1. North invested RM40,000 in the partnership of West and East. The capital balance of West and East were RM40,000 and RM60,000, respectively. Income and loss is shared according to the ratio of equity balances. North was to receive 25% interest in the new partnership. The journal entry to record this transaction would NOT include:

a	a credit to East's capital account for RM3,000
b	a debit to cash for RM40,000
c	a credit to North's capital account for RM30,000
d	a credit to West's capital account for RM2,000

2. Depletion:

a	Is an unrealised expense reported in equity.
b	Is also called amortization.
c	Is also called depreciation.
d	Is the process of allocating the cost of natural resources to periods in which they are consumed.

3. A company had a beginning balance in retained earnings of RM43,000. It had net income of RM6,000 and paid out cash dividends of RM5,625 in the current period. The ending balance in retained earnings equals:

a	RM11,625.
b	RM54,625.
c	RM43,375.
d	RM42,625.

4. The ability to meet short-term obligations and to efficiently generate revenues is called:

a	Liquidity and efficiency.
b	Market prospects.
c	Profitability.
d	Solvency.

5. A master budget:

a	includes only financial aspects of a plan and excludes nonfinancial aspects
b	is an aid to coordinating what needs to be done to implement a plan
c	should not be altered after it has been agreed upon
d	includes broad expectations and visionary results

6. Partner's drawings are:

a	Amounts credited for working in the partnership.
b	Money borrowed from the partnership.
c	Partner's artwork.
d	Cash amounts withdrawn or private expenses paid by the partnership on behalf of a partner, in anticipation of profits.

7. Which of the following statements is likely to be true,for a company making profits?

a	The profit for the year will be greater than the gross profit.
b	Retained profits at the year end will be greater than retained profits at the beginning of the year.
c	Retained profits at the year end will be greater than shareholders' equity.
d	The operating profit will be less than the profit for the year.

8. What is the share capital?

a	An equity account representing the amount of assets invested in the company by its employees.
b	An equity account representing the amount of drawings taken from the company.
c	An equity account representing the amount of assets invested in the company by its shareholders.
d	A liability account representing the amount of liability in the company.

9. Land improvements are:

a	Assets that increase the usefulness of land, and like land, are not depreciated.
b	Expensed in the period incurred.
c	Assets that increase the usefulness of land, but that have a limited useful life and are subject to depreciation.
d	Included in the cost of the land account.

10. Sales total RM200,000 when variable costs total RM150,000 and fixed costs total RM30,000. The breakeven point in sales dollars is:

a	RM 30,000
b	RM200,000.
c	RM 40,000
d	RM120,000.