AA015 -CHAPTER 3

ACCOUNTING CYCLE AA015
CHAPTER 3

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3.1 STEPS IN ACCOUNTING CYCLE

1T. raAnnsaalycstiiosns 2 3
(Document journal records post to ledger

Source)

6 5 4
Adjusted Adjustments Trial balance

trial balance

7 8 9
closing entries
Statement of Post- closing
Comprehensive Income Trial Balance

& Statement of
Financial Position

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3.2 TYPES OF BUSINESS DOCUMENTS

q A source document is an evident used for recording purposes ,being created when a
business transaction occurs.

q Each type of such source documents should be used for different transaction.
q It is to prof the Objectivity Accounting Principle

(1) Invoice

Ø Used in a credit transaction
Ø Delivered by the seller to the buyer
Ø Invoice Received- Credit Purchases
Ø Invoice issued- Credit Sales

(2) Delivery Note

Ø Delivered by the seller to the buyer
together with the goods.

Ø To prof the stated purchasing goods
Ø Buyers can check these items.

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(3) Debit Note Ø Delivered by the seller to the buyer
(issued) to inform that the account has
been debited
(Debt increases)

Understated sales price

(4) Credit Note Ø Delivered by the seller to the buyer to
(5) Purchase Order inform the buyer that the account has
been credited (reduced debt.)

Ø Returns outwards- overstated purchase
price

Ø Sent by the buyer to the seller that
contains information about the goods
purchased

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(6) Receipts

Ø Issued by the seller when received
payment from the buyer.

Ø as an evidence to prof that payments
have been made.

(7) Payment Voucher

Ø Internal documents provided by the
business owner to record any kind of
payment. ( no receipt issue)

(8) Cheques Butt

Ø Cheque butt used as a reference and
resource records.

Ø Evidence that payments has been made
by cheque

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(9) Bank Slip

Ø Form issued by the bank for the
transaction record for keeping or
withdraw money from customers.

(10) Bank Statement

Ø Issued by the bank to the account holder
at the end of the month.

Types of Business Activities
(1) Services Company

Ø Services business giving services
Ø Example Doby , Hair Salon , Cleaning Services
(2) Merchandising Company
Ø Purchases

- Purchase of goods for resale – cash purchases and credit purchases
Ø Sales

- Sale of goods - cash Sales and credit Sales

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Ø Discounts
- Encourage the purchase / sale – trade discount and cash discount ( purchases
discount and sales discount )

(i) Trade discount
- Discount offered for bulk buying
- Example:
Buy 100-200 units = 10%
Buy 201-300 units = 20%
- No record needed for the trade discount .Thus, a buyer or seller records
the net amount. (List price less trade discount)

(ii) Cash discount
- Cash discount obtained after payment made within discounts period and
will be recorded in the account.
- Example:
Credit Term: 2/10, n/30
2 (discount percentage) / 10 (discount period) , n/30 [ the last payment is
due (credit maturity period)]

- The discounts calculation starts from the date of invoice.
Ø Purchase returns – when goods are returned to the seller.
Ø Purchase allowances – when price changes are made due to the quality / quantity /

goods in a wrong size, defective part.
Ø Sales returns – when goods are returned from customers
Ø Sales Allowances - when price changes are made due to the quality / quantity / goods in

a wrong size, defective part.

Ø Freight Costs ( Transportation Costs)
- Purchase agreement state whether seller or buyer pays freight costs.

(i) Free on Board (FOB) Shipping point

Goods are place free on board the carrier by seller.

Seller Transportation Buyer
Buyer pays freight costs Company

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(ii) Free on Board (FOB) Destination
Goods are placed free on board to the buyer’s place of business.

Seller Transportation Buyer
Company

Seller pays freight costs

(iii) Freight-in (Transportation in)

Freight-in is the transportation cost to be paid by the buyer of merchandise
purchased. Freight-in is considered to be part of the cost of the merchandise.

(iv) Freight-out (Transportation out)

Freight-out is the transportation cost to be paid by the seller when its merchandise
is sold. This is an operating expense.

3.3 JOURNALISING PROCESS

Ø A journal is referred to as the book of original or prime entry , also known as the book
of first entry.

Ø Journal is a record that keeps accounting transactions in chronological order.
Ø Journal are simply debits and credits in chronological (date) order.
Ø The purpose of journals is to keep a day-to-day record of a business and its

transactions.
Ø Journal can be classified into two main categories.

3.3.2 SPECIAL JOURNAL

Ø A special journal is used to record similar types of transaction.
Ø There are four (4) types of special journals that are frequently used by merchandising

business:

Sales Journal is used to record sales of merchandise on account.
Purchase Journal ( Credit Sales )
is used to record purchases of merchandise on
account. ( Credit Purchase)

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Cash Receipts Journal is used to record all cash received.

Cash Payments Journal is used to record all cash paid

SALES JOURNAL
Ø Sales journal is used only to record sales of merchandise on account

(Credit Sales)

Format: Terms Dr. Acc. Receivable
Date Account Debited Cr. Sales (RM)

Total

Date of Customer’s Credit Terms Total Sales/
sales Name Designated Sales Value

Example related to the sales credit posted to sales journal :-

Ø Jan 10, 2020 Sold merchandise / goods on account to Sauqi Enterprise RM 10,400
terms. 2/10, n/30.

Ø Jan 25, 2020 Sold goods/merchandise on account to Nazierah Sdn Bhd
RM 5,200 terms 1/15 , n/30.

