UNISA

FAC1502
ASSIGNMENT 4
Latest update
Distinction pass

UPDATE 17/6/2023
2
VERSION 1

The financial year-end for Nice Dealers is 28 February. The rental expenses of Nice Dealers are R9 600 per
month. The financial records of Nice Dealers showed that rent was paid for ten months during the financial
year ended 28 February 20.2.

Use the information to do the journal entry that correctly accounts for the closing adjustment of the
rentals at year-end:

Instructions:

1. Use a full stop to indicate any decimals (eg: 1000.01)

2. Round off to the second decimal after the full stop (eg: 50.56)

3. For embedded questions spelling is very important. If you spell the answer incorrect it will be marked
incorrect. Please make sure that your spelling of the words is correct.

4. Don’t use any special characters (&) and don’t use bold in your answer. It will be marked incorrect.

5. Do not use any abbreviations.

6. Your answer is case sensitive; therefore, you need to put the very first letter of the answer in uppercase,
but the rest of your answer must be in lowercase (eg: Interest on loan)

NICE DEALERS

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Indicate whether the following statement is true or false:
The historical cost of asset and liabilities are increased if they become impaired or onerous.

Select one:
True
False
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Indicate whether the following statement is true or false:
Assets decrease on the debit side of a T-account.

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True
False
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Waterhouse is a small township retail business that trades in soft drinks and has a 30 June 20.19 financial
year-end. The business records the amount of inventory it purchases only on a cash basis. The owner,
Daniel Makoe, has requested you to assist him in preparing the accounting records on an accrual basis.
He has provided you with the following information:
Purchases: Inventory
Date Amount
R

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15 July 20.19 10 385
19 August 20.19 7 236
28 September 20.19 17 311
12 October 20.19 14 422
30 November 20.19 20 005
31 December 20.19 17 987
03 February 20.19 6 500
25 March 20.19 7 340
17 May 20.19 3 670
104 856
Based on your review of the business’s bank statement and a discussion with Daniel, you established the
following:

1. On 30 June 20.19, only R2 540 worth of inventory was still on hand. There was no opening inventory
and no inventory shortages.

2. The business sells products at a 20% mark up on cost.

3. The owner and his assistant earn a total monthly salary of R2 000 a month, their salaries was not paid
on 30 June 20.19 due to a lack of funds.

4. The rates and taxes account are in arrears. No payments have been made for an entire financial year
due to a dispute with the municipality. The amount owing is R4 550.

5. According to Daniel, the business uses a prepaid electricity meter. Prepaid electricity bought for the
year amounted to R3 200 of which R150 has not yet been used by year end.

6. The business rents a pool table from a gaming agent. The conditions for the rental of the pool table
is that 50% of the takings are business income and the balance goes to the agent as a commission. By 31
May 2019, R2 834 was deposited into the business’s account for the businesses’ share. At year end, the
pool table had R1 840 worth of R2 coins in its safe.

7. Daniel paid R870 for maintenance to the local handy man out of his own pocket and has not yet
been refunded by the business.

8. A monthly rental of R500 is made to the garage owner of from where the business operates. June’s
rent is still due.

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9. The business has 10 fridges with a cost of R3 000 each. Daniel estimates that they have an estimated
useful life of 8 years.

Use the information provided to prepare the trading section and other income sections of the
statement of profit or loss and other comprehensive income of Waterhouse for the year ended 30
June 20.19.

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put a 0 in the
amounts column.
Keep the sequence strictly according to the information given.

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Dineo Dlamini is the owner of Dineo’s Hairdressing Salon. You are given the following information for
Dineo’s Hairdressing Salon for the year ended 30 June 20.1.
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 R
Capital 250 000
Equipment 150 000
Bank (favourable balance) 100 000
Trade payables 90 000
Accrued expenses 1 500
Accrued income 2 600
Services rendered 250 000
Interest income 3 400
Wages 160 000
Telephone expenses 34 000
Water and electricity: deposit 4 800
Insurance 22 000
Rental expenses 54 000
Advertising 8 000

Which will the correct total comprehensive income/loss for Dineo’s Hairdressing Salon for the year
ended 30 June 20.1 be?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)
3. If the net effect on the accounting equation is a decrease, please enter the amount as a negative
(eg: -12141.72)

-24600
Answer:
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On 1 September 20.18 Mr Will Turner started a new blacksmith business called Iron Duke. Iron Duke
manufactures and sells domestic cast iron furniture. The following transactions took place during the first
financial year of the entity ending 31 August 20.19.
 On 1 September 20.18 the owner Mr Will Turner made his new personal machine, the Belt Grinder,
available to the business. The cost of the Belt Grinder was R15 000.
 On 1 September 20.18 the factory building the business will be using was purchased for R230 000
using a long-term loan that is payable on 31 August 20.24.

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  The business bought a CNC machine on credit from Big Traders for R11 500. The business paid
R1 500 cash for the installation of the machine. Both transactions took place on 30 November 20.18.
 On 31 August 20.19, Mr Will Turner, decided to trade-in the old delivery van for a new delivery van.
The trade-in value was R14 500, and the cost of the new delivery van was R60 000, with the
difference settled in cash. On the 1 September 20.18 the owner, Mr Will Turner, contributed this
delivery van which had cost R45 000 when new. The vehicle was bought on 1 September 20.16 by
Mr Will Turner and had a carrying value of R27 000 on 1 September 20.18 with only 3 years useful
life remaining. Depreciation needs to be written off on the straight-line basis. (You only need to do
the entries for the asset realisation.)
At the year-end, 31 August 20.19, the depreciation for the current year had not yet been provided for.

The following accounting policies need to be applied regarding property, plant and equipment:

 Depreciation on buildings must be written off over 20 years and vehicles over 5 years both on the
straight-line basis.
 Machinery must be depreciated at 10% per annum on the diminishing balance method.

Show the effect of each of the depreciation transactions on the basic accounting equation with a plus
sign (+) for an increase and a minus sign (-) for a decrease next to each amount under each element.
Also indicate the account(s) that will be affected by each transaction next to the affected elements for
the financial year ended 31 August 20.19. (The business makes use of the perpetual inventory system.)

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the
accounts column and a 0 in the amounts column.
Keep the sequence buildings, vehicles then machinery.

Question 7
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On 1 February 20.2 an EFT of R6 400 was made to the Municipality to pay the electricity deposit for
Khulani Barbers.

The correct recording of the effect of the given transaction on the general ledger and the basic
accounting equation is ...

Instructions:
1. Drag the correct answer into the correct space (cell phone click on the answer and click on the place
where you want to place the amount - also keep your cell phone horizontal when doing the question).
2. An option can be used more than once.
3. If an options has been provided and it is not applicable to the specific questions please put a 0 in the
applicable column.

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You are given the following extract of the pre-adjustment trial balance for Arch Traders for the financial
year ended 30 September 20.2.

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ARCH TRADERS
EXTRACT OF THE PRE-ADJUSTMENT TRIAL BALANCE AS AT 30 SEPTEMBER 20.2
Debit Credit
R R
Capital ………………………………………………………… 525 000
Drawings……………………………………………………… 25 000
Buildings………………………………………………………. 150 000
Land................................................................................... 450 000
Vehicles………………………………………………………. 500 000
Equipment…………………………………………………….. 280 000
Accumulated depreciation: Vehicles(1 October 20.1……. 90 000
Accumulated depreciation: Equipment (1 October 20.1)… 60 000
Trade receivables control…………………………………… 225 000
Inventory………………………………………………………. 250 000
Bank overdraft ……………………………………………….. 714 750
Trade payables control……………………………………… 300 000

Additional information

a. On 1 July 20.2 Arch Traders bought new equipment to the value of R80 000.

b. On 30 June 20.2 old equipment with a cost price of R85 000, bought on 1 October 20.0, were sold
for R55 000 cash.

c. Depreciation for the year must be provided as follows:

- Equipment: 10% per annum on the straight-line method

- Vehicles : 20% per annum on the diminishing balance method

Use the information as extracted from the accounting records of Arch Traders to complete the
asset realisation account to calculate the profit/loss on the sale of the old equipment that will be
disclosed in the statement of profit or loss and other comprehensive income. The amount will be:

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.

10
Please keep the sequence of transactions strictly according the information given but also in the correct
format.

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State whether the following statement is true or false:
The entity does not need to provide security to take out a mortgage.

Select one:
True
False
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The following bank reconciliation statement was prepared at 30 June 20.12 in the books of Grey Services:

11
 Bank reconciliation statement as at 30 June 20.12

Debit Credit

R R
Credit balance as per bank statement................................................ - 938
Credit outstanding deposit................................................................... - 1 010
Credit incorrect entry on bank statement ........................................... - 254
Debit balance as per bank account..................................................... 2 202
2 202 2 202

The following is a summary of the deposits and EFT’s recorded in the cash receipts journal and the cash
payments journal for July 20.12:

Cash receipts journal Cash payments journal

Bank Bank
Doc. No. Date Details (Amount Doc. Date Details (Amount
deposited) No. paid)
R R
CRR01- 7 Cash sales 982 PR 3 Telephone 410
01 2 042 P851 expenses
16 Cash sales 6 4 600
CRR01- PR Purchases
20 L. Good 470 11 294
02 P852 Insurance
27 Cash sales 2 202 16 302
BS-01/02 PR Wages
30 Cash sales 1 152 P853 20 376
CRR01- F Andy
03 PR 27 84
P854 Water and
CRR01- electricity
04 PR
P855
PR
P856

The bank statement received on 31 July 20.12 was as follows:

Bank statement: Grey Services – July 20.12
Date Details Debit Credit Balance
R R R
1 Balance................................................................... - - 938 Cr
Error corrected........................................................ - 254 1 192 Cr
2 Cash Deposit........................................................... - 1 010 2 202 Cr

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 Cash deposit fee..................................................... 21 - 2 181 Cr
3 EFT PR P851.......................................................... 410 - 1 771 Cr
6 EFT PR P852.......................................................... 4 400 - 2 629 Dr
7 Cash Deposit........................................................... - 982 1 647 Dr
Cash deposit fee..................................................... 6 - 1 653 Dr
11 EFT PR P853.......................................................... 294 - 1 947 Dr
14 EFT - P Nkosi (rent)................................................ 290 1 657 Dr
16 Cash Deposit........................................................... - 2 042 385 Cr
Cash deposit fee..................................................... 40 - 345 Cr

20 EFT PR P854.......................................................... 302 - 43 Cr

EFT – L Good.......................................................... - 470 513 Cr

25 MF........................................................................... 90 - 423 Cr

27 Cash Deposit........................................................... - 2 202 2 625 Cr

Cash deposit fee..................................................... 75 - 2 550 Cr
EFT PR P855.......................................................... 376 - 2 174 Cr
25
EFT PR P856.......................................................... 84 - 2 090 Cr
27
Debit order.............................................................. 2 000 - 90 Cr
30
EFT PR P857.......................................................... 685 - 595 Cr
IN............................................................................. 142 - 737 Dr

Additional information:

1. Abbreviations:
MF = Management Fee
IN = Interest on overdraft
2. The correct amount of PR P852 is R4 400 and not R4 600.
3. The debit order is for the salary of the bookkeeper.
4. The bookkeeper made an EFT (EFT PR P857) to T Bush, a creditor, but did not enter the transaction
in the books of Grey Services.
5. The inexperienced bookkeeper also omitted some other transactions in the books of Grey Services.

Complete the cash payments journal of Grey Services, bank column only, for July 20.12.

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.

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If an options has been provided and it is not applicable to the specific questions please put N/A in the
accounts column and a 0 in the amounts column.
Keep the transactions strictly in the order they were given.

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Indicate whether the following statement is true or false:
The format of the statement of financial position presents categories of assets, liabilities and equity as
opposed to the list of the accounts of those elements.

Select one:
True
False
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The following bank reconciliation statement was prepared at 30 June 20.12 in the books of Grey Services:

14
 Bank reconciliation statement as at 30 June 20.12

Debit Credit

R R
Credit balance as per bank statement................................................ - 938
Credit outstanding deposit................................................................... - 1 010
Credit incorrect entry on bank statement ........................................... - 254
Debit balance as per bank account..................................................... 2 202
2 202 2 202

The following is a summary of the deposits and EFT’s recorded in the cash receipts journal and the cash
payments journal for July 20.12:

Cash receipts journal Cash payments journal

Bank Bank
Doc. No. Date Details (Amount Doc. Date Details (Amount
deposited) No. paid)
R R
CRR01- 7 Cash sales 982 PR 3 Telephone 410
01 2 042 P851 expenses
16 Cash sales 6 4 600
CRR01- 470 PR Purchases
20 L. Good 11 294
02 P852 Insurance
27 Cash sales 2 202 16 302
BS-01/02 PR
Wages
30 Cash sales 1 152 P853 20 376
CRR01- F Andy
03 PR 27 84
P854 Water and
CRR01- electricity
04 PR
P855
PR
P856

The bank statement received on 31 July 20.12 was as follows:

Bank statement: Grey Services – July 20.12
Date Details Debit Credit Balance
R R R
1 Balance................................................................... - - 938 Cr
Error corrected........................................................ - 254 1 192 Cr

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 2 Cash Deposit........................................................... - 1 010 2 202 Cr
Cash deposit fee..................................................... 21 - 2 181 Cr
3 EFT PR P851.......................................................... 410 - 1 771 Cr
6 EFT PR P852.......................................................... 4 400 - 2 629 Dr
7 Cash Deposit........................................................... - 982 1 647 Dr
Cash deposit fee..................................................... 6 - 1 653 Dr
11 EFT PR P853.......................................................... 294 - 1 947 Dr
14 EFT - P Nkosi (rent)................................................ 290 1 657 Dr
16 Cash Deposit........................................................... - 2 042 385 Cr
Cash deposit fee..................................................... 40 - 345 Cr

20 EFT PR P854.......................................................... 302 - 43 Cr

EFT – L Good.......................................................... - 470 513 Cr

25 MF........................................................................... 90 - 423 Cr

27 Cash Deposit........................................................... - 2 202 2 625 Cr

Cash deposit fee..................................................... 75 - 2 550 Cr
EFT PR P855.......................................................... 376 - 2 174 Cr
25
EFT PR P856.......................................................... 84 - 2 090 Cr
27
Debit order.............................................................. 2 000 - 90 Cr
30
EFT PR P857.......................................................... 685 - 595 Cr
IN............................................................................. 142 - 737 Dr

Additional information:

1. Abbreviations:
MF = Management Fee
IN = Interest on overdraft
2. The correct amount of PR P852 is R4 400 and not R4 600.
3. The debit order is for the salary of the bookkeeper.
4. The bookkeeper made an EFT (EFT PR P857) to T Bush, a creditor, but did not enter the transaction
in the books of Grey Services.
5. The inexperienced bookkeeper also omitted some other transactions in the books of Grey Services.

Complete the cash receipts of Grey Services, bank column only, for July 20.12.

Instructions:
Drag the correct answer into the correct space.

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An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the
accounts column and a 0 in the amounts column.
Keep the transactions strictly in the order they were given.

Question 13
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Indicate whether the following statement is true or false:
An asset shall be classified as a current asset when it is expected to be converted into money (realised)
within twelve months of the statement of financial position date.

Select one:
True
False
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Victor Smith is the owner of Smith Electricians. On 28 February 20.2 you are given the following
information for Smith Electricians.
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 R
Trade receivables 222 000
Equipment 350 000
Unfavourable bank balance 70 000
Trade payables 50 000
Vehicles 480 000
Loan 300 000
Rent deposit received 6 400
Income received in advance 1 750
Accrued income 4 650

What is the net asset value (equity) of Smith Electricians on 28 February 20.2?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

628500
Answer:
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Indicate by choosing the correct option whether the following statement is true or false:
An income and expenditure statement for non-profit entities is the same as a statement of profit or loss
and other comprehensive income for a sole trader.

Select one:
True
False
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Indicate whether the following statement is true or false:
According to fair value measurement, assets are carried at the present discounted value of the future net
cash inflows the item is expected to generate in the normal course of the business.

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True
False
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Indicate by choosing the correct option whether the following statement is true or false:
Due to a non-profit entity not applying the double entry principle, this will result in the non-profit entity
having incomplete records as the accounting transactions were not recorded properly.

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True
False
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Indicate by choosing the correct option whether the following statement is true or false:
If a single-entry system is used a trial balance can be compiled and the financial statements prepared
from this information will be reliable.

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True
19
 False
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Indicate whether the following statement is true or false:
That portion of a long-term loan or obligation to be repaid within the next 12 months, must be disclosed
as a non-current liability in the statement of financial position.

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True
False
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Indicate by choosing the correct option whether the following statement is true or false:
One of the steps to calculate purchases if no distinction can be made between cash and credit purchases,
if you want to convert a single-entry system into a double-entry system where minimal records are kept, is
to calculate the amounts with the aid of the trade payables control account.

