AFT 1043 BASIC ACCOUNTING SEMESTER FEBRUARY SESSION 2016/2017
GROUP ASSIGNMENT NAME OF LECTURER (TUTORIAL): MADAM NOR MAIZATULAKMA BINTI SAIDI LECTURE GROUP: L3T2
GROUP MEMBERS NURHIDAYAH BINTI CHE JAAPAR SHAHIDAH ADLINA BINTI AZMI NURUL IZZATI BINTI ROZALI SITI NURHIDAYAH NABILAH BINTI BADRUL-HELMY SITI NUR SOLIHAH BINTI MOHD SARBANI
MATRIC NO A16A0774 A16B0959 A16A0854 A16A1030 A16A1022
CONTENT
NO OF PAGES
1. ABSTRACT
1
2. INTRODUCTION
3
3. BACKGROUND OF THE BUSINESS UNDER STUDY
5
4. CURRENT BUSINESS RECORDING STATUS
7
5. ACTION TAKEN BY GROUP TO GUIDE AND HELP THE
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BUSINESS TO HAVE/IMPROVE A SYSTEMATIC RECORDING OF BUSINESS TRANSACTIONS 6. FULL SET OF ACCOUNTS FOR ONE MONTH i.
JOURNALIZE ONE MONTH TRANSACTIONS
10
ii.
POST TO THE ACCOUNTS/LEDGERS
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iii.
PREPARE THE TRIAL BALANCE
17
iv.
PREPARE THE STATEMENT OF PROFIT AND LOSS
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v.
LIST DOWN ALL ASSETS AND LIABILITIES
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7. THE IMPORTANCE OF ACCOUNTING TO THE MICRO
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BUSINESSES/PETTY TRADERS’ ACTIVITIES 8. SUGGESTIONS TO THE MICRO BUSINESSES/PETTY
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TRADERS OF HOW AND WHAT TO DO TO HAVE SYSTEMATIC RECORDINGS OF BUSINESS TRANSACTIONS AND FINAL ACCOUNTS 9. CONCLUSIONS
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10. APPENDICES
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1. ABSTRACT
The main purpose our groups doing this assignment is to apply the basic accounting subject (AFT 1043). So, we can learn the theory toward practical in the class. Our group member consist of six students who have different backgrounds and culture. The company that our group has chosen are Percetakan Berkat Karisma. This company located at Giat Mara industry area. Why we choose this company? Because that company are near to our campus, so that is easy to our member to doing this assignment. Percetakan Berkat Karisma company are runs a business about print paper, card, banner and other such as paper exam and greeting card. we carry on an this interview with the company owner and company workers. We get many information to doing our assignment about Percetakan Berkat Karisma and it very useful to us. We get information about Percetakan Berkat Karisma background, financial information and the purpose of setting up this business and many more. Last but not least, all the detail that our group got, very help us a lot to finish this accounting assignment. The transactions for one month, it managed to achieve successfully.
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ACKNOWLEDGEMENT
Our group member like to thank to our lecturer and our tutor lecturer, Dr Hakimin and madam nor maizatulakma who willing to spends their time to guides our group and give their support to our group to finish doing this Accounting assignment with successfully. Before that, our group member also want thanks to our classmate that give the full corporations when we all in progress to finish and complete this assignment before dateline. Then, we feel very appreciate and very thanks to University Malaysia Kelantan (UMK) which give us chance for our group member to learn more and many about Basic Accounting subject. We also need to thank to our group member that very proactive and motive to find the information and doing this assignment with hardworking. Lastly, our group member need to thanks the happiness and friendly owner and worker that work at Percetakan Berkat Karisma company because they has spent their useful time with us. We know they very busy with their job but their still give us good corporations and we fill interview session with successful. They are very good employee and Percetakan Berkat Karisma will if have good employee like them. Time interview session, our group member can ask all question to them and we had been allow to took picture and other document. So, all information that our group member got, we can use with correctly and usefully.