Solution

Date Account Debited Terms Dr. Acc. Receivable
2020 Cr. Sales (RM)

Jan 10 Sauqi Enterprise 2/10,n/30 10,400

25 Nazierah Sdn Bhd 1/15,n/30 5,200

31 Total 15,600

Ø Sale of goods/merchandise for cash will be recorded in the cash receipts

journal.

Ø Sale of assets in cash will be recorded in the cash receipts journal.

Ø Sale of assets or others than merchandise / goods for credit will be recorded in

the general journal.

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CASH RECEIPTS JOURNAL

Ø Cash receipts journal is used to record all receipts by cash and cheque.
Ø Example of cash receipts transactions:

(i) cash sales of merchandise/goods
(ii) collections of accounts receivable ( related to the Sales Journal )
(iii) receipts of money from bank loans
(iv) additional cash capitals
(v) cash received from disposal /sales of assets

Date Accounts Credited Dr. Bank (RM) Dr.Cash (RM) Dr. Sales
Discounts (RM)

Total

Date of cash Total cash received Amount of discounts
receipts in cheques given and it will reduce

Name of customers/other Total cash the cash received
accounts received amounts

Example related the cash receipts posted to cash receipts journal
Ø Jan 1 , invested cash RM 50,000 in the business as opening capital
Ø Jan 5, 2020 , Sold merchandise/ goods on cheque amounted RM 4,000 to
Syafiqah Enterprise.
Ø Jan 15, 2020, Received cash from Sauqi Enterprise.( refer sales journal )
Ø Jan 19,2020, bank loan received RM 20,000 from Kuwait Finance.
Ø Jan 29, 2020, Sold vehicle RM 10,500 and received cheque.

Date Accounts Credited Dr. Bank (RM) Dr.Cash (RM) Dr. Sales
Discounts (RM)

2020 Capital 4,000 50,000 208
Jan 1 Sales 10,192 208
Sauqi Enterprise 20,000
5 Loan- Kuwait Finance 10,500 60,192
15 Vehicle 34,500
19
29 Total

31

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PURCHASE JOURNAL
Ø Purchase journal is used only to record sales of merchandise on account

( Credit Purchases)

Format: Terms Dr. Purchases
Date Account Credited Cr. Acc. Payable (RM)

Total

Date of Creditor’s Credit Terms Total purchase /
Purchase Name Designated Purchase Value

s

Example :-

Ø Jan 1 , 2020 Purchased merchandise / goods on account to Adli Enterprise RM 5,200
terms. 2/10, n/30.

Ø Jan 15 , 2020 Bought goods/merchandise on account to Nabila Sdn Bhd
RM 2,600 terms 1/15 , n/30.

Solution

Date Account Credited Terms Dr. Purchases
Cr. Acc. Payable (RM)

2020 Adli Enterprise 2/10,n/30 5,200
Jan 1 Nabila Sdn Bhd 1/15,n/30 2,600

15 Total 7,800

31

Ø Purchases of goods/merchandise for cash will be recorded in the cash payment
journal.

Ø Bought of assets in cash will be recorded in the cash payment journal.
Ø Purchase of assets or others than merchandise/goods for credit will be

recorded in the general journal.

CASH PAYMENT JOURNAL

Ø Cash payments journal is used to record all payment by cash and cheque.

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Ø Example of cash payments:
(i) cash purchases of merchandise/goods
(ii) payments of accounts payable( related to the Purchases Journal )
(iii) loan payment in cash
(iv) payment of expenses in cash.

Date Accounts Debited Cr. Bank (RM) Cr.Cash (RM) Cr. Purchase
Discounts (RM)

Total

Date of cash Total cash payment Amount of discounts
payment in cheques received and it will

Name of creditors /other Total cash paid reduce the cash
accounts payment amounts

Example related the cash payment posted to cash receipts journal
Ø Jan 8, 2020 , Bought merchandise/ goods on cheque amounted RM 2,000 from
Isma Enterprise.
Ø Jan 10, 2020 Paid to Adli Enterprise.( refer purchase journal )
Ø Jan 23, 2020 Payment loan amounted RM1, 200 to Kuwait Finance by cheque.
Ø Jan 29, 2020 Paid utilities RM 2,500.
Ø Jan 31, 2020 Cash drawings for buy personal grocery RM 450.

Solution

Date Accounts Debited Cr. Bank (RM) Cr.Cash (RM) Cr. Purchase
Discounts (RM)
2020
Jan 8 Purchase 2,000 5,096 104
1,200 104
10 Adli Enterprise 2,500
23 Loan –Kuwait Finance 3,200 450
29 Utilities Expense
31 Drawings 8,046
31 Total

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3.3.3 GENERAL JOURNAL

Ø Record transactions which are not recorded in special journals , such as:
I.Sales returns and allowance
II.Purchases return and allowance

III.Drawings of goods/merchandise
IV.Purchase of assets on credit
V.Non-cash capital contribution.

Date Account Titles and Explanations Dr. Cr.
(RM) (RM)
Accounts Name XXX XXX
Accounts Name
)
(

Examples related to general journal.
Ø Jan 4,2020 Bought furniture on credit RM 5,500 from Lazaro Furniture
Ø Jan 20,2020 Returned damaged merchandise to Nabila Sdn Bhd RM600.
Ø Jan 25,2020 Owner took the merchandise RM 500 for personal used.
Ø Jan 28,2020 Nazierah Sdn returned damaged merchandise RM 200.