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True
False
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You are given the following pre-adjustment trial balance for JJ Wholesalers:

20
JJ WHOLESALERS
PRE-ADJUSTMENT TRIAL BALANCE AS AT 30 JUNE 20.2
Debit Credit
R R
Capital ……………………………………….. 1 500
000
Drawings…………………………………….. 60 000
Land………………………………………….. 750 000
Buildings……………………………………... 250 000
Vehicles……………………………………… 350 000
Equipment…………………………………… 200 000
Accumulated depreciation: Vehicles……… 35 000
Accumulated depreciation: Equipment…… 20 000
Trade receivables control………………….. 280 000
Inventory…………………………………….. 300 000
Bank …………………………………………. 397 500
Cash float……………………………………. 2 500
Allowance for credit losses………………… 6 500
Trade payables control…………………….. 443 500
VAT control………………………………….. 24 000
Sales…………………………………………. 1 200
000
Cost of sales………………………………… 560 000
Office supplies............................................ 2 350
Wages and salaries………………………… 102 650
Cleaning materials..................................... 2 450
Packing materials...................................... 4 550
Credit losses………………………………… 3 000
Water and electricity……………………….. 12 000
Telephone expenses…………..…………… 15 000
Depreciation…………………………………. 55 000
Bank charges………………………………... 2 000
Rental income……………………………….. 168 000
3 373 000 3 373
000

Additional information

1. A physical inventory count conducted at year-end, revealed that the following

inventory were on hand:
Trading inventory, R290 620
Office supplies, R250
Cleaning material, R260
Packaging material, R1 550.
2. The VAT input was calculated wrong. The amount needs to be decreased with R1 500.
3. The rental income for May and June 20.2 is still outstanding.
4. Ms C Beaty disappeared. It was decided to write her debt amounting to R2 650 off as irrecoverable.
5. It was determined that on 30 June 20.2 the allowance for credit losses should amount to R7 500.
6. The telephone account of R1 150 for July 20.2 has already been paid.
7. Assume that the total comprehensive loss for the year is R700 000.

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The correct disclosure of current assets in the statement of financial position for the year ended 30
June 20.2 will be:

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
Keep the sequence strictly as follows when addressing the information provided under additional
information (start with 1, 3,4,5,6, 2 and bank should be reported last.

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The financial year-end of Parker Traders is 30 April 20.20. At financial year-end the balance of the trade
receivables control account was R40 000. On 30 April 20.20 it was determined that an allowance for credit
losses to the amount of 15% of the trade receivables should be created, due to the impact of the COVID
pandemic. Parker Traders is a registered VAT vendor.

What will the general journal entry be in the books of Parker Traders for the given transaction on
30 April 20.20?

Instructions:
Drag the correct answer into the correct space.
22
An option can be used more than once.

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Indicate by choosing the correct option whether the following statement is true or false:
Accrued membership fees at the beginning of a financial period will be entered on the credit side of the
membership fees account.

Select one:
True
False

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VERSION 2

The following information was obtained from the books of Khulong Traders.

POST-ADJUSTMENT TRIAL BALANCE OF KHULONG TRADERS AS AT 30 JUNE 20.12

Debit Credit
R R
Capital.......................................................................................................................... - 100 000
Drawings..................................................................................................................... 2 695 -
Land at cost............................................................................................................... 140 000 -
Buildings at cost....................................................................................................... 60 000 -
Vehicles at cost......................................................................................................... 122 000 -
Furniture and fittings at cost .............................................................................. 65 000 -
Accumulated depreciation on vehicles (30 June 20.12)............................ - 54 700
Accumulated depreciation on furniture and fittings (30 June 20.12)... - 22 700
Trade receivables control control....................................................................... 9 280 -
Inventory: Trading (1 July 20.11)......................................................................... 13 800 -
Bank.............................................................................................................................. 8 025 -
Petty cash................................................................................................................... 750 -
Mortgage loan......................................................................................................... - 150 000
Loan from Africa Bank (final instalment on 28 February 20.13)........... - 50 000
Trade payables control......................................................................................... - 4 500
VAT control................................................................................................................ - 1 500
Sales............................................................................................................................. - 257 070
Carriage on purchases.......................................................................................... 760 -
Commission income.............................................................................................. - 15 000
Credit losses............................................................................................................. 349 -
Depreciation............................................................................................................ 15 400 -
Insurance................................................................................................................... 2 750 -
Packing materials................................................................................................... 4 300 -
Purchases.................................................................................................................. 155 130 -
Purchases returns.................................................................................................. - 1 130
Rent income............................................................................................................ - 3 800
Sales returns............................................................................................................ 1 338 -
Credit losses recovered....................................................................................... - 2 500
Loss on sale of an asset....................................................................................... 5 700 -
Settlement discount granted............................................................................ 303 -
Settlement discount received........................................................................... - 405
Wages......................................................................................................................... 51 325 -

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 Water and electricity............................................................................................. 4 400 -
663 305 663 305

Additional information:

On 30 June 20.12 trading inventory had a balance of R15 335.

Use the information provided to prepare the trading section and other income sections of the statement
of profit or loss and other comprehensive income of Khulong Traders for the year ended 30 June 20.12.

Instructions:

Drag the correct answer into the correct space.

An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put a 0 in the amounts
column.
Keep the sequence strictly according to the information given.

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Indicate whether the following statement is true or false:
Transaction costs are taken into account if they are incurred in a transaction or other event giving rise to an
asset or a liability.

Select one:
True
False

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Indicate whether the following statement is true or false:
According to current cost basis, liabilities are carried at the discounted amount of cash or cash equivalent that
would be required to settle the obligation currently.

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True
False
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Use the following information to calculate the total comprehensive income/loss for the year ended
28 February 20.2:

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Capital 680 000
Services rendered 470 000
Drawings 35 000
Rent income 65 000
Interest expenses 36 000
Stationery 3 300
Wages 13 500
Insurance expenses 15 600
Water and electricity 12 000
Water and electricity: Deposit 2 000
Accrued expenses 2 600
Accrued income 4 200
Prepaid expenses 3 300
Income received in advance 1 200
Furniture 80 000
Vehicles 620 000
Bank overdraft 80 000
Trade payables control 81 300
Loan: SA Bank 70 200
Current portion of long-term borrowings 18 800
Land 400 000
Buildings 70 000
Inventory 75 000
Trade receivables control 210 000

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)
3. If the net effect is a loss, please enter the amount as a negative (eg: -12141.72)

454600
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Question text
The following information was extracted from the accounting records of Namgoong Plastics:
Balances at 1 April 20.19 R
Equipment: Cost 28 000
Accumulated depreciation: Equipment (26 133)

Additional information
At the beginning of the financial year, 1 April 20.19, Namgoong Plastics replaced its plastic shredding
equipment with new glass recycling equipment that had a purchase price of R45 600. The replaced plastic
shredding machine was sold for R5 000 cash, it was the only piece of equipment in the books of Namgoong
Plastics prior to the purchase of the new glass recycling equipment. Depreciation is provided at 20% p.a.
on the straight-line method.

Use the information as extracted from the accounting records of Namgoong Plastics to
complete the asset realisation account to calculate the profit/loss on the sale of the plastic
shredding equipment that will be disclosed in the statement of profit of loss and other
comprehensive income. The amount will be:

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
Please keep the sequence of transactions strictly according the information given but also in the correct format.

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The following bank reconciliation statement was prepared at 30 June 20.12 in the books of Grey Services:

Bank reconciliation statement as at 30 June 20.12

Debit Credit

R R
Credit balance as per bank statement................................................ - 938
Credit outstanding deposit................................................................... - 1 010
Credit incorrect entry on bank statement ........................................... - 254
Debit balance as per bank account..................................................... 2 202
2 202 2 202

The following is a summary of the deposits and EFT’s recorded in the cash receipts journal and the cash
payments journal for July 20.12:

Cash receipts journal Cash payments journal

Bank Bank
Doc. No. Date Details (Amount Doc. Date Details (Amount
deposited) No. paid)
R R
CRR01- 7 Cash sales 982 PR 3 Telephone 410
01 2 042 P851 expenses
16 Cash sales 6 4 600
CRR01- 470 PR Purchases
20 L. Good 11 294
02 P852 Insurance
27 Cash sales 2 202 16 302
BS-01/02 PR Wages
30 Cash sales 1 152 P853 20 376
CRR01- F Andy
03 PR 27 84
P854 Water and
CRR01- electricity
04 PR
P855
PR
P856

The bank statement received on 31 July 20.12 was as follows:

29
 Bank statement: Grey Services – July 20.12
Date Details Debit Credit Balance
R R R
1 Balance................................................................... - - 938 Cr
Error corrected........................................................ - 254 1 192 Cr
2 Cash Deposit........................................................... - 1 010 2 202 Cr
Cash deposit fee..................................................... 21 - 2 181 Cr

3 EFT PR P851.......................................................... 410 - 1 771 Cr

6 EFT PR P852.......................................................... 4 400 - 2 629 Dr

7 Cash Deposit........................................................... - 982 1 647 Dr

Cash deposit fee..................................................... 6 - 1 653 Dr

11 EFT PR P853.......................................................... 294 - 1 947 Dr

14 EFT - P Nkosi (rent)................................................ 290 1 657 Dr

16 Cash Deposit........................................................... - 2 042 385 Cr

Cash deposit fee..................................................... 40 - 345 Cr
EFT PR P854.......................................................... 302 - 43 Cr
20
EFT – L Good.......................................................... - 470 513 Cr
MF........................................................................... 90 - 423 Cr
25
Cash Deposit........................................................... - 2 202 2 625 Cr
27
Cash deposit fee..................................................... 75 - 2 550 Cr
EFT PR P855.......................................................... 376 - 2 174 Cr
25
EFT PR P856.......................................................... 84 - 2 090 Cr
27
Debit order.............................................................. 2 000 - 90 Cr
30
EFT PR P857.......................................................... 685 - 595 Cr
IN............................................................................. 142 - 737 Dr

Additional information:

1. Abbreviations:
MF = Management Fee
IN = Interest on overdraft
2. The correct amount of PR P852 is R4 400 and not R4 600.
3. The debit order is for the salary of the bookkeeper.
4. The bookkeeper made an EFT (EFT PR P857) to T Bush, a creditor, but did not enter the transaction
in the books of Grey Services.
5. The inexperienced bookkeeper also omitted some other transactions in the books of Grey Services.

30
Prepare the bank reconciliation statement of Grey Services as at 31 July 20.12.

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the
accounts column and a 0 in the amounts column.
Keep the transactions strictly in the order they were given.

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The following information for August 20.19 relates to Babu Services:

1. Pencil totals of the bank columns in the cash journals at 31 August 20.19:

Cash receipts journal R55 550

Cash payment journal R44 440

2. Unfavourable balance per bank statement at 31 August 20.19, R21 940.

3. Items appearing on the bank statement but not in the cash journals:

Bank charges, R560

A deposit meant for another client of the bank, R3 550.
A correction of an error, R564 that appeared in the credit column of the bank reconciliation
statement as at 31 July 20.19.
31
 4. The cash journals reflected a deposit for R14 750 that was not shown on the bank statement of
Babu Services for August 20.19.

The correct bank reconciliation statement of Babu Services as at 31 August 20.19 is ...

Instructions:
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An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the accounts
column and a 0 in the amounts column.
Keep the transactions strictly in the order they were given.

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Indicate whether the following statement is true or false:
A disadvantage of using a single-entry bookkeeping system is that assets and liabilities are not recorded;
therefore, financial statements are prepared using unreliable information.

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True
False
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Indicate whether the following statement is true or false:
Management are considered as an internal user of financial information who use the financial information to
exercise control which means evaluating the current situation and taking corrective steps.

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True
False
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Indicate whether the following statement is true or false:
The double-entry system in accounting provides a logical method of recording transactions.

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False
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Indicate whether the following statement is true or false:
Liabilities are present obligations of a reporting entity to transfer economic resources as a result of past events.

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Question 13

33
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Indicate whether the following statement is true or false.
Non-current liabilities are long-term debts that have to be settled within one year of the date of the statement of
financial position.

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True
False
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Indicate whether the following statement is true or false:
Debentures cannot be secured by a mortgage.

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True
False
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Indicate by choosing the correct option whether the following statement is true or false:
One of the steps to calculate sales if no distinction can be made between cash and credit sales, if you want to
convert a single-entry system into a double-entry system where minimal records are kept, is to calculate the
amounts with the aid of the trade receivables control account.

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True
False
34
Question 16
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On 2 March 20.1, a tenant of ABC Traders, did an electronic funds transfer of R160 000 into ABC Traders’
business bank account. The monthly rental is R16 000 per month. The financial year-end is 28 February
20.2.

Use the information to do the journal entry that correctly accounts for the closing adjustment of the
rentals at year-end:

Instructions:
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Round off to the second decimal after the full stop (eg: 50.56)
3. For embedded questions spelling is very important. If you spell the answer incorrect it will be marked
incorrect. Please make sure that your spelling of the words is correct.
4. Don’t use any special characters (&) and don’t use bold in your answer. It will be marked incorrect.
5. Do not use any abbreviations.
6. Your answer is case sensitive; therefore, you need to put the very first letter of the answer in uppercase, but
the rest of your answer must be in lowercase (eg: Interest on loan)

ABC TRADERS

Adjustment journal – 28 February 20.2 Debit Credit

R R

Answer
Accrued income Answer
32000

Answer
Rent income Answer
32000

Question 18

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Indicate by choosing the correct option whether the following statement is true or false:
An income and expenditure statement for non-profit entities is the same as a statement of profit or loss and
other comprehensive income for a sole trader.

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True
False
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The following information relates to Rainbow Traders for May 20.17.

a. On 31 May 20.17, the trade receivables ledger of Rainbow Traders showed the following trade
receivables (Ignore any VAT implications):
LIST OF TRADE RECEIVABLES: 31 MAY 20.17
Name Balance
R
Moloi Dealers……………………………………………………………………………………… 20 566
Best Stationers……………………………………………………………………………………. 474
Perfect Cleaners………………………………………………………………………………….. 1 192
Architect Designs……………………………………………………………………………….. 1 602
Emily Suppliers…………………………………………………………………………………… 3 960
27 794

b. On 31 May 20.17, the trade receivables control account showed a preliminary balance of R30 246.

c. After an investigation of the individual accounts, source documents and other relevant information,
the following omission was detected:

- Best Stationers was declared insolvent and they could only pay R54 in settlement of their account.
The bank entries has been made, but no entries were made regarding the irrecoverable.

36
What will the general journal entries for the irrecoverable debt transaction be in the books of
Rainbow Traders?

Instructions:

Drag the correct answer into the correct space.

An option can be used more than once.

Round the amounts off to the nearest R.

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Indicate by choosing the correct option whether the following statement is true or false:
If a single-entry system is used a trial balance can be compiled and the financial statements prepared from this
information will be reliable.

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True
False

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Bradly Carstens is the owner Carsten & Sons Plumbing. On 30 October 20.2 you are given the following
information for Carsten & Sons Plumbing.

R
Clients owing for plumbing services rendered on credit 63 000
Equipment owned by Carsten & Sons Plumbing 80 000
Unfavourable bank balance 55 000
Carsten and Sons Plumbing owes suppliers for parts purchased on credit 45 000
Vehicles owned by Carsten and Sons Plumbing 210 000

What is the net asset value (equity) of Carsten and Sons Plumbing on 30 October 20.2?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

253000
Answer:
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Indicate by choosing the correct option whether the following statement is true or false:
The gross profit calculated in the trading statement of a non-profit entity is transferred to receipts and payments
statement.

Select one:
False
Finish attempt ...

38
VERSION 3

Indicate whether the following statement is true or false:

Debentures cannot be secured by a mortgage.

Select one:
True
False
Question 2
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The following transactions occurred on 15 March 20.1 in GS Electricians:

(a) Bought a voltage tester on credit for R2 000 from BB Suppliers.

(b) Rendered services on credit to W Write for R3 000.

The correct effect of the transactions on 23 March 20.1 on the accounting equation are …

Instructions:
1. Drag the correct answer into the correct space (cell phone click on the answer and click on the place
where you want to place the amount - also keep your cell phone horizontal when doing the question).
2. An option can be used more than once.
3. If an options has been provided and it is not applicable to the specific questions please put a 0 in the
applicable column.

39
Question 3
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Indicate whether the following statement is true or false.
Non-current liabilities are long-term debts that have to be settled within one year of the date of the
statement of financial position.

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True
False

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You are given the following extract of the pre-adjustment trial balance for Arch Traders for the financial
year ended 30 September 20.2.
ARCH TRADERS

40
EXTRACT OF THE PRE-ADJUSTMENT TRIAL BALANCE AS AT 30 SEPTEMBER 20.2
Debit Credit
R R
Capital ………………………………………………………… 525 000
Drawings……………………………………………………… 25 000
Buildings………………………………………………………. 150 000
Land................................................................................... 450 000
Vehicles………………………………………………………. 500 000
Equipment…………………………………………………….. 280 000
Accumulated depreciation: Vehicles(1 October 20.1……. 100 000
Accumulated depreciation: Equipment (1 October 20.1)… 60 000
Trade receivables control…………………………………… 225 000
Inventory………………………………………………………. 250 000
Bank overdraft ……………………………………………….. 714 750
Trade payables control……………………………………… 300 000

Additional information

a. On 1 October 20.1 Arch Traders bought a new vehicle to the value of R280 000.

b. On 30 June 20.2 one of the two old vehicles bought on 1 October 20.0 were sold for R100 000 cash.
The vehicle was bought at a cost price of R250 000.

c. Depreciation for the year must be provided as follows:

- Equipment: 10% per annum on the straight-line method

- Vehicles : 20% per annum on the diminishing balance method

Use the information as extracted from the accounting records of Arch Traders to complete the
asset realisation account to calculate the profit/loss on the sale of the old vehicle that will be
disclosed in the statement of profit or loss and other comprehensive income. The amount will be:

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
Please keep the sequence of transactions strictly according the information given but also in the correct
format.

41
Question 6
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Indicate whether the following statement is true or false:
According to the current value measurement basis, liabilities should be recorded at the amount paid or
the fair value of the consideration given to acquire the liability at the time of their acquisition.

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True
False
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The following information for August 20.19 relates to NP Glassworks:

1. Pencil totals of the bank columns in the cash journals at 31 August 20.19:
42
Cash receipts journal, R65 650
Cash payments journal, R15 800

2. The bank statement for August 20.19 reflected the following items which did not appear in the cash
journals for August 20.19:
 Credit balance per bank statement at 31 August 20.19, R44 109.
 Direct deposit: Ms A Ngcobo, R2 000. NP Glassworks sublets part of its building to Ms A Ngcobo,
who pay the monthly rental via electronic funds transfer.
 Interest on bank account, R459.
 A deposit meant for another client, R5 400.
 Service fees, R300.
 Debit order, WM Insurers, R6 300

3. Items appearing in the cash journals for August 20.19 but not on the bank statement for
August 20.19:
A deposit on 30 August 20.19, R14 000.

