Q2

1. Which of the following is NOT a business transaction?
A. Make a sales offer.

B. Sell goods for cash.
C. Receive cash for services to be rendered later.
D. Pay for supplies.
2. A business paid RM7,000 to a creditor. The effect of the transaction on the accounting
equation was to:
A. increase one asset, decrease another asset.
B. decrease an asset, decrease a liability.
C. increase an asset, increase a liability.
D. increase an asset, increase owner's equity.
3. How does receiving a bill to be paid next month affect the accounting equation?
A. assets decrease, owner's equity decreases
B. assets increase, liabilities increase
C. liabilities increase, owner's equity increases
D. liabilities increase, owner's equity decreases
4. If the owner wanted to know how money flowed into and out of the company, which
financial statement would he/she use?
A. Statement of Profit or Loss and Other Comprehensive Income
B. Statement of Cash Flows
C. Statement of Financial Position
D. Statement of Changes in Equity
5. The year-end balance of the owner's capital account appears in:

A. both the Statement of Changes in Equity and the Statement of Profit or Loss and
Other Comprehensive Income
B. only the Statement of Changes in Equity
C. both the Statement of Changes in Equity and the Statement of Financial Position
D. both the Statement of Changes in Equity and the Statement of Cash Flows
6. The Statement of Financial Position reports:

A. financial position on a specific date.
B. results of operations on a specific date.
C. financial position for a specific period.
D. results of operations for a specific period.
7. ___________ are the economic resources owned; expected to benefit the business in
future.
A. Owner’s equity
B. Revenues
C. Assets
D. Unearned Revenues
8. What is the effect to the accounting equation, if payment was made to creditors for
previously purchasing office equipment on account?
A. Decrease of both asset and liability
B. Increase of asset, decrease of liability
C. Increase of both liability and owner’s equity
D. Decrease of asset, increase in owner’s equity
9. Mr Chin is having financial problems and faces difficulties in paying his personal
debt. Therefore, at the end of the month, Mr Chin withdraws RM5,500 in cash from
his business (Chin Enterprise) to pay his personal debt. What are the effects of this
transaction on the accounting equation of Chin Enterprise?
A. Increase in asset RM5,500, Increase in owner’s equity RM5,500
B. Decrease in asset RM5,500, Decrease in owner’s equity RM5,500
C. Decrease in asset RM5,500, Increase in liabilities RM5,500
D. Decrease in liabilities RM5,500, Decrease in owner’s equity RM5,500
10. Items below can affect the owner’s equity in an accounting equation EXCEPT:
A. Revenues
B. Expenses
C. Withdrawal
D. Payment to creditors
11. The accounting equation can be stated as:

A. Expenses = Liabilities – Owner’s Equity
B. Assets – Liabilities = Owner’s Equity
C. Liabilities = Revenue + Owner’s Equity
D. Owner’s Equity = Assets + Liabilities
12. If total assets and liabilities decreased RM55,900 and RM36,000 during a period
respectively, what is the amount and direction (increase or decrease) of the change in
owner’s equity for that period?
A. RM19,900 increase
B. RM29,900 decrease
C. RM19,000 decrease
D. RM19,900 decrease
QUESTION 2
Below are the transaction for Sintokish Enterprise as October 2020:
Oct 1 Contributed RM30,000 of cash and RM20,000 of equipment to start the business.
Oct 3 Borrowed RM80,000 from the bank by signing a notes payable.
Oct 15 Purchased a van by paying cash for RM75,000.
Oct 17 Paid January rent of RM1,500 for the office space by credit.
Oct 22 Performed services for customers and received cash immediately for RM20,000.
Oct 23 Purchased RM600 in supplies on account.
Oct 25 Performed services for customers and will collect next month of RM123,000
Oct 26 Withdrew of cash RM700 and equipment RM300.
Oct 28 Paid RM1000 to the bank for notes payable.
Oct 30 Paid half of amount for Oct 23 transaction.
REQUIRED: Analyze the above transactions by preparing accounting equation for

Sintokish Enterprise.

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1. Which of the following is NOT a business transaction?

A. Make a sales offer.

5. The year-end balance of the owner's capital account appears in:

6. The Statement of Financial Position reports:

11. The accounting equation can be stated as:

REQUIRED: Analyze the above transactions by preparing accounting equation for

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