Question 1

Lecture 1 Introduction to Accounting (Theories)

Lecture 2 Basic Accounting Concepts and Conventions (Theories)

Accounting – process of identifying, measuring, and communicating economic information

to permit informed judgments and decisions by the information users.

Bookkeeping – process of recording data relating to accounting transactions in the

accounting books.

Accrual accounting – contrasts with cash accounting, which recognizes

revenue only when cash is received and expenses only when cash is paid.

● Accrued expenses – Accrued expenses refer to costs that a company has incurred
but has not yet paid, and they are (recorded as liabilities in the balance sheet)
recognized on the financial statements to reflect the obligation.

● Prepaid expenses – are costs that have been paid in advance but have not yet
been incurred, and they are recorded as assets on the balance sheet until the
related goods or services are received.

● Trade receivables – Also known as accounts receivable represent the amounts

owed to a business by its customers for goods or services provided on credit.

● Trade payables – Also known as accounts payable, are the amounts that a company
owes to its suppliers for goods or services received on credit.

● Bad debts expenses – expenses are incurred when customers fail to pay their
outstanding debts. (Trade receivables – Bad debts = Net trade receivables)

● Allowance for bad debts – a contra-asset account that reflects the estimated
amount of uncollectible accounts.

● A bank statement and invoice – A bank statement is a document provided by a

bank that shows the account holder's transactions, while an invoice is a bill issued by
a seller to a buyer, specifying the items or services provided and the amount due.

● Assets and liabilities – Assets are resources owned by a company that have
economic value and can be used to generate future benefits, whereas liabilities are
obligations that a company owes to external parties (eg. suppliers).

● Expenses and Revenue – Expenses are the costs incurred by a company to

generate revenue, while revenue represents the income earned from the company's
primary operations.
 ● Capital – Capital refers to the financial resources invested in a business by its
owners, including both equity (ownership) and debt (borrowed funds). It is a critical
component of the company's financial structure.

Asset (+ -); Liabilities (- +); Equity (- +); Revenue (- +); Expenses (+ -)

Lecture 3 Basic Accounting Procedures and Systems I (Assets, Liabilities and Capital)
● 5 Categories: Assets, Liabilities, Capitals/Equity, Revenue, Expenses
● Assets = Liabilities + Capitals
● Double entry (Debit/ Credit); Ledger (T-account)

In terms of Assets, Liabilities and Capital:

● To increase an asset – Debit Entry
● To decrease an asset – Credit Entry
● To increase a liability/capital account – Credit Entry
● To decrease a liability/capital account – Debit Entry

Lecture 4 Accounting Procedures and System II (Revenues and Expenses)

● Sales VS Other Revenue
● Purchases VS Expenses

Increase in Inventory
- Purchases of goods. - purchases
- Return into the business of goods previously sold – Sales Return/ Return Inwards

Decrease in Inventory
- Sales of goods.
- Goods previously bought by the business being
- Returned to the business – Purchases Return/
- Return Outwards

Lecture 5 Financial Statements of Sole Proprietorship

● Income Statement and Balance Sheet

Question 2
Lecture 6 & 7 Books of Prime Entry and Ledgers
● Sales day book
● Purchase day book
 ● Sales returns day book
● Purchases returns day book
● Bank Book
● Cash Receipts Book
● Cash Payments Book
● Petty Cash Receipts Book
● Petty Cash Payments Book
● Journal

S & Co. – Accounts Receivable (customer paid to us)

A & Co. – Accounts Payable (we paid to supplier)

Question 3
Lecture 9 Accounting for Non-current Assets and Depreciation
Note: premises, Land, building (no depreciation – revaluation)
(depreciation: motor vehicles, machinery, office equipment, fixtures & fittings…)

Straight-Line method

(method 1)

(method 2)

Reducing balance method (method 3)

Reducing balance – Depreciation Schedule

Year 4 net book value = RM6,561

Year 5 beginning book value = RM6,561

T-account for Non-current Assets

Machinery
Date Details RM Date Details RM
1 Jan 2023 Cash at Bank 10,000 31 Dec 2023 Depreciation 1,000
31 Dec 2023 Balance c/d 9,000
10,000 10,000
1 Jan 2024 Balance b/d 9,000

T-account for Depreciation (expenses – P/L)

Depreciation expense
Date Details RM Date Details RM
31 Dec 2023 Machinery 1,000 31 Dec 2023 Balance c/d 1,000
(10,000 x 10%)
1,000 1,000
1 Jan 2024 Balance b/d 1,000

Accumulated depreciation ( – SOFP)

Accumulated depreciation – Machinery
Date Details RM Date Details RM
31 Dec 2023 Balance c/d 3,000 1 Jan 2023 Balance b/d 2,000
31 Dec 2023 Depreciation 1,000
 1,000 1,000
1 Jan 2024 Balance b/d 3,000

Statement of Profit or Loss for the year ended 31 December 2023

Gross Profit RM 9,000

Less: Expenses

Depreciation (RM 1,000)

Net Profit RM 8,000

Statement of Financial Position as at 31 December 2023

Asset:

Machinery at cost (RM 10,000)

Less: Accumulated depreciation – Machinery (RM 3,000)

Net Asset Value RM 7,000

Question 4
Lecture 8 Accounting for Trade Receivables
Lecture 9 Accounting for Non-current Asset and Depreciation
Lecture 10 Year-end Adjustment I
Lecture 11 Finalised Financial Statements and Closing Entries