Solution Dr. Cr.
Date Account Titles and Explanations (RM) (RM)

2020 Furniture 5,500 5,500
Jan 4 Lazaro Furniture
( To record purchase furniture on credit )

20 Accounts Payable – Nabila Sdn Bhd 600
Purchase returned and allowance 600

(To record returned merchandise to supplier)

25 Drawings 500
Purchases 500

( To record took merchandise for own used) 200
28 Sales returned and allowance 200

Accounts Receivable-Nazierah Sdn Bhd
(To record returned merchandise from customer)

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Exercise
The following transaction a business traditional biscuits by Smartly Cookies Enterprise on
March 2020.

Date Transactions (1)
Journal
2020
March 1 Invested RM100, 000 for business capital into the bank.

2 Bought a vehicle worth RM50,000 on account from Toyota Sdn Bhd.

3 Purchased biscuits RM30,000 from Hani Enterprise and payments
are made by cheque.

4 Sold 100 boxes of cookies to Jasni Enterprise, RM 16,800 on account
with terms of 2/15, n / 30.

6 Sold 50 boxes of biscuits to Dani Enterprise, RM 10,200 on account
with terms 2/15, n/30

11 Bought biscuits of RM 52,600 from Doremi Enterprise, invoice dated
on March 11, Terms of 2/15, n/30.

12 Jasni returned damaged cookies worth RM800.

14 Jasni Enterprise settled the payment.

16 Doremi Enterprise issued credit memo RM 200, for returned of
faulty biscuits.

21 Settle all debt to Doremi Enterprise with cheque.

22 Purchased biscuits from Wali Enterprise on credit RM 41,625, with
terms 2/15, n / 30.

31 Paid salaries expense RM15,900 by cheque.

31 Total cash sales for cookies and biscuit amounted RM134 680.

REQUIRED:

1. Identify appropriate journal.
2. Record the business transactions of Smartly Cookies Enterprise into the appropriate

journals.

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(Sales Journal, Cash Receipts Journal , Purchase Journal , Cash Payment Journal and
General Journal )

Sales Journal Terms Dr. Acc. Receivable
Date Account Debited Cr. Sales (RM)

Cash Receipts Journal Dr. Bank Dr.Cash Dr. Sales
Date Accounts Credited (RM) (RM) Discounts (RM)

Purchases Journal Terms Dr. Purchases
Date Account Credited Cr. Acc. Payable (RM)

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Cash Payments Journal Cr. Bank Cr. Cash Cr. Purchase
Date Accounts Debited (RM) (RM) Discounts (RM)

General Journal Dr. Cr.
Date Account Titles and Explanations (RM) (RM)

3.3.3 SUBSIDIARY LEDGER
Ø There are two type of subsidiary ledger
i. Subsidiary Ledger of Accounts Receivable -records all transactions in respect of
DEBTORS with their balance.
ii. Subsidiary Ledger of Accounts Payable - record all transactions in respect of
CREDITORS and with their balance.

Ø There are two forms of ledger accounts. (Cr)
a) T- account RM
(Dr) Account’s Name

Date Explanation RM Date Explanation

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b) Columnar Ledger Account’s Name Debit Credit Balance
Date Explanation Ref

Based on exercise by Smartly Cookies Enterprise on March 2020, kindly posted
appropriate journal to:-

i) Subsidiary ledger of Accounts Receivable
ii) Subsidiary ledger of Accounts Payable.

Subsidiary ledger of Accounts Receivable

Date Explanation Ref Debit Credit Balance

Date Explanation Ref Debit Credit Balance
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Subsidiary ledger of Accounts Payable Ref Debit
Date Explanation Credit Balance

Date Explanation Ref Debit Credit Balance

3.4 POSTING RECORD TO GENERAL LEDGER

Ø General ledger Definition: The whole group of accounts controlled by a
business. It consists of all assets, liabilities the owner's equity.

Ø Posting is the process of transferring records from the journal into the appropriate
ledger.

Sales Journal Sales, Accounts Receivable

Purchases Journal Purchases, Accounts Payable

Cash Receipts Journal Cash, Sales Discounts,
Capital, Sales, Account Receivable.

Cash Payments Journal Cash, Bank, Purchase Discounts, Capital,
Purchases, Accounts Payable. Salary
expenses

General Journal Vehicle, Notes Payable, Sales Returns and
Allowances, Purchase returns and Allowances
, Accounts Receivable , Accounts Payable.

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Based on the exercise Smartly Cookies Enterprise on March 2020, specify the
general ledger accounts to be prepared:-

1. Posted to the accounts receivable control account
Accounts Receivable Control Account

Date Explanation Ref Debit Credit Balance

2. Posted to the accounts payable control account.
Accounts Payable Control Account

Date Explanation Ref Debit Credit Balance

3. Posted to others accounts Bank Debit Credit Balance
Date Explanation Ref

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Date Explanation Cash Debit Credit Balance
Ref

Date Explanation Purchase Discount Debit Credit Balance
Date Explanation Ref
Date Explanation
Sales Discount Debit Credit Balance
Ref

Sales Debit Credit Balance
Ref

Date Explanation Purchases Debit Credit Balance
Ref

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Date Explanation Capital Debit
Ref Credit Balance

Date Explanation Salary Expense Debit Credit Balance
Ref

Date Explanation Vehicle Debit Credit Balance
Ref

Other Payable – Toyota Sdn Bhd

Date Explanation Ref Debit Credit Balance

Date Explanation Sales Returns and Allowances Credit Balance
Ref Debit

PurchaseReturns and Allowances

Date Explanation Ref Debit Credit Balance

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3.5 PREPARATION OF TRIAL BALANCE

Ø Trial Balance - list of all the general ledger account balances.
Ø The TOTAL on the debit side of the trial balance must be equal to the TOTAL of

credit side.
Ø Trial Balance is prepared to confirm/verified the balance of total debits and the

total credits at the end of an accounting period.
Ø In conclusion, the Trial Balance is a summary of account balances of the ledger.