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2. Introduction
Accounting is the systematic and comprehensive recording of financial transactions pertaining to a business, and it also refers to the process of summarizing, analyzing and reporting these transactions to oversight agencies and tax collection entities. Accounting is one of the key functions for almost any business. It may be handled by a bookkeeper and accountant at small firms or by sizable finance departments with dozens of employees’ at large companies. Accounting is a service activity and it is important as it provides quantitative information of financial nature to various stakeholders which are intended to be used in making economic decision. These stakeholders include investors, management, and government, suppliers, financiers, regulators and etc. The business accounting help in making a number of short term and long term business decisions which helps an enterprise to grow. In today’s complex business environment, it is very important for the business to keep their accounting records clean and up to date. Proper accounting is important to any business because the accounting records helps in evaluating the performance of business. It also helps to manage and monitor cash flow and helps business to be statutory compliant. Besides that, the accounting records helps to create budget and future projections and it also helps in filing financial statements with regulators, stock exchanges and filing of tax returns. The objective of this study is this course will introduce students to the preparations and uses of financial statements, accounting standards, concept and theory and accounting cycle framework. The course will also equip students with skills to do record keeping, bank reconciliation, and final accounts with adjustments. At the end of this course, the students are able to prepare the financial statements using accounting concepts and financial reporting standards. The students also can manage business information in the preparation of financial statements and can report verbally the preparation process of the financial statements. For this assignment, we have chosen the Percetakan Berkat Karisma’s company. We have to prepare a report on the preparation of a full set of accounts for micro 3
business or petty traders. In order to get the information about the company, we have to conduct an interview with the managers or the business owner. On 23 March 2017, we went to Percetakan Berkat Karisma’s company and make an interview with the manager of the company. We asked the manager about the account of the company for one month transaction on January 2017.
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3. COMPANY BACKGROUND
Generally, we know at Malaysia have many company that running their own business. There are many type of business such as food and beverage that people in this country running up their business. So, we have chosen one of the types of business that provide accounting report which is to gain their profit in their business. Percetakan Berkat Karisma is the company that we have interviewing them to know their own profit that their get every month. Mr Haji Alias bin Haji Awang Kechik who is the founder of the company that running up the business. He was choose the type of business like printing industry which is he has the knowledge about the printing services. The founder of the company is Mr Haji Alias which is 55 years old. He was born in Kelantan on 1962. Before he run up the business, he was taking the Sijil Pelajaran Malaysia (SPM) at Sekolah Menengah Kebangsaan Putra, Kota Bharu. After then, he never continues or furthers the studies but make decision to work with his parents at the hometown. Then, he makes decision by developing his own business under Industri MARA, Pengkalan Chepa and now became one of the successful business men in Kelantan. He was married with his wife who is Hajah Che Hazmah binti Che Kob who is running the business with him and always supports their business. She is 54 years old and she works at Universiti Teknologi Malaysia (UITM) Kota Bharu. They have three children that also help their business. The eldest is Nurul Aisha binti Haji Alias, 29 years old. The second child is Mohd Shahmi bin Haji Alias, 23 years old and the last child is name Mohd Irfan bin Haji Alias, 20 years old. He also has a son in-law and daughter inlaw. Besides, he also has three grandchildren. Percetakan Berkat Karisma is located at Lot 148, Kawasan Industri Mara Fasa 3, Pengkalan Chepa, 16100 Kota Bharu, Kelantan. The company was registered on October 16, 1996 and was registered with the Ministry of Finance in the field of supplier or services. Now, Percetakan Berkat Karisma has been 21 years in business world. Percetakan Berkat Karism was opened on working hour which is on 8.30 AM until 5 PM and closed on Friday. The company have contact number and mobile phone which is 5
their customer can contact them. Besides that, the company also have email which is
[email protected]. In addition, Percetakan Berkat Karisma have their motto which is ‘Customer’s satisfaction is our priority’. Besides that, the objective is “We have our own aim to strive in making Malaysia more modern and we strive hard to be satisfaction and be one of the best printing suppliers”. Other than that, the vision of Percetakan Berkat Karisma is 'Strive hard to be one of best printing supplier'. The company have 12 employees who are help him to run up the business since 21 years ago. The employees that hired by Percetakan Berkat Karisma are 12 skilful and trustful workers including his three children and also son in-law. The employees are very dedication and innovative. They will make every effort to succeed and become a respected supplier of printed materials in the face of the new millennium and moving towards achieving the goals of Vision 2020. Last but not least, Mr Haji Alias has their own mission and vision to increase his profit of company.