4. On 1 August 20.19, the opening balance of the bank account was R7 000 (favourable).

Complete the cash payments journal of NP Glassworks, bank column only, for August 20.19.

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the
accounts column and a 0 in the amounts column.
Keep the transactions strictly in the order they were given.

43
Question 8
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Indicate whether the following statement is true or false:
Depreciation, consumables and credit losses recovered are examples of expenses.

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True
False
Question 9
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Indicate by choosing the correct option whether the following statement is true or false:
Financial statements prepared from using the single-entry system are considered unreliable.

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True

44
 False
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Betties Smith is the owner of Betties Plumbing. You are given the following information for Betties
Plumbing for the year ended 28 February 20.2:

R
Capital 252 000
Services rendered 510 000
Wages 100 000
Telephone expenses 10 000
Water and electricity 8 000
Water and electricity: Deposit 5 600
Insurance 1 500
Maintenance of vehicles 2 500
Interest income 1 500
Accrued expenses 3 300
Prepaid expenses 3 600
Interest expenses 2 000

What is the amount of the total expenditure for Betties Plumbing for the year ended 28 February
20.2?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

124000
Answer:
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Indicate whether the following statement is true or false:

45
When an entity uses inconsistent accounting treatments, it allows for the users of the financial information
to compare the financial statements of the entity for a period.

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True
False
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The inexperienced accounting clerk wrongfully entered the manager's salary of R11 000 into the insurance
account. Ignore any VAT implications for this transaction.

The correct journal entry of the correction of the error will be …

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)
3. Round the amount of to the nearest Rand (eg: 12141.72 will be 12142)

GENERAL JOURNAL - MAY 20.2 GJ1

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The following information relates to Bi-Lock Traders for the year ended 28 February 20.19.

Bi-Lock Traders sells bicycles and bicycle equipment. The inexperienced accountant prepared the final
accounts before taking most of the adjustments into account and has made some errors in the determination
of the profit.

BI-LOCK TRADERS

GENERAL LEDGER

Dr Trading account Cr
R R
20.19 20.19
Feb 28 Cost of sales 1 816 080 Feb 28 Sales 2 705 644
Profit or loss 889 564
2 705 644 2 705 644

Dr Profit or loss account Cr

R R
20.19 20.19
Feb 28 Accounting fees 15 000 Feb 28 Trading account 889 564
Credit losses 17 500 Credit losses 8 830
Consumable stores 60 460 recovered
Sales returns 24 500 Settlement discount 18 669
Depreciation 80 840 received
Settlement discount Interest on current 122
granted 11 160 account
Insurance 84 600 Interest income (on
Interest on overdraft 5 125 overdue trade
Interest expenses (on receivables control 465
overdue trade account) 66 500
payables 570 Rental income
Salaries and wages 568 812
Sundry operating
expenses 116 143
984 710 984 710

BI-LOCK TRADERS
EXTRACT FROM PRE-ADJUSTMENT TRIAL BALANCE AT 28 FEBRUARY 2019
Debit Credit

47
 R R
Loan: Watson Bank (8% p.a.) (1 March 300 000
20.18)……………………………… 60 000
Fixed deposit: Pedal Bank (6% 245 950
p.a.)……………………………...…………..
127 800
Trading
inventory..………………………………………………………………. 6 400
Trade receivables control
.……………………………………………………..
Allowance for credit
losses…………………………………………….……….

Additional information

1. A debtor returned a bicycle sold to him for R14 000 because it was faulty. A mark-up of 75% on cost
is used. It was immediately returned to the supplier. No entries were made in the accounting records of
Bi-Lock Traders in connection with these transactions.

2. A physical inventory count revealed that trading inventory on hand at the end of the financial year
actually amounted to R228 500.

3. Consumable stores amount to only R35 000, the amount recorded in the profit or loss was incorrect.

4. An amount of R1 600 was received from a debtor who has been declared insolvent at year end and
has been correctly recorded. The amount received is 40% the total debt owed by the debtor. No entries
have been made to record the credit loss.

5. The allowance for credit losses must be adjusted to 4% of outstanding trade receivables.

6. Insurance includes an amount of R6 000 which has been paid for the period 1 May 20.18 to
30 April 20.19.

7. Rent has been received until 31 March 20.19. The rent was increased by R250 per month from
1 October 20.18.

8. The investment in a fixed deposit at Pedal Bank was made on 1 January 20.19. No interest has
been received yet.

9. An amount of R560 was received from M Moriarty. His account has previously been written off as
irrecoverable as he has immigrated to Canada. No entries regarding this transaction have been recorded
in the accounting records, yet.

Prepare the correct distribution, administrative and other expenses and finance charges sections
in the statement of profit or loss and other comprehensive income of Bi-Lock Traders for the year
ended 28 February 20.19.

Instructions:

48
Drag the correct answer into the correct space.
An option can be used more than once.
Keep the sequence strictly according to the information given in the wrong trading account and profit or
loss account.

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Indicate whether the following statement is true or false:
Transaction costs are taken into account if they are incurred in a transaction or other event giving rise to
an asset or a liability.

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True
False
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Indicate by choosing the correct option whether the following statement is true or false:
The gross profit calculated in the trading statement of a non-profit entity is transferred to income and
expenditure statement and is disclosed under income.

Select one:
True
False
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The following information was obtained from the books of Khulong Traders.

POST-ADJUSTMENT TRIAL BALANCE OF KHULONG TRADERS AS AT 30 JUNE 20.12

Debit Credit
R R
Capital......................................................................................................................... - 100 000
Drawings.................................................................................................................... 2 695 -
Land at cost.............................................................................................................. 140 000 -
Buildings at cost..................................................................................................... 60 000 -
Vehicles at cost........................................................................................................ 122 000 -
Furniture and fittings at cost ............................................................................. 65 000 -
Accumulated depreciation on vehicles (30 June 20.12)........................... - 54 700
Accumulated depreciation on furniture and fittings (30 June 20.12).. - 22 700
Trade receivables control control...................................................................... 9 280 -
Inventory: Trading (1 July 20.11)........................................................................ 13 800 -
Bank.............................................................................................................................. 8 025 -
Petty cash................................................................................................................... 750 -
Mortgage................................................................................................................... - 150 000
Loan from Africa Bank (final instalment on 28 February 20.13)........... - 50 000
Trade payables control......................................................................................... - 4 500

50
 VAT control............................................................................................................... - 1 500
Sales........................................................................................................................... - 257 070
Carriage on purchases......................................................................................... 760 -
Commission income............................................................................................. - 15 000
Credit losses............................................................................................................. 349 -
Depreciation............................................................................................................ 15 400 -
Insurance................................................................................................................... 2 750 -
Packing materials................................................................................................... 4 300 -
Purchases.................................................................................................................. 155 130 -
Purchases returns.................................................................................................. - 1 130
Rent income............................................................................................................ - 3 800
Sales returns............................................................................................................ 1 338 -
Credit losses recovered....................................................................................... - 2 500
Loss on sale of an asset....................................................................................... 5 700 -
Settlement discount granted............................................................................. 303 -
Settlement discount received........................................................................... - 405
Wages......................................................................................................................... 51 325 -
Water and electricity............................................................................................. 4 400 -
663 305 663 305

Additional information:

On 30 June 20.12 trading inventory had a balance of R15 335.

Use the information provided to prepare the asset section of the statement of financial position
of Khulong Traders as at 30 June 20.12.

Instructions:

Drag the correct answer into the correct space.

An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put a 0 in the
amounts column.
Keep the sequence strictly according to the information given.

51
Question 18
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Betties Smith is the owner of Betties Plumbing. You are given the following information for Betties
Plumbing for the year ended 28 February 20.2:

R
Capital 250 000
Services rendered 450 000
Wages 70 000
Telephone expenses 10 000
Water and electricity 8 000
Water and electricity: Deposit 2 300
Insurance 1 500
Maintenance of vehicles 2 500
Rent deposit paid 4 300
Accrued expenses 5 300
Rent expenses 25 800
Interest income 24 000

52
What is the amount for the total expenditure for Betties Plumbing for the year ended
28 February 20.2?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

Answer:
117800

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The following information relates to Sammy Dealers, who is registered as a VAT vendor and who uses the
periodic inventory system. VAT at 15% is applicable. The VAT period of the business ends on unequal
months.
As per the trial balance on 30 April 2022. Mini Traders owes Sammy Dealers, R2 300. Mini Traders settled
the account of R2 300 on 1 May 2022. A settlement discount of 20% was granted to Mini Traders.

What will the correct entries of the transaction be in the books of Sammy Dealers?

Instructions:
Drag the correct answer into the correct space (including the blank spaces on headings).
An option can be used more than once.

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Indicate whether the following statement is true or false:
A disadvantage of using a single-entry bookkeeping system is that entities using a single-entry system
can never convert to a double-entry system.

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True
False
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Indicate by choosing the correct option whether the following statement is true or false:
Membership fees received in advance at the end of a financial period will be entered on the credit side of
the membership fees account.

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True
False
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Indicate whether the following statement is true or false regarding the statement of financial position:
Equity is determined by deducting total liabilities from assets.

Select one:

54
 True
False
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Indicate whether the following statement is true or false:
Capital contributions by the owner are always in the form of cash.

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True
False
Finish attempt ...

55
VERSION 4

Mr G Raffe, the owner of Gourmet Meals. He forgot to pay his cleaning service on his flat at 30 March
20.21. He quickly made an EFT payment of R9 323 from the bank account of Gourmet Meals directly into
the cleaning service bank account.

The correct analysis of the effect of the given transaction on the general ledger and the accounting
equation is ...

Instructions:

1. Drag the correct answer into the correct space (cell phone click on the answer and click on the place
where you want to place the amount - also keep your cell phone horizontal when doing the question).
2. An option can be used more than once.
3. If an options has been provided and it is not applicable to the specific questions please put a 0 in the
applicable column.

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Betties Smith is the owner of Betties Plumbing. You are given the following information for Betties Plumbing
for the year ended 28 February 20.2?

R
Capital 250 000
Services rendered 450 000
Wages 70 000
Telephone expenses 10 000
Water and electricity 8 000
Insurance 1 500
Maintenance of vehicles 2 500
56
 Interest expense 2 500
Interest income 3 000

What is the correct equity amount for Betties Smith for the year ended 28 February 20.2?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

608500
Answer:
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On 1 September 20.18 Mr Will Turner started a new blacksmith business called Iron Duke. Iron Duke
manufactures and sells domestic cast iron furniture. The following transactions took place during the first
financial year of the entity ending 31 August 20.19.
- Interest incurred on the purchase of a CNC machine on credit from Big Traders was R660 for
the year; no payments or entries regarding this interest were made yet in the books of Iron Duke.
- Interest due on the long-term loan was R12 500 for the year ending 31 August 20.19 and was
paid in cash on 2 September 20.19.
- On 31 August 20.19, Mr Will Turner, decided to trade-in the old delivery van for a new delivery
van. The trade-in value was R14 500, and the cost of the new delivery van was R60 000, with the
difference settled in cash. (You only need to do the entry for the acquisition of the new delivery van.)
Show the effect of each transaction on the basic accounting equation with a plus sign (+) for an
increase and a minus sign (-) for a decrease next to each amount under each element. Also indicate
the account(s) that will be affected by each transaction next to the affected elements for the financial
year ended 31 August 20.19. (The business makes use of the perpetual inventory system.)

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the
accounts column and a 0 in the amounts column.
Keep the transactions strictly in the order they were given.

57
Question 4
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Ronnie Peters is the owner of Ronnie’s Hairdressing Salon. You are given the following information for
Ronnie’s Hairdressing Salon for the year ended 30 June 20.1.

R
Capital 300 000
Equipment 200 000
Vehicles 160 000
Bank (unfavourable balance) 150 000
Accrued income 3 500
Income received in advance 4 600
Prepaid expenses 3 600
Accrued expenses 5 200
Trade payables 92 600
Trade receivables 63 500
Services rendered 250 000
Interest income 2 400
Wages 165 000
Telephone expenses 45 000

58
 Water and electricity: deposit 2 000
Water and electricity 29 000
Insurance 12 000
Rental income 41 000
Advertising 3 000

What is the amount for the total assets of Ronnie’s Hairdressing Salon as at 30 June 20.1?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

432600
Answer:
Question 5
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The following information for August 20.19 relates to NP Glassworks:

1. Pencil totals of the bank columns in the cash journals at 31 August 20.19:
Cash receipts journal, R65 650
Cash payments journal, R15 800

2. The bank statement for August 20.19 reflected the following items which did not appear in the cash
journals for August 20.19:
 Credit balance per bank statement at 31 August 20.19, R44 109.
 Direct deposit: Ms A Ngcobo, R2 000. NP Glassworks sublets part of its building to Ms A Ngcobo,
who pay the monthly rental via electronic funds transfer.
 Interest on bank account, R459.
 A deposit meant for another client, R5 400.
 Service fees, R300.
 Debit order, WM Insurers, R6 300

59
 3. Items appearing in the cash journals for August 20.19 but not on the bank statement for
August 20.19:
A deposit on 30 August 20.19, R14 000.

4. On 1 August 20.19, the opening balance of the bank account was R7 000 (favourable).

Complete the bank reconciliation statement of NP Glassworks as at 31 August 20.19.

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the
accounts column and a 0 in the amounts column.
Keep the transactions strictly in the order they were given.

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The following information was obtained from the books of Orange Traders:
TRIAL BALANCE OF ORANGE TRADERS AS AT 29 FEBRUARY 20.12
Debit Credit
R R
Capital.................................................................................................. - 100 000

60
 Drawings.............................................................................................. 2 445 -
Land (at cost)....................................................................................... 120 000 -
Buildings (at cost)................................................................................ 80 000 -
Vehicles (at cost)................................................................................. 120 000 -
Furniture and fittings (at cost) ............................................................. 65 000 -
Accumulated depreciation on vehicles (1 March 20.11)..................... - 54 700
Accumulated depreciation on furniture and fittings (1 March 20.11).. - 22 700
Trade receivables control.................................................................... 6 780 -
Inventory: Trading (1 March 20.11)..................................................... 13 550 -
Bank..................................................................................................... 7 775 -
Cash float............................................................................................. 500 -
Mortgage.............................................................................................. - 150 000
Loan from Africa Bank (@ 12% p.a.)................................................... - 50 000
Trade payables control........................................................................ - 3 200
Sales.................................................................................................... - 243 645
Carriage on purchases........................................................................ 660 -
Commission income............................................................................ - 15 000
Credit losses........................................................................................ 244 -
Insurance............................................................................................. 2 400 -
Packing materials................................................................................ 3 300 -
Purchases............................................................................................ 154 880 -
Purchases returns................................................................................ - 245
Rent income......................................................................................... - 3 300
Sales returns........................................................................................ 1 338 -
Settlement discount granted................................................................ 553 -
Settlement discount received.............................................................. - 155
Stationery............................................................................................. 2 345 -
Wages.................................................................................................. 56 775 -
Water and electricity............................................................................ 4 400 -
642 945 642 945

Additional information:

a. Inventory on hand at 29 February 20.12

 Trading inventory – R12 800

 Stationery – R345.
b. The insurance amount of R2 400 includes a premium of R200 for March 20.12.
c. The loan was obtained from Africa Bank on 1 September 20.11. The interest on the loan has still to be
paid.

61
 d. Rent income for February 20.12 is still outstanding.
e. Provision must be made for depreciation as follows:

 Vehicles – 20% per annum on the diminishing balance method.

 Furniture and fittings – 10% per annum on the cost price.

Use the information provided to prepare the asset section of the statement of financial position of
Orange Traders as at 29 February 20.12.

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put a 0 in the
amounts column.
Keep the sequence strictly according to the information given (under current assets bank should be
disclosed as the last item).

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Indicate by choosing the correct option whether the following statement is true or false:
If a single-entry system is used a trial balance can be compiled and the financial statements prepared
from this information will be reliable.

Select one:
True
False
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State whether the following statement is true or false:
If the information was entered correctly in the journal but a posting error was made to the trade payables
ledger, the individual creditor’s account must be corrected, and the creditors list must be adjusted to
correct the error.

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True
False
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Indicate whether the following statement is true or false:
Membership fees received in advance at the end of a financial period will be entered on the debit side of
the membership fees account.

63
Select one:
True
False
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The following information relates to Sammy Dealers, who is registered as a VAT vendor and who uses the
periodic inventory system. VAT at 15% is applicable. The VAT period of the business ends on unequal
months.
As per the trial balance on 30 June 2022. Sammy Dealers owes Vice Traders, R4 600. Sammy Dealers settled
the account of R4 600 on 1 July 2022. A settlement discount of 5% was granted by Vice Traders.

What will the correct entries be of the given transaction in the books of Sammy Dealers?

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.

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Indicate by choosing the correct option whether the following statement is true or false:
Financial statements prepared from using the single-entry system are considered unreliable.

