Payables - Tutorials Q

FAR210
PAYABLES – Discussion Questions
Answer all questions. Choose the most suitable answer.
1. Choose the examples of payables:
i. Accrued bonuses and wages.

ii. Sundry payables.
iii. Current tax liability.
iv. Dividend payables.
A. i, iii
B. ii, iv
C. i, ii, iv
D. All of the above
2. The following statements in relation to the objectives of providing information on

payables are incorrect EXCEPT for:
A. To help users to understand the return that the entity has produced on its
economic resources.
B. To assess management’s stewardship of the entity’s economic resources.
C. To ascertain the entity’s efficiency in managing its working capital.
D. To predict the entity’s future returns on its economic resources.
3. Liability can be recognised when the transaction satisfies the definition of liabilities and
high potential of future economic benefit flow to the entity when performance obligation
is met.
A. True
B. False
4. A credit note is a document from supplier informing a customer that his account has
been adjusted for any returns.
A. True
B. False
5. Derecognition is the removal of a previously recognised financial liability from an entity’s

statement of financial position.
A. True
B. False
The following scenario relates to question 6 and 7
Victory Bhd is a retailer of computer products. A contract with a computer wholesaler, EZ Bhd
was signed on 1 June 2022 to purchase several computer-related products and support
services. Both parties agreed on the payment term, whereby Victory Bhd will pay an initial
payment of 40% upon delivery of the products, and the balance payment will be paid within
30 days after the receipt. EZ Bhd offered credit terms of 5/14, net 30. On 2 June 2022, the
agreed products were delivered to Victory Bhd together with an invoice worth RM 21,570. On
17 June 2022, Victory Bhd had issued a cheque to settle all amount due to EZ Bhd. Both
companies close their books on 30 June each year.
6. Based on the paragraph above, the following statements are incorrect except for:
A. The transaction on 1 June 2022 between Victory Bhd and EZ Bhd give rise to
financial liability.
B. The amount of trade payables to be initially recognised in Victory Bhd’s books is
RM21,570
C. Victory Bhd will receive a discount of 5% if payment is made within 14 days of the
invoice date.
D. On 2 June 2022, Victory Bhd should made a credit entry on its cash account by
RM8,624
7. The journal entries to record the transaction on 17 June 2022 are:
A. DEBIT Trade payables RM12,294.90, CREDIT Bank RM12,294.90

B. DEBIT Bank RM12,294.90, CREDIT Trade payables RM12,294.90
C. DEBIT Trade payables RM12,942, CREDIT Bank RM12,942
D. DEBIT Bank RM12,942, CREDIT Trade payables RM12,942
The following scenario relates to question 8, 9 and 10.
On 10 March 2022, Kirana purchased goods worth RM56,000 on credit with the term 2/15, net
30 from Salam Enterprise. A trade discount of 2% was also given to Kirana. Salam Enterprise
charged transportation cost of RM500 for this purchase. Kirana paid cash of RM5,000 upon
delivery of the goods on 13 March 2022, On 16 March 2022 Kirana returned damaged goods
worth RM1,250 to Salam Enterprise. On 23 March 2022, Kirana settled all amount owed by
cheque. Both companies closed their books on 31 March each year.
8. The following statements are correct EXCEPT for:
A. Salam Enterprise can be recognised as a liability on 13 March 2022.

B. The acceptance of goods from Salam Enterprise has created a contractual
obligation for Kirana
C. Trade discount usually expressed in percentage of the quoted price.
D. The obligation to deliver cash has expired when the damaged goods were returned
to the supplier.
9. The amount of purchase is:
A. RM56,000
B. RM56,500
C. RM55,380
D. RM55,370
10. The journal entry to record the transaction on 23 March 2022 in Kirana’s books:
A. DEBIT Salam Enterprise RM49,750, CREDIT Discount Received RM995,

CREDIT Bank RM48,755
B. DEBIT Salam Enterprise RM50,370, CREDIT Discount Received RM2,518.50,
CREDIT Bank RM47,851.50
C. DEBIT Salam Enterprise RM49,130, CREDIT Discount Received RM982.60,
CREDIT Bank RM48,147.40
D. DEBIT Salam Enterprise RM49,120, CREDIT Discount Received RM982.40,
CREDIT Bank RM48,137.40.
END OF QUESTION

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FAR210

PAYABLES – Discussion Questions

Answer all questions. Choose the most suitable answer.

1. Choose the examples of payables:

i. Accrued bonuses and wages.

2. The following statements in relation to the objectives of providing information on

5. Derecognition is the removal of a previously recognised financial liability from an entity’s

7. The journal entries to record the transaction on 17 June 2022 are:

A. DEBIT Trade payables RM12,294.90, CREDIT Bank RM12,294.90

The following scenario relates to question 8, 9 and 10.

8. The following statements are correct EXCEPT for:

A. Salam Enterprise can be recognised as a liability on 13 March 2022.

9. The amount of purchase is:

A. DEBIT Salam Enterprise RM49,750, CREDIT Discount Received RM995,

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