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4. CURRENT BUSINESS
Percetakan Berkat Karisma was a sole proprietorship which is one of the types of business. This is because Mr Haji Alias was run up his business by himself. Then, he made a loan from bank to run the business. Now, the company have amount of capital around RM80000 in their company. Then, the salaries of their employees were around RM15000. That means their company were very stable. Mr Haji Alias can manage their own business when he used the types of business like sole proprietorship. A sole proprietorship is a business other that the business registered under the Company Act 1965, business managed by the government or any incorporated public bodies, organisations registered or exempted under any written law that enforce in regards and with organisational registration or a cooperative company, business that stands as on-going of any profession (Section 4, Business Registration Act, 1956). Many people more prefer to choose sole proprietorship than company or partnership because it is established, owned, funded and managed by only one person. Normally, it is run by one person and will hire a few workers to help the business. For example, the founder of Percetakan Berkat Karisma who is Mr Haji Alias just taken 12 workers to help him manage the business. That means he used this type of business because he want to manage his company by himself. So, he can gain their profit when his used this type of business. Generally, sole proprietorship is the highest number of registered businesses in Malaysia. This is because sole proprietorship is allotted under the Business Registration Act 1956 where this type of business is easily established and formed. Then, it profit also belong to the owner. If the company it lost, the owner also lost or bankrupt. So, it will be effect to the owner. As conclusion, Mr Haji Alias is one of the sole proprietorship that running up their business in Malaysia.
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5. Actions taken by the group to guide and helps the business to have/improve a systematic recording of business transactions.
In every business there are numerous business transactions and it is impossible for the management to keep in their mind all business transactions that they have made or purchase the items. The systematic and complete recording of business transactions helps the management to receive any retrieve information easily and in time. Business records which must be kept include documents which provide a record of the business transactions, or which enable these transactions to be traced and verified through the accounting system from start to finish. The types of business transactions are include invoices, receipts, cash register tapes, banking records, cheque, etc. The essence of good record keeping is good book keeping. Efficient bookkeeping will save the company time and money in long run. To improve a systematic recording of business transactions are by making the bookkeeping part of the accountant or owner of company regular routine. Once they established a routine, they shall find that the work through their books more quickly. Next, the accountant or owner has to keep their bookkeeping up to date all the time if there are transactions that make on that day. They also have to keep the books in an organized manner because their works quicker if they can easily access the information that they needs. It is very important to record the business transactions every day because when the transactions are record last minutes, there will incident that will happen during the recording. For example, the transactions are misplace or missing and that why do not leave things until last minutes. Besides the guides that our group has given, they can also look for another ways to improve their bookkeeping or meet the accounting company that can give the good guidelines and examples for them to improve more. To keep the business transactions there are two ways to do it. First using the paper based method. To use the paper based record keeping simply means that keep all the invoices for sales and for purchases as well as cheque, copies of bank deposit slips and bank statements. When the company use the paper based method of book keeping, 8
they must make sure they keep all records in legible and well organized manner. The second method is using the computer method. It is depending on the type and size of the company business, using the computer can simplify and improve the company record keeping. There are several advantages using a computer to keep the records because most computer accounting programs will give them an up-to-date picture of how the business is going and help them plan and forecast the business future situation. The computer can improve the accuracy of record keeping and find the recorded information more quickly if they need it for later. Besides, the lists of items that change from time to time can be updated more easily if they are kept the record of transactions on the computer.