Format Company’s Name Credit (RM)
Trial Balance
Account’s XXX
Accounts Assets As at 31 January 2020 XXX
Accounts Expenses Debit (RM) XXX
Accounts Liabilities XXX XXXX
Accounts Owner’s Equity XXX
Accounts Revenue
TOTAL XXXX

Based on exercise by Smartly Cookies Enterprise on March 2020, kindly prepare a
Trial Balance as at 31March 2020.

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Smartly Cookies Enterprise
Trial Balance Credit (RM)

As at 31 March 2020

Account’s Debit (RM)

TOTAL
Additional information:
Ending Inventory as at 31 March 2017, RM 20,000

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3.6 PREPARING FINANCIAL STATEMENT FOR MERCHANDISING AND SERVICE ENTITIES

i) Statement of Profit and Loss
ii) Statement of Owner’s Equity
iii) Statement of Financial Position

Definitions of merchandising and services business

Merchandising Business Services Entities Business
§ sell goods trade § sell services
§ the revenue is SALES § revenue is SERVICE REVENUE
§ with cost of goods sold § no cost of goods sold
§ income statement with ‘multiple step’ § income statement with ‘single step’

form form

Format Statement Profit and Loss for a Merchandising Business
Company’s Name

Statement of Profit and Loss
For the year ended 31 December 20XX

Sales RM RM RM
XXX XXX

Less: Sales discount (XX)
Sales returns and allowance (XX)

Net Sales XX
LESS: COST OF GOODS SOLD XXX
Beginning inventory (XX)
(XX)
Purchases XXX
Less: Purchases discount
XX
Purchases returns and allowance XX
Net Purchases XX
Add: Freight In
XXX
Insurance of purchase XXXX
Import Duty

Cost Of Purchase

COST OF GOODS AVAILABLE FOR SALE

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Less : Ending Inventory (XX)
COST OF GOODS SOLD (XXX)
GROSS PROFIT / LOSS XXX
Add : Other Revenue
XX
Dividend received XX
Rental incomes XX XXX
Commissions received
XX
Less: Operating Expenses XX
Salaries expense XX
Rental expense XX
Depreciation expense XX
Interest expense XX
Stationary expense XX (XXX)
Utilities expense
Insurance expense XXX

NET PROFIT / NET LOSS

Format Statement Profit and Loss for a Service Entities Business
Company’s Name

Statement of Profit and Loss
For the year ended 31 December 20XX

REVENUES: RM RM
Service Revenue XXX XXXX
Interest Revenue XXX
(XX)
LESS: EXPENSES XX XXX
Salaries expense XX
Rental expense XX
Depreciation expense XX
Interest expense XX
Stationary expense XX
Utilities expense XX
Insurance expense

NET PROFIT / NET LOSS

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Based on exercise by Smartly Cookies Enterprise on March 2020, kindly prepare
Statement of Profit or Loss for the year ended 31March 2020.

RM RM RM

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Format Statement of Owner’s Equity

Company’s Name RM
Statement of Profit and Loss XXX
For the year ended 31 December 20XX XX
XXX
Beginning capital
Add: Additional capital XX / (XX)

Add : Net Profit @ Less: Net Loss XXX
(XX)
Less: Drawings
Ending capital XXX

Based on exercise by Smartly Cookies Enterprise on March 2020, kindly
prepare Statement of Owner’s Equity as at 31 March 2020.

RM

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Format Statement of Financial Position

Company’s Name
Statement of Financial Position

As at 31 December 20XX

RM RM RM

ASSETS
Non-Current Assets

Properties XXX
XXX
Office equipment (XX) XXX
Less: Accumulated depreciation
XXX
Office equipment (XX) XXX
Vehicle

Less: Accumulated depreciation Vehicle

Total Non-Current Assets XXX
Current Assets
Cash XXX
Bank XXX
Accounts Receivable XXX
XXX
Ending Inventory
Total Current Assets XXX
TOTAL ASSET XXXX

OWNER’S EQUITY & LIABILITIES XXX
Owner’s Equity: XXX
Beginning capital XXX
+ Additional capital (XXX)
+ Net Profit / - Net Loss
- Drawings

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Ending Capital XXX
RM RM RM

Liabilities:

Non-Current Liabilities:

Bond payable XXX

Long term loan XXX

Long term notes payable XXX XXX

Current Liabilities: XXX
Accounts payable

Short term loan XXX XXX

Total Liabilities XXX

TOTAL OWNER’S EQUITY & LIABILITIES XXXX

Based on exercise by Smartly Cookies Enterprise on March 2020, kindly prepare

Statement of Financial Position for the year ended 31March 2020.

RM RM RM

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RM RM RM

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EXERCISES

Question 1

a) Explain the accounting cycle for a business.
b) Describe the purpose of account control and what is the relationship to the

subsidiary ledger. List two common subsidiary ledger provided by trading
business.
c) For each of the transactions below, students are required to make double entries
for debit and credit.
Example:

Bought RM 4,000 worth of merchandise on credit from Syarikat Mulia.

Dt. Purchases 4,000

Ct. Accounts Payable – Syarikat Mulia 4,000

March 3 Sold of goods at a price of RM 4,500 on credit to Syarikat
Tam.