64
Select one:
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False
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The following information was obtained from the books of Orange Traders:
TRIAL BALANCE OF ORANGE TRADERS AS AT 29 FEBRUARY 20.12
Debit Credit
R R
Capital.................................................................................................. - 100 000
Drawings.............................................................................................. 2 445 -
Land (at cost)....................................................................................... 120 000 -
Buildings (at cost)................................................................................ 80 000 -
Vehicles (at cost)................................................................................. 120 000 -
Furniture and fittings (at cost) ............................................................. 65 000 -
Accumulated depreciation on vehicles (1 March 20.11)..................... - 54 700
Accumulated depreciation on furniture and fittings (1 March 20.11).. - 22 700
Trade receivables control.................................................................... 6 780 -
Inventory: Trading (1 March 20.11)..................................................... 13 550 -
Bank..................................................................................................... 7 775 -
Cash float............................................................................................. 500 -
Mortgage.............................................................................................. - 150 000
Loan from Africa Bank (@ 12% p.a.)................................................... - 50 000
Trade payables control........................................................................ - 3 200
Sales.................................................................................................... - 243 645
Carriage on purchases........................................................................ 660 -
Commission income............................................................................ - 15 000
Credit losses........................................................................................ 244 -
Insurance............................................................................................. 2 400 -
Packing materials................................................................................ 3 300 -
Purchases............................................................................................ 154 880 -
Purchases returns................................................................................ - 245
Rent income......................................................................................... - 3 300

65
 Sales returns........................................................................................ 1 338 -
Settlement discount granted................................................................ 553 -
Settlement discount received.............................................................. - 155
Stationery............................................................................................. 2 345 -
Wages.................................................................................................. 56 775 -
Water and electricity............................................................................ 4 400 -
642 945 642 945

Additional information:

a. Inventory on hand at 29 February 20.12

 Trading inventory – R12 800

 Stationery – R345.
b. The insurance amount of R2 400 includes a premium of R200 for March 20.12.
c. The loan was obtained from Africa Bank on 1 September 20.11. The interest on the loan has still to be
paid.
d. Rent income for February 20.12 is still outstanding.
e. Provision must be made for depreciation as follows:

 Vehicles – 20% per annum on the diminishing balance method.

 Furniture and fittings – 10% per annum on the cost price.

Record the adjustments in the general journal of Orange Traders. (Ignore narrations)

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put a 0 in the
amounts column.
Keep the sequence strictly according to the information given.

66
Question 13
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Indicate whether the following statement is true or false.
The settlement of an obligation can take place through the conversion of an obligation into equity.

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True
False
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 Flag question
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Indicate whether the following statement is true or false:
Withdrawals made by the owner decrease equity and are therefore considered as an expense of the
business.

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True
False
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Indicate by choosing the correct option whether the following statement is true or false:
Single-entry systems, that is incomplete records, are sometimes used by small businesses, because they
know very little about basic bookkeeping principles.

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True
False
Question 16
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Indicate whether the following statement is true or false:
Equity is determined by deducting total liabilities from total assets.

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True
68
 False
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Extract of pre-adjustment trial balance of Zungu Traders as at 31 August 20.2

Debit Credit
R R
Capital (1 September 20.21)………………………………………….............…. 200 000
Drawings……………………………………………………………….....................…… ?
Inventory: Trading (1 September 20.21)………………………………........ 61 725
Allowance for credit losses……………………………………………...........…. 4 450
Mortgage: GL Bank ……………….................................................................. 195 000
Fixed deposit (at 7.5% per annum)………………………………….........… 50 000
Sales…………………………………………………………………......................…….. 345 060
Carriage on purchases………………………………………….............………… 9 500
Sales returns………………………………………………………….................……. 6 780
Rental income…………………………………………………………................….. 40 500
Purchases……………………………………………………………..................…….. 197 800
Purchases returns…………………………………………………..............……… 2 890
Depreciation…………………………………………………………...............…….. 38 367
Salaries and wages………………………………………………….............…….. 88 500
Insurance expenses………………………………………………….............……. 27 300
Telephone expenses………………………………………………….............…… 14 280
Water and electricity…………………………………………………...........……. 23 450
Credit losses…………………………………………………………................…….. 1 600

After a year-end inventory count, the value of trading inventory on hand was R123 450.

Additional information
(a) On 31 December 20.1, Zungu Traders decided to lease out the office space on the business’ premises
for a monthly rental amount of R4 500. The rental amount is paid in advance on the last day of each month.

Use the information in the pre-adjustment trial balance and the additional information to do the
journal entry that correctly accounts for the closing adjustment of the lease rentals at year-end:

Instructions:
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Round off to the second decimal after the full stop (eg: 50.56)

69
3. For embedded questions spelling is very important. If you spell the answer incorrect it will be marked
incorrect. Please make sure that your spelling of the words is correct.
4. Don’t use any special characters (&) and don’t use bold in your answer. It will be marked incorrect.
5. Do not use any abbreviations.
6. Your answer is case sensitive; therefore you need to put the very first letter of the answer in uppercase
but the rest of your answer must be in lowercase (eg: Interest on loan)

ZUNGU TRADERS

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The following information relates to Babu Services for August 20.19:
BABU SERVICES

1. BANK RECONCILIATION STATEMENT AS AT 31 JULY 20.19

R
Unfavourable balance per bank (4 375)
statement………………………………………………
Deposit not yet 16 720
credited……………………………………………………………………
Favourable balance per bank ?
account………….………………………………………..

2. The bookkeeper received the bank statement for August after the August cash journals were
totaled. On comparing it with the August cash journals the following items did not appear in the cash
journals:

70
 BANK STATEMENT FOR AUGUST 20.19

Details Date Debit Credit

R R
Deposit ………….…………………………………………… 01/08 16 720
Stop order - 17/08 2 260
Insurance………………………………………...................
Service fees……………………….…………………………. 26/08 700
Interest……………………………………………………….. 26/08 105
EFT PR P831….…………………………………………….. 26/08 675
Debit order – City Council………………………………….. 27/08 2 550

Additional information regarding the bank statement received on 31 August 20.19.

2.1 EFT PR P831 was made in favour of a creditor, I Moloi. The amount was incorrectly entered in
the cash payments journal as R765.
2.2 The debit order in favour of the City Council was for the owner’s private water and electricity
account.
2.3 On 31 August 20.19 the bank statement showed a credit balance of R2 765.

3. A deposit for R14 750 appeared in the cash journals, for August 20.19, but not on the bank
statement for the same period:

4. Provisional totals at 31 August 20.19 was:

R

Cash receipts journal 57

17
5
Cash payments journal 46
70
0

Complete the bank reconciliation statement of Babu Services as at 31 August 20.19.

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.

71
If an options has been provided and it is not applicable to the specific questions please put N/A in the
accounts column and a 0 in the amounts column.
Keep the transactions strictly in the order they were given.

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Indicate whether the following statement is true or false:
The statement of changes in equity is prepared at a specific date.

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True
False
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The following information was extracted from the accounting records of Namgoong Plastics:
72
 Balances at 1 April 20.19 R
Equipment: Cost 35 000
Accumulated depreciation: Equipment (29 750)

Additional information
At the beginning of the financial year, 1 April 20.19, Namgoong Plastics replaced its plastic shredding
equipment with new glass recycling equipment that had a purchase price of R48 700. The replaced plastic
shredding machine was sold on credit for R8 000, it was the only piece of equipment in the books of
Namgoong prior to the purchase of the new glass recycling equipment. Depreciation is provided at 20%
p.a. on the straight-line method.

Assuming the plastic shredding equipment was sold at a profit of R5 250, the effect of the transaction
on the accounting equation will be:

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the
accounts column and a 0 in the amounts column.

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Indicate whether the following statement is true or false:
Accounting is defined as the orderly and systematic identification and recording of the monetary values of
financial transactions of an individual or business entity.

73
Select one:
True
False
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Indicate whether the following statement is true or false:
An example of a business entity which will be classified as a service and trading entity will be a Plumber.

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True
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Indicate by choosing the correct option whether the following statement is true or false:
Gizmo Soccer Club can set aside money in a special fund when it wants to use the money for purchasing
of specific training gear for its members.

Select one:
True
False

74
VERSION 5

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On 1 April 20.21 Ms T. Tlale, a debtor of Lulu Traders, owed the business R4 485. Ms T. Tlale was declared
insolvent on 21 April 20.21. The amount of R690 must be written off as irrecoverable. The allowance for
credit losses account must remain unchanged during the year. Lulu Traders is a registered VAT vendor
and the VAT rate applicable is 15%.

What will the correct journal entry for the irrecoverable debt to get written off be?

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
If an option has been provided and it is not applicable to the specific question, please put N/A in the
account column and a 0 in the amounts column.
When debiting or crediting income and expense account, ensure that it that particular account that is
debit or credited first, before debiting or crediting Vat account.

75
Question 3
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The following bank reconciliation statement was prepared at 30 June 20.12 in the books of Grey Services:

Bank reconciliation statement as at 30 June 20.12

Debit Credit

R R
Credit balance as per bank statement................................................ - 938
Credit outstanding deposit................................................................... - 1 010
Credit incorrect entry on bank statement ........................................... - 254
Debit balance as per bank account..................................................... 2 202
2 202 2 202

The following is a summary of the deposits and EFT’s recorded in the cash receipts journal and the cash
payments journal for July 20.12:

Cash receipts journal Cash payments journal

Bank Bank
Doc. No. Date Details (Amount Doc. Date Details (Amount
deposited) No. paid)
R R
CRR01- 7 Cash sales 982 PR 3 Telephone 410
01 P851 expenses
16 Cash sales 2 042 6 4 600
CRR01- 470 PR Purchases
20 L. Good 11 294
02 P852 Insurance
27 Cash sales 2 202 16 302
BS-01/02 PR Wages
30 Cash sales 1 152 P853 20 376
CRR01- F Andy
03 PR 27 84
P854 Water and
CRR01- electricity
04 PR
P855
76
 PR
P856

The bank statement received on 31 July 20.12 was as follows:

Bank statement: Grey Services – July 20.12
Date Details Debit Credit Balance
R R R
1 Balance................................................................... - - 938 Cr
Error corrected........................................................ - 254 1 192 Cr
2 Cash Deposit........................................................... - 1 010 2 202 Cr
Cash deposit fee..................................................... 21 - 2 181 Cr

3 EFT PR P851.......................................................... 410 - 1 771 Cr

6 EFT PR P852.......................................................... 4 400 - 2 629 Dr
7 Cash Deposit........................................................... - 982 1 647 Dr
Cash deposit fee..................................................... 6 - 1 653 Dr

11 EFT PR P853.......................................................... 294 - 1 947 Dr

14 EFT - P Nkosi (rent)................................................ 290 1 657 Dr

16 Cash Deposit........................................................... - 2 042 385 Cr

Cash deposit fee..................................................... 40 - 345 Cr
EFT PR P854.......................................................... 302 - 43 Cr
20
EFT – L Good.......................................................... - 470 513 Cr
MF........................................................................... 90 - 423 Cr
25
Cash Deposit........................................................... - 2 202 2 625 Cr
27
Cash deposit fee..................................................... 75 - 2 550 Cr
EFT PR P855.......................................................... 376 - 2 174 Cr
25
EFT PR P856.......................................................... 84 - 2 090 Cr
27
Debit order.............................................................. 2 000 - 90 Cr
30
EFT PR P857.......................................................... 685 - 595 Cr
IN............................................................................. 142 - 737 Dr

Additional information:

1. Abbreviations:
MF = Management Fee
IN = Interest on overdraft
2. The correct amount of PR P852 is R4 400 and not R4 600.
3. The debit order is for the salary of the bookkeeper.

77
 4. The bookkeeper made an EFT (EFT PR P857) to T Bush, a creditor, but did not enter the transaction
in the books of Grey Services.
5. The inexperienced bookkeeper also omitted some other transactions in the books of Grey Services.

Complete the bank account in the general ledger of Grey Services for the month ended 31 July
20.12.

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the
accounts column and a 0 in the amounts column.
Keep the transactions strictly in the order they were given.

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Indicate by choosing the correct option whether the following statement is true or false:
Membership fees received in advance at the beginning of a financial period will be entered on the credit
side of the membership fees account.

Select one:
True

78
 False
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Indicate whether the following statement regarding income is true or false:
In practice, it is normally required that revenue should be earned before it is recognised.

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True
False
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Indicate whether the following statement is true or false:
A disadvantage of using a single-entry bookkeeping system is that entities using a single-entry system
can never convert to a double-entry system.

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True
False

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Indicate whether the following statement is true or false:

79
A disadvantage of using a single-entry bookkeeping system is that assets and liabilities are not recorded;
therefore, financial statements are prepared using unreliable information.

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True
False
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Indicate whether the following statement is true or false regarding debentures:
There is no annual interest expenses on debentures.

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False
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Betties Smith is the owner of Betties Plumbing. You are given the following information for Betties
Plumbing for the year ended 28 February 20.2:

R
Capital 250 000
Services rendered 450 000
Wages 70 000
Telephone expenses 10 000
Water and electricity 8 000
Water and electricity: Deposit 2 300
Insurance 1 500
Maintenance of vehicles 2 500

80
 Rent deposit paid 4 300
Accrued expenses 5 300
Rent expenses 25 800
Interest income 24 000

What is the amount for the total expenditure for Betties Plumbing for the year ended
28 February 20.2?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

117800
Answer:
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Indicate whether the following statement is true or false.
The settlement of an obligation can take place through the conversion of an obligation into equity.

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True
False
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On 1 September 20.18 Mr Will Turner started a new blacksmith business called Iron Duke. Iron Duke
manufactures and sells domestic cast iron furniture. The following transactions took place during the first
financial year of the entity ending 31 August 20.19.
 On 1 September 20.18 the factory building the business will be using was purchased for R230 000
using a long-term loan that is payable on 31 August 20.24.
81
  The business bought a CNC machine on credit from Big Traders for R11 500. The business paid
R1 500 cash for the installation of the machine. Both transactions took place on 30 November 20.18.
Show the effect of each transaction on the basic accounting equation with a plus sign (+) for an
increase and a minus sign (-) for a decrease next to each amount under each element. Also indicate
the account(s) that will be affected by each transaction next to the affected elements for the financial
year ended 31 August 20.19. (The business makes use of the perpetual inventory system.)

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the
accounts column and a 0 in the amounts column.
Keep the transactions strictly in the order they were given.

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Indicate whether the following statement is true or false regarding the statement of financial position:
Equity is determined by deducting total liabilities from assets.

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True
False
Question 16

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Indicate whether the following statement is true or false:
Financial resources are limited.

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Indicate whether the following statement is true or false:
Sales is disclosed in the statement of profit or loss and other comprehensive income.

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False
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The following information was obtained from the books of Khulong Traders.

POST-ADJUSTMENT TRIAL BALANCE OF KHULONG TRADERS AS AT 30 JUNE 20.12

Debit Credit
R R

83
 Capital.......................................................................................................................... - 100 000
Drawings..................................................................................................................... 2 695 -
Land at cost............................................................................................................... 140 000 -
Buildings at cost....................................................................................................... 60 000 -
Vehicles at cost......................................................................................................... 122 000 -
Furniture and fittings at cost .............................................................................. 65 000 -
Accumulated depreciation on vehicles (30 June 20.12)............................ - 54 700
Accumulated depreciation on furniture and fittings (30 June 20.12)... - 22 700
Trade receivables control control....................................................................... 9 280 -
Inventory: Trading (1 July 20.11)......................................................................... 13 800 -
Bank.............................................................................................................................. 8 025 -
Petty cash................................................................................................................... 750 -
Mortgage loan......................................................................................................... - 150 000
Loan from Africa Bank (final instalment on 28 February 20.13)........... - 50 000
Trade payables control......................................................................................... - 4 500
VAT control................................................................................................................ - 1 500
Sales............................................................................................................................. - 257 070
Carriage on purchases.......................................................................................... 760 -
Commission income.............................................................................................. - 15 000
Credit losses............................................................................................................. 349 -
Depreciation............................................................................................................ 15 400 -
Insurance................................................................................................................... 2 750 -
Packing materials................................................................................................... 4 300 -
Purchases.................................................................................................................. 155 130 -
Purchases returns.................................................................................................. - 1 130
Rent income............................................................................................................ - 3 800
Sales returns............................................................................................................ 1 338 -
Credit losses recovered....................................................................................... - 2 500
Loss on sale of an asset....................................................................................... 5 700 -
Settlement discount granted............................................................................ 303 -
Settlement discount received........................................................................... - 405
Wages......................................................................................................................... 51 325 -
Water and electricity............................................................................................. 4 400 -
663 305 663 305

Additional information:

On 30 June 20.12 trading inventory had a balance of R15 335.

84
Use the information provided to prepare the liability sections of the statement of financial position
of Khulong Traders as at 30 June 20.12.

Instructions:

Drag the correct answer into the correct space.

An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the
details column and a 0 in the amount column.
Keep the sequence strictly according to the information given.

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Bradly Carstens is the owner Carsten & Sons Plumbing. On 30 October 20.2 you are given the following
information for Carsten & Sons Plumbing.
85
 R
Clients owing for plumbing services rendered on credit 38 000
Equipment owned by Carsten & Sons Plumbing 80 000
Unfavourable bank balance 50 000
Carsten and Sons Plumbing owes suppliers for parts purchased on 25 000
credit
Vehicles owned by Carsten and Sons Plumbing 210 000

The correct representation of the accounting equation of Bradly Carstens & Sons Plumbing after
consideration of the given information is ...

Instructions:
1. Drag the correct answer into the correct space (cell phone click on the answer and click on the place
where you want to place the amount - also keep your cell phone horizontal when doing the question).
2. An option can be used more than once.

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Indicate whether the following statement is true or false:
A loss increase equity.

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True
False
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86
 Flag question
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Indicate by choosing the correct option whether the following statement is true or false:
An income and expenditure statement for non-profit entities is the same as a statement of profit or loss
and other comprehensive income for a sole trader.

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True
False
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Dineo Dlamini is the owner of Dineo’s Hairdressing Salon. You are given the following information for
Dineo’s Hairdressing Salon for the year ended 30 June 20.1.

R
Capital 250 000
Equipment 150 000
Bank (favourable balance) 100 000
Trade payables 90 000
Accrued expenses 1 500
Accrued income 2 600
Services rendered 250 000
Interest income 3 400
Wages 160 000
Telephone expenses 34 000
Water and electricity: deposit 4 800
Insurance 22 000
Rental expenses 54 000
Advertising 8 000

What is the correct amount for the total assets for Dineo’s Hairdressing Salon as at 30 June 20.1?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
87
2. Only show the amount, do not show the R (eg: 12141.72)

Answer:
257400

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Indicate whether the following statement is true or false:
According to the Conceptual Framework, if the benefit of providing information outweighs the costs of
providing the information, then it should not be included in the financial statements of an entity.