1. Direct write-off method

Dr Bad Debts Expense 1,000

Cr Accounts Receivable – Jess 1,000
(To record write-off Jess account)

Write-off Bad Debts from Trade receivables account

Trade Receivables
Date Details RM Date Details RM
1 Jan 2023 Marry 5,000 1 Aug 2023 Bad debt -Jess 1,000
5 June 2023 Jess 1,000 31 Dec 2023 Balance c/d 5,000
 6,000 6,000
1 Jan 2024 Balance b/d 5,000

Bad Debt expense

Date Details RM Date Details RM
1 Aug 2023 Bad debt -Jess 1,000 31 Dec 2023 Balance c/d 1,000

1,000 1,000
1 Jan 2024 Balance b/d 1,000

2. Allowance method for uncollectable accounts

a. Estimated uncollectables
Dr Bad Debts Expense 1,000
Cr Allowance for Doubtful Debts 1,000

b. Actual uncollectables (when the debt turns bad)

Dr Allowance for Doubtful Debts 1,000
Cr Accounts Receivable – Jess 1,000

Bad Debt expense

Date Details RM Date Details RM
1 Aug 2023 Bad debt -Jess 1,000 31 Dec 2023 Balance c/d 1,000

1,000 1,000
1 Jan 2024 Balance b/d 1,000

Allowance for Doubtful Debt

Date Details RM Date Details RM
31 Dec 2023 Balance c/d 1,000 31 Dec 2023 Bad debt -Jess 1,000

1,000 1,000
1 Jan 2024 Balance b/d 1,000

Trade Receivables
Date Details RM Date Details RM
1 Jan 2023 Marry 5,000 1 Aug 2023 Bad debt -Jess 1,000
5 June 2023 Jess 1,000 31 Dec 2023 Balance c/d 5,000

6,000 6,000
 1 Jan 2024 Balance b/d 5,000

Financial Statement
Statement of Profit or Loss for the year ended 31 December 2023

Gross Profit RM 9,000

Less: Expenses

Bad debt (RM 1,000)

Doubtful debt (RM 1,000)

Net Profit RM 7,000

Statement of Financial Position as at 31 December 2023

Asset:

Trade Receivables (RM 6,000)

Less: Allowance for Doubtful Debt (RM 1,000)

Net Asset Value RM 5,000

XXX Company
Statement of Comprehensive Income for the year ended ….

RM RM

Sales XX

Less: Return inwards (trial balance: debit return) (XX)

Net Sales XX

Less: Cost of Goods Sold

Opening inventories XX

Add: Purchases XX

Less: Return outwards (trial balance: credit return) (XX)

Less: Carriage inwards (XX)

Less: Closing inventories (XX) (XX)

GROSS PROFIT XX
Add: Revenue

Commission received XX

Rental received XX

Interest received XX XX

Less: Expenses

Advertising XX

Service and Repairing expenses XX

Rental paid XX

Commission paid XX

Insurance paid XX

Interest paid XX

Salaries and Wages XX

Electricity and utilities XX

Carriage outwards XX

Any other expenses XX (XX)

NET PROFIT XX

XXX Company
Statement of Financial Position as at ….

RM RM

Non-current assets

Motor vehicles XX
Less: Accumulated depreciation (XX) XX

Office equipment XX
Less: Accumulated depreciation (XX) XX

Fixtures and fittings XX

Less: Accumulated depreciation (XX) XX

XX
Current assets

Closing Inventories XX

Trade receivables XX

Less: Allowance for doubtful debts (XX) XX

Prepaid expenses (eg. prepaid rent/ insurance…) XX

Interest receivable XX

Fixed deposit XX

Cash at Bank XX

TOTAL ASSET XX

Non-current Liabilities

Bank Loan XX

Current Liabilities

Trade payables XX

Accrued expenses (eg. Accrued salaries/ insurance…) XX

Revenue received in advanced XX

Bank overdraft XX

XX

Equity

Beginning capital XX

Add: Net Income (or Less: Net Loss) XX

XX

Less: Drawings (XX)

Closing Capital XX

TOTAL EQUITY AND LIABILITIES XX

Class Timetable
✅ 19/12 (tue) Lecture 1 Introduction to Accounting (Theories)
Lecture 2 Basic Accounting Concepts and Conventions
(Theories)

✅ 19/12 (tue) Lecture 3 Basic Accounting Procedures and Systems I

Lecture 4 Accounting Procedures and System II

✅ 21/12 (thur) Lecture 5 Financial Statements of Sole Proprietorship

✅ 23/12 (sat) Lecture 6 & 7 Books of Prime Entry and Ledgers

✅ 30/12 (sat)
6-8pm
Lecture 8 Accounting for Trade Receivables

✅ 30/12 (sat)
6-8pm
Lecture 9 Accounting for Non-current Asset and
Depreciation

✅ 30/12 (sat)
6-8pm
Lecture 10 Year-end Adjustment I

✅ 1/1 (mon)
10-12pm
Lecture 11 Finalised Financial Statements and Closing
Entries

✅ 1/1 (mon)
10-12pm
Lecture 12 Correction of Errors

✅ 2/1 (tue)
6-7pm
Lecture 13 Financial Statement for Club, Society, and
Association

✅ 2/1 (tue)
6-7pm
Lecture 14 Accounting for Inventory

✅ 6/1 (sat)
6-7pm
Final Revision & Past Year revision