5 Bough goods at a price of RM 3,800 on credit from
Syarikat Berjaya.

6 Returned of the purchase of RM 200 to Syarikat Berjaya.

8 Bough furnitures from Hias Bestari Ent. worth RM 800 in
cash.

12 Received damaged goods of RM 150 from Syarikat Tam.

18 Sold goods at a price of RM 3,000 on credit to Syarikat
Milikku.

25 Took goods for personal use worth RM 100.

27 Received payment of RM 6,000 from the Syarikat Zami by
cheque.

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Question 2

The followings are some transactions that involved Zizi Book Company Sdn. Bhd.:-

a) Paid amount due to supplier.
b) Customers returned the damaged book.
c) Customers settled debts.
d) Sold the vehicle in cash.
e) Sold books on credit.
f) Sell goods in cash.
g) Zizi brought in cash into the company.
h) Purchased of goods on credit.
i) Bought Office equipment on credit

Required:
For each of the above transactions, state the relevant and appropriate journals.

Question 3
During the month of December 2019, Thaqifah Enterprise has done all the following
transactions:
Dec 1 Sold of goods to Kedai Lee amounting RM5, 000 provided 2/15, n/30.

4 Sold goods worth RM9, 000 in cash.
7 Received cheques for payment of debt settlement after discount from

Syarikat Lee.
12 Sold of goods to Lin Enterprise of RM2, 500 provided 1/10, n/30.
17 Sold of goods to Kedai Kim amounting RM3, 400 provided 2/15, n/30.
19 Cash taken worth RM300 for personal use.
22 Received cheque for full payment from Kedai Kim for transactions on

December 17th 2019.
28 Received December rental amounting to RM2, 000 in cash.
REQUIRED:
Record the relevant transaction to the sales journal and the cash receipts journal.

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Question 4

Below is the information about Perniagaan ISMI for March 2020:

Balance as at March 1st, 2020 to:

Subsidiary Ledger Accounts Receivable:

Pikir Sdn. Bhd. RM 2,000

Kilang Mesra RM 1,500

General Ledger:

Accounts Receivable Control Accounts RM 3,500

Transactions during the month of March 2020:

Date Transactions

Mac 2 Brought the furniture in the business worth RM 20,000 and cash of RM
10,000.

4 Sold goods worth RM 4,000 to Pikir Sdn. Bhd. (PSB) with Invoice no 007
provided 2/10, n / 30.

11 Bought RM200 of goods by cheque.
14 Received cheque as payment from PSB for transactions on March 4th,

2020.
23 Sold goods of RM1,000 in cash.
25 Bought RM150 goods in cash from Perniagaan Jejak Waja.

REQUIRED:

a) Record all the transactions in the sales journal and the cash receipts journal.
b) Prepare control accounts receivables and the accounts receivable subsidiary

ledger in the form of a column.

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Question 5
Throughout the month of December 2019, Thaqifa Electrical Shop had performed all the
following transactions:
Dec 1 Brought vehicle worth RM10,000 and RM5,000 cash into the business.

2 Bought goods from Kedai Lee worth RM5,000 with terms provided 2/15, n/30.
3 Paid rental for December amounting RM2,000 in cash.
4 Sold goods worth RM9,000 in cash.
7 Paid all debts to Kedai Lee after discounts.
12 Sold goods to Lin Enterprise of RM2,500 with terms 1/10, n/30.
15 Issued a credit memo to Lin Enterprise of RM100 for returned goods.
17 Sold goods to Kedai Kim worth RM3,400 with terms provided 2/15, n/30.
19 Lin Enterprise settled the debts of RM 1,000 by cheque.
20 Purchased goods from Rahat stores worth RM5,000 with terms 2/10, n/30.
22 Issued cheque worth RM 300 for the owner usage.
25 Paid by cheque for buying furniture amounting RM3,000.
REQUIRED:
Record the corresponding transaction to the sales journal, purchases journal, a cash
receipts journal, cash payments journal and the general journal.

Question 6

Below is the information about Perniagaan Rahat for the month of October 2019:

Balance as at October 1st, 2019 to:

Subsidiary Ledger Accounts Payable:

Kedai Loo RM 1, 500

Guar Bhd RM 2, 500

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RM 4 000
General Ledger:
Accounts Payable Control Accounts

Transactions during the month of October 2019:

Date Transactions

Oct 2 Brought in vehicle into the business worth RM20,000 and RM10,000 cash.

4 Bought goods from Guar Bhd amounting RM1,500 on credit with terms of
2/10,n/30.

8 Bought goods from Kedai Loo of RM8,000 on credit terms 2/15, n/30.

11 Settled debts for October 4th transactions to Guar Bhd including transport
charges of RM100 by cheque.

14
Bought more inventories from Kedai Loo with the same credit term worth
RM 2,000.

22
Paid half of the debt for the October 8th transactions by cheque.

28 Paid utility expenses worth RM300 in cash.
30 Cash withdrawals of RM250 for personal use.

REQUIRED:
a) Record all the transactions that are appropriate to the purchases journal and
cash payments journal.
b) Prepare accounts payable control account and subsidiary ledger accounts
payable in the form of a column.

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Question 7

Below is the information related to Perniagaan Soleh in March 2020:

Balance March 1st, 2020 to:

Subsidiary Ledger Accounts Receivable:

Maulana Sdn. Bhd. RM 2,300

Kilang Mesra RM 1,500

General Ledger:

Accounts Receivable Control Accounts RM 3,800

Subsidiary Ledger Accounts Payable: RM 1, 500
Kedai Istiqamah RM 2, 500
Mercu Bhd
RM 4 000
General Ledger:
Accounts Payable Control Accounts

Transactions during the month of March 2020:

Date Transactions

Mar 2 Bring in furniture into the business worth RM 20,000 and cash
amounting to RM 10,000.