Select one:
True
False

88
VERSION 6

Indicate whether the following statement is true or false:

A liability shall be classified as a current liability when it is expected to be converted into money (realised)
within twelve months of the statement of financial position date.

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True
False
Question 2
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State whether the following statement is true or false:
The entity does not need to provide security to take out a mortgage.

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Indicate by choosing the correct option whether the following statement is true or false:
Accrued membership fees at the beginning of a financial period will be entered on the credit side of the
membership fees account.
89
Select one:
True
False
Question 4
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On 23 March 20.1 the bookkeeper of Gizmo Electricians made the following electronic payments; to the
municipality for the payment of the water and electricity account of R5 000 and to a few contract workers
to pay their wages of R3 000 in total.

The correct effect of the transactions on 23 March 20.1 on the accounting equation are ...

Instructions:
1. Drag the correct answer into the correct space (cell phone click on the answer and click on the place
where you want to place the amount - also keep your cell phone horizontal when doing the question).
2. An option can be used more than once.
3. If an options has been provided and it is not applicable to the specific questions please put a 0 in the
applicable column.

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 Flag question
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Indicate whether the following statement is true or false:
Liabilities are present obligations of a reporting entity to transfer economic resources as a result of past
events.

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True
False
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The following information was obtained from the books of Orange Traders:
TRIAL BALANCE OF ORANGE TRADERS AS AT 29 FEBRUARY 20.12
Debit Credit
R R
Capital.................................................................................................. - 100 000
Drawings.............................................................................................. 2 445 -
Land (at cost)....................................................................................... 120 000 -
Buildings (at cost)................................................................................ 80 000 -
Vehicles (at cost)................................................................................. 120 000 -
Furniture and fittings (at cost) ............................................................. 65 000 -
Accumulated depreciation on vehicles (1 March 20.11)..................... - 54 700
Accumulated depreciation on furniture and fittings (1 March 20.11).. - 22 700
Trade receivables control.................................................................... 6 780 -
Inventory: Trading (1 March 20.11)..................................................... 13 550 -
Bank..................................................................................................... 7 775 -
Cash float............................................................................................. 500 -
Mortgage.............................................................................................. - 150 000
Loan from Africa Bank (@ 12% p.a.)................................................... - 50 000
Trade payables control........................................................................ - 3 200
Sales.................................................................................................... - 243 645

91
 Carriage on purchases........................................................................ 660 -
Commission income............................................................................ - 15 000
Credit losses........................................................................................ 244 -
Insurance............................................................................................. 2 400 -
Packing materials................................................................................ 3 300 -
Purchases............................................................................................ 154 880 -
Purchases returns................................................................................ - 245
Rent income......................................................................................... - 3 300
Sales returns........................................................................................ 1 338 -
Settlement discount granted................................................................ 553 -
Settlement discount received.............................................................. - 155
Stationery............................................................................................. 2 345 -
Wages.................................................................................................. 56 775 -
Water and electricity............................................................................ 4 400 -
642 945 642 945

Additional information:

a. Inventory on hand at 29 February 20.12

 Trading inventory – R12 800

 Stationery – R345.
b. The insurance amount of R2 400 includes a premium of R200 for March 20.12.
c. The loan was obtained from Africa Bank on 1 September 20.11. The interest on the loan has still to be
paid.
d. Rent income for February 20.12 is still outstanding.
e. Provision must be made for depreciation as follows:

 Vehicles – 20% per annum on the diminishing balance method.

 Furniture and fittings – 10% per annum on the cost price.

Use the information provided to prepare the distribution, administrative and other expenses section
and the finance costs section of the statement of profit or loss and other comprehensive income of
Orange Traders for the year ended 29 February 20.12.

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put a 0 in the
amounts column.
92
Keep the sequence strictly according to the information given (starting with additional information and
then trial balance).

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Indicate whether the following statement is true or false:
Information is considered to be material if its omission or misstatement could influence the decisions of
users that are based on that information.

93
Select one:
True
False
Question 11
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Indicate by choosing the correct option whether the following statement is true or false:
One of the steps to calculate purchases if no distinction can be made between cash and credit purchases,
if you want to convert a single-entry system into a double-entry system where minimal records are kept, is
to calculate the amounts with the aid of the trade payables control account.

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Betties Smith is the owner of Betties Plumbing. You are given the following information for Betties
Plumbing for the year ended 30 June 20.1.

R
Capital 250 000
Services rendered 500 000
Wages 100 000
Telephone expenses 8 000
Water and electricity 5 000
Insurance expenses 2 500
Maintenance of vehicles 3 000
Interest expenses 1 500

94
Interest income 2 000

What is the correct equity amount for Betties Plumbing on 30 June 20.1?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

632000
Answer:
Question 13
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Indicate by choosing the correct option whether the following statement is true or false:
A receipts and payments statement for non-profit entities is the same as a bank account for a sole trader.

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True
False
Question 14
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Indicate whether the following statement is true or false:
Net asset value (equity) represents the portion by which the liabilities exceed assets.

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False
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 Flag question
Question text
The following information relates to Babu Services for August 20.19:
BABU SERVICES

1. BANK RECONCILIATION STATEMENT AS AT 31 JULY 20.19

R
Unfavourable balance per bank (4 375)
statement………………………………………………
Deposit not yet 16 720
credited……………………………………………………………………
Favourable balance per bank ?
account………….………………………………………..

2. The bookkeeper received the bank statement for August after the August cash journals were
totaled. On comparing it with the August cash journals the following items did not appear in the cash
journals:

BANK STATEMENT FOR AUGUST 20.19

Details Date Debit Credit

R R
Deposit ………….…………………………………………… 01/08 16 720
Stop order - 17/08 2 260
Insurance………………………………………..................
Service fees……………………….…………………………. 26/08 700
Interest……………………………………………………….. 26/08 105
EFT PR P831….…………………………………………….. 26/08 675
Debit order – City Council………………………………….. 27/08 2 550

Additional information regarding the bank statement received on 31 August 20.19.

2.1 EFT PR P831 was made in favour of a creditor, I Moloi. The amount was incorrectly entered in
the cash payments journal as R765.
2.2 The debit order in favour of the City Council was for the owner’s private water and electricity
account.

96
 2.3 On 31 August 20.19 the bank statement showed a credit balance of R2 765.

3. A deposit for R14 750 appeared in the cash journals, for August 20.19, but not on the bank
statement for the same period:

4. Provisional totals at 31 August 20.19 was:

R

Cash receipts journal 57

17
5
Cash payments journal 46
70
0

Prepare the bank account in the general ledger of Babu Services, properly balanced, at 31 August
20.19.

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the
accounts column and a 0 in the amounts column.
Keep the transactions strictly in the order they were given.

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97
The following information was extracted from the accounting records of Lele Plastics:
Balances at 1 April 20.19 R
Equipment: Cost 56 000
Accumulated depreciation: Equipment (37 800)

Additional information
At the beginning of the financial year, 1 April 20.19, Lele Plastics replaced its plastic shredding equipment
with new glass recycling equipment that had a purchase price of R250 000. The replaced plastic shredding
machine was sold for R10 500 cash, it was the only piece of equipment in the books of Lele Plastics prior
to the purchase of the new glass recycling equipment. Depreciation is provided at 15% p.a. on the straight-
line method.

Use the information as extracted from the accounting records of Lele Plastics to complete the asset
realisation account to calculate the profit/loss on the sale of the plastic shredding equipment that will
be disclosed in the statement of profit of loss and other comprehensive income. The amount will be:

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
Please keep the sequence of transactions strictly according the information given but also in the correct
format.

Question 17
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98
 Flag question
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Indicate whether the following statement is true or false.
The settlement of an obligation can take place through the conversion of an obligation into equity.

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True
False
Question 18
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BABU SERVICES
BANK RECONCILIATION STATEMENT AS AT 31 JULY 20.19
R
Favourable balance per bank statement………………………………………… 20 625
Deposit not yet credited…………………………………………………………… 16 720
Debit error on bank statement…………………………………………………… (25 000)
Favourable balance per bank account………….……………………………… ?

The balances and totals at the 31 August 20.19 after all the differences in the bank statement for August
as well as the cash journals were taken into consideration was:

Cash receipts journal R57 370

Cash payments journal R52 200
Bank reconciliation statement R17 515 (unfavourable)

The correct bank account in the general ledger of Babu Services for the month ended August
20.19 is ...

Instructions:
Drag the correct answer into the correct space.
99
An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the
accounts column and a 0 in the amounts column.
Keep the transactions strictly in the order they were given.

Question 19
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Indicate by choosing the correct option whether the following statement is true or false:
It is sometimes better to start by preparing the statement of profit or loss and other comprehensive
income, statement of changes in equity and statement of financial position if you want to convert a
single-entry system into a double entry system where subsidiary journal are kept.

Select one:
True
False
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Indicate by choosing the correct option whether the following statement is true or false:

100
The one advantage of using a single-entry system is that financial statement results can be compared on a
yearly basis.

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True
False

Question 22
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Use the following information to calculate the total liabilities amount for the basic accounting
equation:

R
Capital 680 000
Services rendered 470 000
Drawings 35 000
Rent income 65 000
Interest income 36 000
Stationery 3 300
Wages 13 500
Insurance expenses 15 600
Water and electricity 12 000
Water and electricity: Deposit 2 000
Accrued expenses 2 600
Accrued income 4 200
Prepaid expenses 3 300
Income received in advance 1 200
Furniture 80 000
Vehicles 620 000
Bank overdraft 80 000
Trade payables control 81 300
Loan: SA Bank 70 200
Current portion of long-term borrowings 18 800

101
Land 400 000
Buildings 70 000
Inventory 75 000
Trade receivables control 210 000

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

254100
Answer:
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Indicate whether the following statement is true or false:
Accounting uses symbols and images to convey financial information to users.

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True
False

102
VERSION 7

Indicate whether the following statement is true or false regarding the statement of financial position:
Equity is determined by deducting total liabilities from assets.

Select one:
True
False
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Betties Smith is the owner of Betties Plumbing. You are given the following information for Betties Plumbing
for the year ended 28 February 20.2?

R
Capital 250 000
Services rendered 450 000
Wages 70 000
Telephone expenses 10 000
Water and electricity 8 000
Insurance 1 500
Maintenance of vehicles 2 500
Interest expenses 2 500
Interest income 3 000

What is the profit/loss of Betties Plumbing for the year ended 28 February 20.2?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)
3. If it is a loss, please enter the amount as a negative (eg: -12141.72)

358500
Answer:
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103
 Flag question
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On 2 January 20.2, a tenant of B&D Dealers, did an electronic funds transfer of R270 000 into B&D Dealers’
business bank account. The monthly rental is R18 000 per month. The financial year-end is 31 December
20.2.

What will the closing transfer entry for the transaction on 31 December 20.2 be?

Instructions:
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Round off to the second decimal after the full stop (eg: 50.56)
3. For embedded questions spelling is very important. If you spell the answer incorrect it will be marked
incorrect. Please make sure that your spelling of the words is correct.
4. Don’t use any special characters (&) and don’t use bold in your answer. It will be marked incorrect.
5. Do not use any abbreviations.
6. Your answer is case sensitive; therefore, you need to put the very first letter of the answer in uppercase,
but the rest of your answer must be in lowercase (eg: Interest on loan)

B&D DEALERS

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104
Indicate by choosing the correct option whether the following statement is true or false:
If a single-entry system is used a trial balance can be compiled and the financial statements prepared
from this information will be reliable.

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True
False
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Indicate whether the following statement is true or false:
Expenses increase on the debit side and decrease on the credit side of the T-account as expenses increase
the profit for the year.

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True
False
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State whether the following statement is true or false:
The only difference between debentures and a long-term loan is that with debentures there are several
creditors, whereas with a long-term loan there is usually only one creditor which is usually a financial
institution.

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True
False
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105
 Flag question
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The following information relates to Babu Services for August 20.19:

The bookkeeper received the bank statement for August after the August cash journals were totaled. On
comparing it with the August cash journals the following items did not appear in the cash journals:

BANK STATEMENT FOR AUGUST 20.19

Details Date Debit Credit
R R
Deposit 01/08 16 720
………….………………………………………...........
P 06/08 18 250
Lazarus……....……………………..…...……………………
Stop order - 12/08 2 250
Insurance………………………………………… 17/08 3 600
K Letima 26/08 700
.………………………………………………………. 26/08 105
Service 26/08 675
fees……………………….…………………………… 27/08 2 550
Interest………………………………………………………….
I Moloi ….………………………………………………………
Debit order – City Council……………………………………

Additional information regarding the bank statement received on 31 August 20.19.

(a) An EFT was made directly to the bank account of a creditor, I Moloi. The amount was incorrectly
entered in the cash payments journal as R765.

(b) The debit order in favour of the City Council was for the owner’s private water and electricity account.

(c) The R16 720 appeared in the bank reconciliation statement as at 31 July 20.19 as a deposit not yet
credited by the bank.

(d) On 17 August 20.19 Ms K Letima deposited R3 600 directly into the bank account of Babu Services in
full settlement of her account of R4 060.

(e) An EFT was made directly into the bank account of P Lazarus by Babu Services to pay their account.

(f) Provisional totals at 31 August 20.19 was:

R
Cash receipts journal 55 550
Cash payments journal 44 440
106
The correct cash payments journal of Babu Services for August 20.19 will be ...

Instructions:

Drag the correct answer into the correct space.

An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the
accounts column and a 0 in the amounts column.
Keep the transactions strictly in the order they were given.

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Indicate whether the following statement is true or false:
An asset shall be classified as a current asset when it is expected to be converted into money (realised)
within twelve months of the statement of financial position date.

Select one:
True
False

107
Question 13
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Indicate whether the following statement is true or false:
If debentures are redeemable within the next 18 months the debentures will be shown as a current
liability in the statement of financial position.

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True
False
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Indicate whether the following statement is true or false:
According to the current value measurement basis, liabilities should be recorded at the amount paid or
the fair value of the consideration given to acquire the liability at the time of their acquisition.

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True
False
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108
Indicate whether the following statement is true or false:
Eskom is an example of a state-owned company in South Africa.

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False
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Use the following information to calculate the profit or loss for the year:

R
Capital 680 000
Services rendered 470 000
Drawings 35 000
Rent income 65 000
Interest expenses 36 000
Stationery 3 300
Wages 13 500
Insurance expenses 15 600
Prepaid expenses 2 350
Furniture 80 000
Vehicles 620 000
Bank overdraft 80 000
Trade payables control 81 300
Loan: SA Bank 70 200
Land 400 000
Buildings 70 000
Inventory 75 000
Trade receivables control 210 000

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)
3. If it is a loss, please enter the amount as a negative (eg: -12141.72)

109
Answer:
466600

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Indicate by choosing the correct option whether the following statement is true or false:
Accrued membership fees at the beginning of a financial period will be entered on the credit side of the
membership fees account.

Select one:
True
False
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Indicate whether the following statement is true or false:
After each transaction the debit side of the accounting equation must equal the credit side of the
accounting equation.

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True
False
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On 15 September 20.21 Law Attorneys applied for a loan of R95 000 from TEN Bank to buy land. The loan
was granted, and the money was paid over to Property Limited.

110
The correct analysis of the effect of the given transaction on the general ledger and the accounting
equation is ...

Instructions:
1. Drag the correct answer into the correct space (cell phone click on the answer and click on the place
where you want to place the amount - also keep your cell phone horizontal when doing the question).
2. An option can be used more than once.
3. If an options has been provided and it is not applicable to the specific questions please put a 0 in the
applicable column.

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Indicate by choosing the correct option whether the following statement is true or false:
Single-entry systems, that is incomplete records, are sometimes used by small businesses, because they
know very little about basic bookkeeping principles.

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True
False
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111
 Flag question
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Indicate by choosing the correct option whether the following statement is true or false:
A receipts and payments statement for non-profit entities is the same as a bank account for a sole trader.

Select one:
True
False

112
VERSION 8

Indicate by choosing the correct option whether the following statement is true or false:
Membership fees received in advance at the beginning of a financial period will be entered on the credit
side of the membership fees account.

Select one:
True
False
Question 2
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The following information relates to Babu Services for August 20.19:
BABU SERVICES

1. BANK RECONCILIATION STATEMENT AS AT 31 JULY 20.19

R
Unfavourable balance per bank (4 375)
statement………………………………………………
Deposit not yet 16 720
credited……………………………………………………………………
Favourable balance per bank ?
account………….………………………………………..

2. The bookkeeper received the bank statement for August after the August cash journals were
totaled. On comparing it with the August cash journals the following items did not appear in the cash
journals:
BANK STATEMENT FOR AUGUST 20.19

Details Date Debit Credit

R R
Deposit ………….…………………………………………… 01/08 16 720
Stop order - 17/08 2 260
Insurance………………………………………...................
Service fees……………………….…………………………. 26/08 700
Interest……………………………………………………….. 26/08 105
EFT PR P831….…………………………………………….. 26/08 675
Debit order – City Council………………………………….. 27/08 2 550

113
Additional information regarding the bank statement received on 31 August 20.19.

2.1 EFT PR P831 was made in favour of a creditor, I Moloi. The amount was incorrectly entered in
the cash payments journal as R765.
2.2 The debit order in favour of the City Council was for the owner’s private water and electricity
account.
2.3 On 31 August 20.19 the bank statement showed a credit balance of R2 765.

3. A deposit for R14 750 appeared in the cash journals, for August 20.19, but not on the bank
statement for the same period:

4. Provisional totals at 31 August 20.19 was:

R

Cash receipts journal 57

17
5
Cash payments journal 46
70
0

Complete the cash receipts of Babu Services, bank column only, for August 20.19.