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6. FULL SET OF ACCOUNTS FOR ONE MONTH i.
JOURNALIZE ONE MONTTH TRANSACTIONS
TRANSACTION OF PERCETAKAN BERKAT KARISMA SDN. BHD . 2017 JANUARY
1 Deposited credit RM80000 into bank as capital 6 Purchased paper and ink on time from SMO Book Stores RM10000 8 Paid insurance by credit with amount RM5000. 15 Paid maintenance by credit with amount RM20000. 18 Paid rent transportation RM1000 cash. 21 Sold exam paper to UITM Kota Bharu RM5000 on credit. 22 Bought computer for office use RM2700 on credit. 24 Lembaga Kenaf dan Tembakau Negara has paid to us RM4400 by internet transfer. 25 Bought computer for office use, RM2700 on credit. 26 Puan Hasmah bought printed as a wedding gift by cash RM1500. 27 En. Ahmad paid service printing by cash RM2100. 28 Paid salary RM15000 by using transfer bank. 29 Paid rent of building, RM500 by bank. 30 Paid electric and water with cash RM20
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ii.
LEDGRES ACCOUNT Capital account
2017
RM
balance c/d
80,000
January
2017
1
Bank
RM January 1 80,000
80,000
80,000
Bank 2017
RM
January 1 24
Capital LKTN
2017
RM
80,000 January 6 Paper and ink 4,400
8 Insurance
5,000
15 Maintenance
20,000
21 Exam paper 22 Computer Acer 28 Salary 29 Rent building 84,400
Balance b/d
10,000
5,000 2,700 15,000 500 84,400
26,200
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Paper and ink 2017 January
RM 6
Bank
10,000
2017 balance c/d
10,000 10,000
Balance b/d
RM 10,000 10,000
Insurance 2017 January
RM 8
Bank
5,000
2017 balance c/d
5,000 balance b/d
RM 5,000 5,000
5,000
Maintenance 2017 January 15
RM 2017 Bank
20,000 20,000
balance b/d
20,000
12
balance c/d
RM 20,000 20,000
Rent of transportation 2017
RM 2017
January 18
Cash
10,000
RM
balance c/d
10,000 balance b/d
10,000 10,000
10,000
Cash 2017
RM
January
26 27
Puan Hasmah En. Ahm
15,000 2,100
3,600 Balance b/d
100
13
2017
RM
June 18 Rent of transportation 1000 25 Withdraw
500
30 Electric and water
2000
Balance c/ d
100
3,600
Exam Paper UITM Kota Bharu 2017 January
RM 21
Ban
2017
5,000
RM
balance c/d
5,000 Balance b/d
5,000 5,000
5,000
Computer Acer 2017
RM
January 22
Bank
2017
2,700
RM
balance c/d
2,700
2,700 Balance b/d
2,700
2,700
Lembaga Kenaf dan Tembakau Negara 2017 Balance c/d
RM 2017
RM
4,400 January
24
Bank
4,400
4,400 4,400
Balance b/d
14
4,400
Withdraw 2017
RM 2017
January 25 Cash
500
RM
balance c/d
500
500 balance b/d
500
500
Puan Hasmah 2017
RM balance c/d
2017
RM
1,500 January 26
Cash
1,500
1,500 1,500
Balance b/d
1,500
En. Ahmad 2017 Balance c/d
RM 2,100
2017 January 27
Cash
2,100
RM 2,100 2,100
balance b/d
15
2,100
Salary 2017 January
RM 28
Bank
2017
15,000
balance c/d
15,000 Balance b/d
RM 15,000 15,000
15,000
Rent building 2017 January
29
Bank
RM
2017
RM
500
balance c/d
500
500 500
Balance b/d
500
Electric and Water 2017 January
RM 30
Cash
2,000
2017 balance c/d
2,000 Balance b/d
RM 2,000 2,000
2,000
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iii.
