Question 1 (a) Explain the "business entity" concept and its impact on the recording of transactions. (8 marks) (b) State why it is important to differentiate between capital expenditure and revenue expenditure, and briefly explain the accounting treatment of each type of expenditure. (6 marks) (c) Rosa Vann runs a retailing business. When Rosa prepared the Trial Balance of her business for the year ending 30th June 2021, it failed to balance. Rosa opened a suspense account for the difference. Rosa subsequently discovered the following: 1. A receipt of RM4,000 from Kevin Muster, a debtor, had been correctly posted in the cash book but had been incorrectly posted to Keith Munster's debtor account. 2. A payment of RM49.960 for the purchase of some new machinery and equipment had been posted as RM46,690 to the machinery and equipment at cost account. 3. The petty cash book balance of RM140 had been omitted from the Trial Balance. 4. A cheque totalling RM6,210 paid in respect of maintenance and servicing of machinery was correctly entered in the business bank account but had been credited to the machinery and equipment at cost account. 5. In recording a bank loan, the cash received amounting in total to RM116,600 was credited to the loan account as RM116,000. Required: (i) Prepare the journal entries with brief narratives to correct the above errors. (8 marks) (ii) Prepare the suspense account. (3 marks) [Total: 25 marks) Question 2 On 1st January 2018, Robin Wright bought a van for RM50,000. In her final accounts, which are prepared for the year ended 31st December each year, she has been depreciating the van at 30% per annum using the reducing balance method. Required: (a) Prepare depreciation schedule for year 2018, 2019, 2020, and 2021. (9 marks) (b) Prepare accumulated depreciation account for year 2018, 2019, 2020 and 2021. (12 marks) (c) Prepare statement for profit and loss for year ended 2018, 2019, 2020 and 2021. (2 marks) (d) Prepare statement for financial position for year 2018, 2019, 2020 and 2021. (2 marks) [Total: 25 marks)