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the
accounts column and a 0 in the amounts column.
Keep the transactions strictly in the order they were given.

114
Question 3
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Indicate by choosing the correct option whether the following statement is true or false:
Gizmo Soccer Club can set aside money in a special fund when it wants to use the money for purchasing
of specific training gear for its members.

Select one:
True
False
Question 4
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Indicate by choosing the correct option whether the following statement is true or false:
It is sometimes better to start by preparing the statement of profit or loss and other comprehensive
income, statement of changes in equity and statement of financial position if you want to convert a
single-entry system into a double entry system where subsidiary journal are kept.

115
Select one:
True
False
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On 1 September 20.18 Mr Will Turner started a new blacksmith business called Iron Duke. Iron Duke
manufactures and sells domestic cast iron furniture. The following transactions took place during the first
financial year of the entity ending 31 August 20.19.
-. On 31 August 20.19, Mr Will Turner, decided to trade-in the old delivery van for a new delivery van. The
trade-in value was R14 500, and the cost of the new delivery van was R60 000, with the difference settled
in cash. On the 1 September 20.18 the owner, Mr Will Turner, contributed this delivery van which had cost
R45 000 when new. The vehicle was bought on 1 September 20.16 by Mr Will Turner and had a carrying
value of R27 000 on 1 September 20.18 with only 3 years useful life remaining. Depreciation needs to be
written off on the straight-line basis. (You only need to do the entries for the asset realisation.)
Show the effect of the asset realisation transaction on the basic accounting equation with a plus sign
(+) for an increase and a minus sign (-) for a decrease next to each amount under each element. Also
indicate the account(s) that will be affected by each transaction next to the affected elements for the
financial year ended 31 August 20.19. (The business makes use of the perpetual inventory system.)

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the
accounts column and a 0 in the amounts column.
Keep the transactions strictly in the order they were given.

116
Your answer is not complete; please drag an item to each drop region.
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Indicate whether the following statement is true or false:
When an entity uses inconsistent accounting treatments, it allows for the users of the financial information
to compare the financial statements of the entity for a period.

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True
False
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On 1 March 20.21 Sithole’s Restaurant purchased chairs and tables for the restaurant for R180 000. The
chairs and tables were paid for with the credit card of the business.

The correct effect of the given transaction on the basic accounting equation is ...

Instructions:
1. Drag the correct answer into the correct space (cell phone click on the answer and click on the place
where you want to place the amount - also keep your cell phone horizontal when doing the question).
2. An option can be used more than once.
3. If an options has been provided and it is not applicable to the specific questions please put a 0 in the
applicable column.

117
Question 10
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Indicate whether the following statement is true or false:
The financial position of an entity is reported over a financial period.

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Betties Plumbing for the year ended 28 February 20.2?

R
Capital 252 000
Services rendered 510 000
Wages 100 000
Telephone expenses 10 000
Water and electricity 8 000
Insurance 1 500
Maintenance of vehicles 2 500
Interest expenses 1 500
Interest income 2 000
118
The total expenditure for Betties Plumbing for the year ended 28 February 20.2 is ...

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

123500
Answer:
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The financial year end for Trusty Traders is 28 February. The rental expenses of Trusty Traders are R11 000
per month. The financial records of Trusty Traders showed that rent was paid for thirteen months during
the financial year ended 28 February 20.2.

The correct adjustment journal entries in the general journal for 28 February 20.2 will be …

Instructions:
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Round off to the second decimal after the full stop (eg: 50.56)
3. For embedded questions spelling is very important. If you spell the answer incorrect it will be marked
incorrect. Please make sure that your spelling of the words is correct.
4. Don’t use any special characters (&) and don’t use bold in your answer. It will be marked incorrect.
5. Do not use any abbreviations.
6. Your answer is case sensitive; therefore, you need to put the very first letter of the answer in uppercase,
but the rest of your answer must be in lowercase (eg: Interest on loan)

TRUSTY TRADERS

119
Question 13
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Parker Traders provided you with the following information regarding the list of totals and balances on 30
April 20.8
R
TOTALS FOR JOURNALS
Total of the trade receivables column in the sales journal………………. 276 080
Total of the trade payables column in the purchases journal………….. 215 200
Total of the trade receivables column in the sales returns journal….. 4 000
Total of the trade payables column in the purchases returns journal 8 600

BALANCES OF GENERAL LEDGER ACCOUNTS

Balance of allowance for credit losses (1/03/20.7)……………………........ 2 040
Balance of trade receivables control account (1/03/20.7)…………....... 40 800

Additional information
A sales invoice of R950 was entered twice in the sales journal and posted twice to the personal account of
a debtor, Mr T Maharaj.

What will the general journal entry for the correction of the sales invoice of R950 that was entered
twice in the sales journal and personal account of Mr T Maharaj be?

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.

120
Question 14
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Indicate whether the following statement is true or false regarding debentures:
Debentures usually have many creditors.

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False
Question 15
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Indicate whether the following statement is true or false:
A disadvantage of using a single-entry bookkeeping system is that entities using a single-entry system
can never convert to a double-entry system.

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121
 True
False
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Indicate whether the following statement is true or false:
The conversion of an obligation into equity is one way in which an obligation can be settled.

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False
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You are given the following extract of the pre-adjustment trial balance for Arch Traders for the financial
year ended 30 September 20.2.
ARCH TRADERS
EXTRACT OF THE PRE-ADJUSTMENT TRIAL BALANCE AS AT 30 SEPTEMBER 20.2
Debit Credit
R R
Capital ………………………………………………………… 525 000
Drawings……………………………………………………… 25 000
Land ………………………………………………………….. 400 000
Buildings……………………………………………………… 200 000
Vehicles………………………………………………………. 500 000
Equipment…………………………………………………….. 280 000
Accumulated depreciation: Vehicles(1 October 20.1……. 90 000
Accumulated depreciation: Equipment (1 October 20.1)… 60 000
Trade receivables control…………………………………… 225 000
Inventory………………………………………………………. 250 000
Bank overdraft ……………………………………………….. 714 750
Trade payables control……………………………………… 270 000
VAT control…………………………………………………… 30 000
Allowance for credit losses…………………………………. 4 000
Rental income……………………………………………….. 45 000
Wages and salaries………………………………………….. 90 000
122
 Water and electricity………………………………………… 72 000
Telephone expenses.……………………………………….. 43 750
Insurance expenses.………………………………………… 65 000
Credit losses………………………………………………….. 2 500

Additional information
a) A tenant took occupation on 1 August 20.2. The tenant paid the rent for six months on 1 August 20.2.
b) On 30 September 20.2 Arch Traders received a telephone account for R8 750 which was overdue for
two months and was still not paid on 30 September 20.2.
c) Arch Traders changed insurance providers to Lee Insurers. On 1 May 20.2 an EFT payment of
R30 000 was made to Lee Insurers. This amount was paid for the period 1 May 20.2 to 31 December
20.2.
d) The accountant decided to increase the allowance for credit losses to R5 000.
e) The VAT input was calculated wrong. The amount needs to be decreased with R2 500.
f) No entries were made in the books of JJ Wholesalers regarding the interest on overdraft of R8 577
payable.

The correct disclosure of current liabilities in the statement of financial position of JJ

Wholesalers for the year ended 30 September 20.2 will be:

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
Items to be disclosed in the face of financial statement should be presented in the following order,
payables, advances or prepayment received, amount owed to SARS and unfavourable balance in the
bank.

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Indicate whether the following statement is true or false:
An entity makes a loss when the income it has earned is less than the expenditure it has incurred in
generating or producing the income.

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True
False
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Indicate whether the following statement is true or false:
Management are considered as an internal user of financial information who use the financial information
to exercise control which means evaluating the current situation and taking corrective steps.

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False
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Indicate whether the following statement is true or false regarding debentures:
There is no annual interest expenses on debentures.

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124
 True
False
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Indicate by choosing the correct option whether the following statement is true or false:
One of the steps to calculate sales if no distinction can be made between cash and credit sales, if you
want to convert a single-entry system into a double-entry system where minimal records are kept, is to
calculate the amounts with the aid of the trade receivables control account.

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True
False
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Dineo Dlamini is the owner of Dineo’s Hairdressing Salon. You are given the following information for
Dineo’s Hairdressing Salon for the year ended 30 June 20.1.

R
Capital 250 000
Equipment 150 000
Bank (favourable balance) 100 000
Trade payables 90 000
Accrued expenses 1 500
Accrued income 2 600
Services rendered 250 000
Interest income 3 400
Wages 160 000
Telephone expenses 34 000
Water and electricity: deposit 4 800
Insurance 22 000
Rental expenses 54 000
Advertising 8 000
125
What is the correct amount for the total assets for Dineo’s Hairdressing Salon as at 30 June 20.1?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

257400
Answer:
Finish attempt ...

VERSION 9

Indicate by choosing the correct option whether the following statement is true or false:
A receipts and payments statement for non-profit entities shows only actual cash receipts and payments.

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True
False
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On 1 September 20.18 Mr Will Turner started a new blacksmith business called Iron Duke. Iron Duke
manufactures and sells domestic cast iron furniture. The following transactions took place during the first
financial year of the entity ending 31 August 20.19.
On 1 September 20.18 the owner, Mr Will Turner, made the following capital contributions:
 Firstly, he invested a cash amount of R100 000 from his personal savings account into the business
bank account.
 He then made his new personal machine, the Belt Grinder, available to the business. The cost of
the Belt Grinder was R15 000.
 He also contributed his personal delivery van which had cost R45 000 when new. The vehicle was
bought on 1 September 20.16 by Mr Will Turner and had a carrying value of R27 000 on
1 September 20.18 with only 3 years useful life remaining.

126
Show the effect of each transaction on the basic accounting equation with a plus sign (+) for an
increase and a minus sign (-) for a decrease next to each amount under each element. Also indicate
the account(s) that will be affected by each transaction next to the affected elements for the financial
year ended 31 August 20.19. (The business makes use of the perpetual inventory system.)

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the
accounts column and a 0 in the amounts column.
Keep the transactions strictly in the order they were given.

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Use the following information to calculate the total liabilities amount for the basic accounting
equation:

R
Capital 680 000
Services rendered 470 000
Drawings 35 000
Rent income 65 000
Interest income 36 000
Stationery 3 300
Wages 13 500

127
Insurance expenses 15 600
Water and electricity 12 000
Water and electricity: Deposit 2 000
Accrued expenses 2 600
Accrued income 4 200
Prepaid expenses 3 300
Income received in advance 1 200
Furniture 80 000
Vehicles 620 000
Bank overdraft 80 000
Trade payables control 81 300
Loan: SA Bank 70 200
Current portion of long-term borrowings 18 800
Land 400 000
Buildings 70 000
Inventory 75 000
Trade receivables control 210 000

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

254100
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Indicate whether the following statement is true or false:
The historical cost of asset and liabilities are increased if they become impaired or onerous.

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True
False

128
Question 6
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Indicate whether the following statement is true or false:
If debentures are redeemable within the next 18 months the debentures will be shown as a current
liability in the statement of financial position.

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True
False
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Indicate by choosing the correct option whether the following statement is true or false:
Single-entry systems, that is incomplete records, are sometimes used by small businesses, because they
know very little about basic bookkeeping principles.

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True
False
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Indicate whether the following statement is true or false:
A disadvantage of using a single-entry bookkeeping system is that a single-entry system leads to
incomplete records, since the double-entry principle, which requires that for each debit there must be a

129
corresponding credit entry, cannot be applied where only personal accounts are accounted for.

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Indicate whether the following statement is true or false:
That portion of a long-term loan or obligation to be repaid within the next 18 months, must be disclosed
as a non-current liability in the statement of financial position.

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True
False
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The total of trade receivables column in the sales return journal of Dineo Stores is R80 000. In the process
of reconciling the balance on the trade receivables control account with the list of balances as per trade
receivables ledger, it was noted that the sales return journal was overcast by R1 080.

What will the correct general ledger entries in the books of Dineo Stores to rectify the sales returns
journal total be?

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.

130
If an option has been provided and it is not applicable to the specific question, please put N/A in the
account column and a 0 in the amounts column.

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Indicate whether the following statement is true or false:
Membership fees received in advance at the end of a financial period will be entered on the debit side of
the membership fees account.

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False
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Balances at 1 November 20.9 R
Equipment: 280 000
Cost………………………………………………………………
Accumulated depreciation: (164 800)
Equipment……………………………………..

131
Additional information
(a) At the beginning of the financial year, 1 November 20.9, Kumkani Traders decided to upgrade some of
its processes by selling old printing equipment for R35 000 cash. The machine was bought on 1 November
20.4 for R195 000. Depreciated was provided for at 15% p.a. on the straight-line method.
(b) On 1 December 20.9 Kumkani Traders bought 3D printing equipment for R148 600 on credit from
Fourth Dimension. Depreciation on the new machine must be provided for at 20% per annum on the
diminishing balance method.

Use the information as extracted from the accounting records of Kumkani Traders to complete the
asset realisation account to calculate the profit/loss on the sale of the old printing equipment that
will be disclosed in the statement of profit of loss and other comprehensive income. The amount
will be:

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
Please keep the sequence of transactions strictly according the information given but also in the correct
format.

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132
 Flag question
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Indicate whether the following statement is true or false:
Depreciation, consumables and credit losses recovered are examples of expenses.

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False
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The following information was obtained from the books of Khulong Traders.

POST-ADJUSTMENT TRIAL BALANCE OF KHULONG TRADERS AS AT 30 JUNE 20.12

Debit Credit
R R
Capital.......................................................................................................................... - 100 000
Drawings..................................................................................................................... 2 695 -
Land at cost............................................................................................................... 140 000 -
Buildings at cost....................................................................................................... 60 000 -
Vehicles at cost......................................................................................................... 122 000 -
Furniture and fittings at cost .............................................................................. 65 000 -
Accumulated depreciation on vehicles (30 June 20.12)............................ - 54 700
Accumulated depreciation on furniture and fittings (30 June 20.12)... - 22 700
Trade receivables control control....................................................................... 9 280 -
Inventory: Trading (1 July 20.11)......................................................................... 13 800 -
Bank.............................................................................................................................. 8 025 -
Petty cash................................................................................................................... 750 -
Mortgage loan......................................................................................................... - 150 000
Loan from Africa Bank (final instalment on 28 February 20.13)........... - 50 000
Trade payables control......................................................................................... - 4 500

133
 VAT control................................................................................................................ - 1 500
Sales............................................................................................................................. - 257 070
Carriage on purchases.......................................................................................... 760 -
Commission income.............................................................................................. - 15 000
Credit losses............................................................................................................. 349 -
Depreciation............................................................................................................ 15 400 -
Insurance................................................................................................................... 2 750 -
Packing materials................................................................................................... 4 300 -
Purchases.................................................................................................................. 155 130 -
Purchases returns.................................................................................................. - 1 130
Rent income............................................................................................................ - 3 800
Sales returns............................................................................................................ 1 338 -
Credit losses recovered....................................................................................... - 2 500
Loss on sale of an asset....................................................................................... 5 700 -
Settlement discount granted............................................................................ 303 -
Settlement discount received........................................................................... - 405
Wages......................................................................................................................... 51 325 -
Water and electricity............................................................................................. 4 400 -
663 305 663 305

Additional information:

On 30 June 20.12 trading inventory had a balance of R15 335.

Use the information provided to prepare the distribution, administrative and other expenses
section of the statement of profit or loss and other comprehensive income of Khulong Traders for
the year ended 30 June 20.12.

Instructions:

Drag the correct answer into the correct space.

An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put a 0 in the
amounts column.
Keep the sequence strictly according to the information given.

134
Question 15
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Betties Smith is the owner of Betties Plumbing. You are given the following information for Betties Plumbing
for the year ended 28 February 20.2:

R
Capital 250 000
Services rendered 450 000
Drawings 17 000
Wages 70 000
Telephone expenses 10 000
Water and electricity 8 000
Insurance 1 500
Maintenance of vehicles 2 500
Interest expense 3 000
Interest income 2 500

What is the correct equity amount for Betties Smith on 28 February 20.2?

135
NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

590500
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Indicate whether the following statement is true or false:
Current cost reflects the current amount that would be received to acquire an equivalent asset.

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True
False
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Indicate by choosing the correct option whether the following statement is true or false:
The first step to convert a single-entry system into a double entry system, where subsidiary journals are
kept, is to compile a statement of assets and liabilities, these balances will then be journalized and posted
to the various general ledger accounts.

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True
False
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Indicate whether the following statement is true or false:
An account in the general ledger is presented in a “T” format and the right-hand side is referred to as the
debit side and the left-hand side is referred to as the credit side.

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True
False
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Indicate whether the following statement is true or false:
An account in the general ledger is presented in a “T” format and the left-hand side is referred to as the
debit side and the right-hand side is referred to as the credit side.

Select one:
True
False

137
VERSION 10

Indicate whether the following statement is true or false:

Net asset value (equity) represents the portion by which the assets exceed liabilities.

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True
False
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Luna Smith is the owner of Luna’s Plumbing. On 30 September you are given the following information for
Luna’s Plumbing.

R
Clients owing for plumbing services rendered on credit 36 000
Equipment owned by Luna’s Plumbing 100 000
Unfavourable bank balance 50 000
Luna’s Plumbing owes suppliers for parts purchased on credit 25 000
Vehicles owned by Luna’s Plumbing 120 000

The correct representation of the accounting equation of Luna’s Plumbing after considering the given
information is …

Instructions:
1. Drag the correct answer into the correct space (cell phone click on the answer and click on the place where
you want to place the amount - also keep your cell phone horizontal when doing the question).
2. An option can be used more than once.

138
Question 3
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Indicate whether the following statement is true or false:
A loss decrease equity.

