This part consists of TEN (10) multiple-choice questions. Choose the most suitable answer. 1. What is the objective of financial statements ? A to record the financial activities and non-financial activities of the business for - the purpose of making decision . to show the value of the shares in the company C to help management in coordinating the task among its employees D to provide information about the financial position, performance and cash flows of an entity that is useful to those users in making economic decisions use the financial statements to analyse the business's strengths and weaknesses in making an investment decision whether to buy, sell or keep their investment in the business 2 A. B. C. D. Government Investors Inland revenue officers Management 3 3 What would be the correct steps in accounting to record the adjusting entry? A Ledger > Adjusted trial balance > Adjusted financial statements B Journal > Ledger > Adjusted trial balance > Adjusted financial statements. C Adjusted trial balance > Adjusted financial statements D. None of the above The twins, Kamal and Kaisara, intend to open an apparel manufacturing business together. They are considering a business organization that has a limited liability with unlimited number of members. Which of the following meets Kamal and Kaisara's expectation? . . C. D. Sole proprietorship Private company Parentship Public company 5 The business owner paid for his family insurance expenses using the business money and recorded the transaction in the business's insurance expense. The business owner violated concept A Business entity B Materiality C Going concern D Periodicity 6. The items of non-current assets include A Cash in hand, inventory, and account receivables B. Machineries, motor vehicles, and account payables C Freehold land, long-term investment, and patents D. Fixtures and fittings, capital and stationery represent the business's financial obligations that require settlements of more than one year. 7. A B . D. Non-current assets Non-current liabilities Owner's equity Expenses 8 The business purchased a machinery worth RM15,000 on credit from Trex Machinery Sdn Bhd. Determine the effect of this transaction on the accounting equation A Increase in asset and decrease in asset. B Increase in asset and decrease in liability C. Increase in asset and increase in liability D. Increase in asset and increase in owner's equity The business returned the defective goods worth RM150 that was purchased a week ago in cash Determine the book of prime entry used to record the transaction . C D. Return inwards journal Return outwards journal Cash receipt journal Cash payment journal 10. The business purchased a second-hand car worth RM5,000 in cash. The business also incurred a major repair of RM3,900 to bring to its working condition. The car's first road tax and insurance worth RM1,200 was paid by cheque. Compute the capital expenditure incurred for the car A RM10,100 B RM6.200 C. RM8,900 D. RM5,000 (Total 10 marks)