4 Sold goods of RM 4,000 to Maulana Sdn. Bhd. (MSB) with Invoices no.
007 provided terms of 2/10, n / 30.

8 Purchased goods from Mercu Bhd worth RM 1,500 with terms 2/10, n /
30.

10 Returned goods to Mercu Bhd of RM200 for business on March 8th
which did not meet the required specifications.

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11 Sold goods to Maulana Sdn Bhd (MSB) of RM 750 with terms 2/10, n /
30.

14 Bought goods from Kedai Istiqamah of RM 8,000 on credit terms 2/15,
n / 30.

19 Settled all debts to Mercu Bhd in cash.

22 Sold goods to Kilang Mesra amounting RM3,000.

25 Purchased of office equipment Syarikat Acer worth RM4,500.

30 Bought goods from Kedai Istiqamah worth RM2,000 with terms 2/15,
n/30.

REQUIRED:

a) Record all the transactions that are appropriate to the sales journal, purchases
journal, a cash receipts journal, cash payments journal and the general journal.

b) Prepare accounts receivables control account and subsidiary ledger for accounts
receivable in the form of column.

c) Prepare accounts payable control account and subsidiary ledger for accounts
payable in the form of column.

Question 8

Mr. Hanip started his business on 1st July 2019. The following lists are the July
business transactions.

Date Transactions

July 1 Start a business with RM25, 000 cash, vehicles amounting to RM50,000
and office equipment worth RM10,000 as capital.

3 Bought merchandise from Pearl Bhd RM7,000 with credit terms of 2/15,
n / 30.

7 Sold merchandise on credit to Cinta Enterprise amounting RM2,200.

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13 Paid debt to Pearl Bhd.
22 Bought office equipment from Syarikat Maju amounting RM4,000 cash.
30 Sold merchandise to Muthu for cash of RM800.

REQUIRED :
(i) Record all transactions into the appropriate journals.
(ii) Prepare control accounts receivable and accounts receivable subsidiary ledger.

Question 9

The followings are a business transactions of Perniagaan Awan Zakir on April 2020.

Date Transactions

Apr 1 Start business with cash of RM35,000 and vehicles worth RM60,800 as
capital.

3 Bought merchandise worth RM7,800 from Perniagaan Karisma (PK) with
terms of 2/10, n/30.

8 Sold merchandise on of RM4,500 on credit to Perniagaan Madani with
terms of 2/15, n/60.

12 Paid all debts to Perniagaan Karisma.

20 Bought merchandise by cash amounting RM3,200 from Perniagaan
Luhur.

28 Paid salary of employees amounting RM2,230 and receive payments for
all the outstanding amount from Perniagaan Madani.

REQUIRED :
(i) Record all transactions into the appropriate journals.
(ii) Prepare control accounts receivable and accounts receivable subsidiary ledger.

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Question 10

The followings are the business transactions of Perniagaan Zuhal for the month of
March 2020

Date Transactions

Mar 2 Started a business with cash of RM30,000 and RM7,000 furniture.

4 Received RM20,000 bank loan to increase business capital.

7 Bought RM12,000 of goods on credit from Jupiter Sdn. Bhd. with the
terms 3/10, n/30.

12 Sold items of RM500 on credit to Perniagaan Sinar.

17 Settled half of debt to Jupiter Sdn Bhd with a cheque.

23 Paid utility expenses RM40.

REQUIRED :

Record all the transactions in the purchase journal, sales journal, a cash receipts
journal, cash payments journal and the general journal.

Question 11

Perniagaan Nikki (PN) is selling and distributing kitchenware in Sungai Petani. The
following lists are the transactions that occurred in March 2020.

Date Transactions

Mar 1 Paid RM8,400 for office buildings insurance up to 31st March 2020.

6 Cash sales of RM6,500.

9 Bought merchandise amounting RM5,400 from Sejati Enterprise.

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10 Sold merchandise to Peralatan Dapur Saleha amounting RM3,500 with
credit terms of 2/10 , n/30.

14 Received order amounting RM21,300 of electrical goods for the Silver
Jubilee celebration of Sungai Petani Council which will be held in June
2020 at Padang Mahkota.

19 Received payment from Peralatan Dapur Saleha for business transaction
on March 10th, 2020.

22 Credit sales to Hong Dong Enterprise for RM8,500.

24 Received deposit of RM1,000 from Puan Indah for groceries set to be
delivered to her new home in May 2020.

25 Mr. Nikki, Nikki Business owner have taken a RM650 kitchen utensils and
gave to his mother as gift in conjunction with Mother's Day this year.

26 Hong Dong Enterprise returned the kitchenware worth RM1,550 as
damaged.

27 Paid RM9,500 to Sejati Enterprise.

REQUIRED :

Record all the business transactions in March in the purchase journal, sales journal, a
cash receipts journal, cash payments journal and the general journal.

Question 12

Thaqifah Haifa starts the business selling electrical appliances such as television, radio,
minicompo and video recorder on January 1st, 2020. All the following transactions had
occurred on January 2020:

Jan 1 Banked-in RM10,000 as start-up capital for the business to the bank.

4 Bought furniture worth RM1,500 from Cahaya Bhd on credit.

5 Bought electrical goods on credit from Maju Jaya Bhd valued at RM30,500
with terms 2/15, n / 60.

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10 Returned goods worth RM500 to Maju Jaya Bhd for sending the wrong
items.

13 Sold electrical goods worth RM5,300 in cash.
14 Sold RM28,000 of electrical goods on credit to Chong Studio with credit

terms of 5/10, n / 30.
16 Pay 1/3 of the total debt to Maju Jaya Bhd with cheque.