TRIAL BALANCE TRIAL BALANCE RM
RM
Bank
26,200
Capital
80,000
Paper and ink
10,000
LKTN
4,400
Insurance
5,000
Pn. Hasmah
1,500
Maintenance
20,000
En. Ahmad
2,100
Transportation
1,000
Cash
100
Exam paper
5,000
Computer
2,700
Withdraw
500
Salary
15,000
Building
500
Electric and water
2,000
TOTAL
88,000
88,000
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iv.
STATEMENT OF PROFIT AND LOSS Profit and Loss
Sales
RM 8000
(-) Cost of goods sold Opening stock
RM 0
Purchase
RM 10000 RM 10000
(-) closing stock
RM 8000 RM 2000
Gross Profit
RM 6000
(-) Expenses Insurance
RM 5000
Maintanance
RM 20000
Transportation
RM 1000
Computer
RM 2700
Salary
RM 15000
Building
RM
Water and electric Bill
RM 2000
500
(RM 40200) Net Loss
(RM 40200)
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v.
ASSETS AND LIABILITIES
BALANCE SHEET Capital Current Asset:
RM 80000
(-) Net Loss RM 40200
Bank
RM 26200
Cash
RM
Debtor
RM 5000
Closing Stock
RM 8000
Drawing RM
100
500 RM 40700
RM 39300
RM 39300
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7. The importance of accounting to the micro businesses or petty traders’ activities Accounting is communications of information that owners, managers, and investors need to evaluate a company’s financial performance. The term Accounting is very familiar and we always hear that term. Accounting is a process of recording, summarizing, analyzing and recording of financial transactions of the micro business. Accounting is the most of important functions of the business. Accounting can be divided into various fields such as management accounting and financial accounting. Management accounting is report of information for internal user. Then, financial accounting refer to statutory reporting. The important of accounting to the Percetakan Berkat Karisma is to provide quantitative information of financial nature to various stakeholder which is intended to be used in making economic decision. Business accounting help in making a number of short term and long term business decisions will helps micro business to grow as well as penetrate in market. Accounting also helps in evaluate the performance of business. The accounting records refer to results of operations as well as statement of financial position. Balance sheet and profit and loss accounts rations are calculate which help user of financial statements to analyze the performance of an entity. For instance, current ratio, turnover ratio and debt equity ratio. We can get budgeted figures if we compare previous period accounting data with current period. If your income good or positive but cash flow bad and negative? Why? Do you have much business debt, will you manage it? Then, we need to learn some current ratio, turnover ratio and other. Turnover ratio function is to help business to gouge company’s activity level. It also identify things that will be hidden in plain sight such as finding out business inventory and customers are needs to pay later and later. Next, helps Percetakan Berkat Karisma to be statutory compliant and create budget and future projections. Goods business accounting can may sure timely record our liabilities that need to be paid within the prescribed time line. For example, 20
provident fund, pension fund, VAT, sales tax and income tax. This will helps business to be statutory if payment of liabilities with timely. Accounting data also helps Percetakan Berkat Karisma to steady budget and forecast for future time. Business trends are projected based on past data produced by accounting system. Then, the important of accounting to the micro business is accounting will save your time. An accounting will helps you to accomplish and look at your duty and the time with constraints. It is quite tempting and motivate the business owner to manage and care their own accounts but it is always advisable. It is gives you a lot of time that you can spend on business growth. Lastly, Accounting also helps in Audits and legal issues. The bad issues for business are getting audited and checked by government authorities. Accounting can handle all your audit related issues. You do not have to worry and think about tax season or audits your account. That skills of accounting offer you to great advice on legal financial issues.
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8. Suggestions to the micro businesses/petty trader of how and what to do to have a systematic recordings of business transactions and final account. Systematic recordings of business transactions and final account usually not used by micro businesses. This would effects their business. If the business use systematic recordings of business transactions and final account, they will know the profit and loss the company. Moreover, the recording business transaction can improve the company. My suggestions to the micro businesses/petty traders of how to do to have a systematic recordings of business transactions and final account are: 1. Keep recordings of business transactions up to date. Micro business not think that the business transaction as important things and many of them do the transaction last minute before close the account. So, this can probably the account not balance. Recordings need up to date. As we know, if the recordings not up to date, this can make our work more difficult and risk losing money if not realising that the customers and our debt. All businesses need records all the business transactions to confirm the calculation. The records that must be kept such as receipts, payment, income, expenditure, list of debtors and creditors and more.