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False
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State whether the following statement is true or false:
If debentures are redeemable within the next 12 months the debentures will be shown as a current liability in
the statement of financial position.

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True
False
Question 6
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Indicate by choosing the correct option whether the following statement is true or false:
One of the steps to calculate purchases if no distinction can be made between cash and credit purchases, if you
want to convert a single-entry system into a double-entry system where minimal records are kept, is to calculate
the amounts with the aid of the trade receivables control account.

139
Select one:
True
False
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You are given the following information for Markle Beauty Salon for the month ended 31 August 20.1. Markle
Beauty Salon owes Hairdressing Suppliers an amount of R60 000. Due to the tough economic conditions, Markle
Beauty Salon had to resort to providing services on credit and their clients owe them R80 000. Markle Beauty
Salon also owns equipment to the value of R10 000 and had a unfavourable bank account balance of R15 000.
Markle Beauty Salon also had to pay an extra rental amount as the deposit for their rental of the salon of R4 000.

What is the net worth (equity) of Markle Beauty Salon on 31 August 20.1?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

19000
Answer:
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Bright Traders leased a portion of it's factory to Faith Traders at the beginning of the
current financial year for a period of 12 months (the current financial period ends on
28 February 20.19). Bright Traders received rent to the amount of R30 696 from
Faith Traders, which covers the rent amount for the current financial period. On
1 September 20.18, Bright Traders notified Faith Traders that from 1 October 20.18
to 28 February 20.19, Bright Traders will be renovating the entire factory building.
Therefore, Bright Traders requested Faith Traders to vacate the factory building
during the renovation period. Bright Traders and Faith Traders reached an
agreement that the rent already paid for the renovation period will be utilised in the
next financial period when renovations are completed. No adjustment journal entry
has been processed by Bright Traders regarding the above agreement.
The effect that the adjustment journal entry will have on the basic accounting
equation of Bright Traders for the year ended 28 February 20.19 will be …? (Round
off your final answer to the nearest Rand)
140
Instructions:
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Round off to the second decimal after the full stop (eg: 50.56)
3. A decrease in an amount must be indicated by using a negative sign in front of the amount (eg: -
1000.01)
4. An increase must be indicated by the amount without any sign (eg: 1000.01)
5. For embedded questions spelling is very important. If you spell the answer incorrect it will be marked
incorrect. Please make sure that your spelling of the words is correct.
6. If an option has been provided and it is not applicable to the specific question, please put N/A in the account
column and 0 in the amount column.

BRIGHT TRADERS

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Indicate whether the following statement is true or false:
The fundamental qualitative characteristics for useful financial information are relevance and comparability.

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False
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Indicate by choosing the correct option whether the following statement is true or false:

141
The gross profit calculated in the trading statement of a non-profit entity is transferred to receipts and payments
statement.

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True
False
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Use the following information to calculate the total comprehensive income/loss for the year ended
28 February 20.2:

R
Capital 680 000
Services rendered 470 000
Drawings 35 000
Rent income 65 000
Interest expenses 36 000
Stationery 3 300
Wages 13 500
Insurance expenses 15 600
Water and electricity 12 000
Water and electricity: Deposit 2 000
Accrued expenses 2 600
Accrued income 4 200
Prepaid expenses 3 300
Income received in advance 1 200
Furniture 80 000
Vehicles 620 000
Bank overdraft 80 000
Trade payables control 81 300
Loan: SA Bank 70 200
Current portion of long-term borrowings 18 800
Land 400 000

142
Buildings 70 000
Inventory 75 000
Trade receivables control 210 000

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)
3. If the net effect is a loss, please enter the amount as a negative (eg: -12141.72)

454600
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Indicate whether the following statement is true or false:
Liabilities are the residual interest in the assets of an entity after deducting all its liabilities.

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False
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Waterhouse is a small township retail business that trades in soft drinks and has a 30 June 20.19 financial year-
end. The business records the amount of inventory it purchases only on a cash basis. The owner, Daniel Makoe,
has requested you to assist him in preparing the accounting records on an accrual basis. He has provided you
with the following information:
Purchases: Inventory
Date Amount
R
15 July 20.19 10 385
19 August 20.19 7 236

143
28 September 20.19 17 311
12 October 20.19 14 422
30 November 20.19 20 005
31 December 20.19 17 987
03 February 20.19 6 500
25 March 20.19 7 340
17 May 20.19 3 670
104 856
Based on your review of the business’s bank statement and a discussion with Daniel, you established the
following:
1. On 30 June 20.19, only R2 540 worth of inventory was still on hand. There was no opening inventory and
no inventory shortages.

2. The business sells products at a 20% mark up on cost.

3. The owner and his assistant earn a total monthly salary of R2 000 a month, their salaries was not paid on 30
June 20.19 due to a lack of funds.

4. The rates and taxes account are in arrears. No payments have been made for an entire financial year due to
a dispute with the municipality. The amount owing is R4 550.

5. According to Daniel, the business uses a prepaid electricity meter. Prepaid electricity bought for the year
amounted to R3 200 of which R150 has not yet been used by year end.

6. The business rents a pool table from a gaming agent. The conditions for the rental of the pool table is that
50% of the takings are business income and the balance goes to the agent as a commission. By 31 May 2019,
R2 834 was deposited into the business’s account for the businesses’ share. At year end, the pool table had R1
840 worth of R2 coins in its safe.

7. Daniel paid R870 for maintenance to the local handy man out of his own pocket and has not yet been
refunded by the business.

8. A monthly rental of R500 is made to the garage owner of from where the business operates. June’s rent is
still due.

9. The business has 10 fridges with a cost of R3 000 each. Daniel estimates that they have an estimated
useful life of 8 years.

Use the information provided to prepare the distribution, administrative and other expenses section of
the statement of profit or loss and other comprehensive income of Waterhouse for the year ended 30
June 20.19.
144
Instructions:
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An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put a 0 in the amounts
column.
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Indicate whether the following statement is true or false:
In the preparation of financial statements, information which is useless and old should only be presented when
it may be useful to identify and assess certain trends.

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True
False
145
Question 18
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Indicate by choosing the correct option whether the following statement is true or false:
A receipts and payments statement for non-profit entities shows only actual cash receipts and payments.

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Indicate by choosing the correct option whether the following statement is true or false:
Single-entry systems, that is incomplete records, are sometimes used by small businesses, because they know
very little about basic bookkeeping principles.

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Indicate whether the following statement is true or false:
A disadvantage of using a single-entry bookkeeping system is that entities using a single-entry system can
never convert to a double-entry system.

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True
146
 False
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Indicate whether the following statement is true or false:
The only difference between a debenture and a long-term loan is that with debentures there is only one creditor
being a financial institution, whereas with a long-term loan there are usually several creditors.

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True
False
Finish attempt ...

147
VERSION 11

Indicate whether the following statement is true or false:

According to the current value measurement basis, assets should be recorded at the amount paid or the
fair value of the consideration given to acquire the assets at the time of their acquisition.

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The owner of GS Electricians, Mr Gizmo Smith, deposited R10 000 on 1 March 20.1 as opening capital into
the business bank account after obtaining a personal loan from LG Bank.

The correct analysis of the effect of the given transaction on the general ledger and the accounting
equation is ...

Instructions:
1. Drag the correct answer into the correct space (cell phone click on the answer and click on the place
where you want to place the amount - also keep your cell phone horizontal when doing the question).
2. An option can be used more than once.
3. If an options has been provided and it is not applicable to the specific questions please put a 0 in the
applicable column.

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Indicate by choosing the correct option whether the following statement is true or false:
It is sometimes better to start by preparing the statement of profit or loss and other comprehensive
income, statement of changes in equity and statement of financial position if you want to convert a
single-entry system into a double entry system where subsidiary journal are kept.

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Indicate whether the following statement is true or false:
In the preparation of financial statements, information which is useless and old should only be presented
when it may be useful to identify and assess certain trends.

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Indicate by choosing the correct option whether the following statement is true or false:
The gross profit calculated in the trading statement of a non-profit entity is transferred to income and
expenditure statement and is disclosed under income.

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True

149
 False
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State whether the following statement is true or false:
If debentures are redeemable within the next 12 months the debentures will be shown as a current liability
in the statement of financial position.

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Indicate whether the following statement is true or false:
Expenses for the year are disclosed in the statement of financial position.

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Indicate whether the following statement is true or false:

150
A disadvantage of using a single-entry bookkeeping system is that a single-entry system leads to
incomplete records, since the double-entry principle, which requires that for each debit there must be a
corresponding credit entry, cannot be applied where only personal accounts are accounted for.

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State whether the following statement is true or false:
That portion of a long-term loan or obligation to be repaid within the next 18 months, must be disclosed
as a current liability in the statement of financial position.

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The following information was obtained from the books of Khulong Traders.

POST-ADJUSTMENT TRIAL BALANCE OF KHULONG TRADERS AS AT 30 JUNE 20.12

Debit Credit
R R
Capital (1 July 20.11).............................................................................................. - 100 000
Drawings..................................................................................................................... 2 695 -
Land at cost............................................................................................................... 140 000 -
Buildings at cost....................................................................................................... 60 000 -

151
 Vehicles at cost......................................................................................................... 122 000 -
Furniture and fittings at cost .............................................................................. 65 000 -
Accumulated depreciation on vehicles (30 June 20.12)............................ - 54 700
Accumulated depreciation on furniture and fittings (30 June 20.12)... - 22 700
Trade receivables control control....................................................................... 9 280 -
Inventory: Trading (1 July 20.11)......................................................................... 13 800 -
Bank.............................................................................................................................. 8 025 -
Petty cash................................................................................................................... 750 -
Mortgage loan......................................................................................................... - 150 000
Loan from Africa Bank (final instalment on 28 February 20.13)........... - 50 000
Trade payables control......................................................................................... - 4 500
VAT control................................................................................................................ - 1 500
Sales............................................................................................................................. - 257 070
Carriage on purchases.......................................................................................... 760 -
Commission income.............................................................................................. - 15 000
Credit losses............................................................................................................. 349 -
Depreciation............................................................................................................ 15 400 -
Insurance................................................................................................................... 2 750 -
Packing materials................................................................................................... 4 300 -
Purchases.................................................................................................................. 155 130 -
Purchases returns.................................................................................................. - 1 130
Rent income............................................................................................................ - 3 800
Sales returns............................................................................................................ 1 338 -
Credit losses recovered....................................................................................... - 2 500
Loss on sale of an asset....................................................................................... 5 700 -
Settlement discount granted............................................................................ 303 -
Settlement discount received........................................................................... - 405
Wages......................................................................................................................... 51 325 -
Water and electricity............................................................................................. 4 400 -
663 305 663 305

Additional information:

On 30 June 20.12 trading inventory had a balance of R15 335.

The balance b/d on 30 June 20.12 of the capital account was R136 990.

Use the information provided to prepare the statement of changes in equity of Khulong Traders as
at 30 June 20.12.

152
Instructions:

Drag the correct answer into the correct space.

An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the
details column and a 0 in the amount column.
Keep the sequence strictly according to the information given.

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Ronnie Peters is the owner of Ronnie’s Hairdressing Salon. You are given the following information for
Ronnie’s Hairdressing Salon for the year ended 30 June 20.1.

R
Capital 300 000
Equipment 200 000
Vehicles 160 000
Bank (favourable balance) 150 000
Accrued income 3 500
Income received in advance 4 600
Prepaid expenses 3 600
Accrued expenses 5 200
Trade payables 92 600

153
 Trade receivables 63 500
Services rendered 250 000
Interest income 2 400
Wages 165 000
Telephone expenses 45 000
Water and electricity 29 000
Insurance 12 000
Rental expenses 41 000
Advertising 3 000

What is the amount for the total assets of Ronnie’s Hairdressing Salon as at 30 June 20.1?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

580600
Answer:
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Indicate by choosing the correct option whether the following statement is true or false:
Membership fees received in advance at the end of a financial period will be entered on the credit side of
the membership fees account.

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True
False
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154
 Flag question
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The following information relates to Sammy Technologies who buys and sells computers and computer
accessories. Sammy Dealers is a registered as a VAT vendor and uses the periodic inventory system. VAT at
15% is applicable. The VAT period of the business ends on unequal months.
Transactions:
20.22
July 6 Purchased 10 laptops from IT Wholesalers on credit for R17 250 each. (credit invoice no: IT657)
Purchases a point-of-sale scanner from Mega Wholesalers on credit for R2 875 to be used by the
cashiers. (credit invoice no: MW 456)

The correct entry in the purchases journal of Sammy Technologies will be:

Instructions:
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An option can be used more than once.

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Indicate whether the following statement is true or false.
Financial statements are prepared from using the single-entry system are considered reliable.

155
Select one:
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Indicate whether the following statement is true or false:
An account in the general ledger is presented in a “T” format and the right-hand side is referred to as the
debit side and the left-hand side is referred to as the credit side.

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Indicate whether the following statement is true or false:
The financial position of an entity is reported over a financial period.

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You were presented with the following statement of financial position of Fancy Hairdressers:
156
FANCY HAIRDRESSERS
STATEMENT OF FINANCIAL POSITION AS AT 28 FEBRUARY 20.10
Notes R
ASSETS
Non-current assets 545 500
Property, plant and equipment 545 500
Current assets 93 925
Trade and other receivables 18 325
Cash and cash equivalent 75 600

Total assets 639 425

EQUITY AND LIABILITIES

Equity 456 840
Capital 456 840
Non-current liabilities ?
Long-term borrowings ?
Current liabilities 30 600
Trade and other payables 30 600

Total equity and liabilities 639 425

What is the correct amount for non-current liabilities?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

151985
Answer:

157
VERSION 12

The following information for August 20.19 relates to NP Glassworks:

1. Pencil totals of the bank columns in the cash journals at 31 August 20.19:
Cash receipts journal, R65 650
Cash payments journal, R15 800

2. The bank statement for August 20.19 reflected the following items which did not appear in the cash
journals for August 20.19:
 Credit balance per bank statement at 31 August 20.19, R44 109.
 Direct deposit: Ms A Ngcobo, R2 000. NP Glassworks sublets part of its building to Ms A Ngcobo,
who pay the monthly rental via electronic funds transfer.
 Interest on bank account, R459.
 A deposit meant for another client, R5 400.
 Service fees, R300.
 Debit order, WM Insurers, R6 300

3. Items appearing in the cash journals for August 20.19 but not on the bank statement for
August 20.19:
A deposit on 30 August 20.19, R14 000.

4. On 1 August 20.19, the opening balance of the bank account was R7 000 (favourable).

Complete the bank account in the general ledger of NP Glassworks for the month ended 31 August
20.19.

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the
accounts column and a 0 in the amounts column.
Keep the transactions strictly in the order they were given.

158
Question 2
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Indicate whether the following statement is true or false:
Equity is determined by deducting total liabilities from total assets.

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A liability is a claim which a party other than the owner/s has on the assets of the entity. Indicate whether
the following statement is true or false regarding liabilities?
Liabilities are held primarily for the purpose of being traded.

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True
False
Question 4
159
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Indicate by choosing the correct option whether the following statement is true or false:
One of the steps to calculate purchases if no distinction can be made between cash and credit purchases,
if you want to convert a single-entry system into a double-entry system where minimal records are kept, is
to calculate the amounts with the aid of the trade payables control account.

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Extract of pre-adjustment trial balance of Zungu Traders as at 31 August 20.2

Debit Credit
R R
Capital (1 September 20.1)………………………………………………............... 200 000
Drawings……………………………………………………………….......................…… ?
Inventory: Trading (1 September 20.1)…………………………….........…… 61 725
Allowance for credit losses………………………………………..............………. 5 000
Mortgage: GL Bank ………………..................................................................... 195 000
Fixed deposit (at 7.5% per annum)………………………………..........……... 50 000
Sales…………………………………………………………………….........................…... 345 060
Carriage on purchases……………………………………………….................…… 9 500
Sales returns…………………………………………………………......................……. 6 780
Rental income………………………………………………………....................……... 19 800
Purchases……………………………………………………………….......................….. 197 800
Purchases returns…………………………………………………….......................… 2 890
Depreciation………………………………………………………….....................……. 38 367
Salaries and wages…………………………………………………..................…….. 88 500
Insurance expenses………………………………………………..................………. 27 300
Telephone expenses…………………………………………………..................…... 14 280
Water and electricity……………………………………………………................…. 23 450
Credit losses…………………………………………………………….....................….. 1 600

160
After a year-end inventory count, the value of trading inventory on hand was R123 450.

Additional information
(a) On 29 August 20.2, Zungu Traders was informed that A Langa, a debtor who owed the entity R660, had
been declared insolvent. The amount must still be written off as irrecoverable.

Prepare the closing transfer journal entry for credit losses for the year ended 31 August 20.2 for
Zungu Traders:

Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Round off to the second decimal after the full stop (eg: 50.56)
3. For embedded questions spelling is very important. If you spell the answer incorrect it will be marked
incorrect. Please make sure that your spelling of the words is correct.
4. Don’t use any special characters (&) and don’t use bold in your answer. It will be marked incorrect.
5. Do not use any abbreviations.

6. Your answer is case sensitive; therefore you need to put the very first letter of the answer in uppercase
but the rest of your answer must be in lowercase (eg: Interest on loan)

ZUNGU TRADERS

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Indicate whether the following statement is true or false:
After each transaction the debit side of the accounting equation must equal the credit side of the
accounting equation.

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True
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Question 8
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Indicate whether the following statement is true or false:
The three characteristics that would ensure faithful representation are completeness, neutrality and free
from error.

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You were presented with the following statement of change in equity of Salome Hairdressers:

SALOME HAIRDRESSERS

162
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 20.21
R
Capital (1 July 20.20) 50 000
Plus: Additional capital contributions during the year 25 000
Plus/Less: Total comprehensive income/loss for the year ?
Less: Drawings (15 350)
Capital (30 June 20.21) 76 000

The total comprehensive profit/loss for the year will be …

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)
3. If it is a loss, please enter the amount as a negative (eg: -12141.72)

16350
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Indicate by choosing the correct option whether the following statement is true or false:
A summary of all cash transactions for a non-profit entity is represented in the income and expenditure
statement.

