Revision - Test FAR110

What is the main objective of financial reporting?

• to provide information to the managers regarding the performance of their departments

• to provide information on the value of the shares in the company

• to provide information on the financial performance and financial position of a company

• to provide information on the number of employees in a company

All the following statements about external users of accounting information are correct EXCEPT

• External users have limited access to an organization’s information

• External users are directly involved in managing the organization

• Suppliers are considered as external users

• External users are from the outside of the organization

Which of the following refers to a general partnership business?

• Profit or loss is shared among the partners

• It has limited liability

• Capital is contributed by the shareholders

• Income from business is not subject to tax

Which of the following items in NOT a revenue?

• Rental income

• Dividends received

• Accounts receivable

• Discounts received

A piece of land bought in Year 2015 for RM500,000 was recorded at that price even though it was valued at RM700,000. Which accounting principle it adhered to?

• Historical cost principle

• Expenses recognition principle

• Going concern principle

• Full disclosure principle

Puan Lisa is the owner of Lisa Enterprise. She took goods worth RM1,000 from her company for her own personal use. Her accountant wants to record this transaction in the books of the business. Which accounting concept is the accountant applying?

• Accrual-based concept

• Economic entity concept

• Materiality concept

• Consistency concept

Aiman borrowed RM30,000 from ABC Bank Nasional for business purpose. In the ledger accounts, he debited the “ABC Bank Nasional Account” and credited the “Bank Account”. This is an/a

• Error of omission

• Error of principle

• Error of reversal entries

• Error of commission

Which of the following errors will affect the Trial Balance?

                        I.          Posting to the incorrect side of an account

                        II.         Error of reversal entries

                        III.        Error of transposition

                        IV.        Error in addition

• I, II and III only

• I, III and IV only

• II, III and IV only

• All of the above

The following transactions should be posted in general journal EXCEPT

• Owner brought into his business RM10,000 value of office equipment

• Correcting error of original entry

• Purchased office equipment RM150 by credit from Bookstore

• Purchased inventories on credit from A&A Enterprise for RM2,000

DD Enterprise sold 5 items at RM105 each (credit term 3/15, net 30). If the customer wanted to make full settlement within 10 days, it will be for:

• RM525.00

• RM509.25

• RM510.00

• RM540.75