relevance
B. Verifiability
C. Timeliness
D. Understandability

72.________________ concepts assume that a business will continue in operation indefinitely.

A. Materiality
B. Prudence
C. Going concern
D. Neutrality

73.The financial statements should not be prepared with the intention to influence certain
decisions. This is in accordance with the __________concept.
A. comparability
B. neutrality
C. consistency
D. materiality

74.Which of the following qualitative characteristics relates to the fact that an information is
complete, neutral and free from error?
A. Verifiability
B. Faithful representation
C. Consistency
D. Relevance
75.________ characteristic requires financial information to be comprehensible.
A. Verifiability
B. Comparability
C. Understandability
D. Timeliness

76.The following are the internal users of an organization, except:

A. Owners and managers.
B. Securities Commission and potential customers.
C. Storekeeper and employee.
D. Internal auditor and accountant.

77.____________ is the last step in the accounting cycle.

A. Preparation of financial statements.
B. Postings the transactions from journal to ledgers.
C. Recording the accounting adjustments.
D. Analysis of financial statements

78.An asset is recorded at its original price. This is to fulfil which qualitative characteristic of
financial information or accounting concept?
A. Completeness
B. Economic entity concept
C. Historical cost concept
D. confirmatory value

79.Which of the following is not true concerning a conceptual framework in accounting

concept?
A. It allows preparers to solve practical problem more quickly by reference to it.
B. To assist MASB in developing MFRS Standards
C. It should be a basis on fundamental truths that are derived from the laws of nature.
D. None of the above.

80.The fundamental qualitative characteristic of conceptual framework is _____________

A. economic entity
B. Going concern
C. Truthful representation
D. Free from error

81.The depreciation method was used for the last accounting year, and it should be used for
the current and future accounting period as to comply with __________
A. Consistency concept
B. Going concern concept
C. Money measurement concept
D. Completeness concept

82.Which of the following accounting equation is not true?

A. Assets - Liabilities + Revenues = Capital - Expenses
 B. Assets + Expenses = Capital + Liabilities + Revenues
C. Assets + Expenses – Revenues = Liabilities + Capital
D. Assets - Liabilities = Capital + Revenues - Expenses

83.Which of the following is INCORRECT classification?

A. Office equipment – non-current asset
B. Inventory – current asset
C. Bank overdraft – current liability
D. Account receivable – current liability

84.Which of the following statement described the principles of double entry is true?
A. Cash purchases will be debited in the purchases account.
B. Cash contributed by the owner of the business will be debited in the capital
account.
C. Withdrawal of cash by the owner of the business for his/her personal usage will be
debited in the capital account.
D. Sold of goods to existing customers on credit will be debited in the sales account.

85.In a double entry system, a credit is used to record __________.

A. increase in revenues and drawings
B. increase in expenses and assets
C. increase in owner’s equity and assets
D. increase in liabilities and owner equity

86.Which of the following is an internal user of the accounting information?

A. Government
B. Potential Investor
C. Management
D. Customer

87.Bookkeeping differs from accounting. It primarily involves which part of the accounting
process.
A. Identification
B. Measurement
C. Recording
D. Communication

88.Under the going concern concept, accountant

A. Assume that the business will be profitable for the foreseeable future
B. Assume that the company is planning to sell all its assets as part of going out of
business
C. Are required to have dealings only with companies that are not currently in danger
of bankruptcy
D. Assume the business will continue operating for the foreseeable future

89.For accounting purposes, the business entity should be considered separate from its
owners if the entity is
 A. a corporation
B. a proprietorship
C. a partnership
D. all of the above

90.Which of the following statements is incorrect?

A. Timeliness means having information available to decision makers in time to be
capable of influencing their decisions.
B. Comparable information enables comparisons within the entity and across entities.
C. Consistency refers to the use of the different methods within a reporting entity or in
a single period across entities.
D. When information can be verified, it gives assurance that the information faithfully
represents the economic phenomena being represented.

91.Which of the following is NOT component under relevance?

A. Predictive value
B. Confirmatory value
C. Neutrality
D. Materiality

92.Which of the following represents the expanded accounting equation?

A. Asset = Liabilities + Capital + Drawings - Revenues – Expenses
B. Asset + Drawings + Expenses = Liabilities + Capital + Revenues
C. Asset - Liabilities - Drawings = Capital + Revenues – Expenses
D. Asset = Revenue + Expenses – Liabilities

93.Expenses can best be defined as

A. An item of property owned by company that having value and available to meet
debts or commitments
B. An obligation of a company that results in company’s future sacrifices of economic
benefits to other entities or businesses.
C. C. Costs that have been incurred during the course of business.
D. All are true.

94.Which of the following types of accounts have a normal credit balance?

A. Assets and liabilities
B. Liabilities and expenses
C. Revenues and liabilities
D. Capital and drawing

95.Which of the following is NOT an example general ledger?

A. Cash ledger
B. Sales ledger
C. Capital ledger
D. Account Payable Seroja ledger