17 Chong Studio returned damaged goods worth RM400.

18 Bought electrical goods worth RM3,400 on cash.

19 Took a television worth RM1,600 from the store for family use.
23 Chong Studio settled some of the debts worth RM10,000 by cheque.

29 Paid employee salaries amounting RM500 cash.

REQUIRED:

a) Record all the transactions above into the appropriate journals.
b) Post the related subsidiary ledger.
c) Prepare a trial balance on 31st January 2020.

Question 13

Along Sdn Bhd (ASB) commenced a business selling carpets and furnitures on 1st July
2019. The following transactions took place in July.

July 1 Invest in business with cash of RM500,000 and RM50,000 vehicle.
3 Bought shop fittings from Lan Sdn Bhd for RM25,000 in cash.

9 Bought carpets and furniture valued at RM45,000 and RM82,000 on
conditional credit terms for 2/15, n / 60 from Han Seng Sdn Bhd.

10 Sold two units carpets worth RM7,500 per unit in cash to Intan Indah
Sdn Bhd.

15 Gave a debit note to Han Seng Sdn Bhd on the returned of damaged
furniture worth RM12,000.

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19 Sold four units of furniture amounting RM14,500 per unit to Perniagaan
Endah Consultant where two units were paid in cash while two units on
credit.

23 Bought 10 units of carpets worth RM2,000 per unit. Of these, six units
were purchased in cash and the remainder on credit with terms of 2/10,
n / 60 from Husin Sdn Bhd.

24 Telephone and electricity bills paid RM1,200.

25 Paid wages above the wage rate for two workers amounting RM35 per
day (assuming the number of working days is 20 days).

26 Sold three units of furniture on credit to Alam Arkitek Sdn Bhd for
RM45,000.

27 Send a credit note to the Alam Arkitek Sdn Bhd for the returned of
RM13,200 furniture.

28 Settle debts to Husin Sdn Bhd and paid half (1/2) of debt to Han Seng
Sdn Bhd.

29 Perniagaan Endah Konsultan Sdn Bhd settled their debts.

REQUIRED :
(i) Record the transactions in journal entries accordingly.

(ii) Transfer the record to the general ledger and related subsidiary ledgers.

(iii) Prepare a trial balance as at July 31st, 2019.

Question 14

The followings are the account balances of Perniagaan Kristal on December 31st, 2019.

RM RM

Cash 14,000 Furniture 15,000

Accounts Receivables 5,000 ADV – furniture 1,500

Accounts Payables 6,000 Inventories 6,000

Equipment 3,000 Capital 35,500

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The following information was obtained during the month of January:

Date Transactions

Jan 1 Bought additional furniture for businesses worth RM3,000 in cash from
Julisa Sdn. Bhd.

5 Sold merchandise amounting RM20,000 to Opel Company with terms of
2/15, n/30.

9 Purchased merchandise from Granite Company valued at RM18,000 with
terms of 2/10, n / 30.

10 Opel company returned defects merchandise valued at RM1,000.

15 Paid half of the debt for the purchase of Granite Company bought on
January 9.

17 Opel company settled all its debts.

23 Cash withdraw to pay for traffic summonses of RM200 for owner's wife.

REQUIRED :
(i) Record all transactions in the sales journal, purchases journal, a cash receipts

journal, cash payments journal and the general journal.
(ii) Prepare a trial balance as at 31st January 2020

Question 15
Perniagaan Tukang Bina (PTB) is handling the business of selling household
appliances. The list is an excerpt of PTB account balance as at July 1st, 2019.

Accounts RM
Cash 18,000
Accounts Receivable – Syarikat Tukul Sdn. Bhd
Office equipment 9,500
11,500

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Accounts Payable – Perniagaan Jati 3,000
Capital 30,000
Loan
6,000

The following transactions occurred in July 2019.

Date Transactions

July 2 Sold merchandise worth RM12,000 to Perniagaan Belati with payment
terms of 2/10, n / 30.

4 Tukul Company Sdn. Bhd settled payments for all their debts.

6 Purchased merchandise on credit from Syarikat Mukmin worth RM8,000
with payment terms of 2/10, n / 30.

9 Paid transportation costs RM700 for sales on July 2nd, 2019.

10 Paid all the debts to Perniagaan Jati.

11 Received payment from Perniagaan Belati for sales on July 2nd, 2019.

13 Bought RM3,800 for office furniture on credit from D'Cantek Furniture
stores.

15 Returned damaged merchandise worth RM900 purchased from the Syarikat
Mukmin.

17 Settled the debts to the Syarikat Mukmin.

20 Bought merchandise amounting RM5,400 in cash from Maju Indah
supermarket.

23 Sold merchandise worth RM3,500 to Kedai Runcit Salina.

25 Paid salaries of RM1,800.

27 Buought merchandise from Perniagaan Berkat worth RM9,500.

30 Paid shop rental monthly amounting RM1,500 for July 2019.

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REQUIRED:

(i) Record all transactions for the month of July 2019 in the sales journal, purchases
journal, a cash receipts journal, cash payments journal and the general journal
(please ignore description).

(ii) Prepare a trial balance at July 31, 2019.

Question 16

The following lists are part of the account balances for Perniagaan Mesra (PM) as at
July 1st, 2019.

Account RM

Cash 16,000

Accounts Receivables – Makmor Sdn Bhd 18,500

Accounts Payables – Aminah Enterprise 4,870

Capital 29,630

The lists below are the July 2019 monthly transactions occurred for PM.

Date Transactions

July 2 Makmor Sdn Bhd settled all their debts.

