PRINCIPLE OF ACCOUNTING

1. THERE ARE ONLY 2
ASSIGNMENTS FOR THIS
COURSE
EACH ASSIGNMENT WILL GIVE
YOU 20 MARKS.
ASSIGNMENT 1 : due 18 march
ASSIGNMENT 2 : due 8 april

2. ASSIGNMENT 1
(20%)
Question 1
Examine the Trial Balance of Encik Nobita as at 31 January 2012 and answer the following
questions:
Debit
RM
Credit
RM
Motor vehicles 30,000
Office equipment 12,000
Inventory 39,000
Cash 3,455
Bank 7,900
Sizuka 5,545
Sin Chan 6,800
Capital 60,000
Drawings 3,000
Rent 8,000
Discount 500
Commission 4,800
Purchases 68,000
Sales 90,000
Returns 1,000
170,000 170,000
a. Why does the total of the debits equal the total of the credits?
b. Name the debtor and the creditor of Encik Nobita.

3. c. What does “Bank” on the credit side of the Trial Balance indicate?
d. Is it possible for the Cash Account to have a credit balance? Explain your answer.
e. Is “Discount” referring to discount received or discount allowed? If this amount is
erroneously recorded as a debit balance in the account, what will be the effects on the
totals of the Trial Balance?
f. Is “Return” referring to return outwards or return inwards? If this amount is wrongly
credited instead of debited, what will be the effects on the totals of the Trial Balance?
g. Is “Commission” a revenue or an expense?
h. Assuming there is no additional capital, is “Capital” on the credit side referring to capital
on 1 January or 31 January 2012?
i. How will you calculate the capital on 31 January?
j. With reference to the Trial Balance above, is the entity a service enterprise or a trading
enterprise? Give your reasons.
k. Classify the accounts in the Trial Balance above into assets, liabilities, owner’s equity,
revenues and expenses.
Question 2
Encik Ultraman is a retailer selling household goods as well as a supplier to some nearby
food stalls. On 1st
July 2012, he has the following assets and liabilities:
RM
Motor vehicles 25,000
Fittings and fixtures 10,000
Cash in hand 1,250
Cash at bank 12,500
Debtor: Delicious Food Stall 2,300
Creditor: Big Supplier 6,500
The following transactions took place in the month of July:
RM
July 1 Paid rent by cheque
1,00
0
4 Paid Big Supplier RM2,300 in full settlement of account of RM2,350 by cheque.
5 Cash sales banked in
1,24
5

4. 7 Bought goods on credit from Big Supplier
2,40
0
10 Returned goods to Big Supplier
12
0
11 Paid electricity bill in cash
20
0
12 Withdrew goods for personel use
30
0
14 Sold goods to Delicious Food Stall on credit
85
0
16 Received cheque from Delicious Food Stall for RM2,150 in full settlement of his
account on 1 July.
18 Delicious Food Stall returned defective goods
10
0
20 Cash sales banked in
3,50
0
22 Purchased goods paid by cheque
1,86
0
23 Bought air conditioner paid by cheque
3,00
0
25 Paid general expenses in cash
45
0
27 Withdrew cash from bank for office use
1,50
0
28 Paid wages in cash
1,80
0
29 Paid insurance by cheque
65
0
30 Paid owner's membership subsciption through business bank account
30
0
31 Cash sales banked in
1,60
0
You are required to:
a. Record the above transactions in the appropriate accounts in the Ledger for the
month of July;
b. Prepare a Trial Balance as at 31 July 2012.

5. ***end of assignment1 question***

6. ***end of assignment1 question***