2. Use electronic record. Micro business more prefer manual record and just use notebook for their recording business transaction but now we have another way of recording business transaction that is electronic record. Manual record cheaper and less risk to loss than electronic record but, electronic record more efficient and less storage. Moreover, now we have accounting software that make it easier to record information. This can save time and storage. Other than that, electronic record can save the data and more security.
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3. Hire specific worker. Usually, micro business just use the worker that need to do many work to record business transaction. But, this is not fine to the company. Because the worker need to think about many of his work. So they cannot concentrate. It no loss if hire specific worker for record business transaction because the worker can only do their work and can concentrate. So, this can give advantage to the company and the record of account will not false. Moreover, the owner will find an accounting for the business micro that have basic account. The owner no need to worry anymore.
4. Go to class business transaction. Why we need to record business transaction?. I think, if we not record business transactions, that will give bad effect to business financial. That’s why we need to recording everything in business. If we have worker, the company need send and sponsor them to the class for improve in business transaction even though they work long time in the company. Moreover, they can study how to record and how to use manual and electronic recording business transaction.
5. Learn basic account. Many of owner micro business not high study. So, they not know about basic account. At the first open the business, they will be an accountant for the business. This is because, they not believe any person and do not want the business bankrupt. In this case, the owner need to learn basic account. This can make sure that the owner can ind
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9. CONCLUSION Based on the research that we have interviewed at Percetakan Berkat Karisma Sdn. Bhd. we have learnt about the on how they have prepared a systematic recording for their business transactions. Besides that, we also got more understands for our subject when we have did our interviewed on them. After, got the information and financial statement from the Percetakan Berkat Karisma Sdn. Bhd. we have did the transaction for one month and from that we can analyse the company was good in arrange their accounting for their business. Moreover, we can conclude that before doing the financial statement we have to know the purpose in each system in accounting for give more ease to record and to avoid from the mistakes. Firstly, we can know on how to find the profit and loss. The profit and loss statement is often used for today and under the accrual basis the revenue and expenses reported on the profit and loss statement should be the revenue that were earned during the accounting period and the expenses that match the revenues being reported or have during the accounting period. Then , it will be said that profit and loss is very crucial in the business because it can be track for know how much the company can gain the net profit or the net loss. Besides that, we also know to prepare the trial balance for the company. As known trial balance is a list closing balances of ledger accounts on a certain date and is the first towards the preparations of financial statement. Then, trial balance usually prepared at the end of an accounting period to assist in the drafting of financial statement. Moreover we have knew the purposes of the preparing the trial balance was to ensure that for every debit entry recorded, a corresponding credit entry has been recorded in the books in according with the double entry concept of accounting. When the totals of the trial balance were not balance, the differences may be investigated and resolved before financial statement are prepared. Then, to ensures that the account balances are accurately extracted from accounting ledgers and assists in the identification and rectification of errors. 24
Therefore, we can also know an assets and liabilities. Assets is the things that are resources owned by a company and which have future economics value that can be measured and can be expressed in dollars. Moreover, it also report on the balance sheet usually ay cost or lower. After that, we can also know the long term assets and the short assets. Then, liability is an obligation and it is reported on a company’s balance sheet. For instance in liability includes loan payable, bonds payable, interest payable, wages payable and income
taxes payable. If less common liabilities are
customer deposits and deferred values. Liability also is often viewed as claims on a company’s assets. Other than that, liability can also be thought of as a source of a company’s assets. Besides that, the company has gained loss about RM 46,200. So for avoid from the losses the company has to increase the system in financial system for the company. In addition the company should has the
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APPENDIX
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