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163
Ms. T Tlale a debtor of JJ Stores owed R5 004 to JJ Stores which has been overdue for the past 7 months.
Interest at 15% per annum must be charged on overdue accounts. The interest has not been recorded in
the books of JJ Stores.

What will the correct ledger entries of JJ Stores to record the interest on the overdue account of Ms. T
Tlale be?

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.

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Indicate by choosing the correct option whether the following statement is true or false:
Gizmo Soccer Club can set aside money in a special fund when it wants to use the money for purchasing
of specific training gear for its members.

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False
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164
 Flag question
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Indicate whether the following statement is true or false:
According to the current value measurement basis, assets should be recorded at the amount of proceeds
received in exchange for the obligation or in some circumstances at the amounts of cash or cash
equivalents expected to be paid to satisfy the liability in the normal course of the business.

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True
False
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Indicate by choosing the correct option whether the following statement is true or false:
Single-entry systems, that is incomplete records, are sometimes used by small businesses, because they
know very little about basic bookkeeping principles.

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True
False
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Indicate whether the following statement is true or false.
Non-current liabilities are long-term debts that have to be settled within one year of the date of the
statement of financial position.

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165
 True
False
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Indicate by choosing the correct option whether the following statement is true or false:
When using a single-entry system, the profit/loss for a certain period can only be determined by means of
a comparison of the capital at the beginning of the period with the capital at the end or the period after
provision has been made for any additions to capital or withdrawals by the owner. An increase in capital
may be regarded as a profit.

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Indicate whether the following statement is true or false:
Liabilities are present obligations of a reporting entity to transfer economic resources as a result of past
events.

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166
Bradly Carstens is the owner Carsten & Sons Plumbing. On 30 October 20.2 you are given the following
information for Carsten & Sons Plumbing.

R
Clients owing for plumbing services rendered on credit 63 000
Equipment owned by Carsten & Sons Plumbing 80 000
Unfavourable bank balance 55 000
Carsten and Sons Plumbing owes suppliers for parts purchased on credit 45 000
Vehicles owned by Carsten and Sons Plumbing 210 000

What is the net asset value (equity) of Carsten and Sons Plumbing on 30 October 20.2?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

253000
Answer:
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The following information was extracted from the accounting records Kola Metals:
Balances at 1 April 20.21 R
Equipment: Cost 40 000
Accumulated depreciation: Equipment (32 000)

Additional information
At the beginning of the financial year, 1 April 20.21, Kola Metals replaced its metal melting machine with a
new metal melting machine that had a purchase price of R64 600. The replaced metal melting machine
was sold on credit for R10 000. It was the only piece of equipment in the books of Kola Metals prior to the
purchase of the new metal melting equipment. Depreciation is provided at 20% p.a. on the straight-line
method.

Use the information as extracted from the accounting records of Kola Metals to complete the asset
realisation account to calculate the profit/loss on the sale on the metal melting machine that will
167
be disclosed in the statement of profit or loss and other comprehensive income. The amount will
be:

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.

VERSION 13

168
The financial position of a business entity is indicated by the accounting equation.

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True
False
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Indicate whether the following statement is true or false:
The elements of the financial statements that measure the financial performance are income and
expenses.

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False
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You are given the following information for Becker & Riaan Nursery for the month ended
28 February 20.2:
Becker and Riaan Nursery owes Big Nursery Suppliers an amount of R35 000. Due to tough economic
conditions, Becker & Riaan Nursery had to resort to providing services on credit and their clients owe
them R45 000. Becker & Riaan Nursery also owns equipment to the value of R15 000 and had an
unfavourable bank account balance of R20 000.

What is the net worth (equity) of Becker & Riaan Nursery on 28 February 20.2?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)

169
2. Only show the amount, do not show the R (eg: 12141.72)

Answer:
5000

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Indicate whether the following statement regarding income is true or false:
Income is recognised when an increase in economic benefits through an increase in assets or a decrease
in liabilities has arisen for the entity.

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The following information relates to Babu Services for August 20.19:

BABU SERVICES

1. BANK RECONCILIATION STATEMENT AS AT 31 JULY 20.19

R
Unfavourable balance per bank (4 375)
statement………………………………………………
Deposit not yet 16 720
credited……………………………………………………………………
Favourable balance per bank ?
account………….………………………………………..

2. The bookkeeper received the bank statement for August after the August cash journals were
totaled. On comparing it with the August cash journals the following items did not appear in the cash
journals:

170
 BANK STATEMENT FOR AUGUST 20.19

Details Date Debit Credit

R R
Deposit ………….…………………………………………… 01/08 16 720
Stop order - 17/08 2 260
Insurance………………………………………..................
Service fees……………………….…………………………. 26/08 700
Interest……………………………………………………….. 26/08 105
EFT PR P831….…………………………………………….. 26/08 675
Debit order – City Council………………………………….. 27/08 2 550

Additional information regarding the bank statement received on 31 August 20.19.

2.1 EFT PR P831 was made in favour of a creditor, I Moloi. The amount was incorrectly entered in
the cash payments journal as R765.
2.2 The debit order in favour of the City Council was for the owner’s private water and electricity
account.
2.3 On 31 August 20.19 the bank statement showed a credit balance of R2 765.

3. A deposit for R14 750 appeared in the cash journals, for August 20.19, but not on the bank
statement for the same period:

4. Provisional totals at 31 August 20.19 was:

R

Cash receipts journal 57

17
5
Cash payments journal 46
70
0

Complete the cash payments journal of Babu Services, bank column only, for August 20.19.

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.

171
If an options has been provided and it is not applicable to the specific questions please put N/A in the
accounts column and a 0 in the amounts column.
Keep the transactions strictly in the order they were given.

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Indicate whether the following statement is true or false:
A disadvantage of using a single-entry bookkeeping system is that It is impossible to determine a profit or
loss from the accounting records.

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True
False
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Indicate whether the following statement is true or false:
Membership fees received in advance at the end of a financial period will be entered on the debit side of
the membership fees account.
172
Select one:
True
False
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Indicate whether the following statement is true or false regarding debentures:
There is no annual interest expenses on debentures.

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False
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Use the following information to calculate the missing figure by using the Basic Accounting
Equation:

R
Capital 450 000
Drawings 15 000
Loan: SA Bank 250 000
Trade receivables control 7 500
Trade payables control 12 000
Income received in advance 3 600
Prepaid expenses 2 500
Machinery 180 000

173
 Buildings 480 000
Bank ?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)
3. If the net effect on the accounting equation is a decrease, please enter the amount as a negative (eg: -
12141.72)

30600
Answer:
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Indicate whether the following statement is true or false:
The historical cost of asset and liabilities are increased if they become impaired or onerous.

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Question 15
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State whether the following statement is true or false:
If the information was entered correctly in the journal but a posting error was made to the trade payables
ledger, the individual creditor’s account must be corrected, and the creditors list must be adjusted to
correct the error.

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174
 True
False
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Indicate by choosing the correct option whether the following statement is true or false:
Gizmo Soccer Club can set aside money in a special fund when it wants to use the money for purchasing
of specific training gear for its members.

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Question 18
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Indicate whether the following statement is true or false:
Bookkeeping does not include accounting, but accounting includes bookkeeping.

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Question 19
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Indicate by choosing the correct option whether the following statement is true or false:

175
One of the steps to calculate purchases if no distinction can be made between cash and credit purchases,
if you want to convert a single-entry system into a double-entry system where minimal records are kept, is
to calculate the amounts with the aid of the trade receivables control account.

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False
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Indicate by choosing the correct option whether the following statement is true or false:
The first step to convert a single-entry system into a double entry system, where subsidiary journals are
kept, is to compile a statement of assets and liabilities, these balances will then be journalized and posted
to the various general ledger accounts.

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True
False

VERSION 14

Indicate whether the following statement is true or false regarding debentures:

176
Debentures usually have many creditors.

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Indicate by choosing the correct option whether the following statement is true or false:
Single-entry systems, that is incomplete records, are sometimes used by small businesses, because they
know very little about basic bookkeeping principles.

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Indicate by choosing the correct option whether the following statement is true or false:
One of the steps to calculate purchases if no distinction can be made between cash and credit purchases,
if you want to convert a single-entry system into a double-entry system where minimal records are kept, is
to calculate the amounts with the aid of the trade receivables control account.

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True
False
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177
 Flag question
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Bradly Carstens is the owner Carsten & Sons Plumbing. On 30 October 20.2 you are given the following
information for Carsten & Sons Plumbing.

R
Clients owing for plumbing services rendered on credit 63 000
Equipment owned by Carsten & Sons Plumbing 80 000
Unfavourable bank balance 55 000
Carsten and Sons Plumbing owes suppliers for parts purchased on credit 45 000
Vehicles owned by Carsten and Sons Plumbing 210 000

What is the net asset value (equity) of Carsten and Sons Plumbing on 30 October 20.2?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

253000
Answer:
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Indicate whether the following statement is true or false:
Vehicles are included as non-current assets in the statement of financial position.

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False
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Indicate whether the following statement is true or false regarding debentures:
There is no annual interest expenses on debentures.

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False
Question 13
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Indicate whether the following statement is true or false:
Bookkeeping is mainly confined to the recording of financial transactions.

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Question 14
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Ronnie Peters is the owner of Ronnie’s Hairdressing Salon. You are given the following information for
Ronnie’s Hairdressing Salon for the year ended 30 June 20.1.

R
Capital 300 000

179
 Equipment 200 000
Vehicles 160 000
Bank (unfavourable balance) 150 000
Accrued income 3 500
Income received in advance 4 600
Prepaid expenses 3 600
Accrued expenses 5 200
Trade payables 92 600
Trade receivables 63 500
Services rendered 250 000
Interest income 2 400
Wages 165 000
Telephone expenses 45 000
Water and electricity: deposit 2 000
Water and electricity 29 000
Insurance 12 000
Rental income 41 000
Advertising 3 000

What is the amount for the total assets of Ronnie’s Hairdressing Salon as at 30 June 20.1?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

432600
Answer:
Question 15
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Indicate whether the following statement is true or false:
A liability shall be classified as a current liability when it is expected to be converted into money (realised)
within twelve months of the statement of financial position date.
180
Select one:
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False
Question 16
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Indicate by choosing the correct option whether the following statement is true or false:
The gross profit calculated in the trading statement of a non-profit entity is transferred to receipts and
payments statement.

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Question 18
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Indicate whether the following statement is true or false:
The underlying assumption for the preparation of financial statements is that an entity will continue to
operate for the foreseeable future.

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Question 19
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Question text
Indicate whether the following statement is true or false:
The statement of financial position only reflects assets belonging to the business.

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True
False
Question 21
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Indicate by choosing the correct option whether the following statement is true or false:
One of the steps to calculate purchases if no distinction can be made between cash and credit purchases,
if you want to convert a single-entry system into a double-entry system where minimal records are kept, is
to calculate the amounts with the aid of the trade payables control account.

Select one:
True
False
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Indicate by choosing the correct option whether the following statement is true or false:
The gross profit calculated in the trading statement of a non-profit entity is transferred to income and
expenditure statement and is disclosed under income.

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True
False

182
VERSION 15

You were presented with the following statement of changes in equity of Precious Salon:

PRECIOUS SALON
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 20.21
R
Capital (1 July 20.20) 170 600
Plus: Additional capital contributions during the year 40 500
Plus/Less: Total comprehensive income/loss for the year ?
Less: Drawings (26 350)
Capital (30 June 20.21) 150 000

The total comprehensive profit/loss for the year will be …

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)
3. If it is a loss, please enter the amount as a negative (eg: -12141.72)

ANSWER -34750
Use the following information to calculate the missing figure by using the Basic Accounting
Equation:

R
Bank (unfavourable balance) 10 000
Trade receivables control 35 000
Prepaid expenses 3 000
Accrued expenses 2 000
Buildings 100 000
Furniture 80 000
Trade payables control ?
Capital 120 000
Drawings 20 000

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

183
Answer: 106000

Indicate whether the following statement is true or false:

A set of decisions about how an entity will handle transactions which are repetitive in nature to achieve a
consistent result is referred to as an accounting policy.

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True
False
Indicate whether the following statement is true or false:
The difference between income and expenditure is either a profit or a loss.

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True
False
ndicate whether the following statement is true or false:
Debentures and the current portion of a long-term borrowing are examples of non-current liabilities.

Select one:
True
False
Indicate whether the following statement is true or false:
An onerous liability is when the historical cost of the liability is no longer sufficient to depict the obligation
to fulfil the liability.

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True
False

Indicate whether the following statement is true or false:

The purpose of incurring expenditure is to earn income.

Select one:
True
184
 False
Use the following information to calculate the missing figure by using the Basic Accounting
Equation:

R
Bank (Unfavourable balance) 32 000
Income received in advance 3 600
Accrued income 4 800
Vehicles 40 000
Equipment ?
Capital 128 000
Trade receivables 14 000
Drawings 2 800

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

Answer: 102000

Bradly Carstens is the owner Carsten & Sons Plumbing. On 30 October 20.2 you are given the following
information for Carsten & Sons Plumbing.

R
Clients owing for plumbing services rendered on credit 63 000
Equipment owned by Carsten & Sons Plumbing 80 000
Unfavourable bank balance 55 000
Carsten and Sons Plumbing owes suppliers for parts purchased on credit 45 000
Vehicles owned by Carsten and Sons Plumbing 210 000

What is the net asset value (equity) of Carsten and Sons Plumbing on 30 October 20.2?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

185
Answer: 253000

VERSION 16

186
Indicate whether the following statement is true or false:
Employees are internal users of the financial information of a business entity who have limited access to the
accounting records of the entity.

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True
False
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Betties Smith is the owner of Betties Plumbing. You are given the following information for Betties
Plumbing for the year ended 28 February 20.2

R
Capital 150 000
Services rendered 350 000
Wages 60 000
Telephone expenses 6 000
Water and electricity 8 000
Insurance 1 500
Maintenance of vehicles 1 500
Interest expense 2 500
Interest income 5 000

What is the correct equity amount for Betties Smith for the year ended 28 February 20.2?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

425500
Answer:
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187
 Flag question
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Indicate whether the following statement is true or false:
The elements of the financial statements that measure the financial performance are income and expenses.

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False
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Indicate by choosing the correct option whether the following statement is true or false:
Membership fees received in advance at the beginning of a financial period will be entered on the credit side of
the membership fees account.

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True
False
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Bradly Carstens is the owner Carsten & Sons Plumbing. On 30 October 20.2 you are given the following
information for Carsten & Sons Plumbing.

R
Clients owing for plumbing services rendered on credit 63 000
Equipment owned by Carsten & Sons Plumbing 80 000
Favourable bank balance 50 000
Carsten and Sons Plumbing owes suppliers for parts purchased on credit 35 000

188
Vehicles owned by Carsten and Sons Plumbing 210 000

What is the net asset value (equity) of Carsten and Sons Plumbing on 30 October 20.2?

NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)

253000
Answer:
Question 6
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Indicate whether the following statement is true or false regarding the statement of financial position:
Equity is determined by deducting total liabilities from assets.

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True
False
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The following information was extracted from the accounting records Kola Metals:
Balances at 1 April 20.21 R
Equipment: Cost 40 000
Accumulated depreciation: Equipment (32 000)

Additional information
At the beginning of the financial year, 1 April 20.21, Kola Metals replaced its metal melting machine with a
new metal melting machine that had a purchase price of R64 600. The replaced metal melting machine was sold
on credit for R10 000. It was the only piece of equipment in the books of Kola Metals prior to the purchase of
the new metal melting equipment. Depreciation is provided at 20% p.a. on the straight-line method.

189
Use the information as extracted from the accounting records of Kola Metals to complete the asset
realisation account to calculate the profit/loss on the sale on the metal melting machine that will be
disclosed in the statement of profit or loss and other comprehensive income. The amount will be:

Instructions:
Drag the correct answer into the correct space.
An option can be used more than once.

Equipment
Accumulated depreciation
Bank
Profit on sale of asset
40 000
32 000
10 000
2 000
42 000
42 000
Depreciation
Loss on sale of asset
Bank
Trade receivables control
Accumulated depreciation
Profit on sale of asset
Trade payables control
Equipment
32 000
2 000
50 000
40 000
42 000
8 000
10 000
Question 8
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Indicate whether the following statement is true or false:
The conversion of an obligation into equity is one way in which an obligation can be settled.

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True
False

190
Question 10
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Indicate whether the following statement is true or false:
A disadvantage of using a single-entry bookkeeping system is that It is impossible to determine a profit or loss
from the accounting records.

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True
False
Question 11
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Indicate by choosing the correct option whether the following statement is true or false:
When using a single-entry system, the profit/loss for a certain period can only be determined by means of a
comparison of the capital at the beginning of the period with the capital at the end or the period after provision
has been made for any additions to capital or withdrawals by the owner. An increase in capital may be regarded
as a profit.

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False
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Indicate by choosing the correct option whether the following statement is true or false:
Gizmo Soccer Club will be classified as a non-profit entity.

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True
False
Question 15
191
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Indicate whether the following statement is true or false:
Debentures and the current portion of a long-term borrowing are examples of non-current liabilities.

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True
False
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Indicate whether the following statement is true or false:
Accounting use words and figures to convey financial information to the users of such information.

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False
Question 19
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Indicate whether the following statement is true or false regarding debentures:
Debentures that will be redeemed within the next 12 months will be considered as current liability in the
statement of financial position.

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True
False
Question 21

192
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Indicate whether the following statement is true or false.
Accrued income is an example of a current liability.

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True
False

193

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