3 Paid all the outstanding balance to Aminah Enterprise.

4 Purchased merchandise worth RM4,000 on credit from Segar Sdn Bhd
with terms of 3/15, n/30.

5 Owners brought in furniture worth RM15,000 for business use.

7 Sold RM12,000 of merchandise to Amzar Sdn Bhd on credit with terms of
2/10, n/30. The cost of merchandise is RM5,500.

9 Paid transportation costs of RM570 for sales on July 7th.

11 Sold of goods for cash RM6,000.

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Date Transactions

12 Returned of goods purchased from Segar Sdn Bhd's worth RM700.

14 Settled all debts of Segar Sdn Bhd.

16 Receive all payments from Amzar Sdn Bhd.

18 Bought goods worth RM7,500 on credit from Adnan Enterprise.

20 Paid employees salary and bonus of RM6,400.

23 Sold goods to Sulhi Enterprise amounting RM4,800.

26 Paid all debts to Adnan Enterprise and receive a discount of RM420.

28 Bought merchandise on credit from Perniagaan Syafiq worth RM5,400.

29 Paid office rent of RM1,200 for August 2019.

REQUIRED :

(i) Record all transactions for the month of July 2019 in the sales journal, purchases
journal, a cash receipts journal, cash payments journal and the general journal
(please ignore description).

(ii) Prepare a trial balance at July 31, 2019.

Question 17

Abu started his business selling electrical products such as television, radio, minicompo
and video recorder on january 1st, 2020. All the following transactions had occurred in
January 2020.

Jan.1 Submit of RM10,000 as business start-up capital to the bank.

4 Bought office furniture from Cahaya Bhd worth RM1,500 in cash.

5 Bought electrical goods on credit from Maju Jaya Bhd valued at RM30,500
with terms of 2/15, n / 60.

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10 Returned goods worth RM500 to Maju Jaya Bhd for sending the wrong
goods

13 Sold electrical goods worth RM5,300 in cash.

14 Sold RM28,000 of electrical goods on credit to Chong Studio with terms of
5/10, n / 30.

16 Pay one-third (1/3) of the total debt to Maju Jaya Bhd.

17 Chong Studio return goods worth RM400 found to be damaged.

18 Bought electrical goods worth RM3,400 in cash.

19 Took a television worth RM1,600 from the store for family use.

20 Sold electrical goods on credit to RM9,900 Jitu Ltd. With terms of 2/10, n /
30.

24 Bought electrical goods on credit from Sentosa Bhd valued at RM5,600 with
terms of 2/10, n / 30.

26 Jitu Bhd settled all its debts.

29 Pay the salaries of employees with RM500 cash.

REQUIRED :
(i) Record the above transactions in the Purchase Journal, Sales Journal, Cash

Receipts Journal, Cash Payments Journal and General Journal.

(ii) Prepare control account for Account Receivable and Account Payable.

(iii) Prepare a trial balance at Jan 31, 2020.

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Question 18

The following accounts balances are taken from the accounting book of FAFI
Pvt. Ltd. as at 30 November 2019.

Particulars RM

Motor vehicles 40,000

Fixtures and fittings 30,000

Cash in hand 10,000

Cash at bank 50,000

Account receivable - Imad 20,000

Accounts payable – Sahaba Enterprise 15,000

During December 2019, the following transactions occurred;

Date Particulars

Dec 1 Purchased new vehicle costing RM25,000. 90% of the price is paid by
cheque and the remainder by cash.

3 Paid telephone bill of RM150, water bill RM100 and electricity bill of
RM200 with cash.

9 Sold goods on credit (2/15,n/30) of RM7,000 to Imad.

10 Paid to Sahaba Enterprise by cash of RM3,000 and received discount of
10%.

15 Imad returned low quality goods worth RM700.

17 Cash sales of RM300.

23 Paid rent of his house children of RM700 with company cheque.

29 Imad paid half of the debt by cheque.

31 Paid Sahaba Enterprise debt of RM5,000 by cheque.

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31 Purchased goods on credit (2/10,n/30) of RM6,000 from Kayangan Sdn
Bhd.

Required :

I. Record the transactions into special journal and general journal.
II. Posted the record to the general ledger and related subsidiary ledgers
III. Prepare the trial balance as at 31 December 2019.

Question 19

The following list is the account balance extracted from Aqil Qisya Book of Accounts on
December 31st, 2019.

Account RM
Capital 17,075
Cash in hand
Inventories as at January 1, 2019 629
Purchases 500
Sales 3,500
Salary Expense 6,000
Sales Returned and Allowance 1,800
Purchase Returned and Allowance
Sales Discount 25
Purchases Discount 20
Rental expense 100
Printing and stationery expenses 80
Carriage inward 1,138
Groceries expense 162
Accounts Receivable 120
Accounts Payable 812
Office furniture 2,050
Van 1,080
Cash at bank 2,840
Inventories at December 31st, 2019 3,000
7,579
700

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REQUIRED :

a) Prepare a trial balance as at December 31st, 2019.

b) Prepare a Statement of Profit or Loss for the year ended December 31st, 2019.

Question 20

The following information are quoted from the book of Perniagaan Kamal at 31st
December 2019.

Accounts RM

Capital 17,075

Cash in hand 629

Inventoriy as at 1st Jan 2019 500

Purchases 3,500

Sales 6,000

Salary expenses 1,800

Sales return 25

Purchases return 20

Sales discount 100

Purchases discount 80

Rental expenses 1,138

Printing and stationery expenses 162

Carriage inwards 120

General expenses 812

Accounts receivable 2,050

Accounts Payable 1,080

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