INTERNATIONAL TRAINING COLLEGE - LINGUA
Towards Educational Excellence
NCHE Reg. No: R0014
NQA Accreditation No: 000095
DEPARTMENT OF BUSINESS AND MANAGEMENT
SPECIAL EXAMINATIONS AUGUST 2021
COURSE
: CERTIFICATE IN ACCOUNTING & FINANCE - NQF LEVEL 4
: CERTIFICATE IN HUMAN RESOURCE MANAGEMENT - NQF LEVEL 4
: CERTIFICATE IN OFFICE ADMINISTRATION - NQF LEVEL 4
: CERTIFICATE IN BUSINESS ADMINISTRATION - NQF LEVEL 4
SUBJECT
: PRINCIPLES OF ACCOUNTING
EXAMINER
: C CHIDENDE
MODERATOR
: MR UZERA
MARKS
TOTAL MARKS : 100
DURATION
____ = _____%
100
: 2 HOURS 30 MINUTES
INSTRUCTIONS :
❖ Write your full names and student number in the space provided.
❖ Marks are indicated at the end of each question.
❖ Answer each question in the space provided below.
❖ Write neatly and clearly.
❖ Cell phones are not allowed during exam sessions.
❖ This paper consists of 11 printed pages including this cover page.
Student Surname:
_________________________
Student First name: _________________________
Student Number:
_________________________
Room Number:
_________________________
Exam Date:
_________________________
FT
PT
Distance
(Please Tick one box only)
1
SECTION A
[25 marks]
Multiple choice questions
Answer all questions in this section. Each question carries 1 mark. Circle the correct
answer
1
A partner with a debit balance in his or her account means the partner
A
B
C
D
Owes the partnership
Is entitled to a bonus
Will receive more salary in the next financial period
Will receive interest on capital contributed.
2
Interest is charged on drawings to:
A
B
C
D
Allow partners to get more money
Discourage partners from taking goods and money from the
business
Increase the current account balances
Increase appropriations.
3
Cash book is a part of _________
A
B
C
D
Voucher
Subsidiary book
General Ledger
Trial Balance.
4
Which of the following is incorrect?
Assets (N$)
A
7 850
B
8 200
C
9 550
D
6 540
Liabilities (N$)
1 250
2 800
1 150
1 120
Capital (N$)
6 600
5 400
8 200
5 420
5
Which of the following best describes the meaning of purchases?
A
B
C
D
Items bought
Goods bought on credit
Goods bought for resale
Goods paid for.
2
6
The descending order in which current assets should be shown in the statement
of financial position is
A
B
C
D
Inventory, accounts receivable, bank, cash
Cash, bank, account receivable, inventory
Account receivable, inventory, bank, cash
Inventory, account receivable, cash, bank.
7
Accounts Payable is classified as a/an ___________ in the _____________.
A
B
C
D
Current asset; statement of financial position
Current liability; statement of financial position
Expense; statement of profit or loss
Revenue; statement of profit or loss.
8
Which of the following documents authorizes the purchase transaction?
A
B
C
D
Credit memo from supplier
Invoice or bill from supplier
Purchase order
Purchase requisition.
9
What is meant by accounts receivable?
A
B
C
D
Money owed to a company by its debtors
Money owed by a company to its creditors
Money owed to a company by its employees
Money owed by a company to its vendors.
10
Which of the following describes the practical framework of bookkeeping?
A
B
C
D
Classifying, recording and summarizing
Reporting, analysing and interpreting
Classifying, analysing and interpreting
Recording, summarizing and reporting.
11
Which of the following users assess the attractiveness of investing in a
business?
A
B
C
D
Tax authorities
Financial analysts
Bank
Employees.
3
12
Which of the following highlights the correct order of the stages in the
accounting cycle?
A
B
C
D
Journalising, final accounts, posting to the ledger and trail balance
Journalizing, posting to the ledger, trial balance and final accounts
Posting to the ledger, trial balance, final accounts and journalizing
Posting to the ledger, journalizing, final accounts and trial balance.
13
Which of the following items would not fall under the definition of an asset?
A
B
C
D
Land
Machinery
Cash
Owner’s equity.
14
Which of the following statement of financial position equations is wrong?
A
B
C
D
Assets + liabilities = capital
Assets – liabilities = capital
Assets – capital = liabilities
Liabilities + capital = assets.
15
Which of the following source books will not be required in a ‘cash’ business?
A
B
C
D
Bank account
Petty cash account
Sales ledger
Nominal ledger
16
The assets that can be converted into cash within a short period (i.e. 1 year or
less) are known as ___________________
A
B
C
D
Current assets
Non-current assets
Intangible assets
Investments.
17
The debts, which are to be repaid within a short period (year or less) are
as _____________________________
A
B
C
D
Current liabilities
Non-current liabilities
Contingent liabilities
All of the above.
4
known
18
Any written evidence in support of a business transaction is called _________
A
B
C
D
Journal
Ledger
Ledger posting
Voucher.
19
What will be debited, if business sold goods for N$10 000 on credit?
A
B
C
D
Cash account
Sales account
Accounts receivable account
Purchases account.
20
What is nature of capital account?
A
B
C
D
Debit balance
Credit balance
Expenses account
Loss.
5
Section B
Answer all questions from this section.
[55 marks]
Question 1
The following balances were extracted from the books of Shilongo Traders on 1 January
2020.
Dr
Purchases Ledger
Sales Ledger
Cr
1 912
83 025
130 905
1 940
In the month of January 2020, the following transactions were made:
Debit balance on Sales Ledger transferred to Purchases Ledger
4 956
Debtor’s cheque dishonoured
1 908
Sales on credit
133 650
Credit purchases
96 645
Returns outwards to credit suppliers
3 795
Returns inwards from credit customers
1 590
Cash sales
19 005
Cash purchases
10 913
Discount allowed
1 305
Discount received
1 600
Allowance for credit losses
474
Payments to credit suppliers
81 540
Receipts from credit customers
127 385
Refund to customer for overpayment
600
At 1 February 2020, the following information was available:
Purchases Ledger debit balances
480
Sales Ledger credit balances
787
Required:
(a) Purchases Ledger Control Account for the month of January 2020.
6
[12 marks]
Dr
Date
Purchases Ledger Control Account
Details
Amount (N$)
Date
Cr
Details
Amount (N$)
Question 2
State which journal is used to record each of the following transactions. [10 marks]
No Transaction
Journal
1
Bought vehicle on credit for N$40 000 for business use
2
Purchased goods for N$450 on credit
3
A debtor paid N$450 to settle his debt
4
Paid N$40 taxi fare to the office worker
5
Sold goods N$350 on credit to McDonald
6
Bought goods for cash N$700
7
A debtor returns goods worth N$340 to us
8
Returned goods to the supplier for N$200
9
Cash sales N$230
10
Purchased goods on credit N$401
7
Question 3
Equipment was purchased by ITCL on 31 December 2020 for N$500 000 cash. The
expected economic life of the equipment is 5 years and the expected residual value at
the end of 5 years is N$20 000. The financial year of the business ends on the last day
of December each year.
Required
(a) Calculate the depreciation per annum using the straight-line method and complete
the table with the necessary values.
End of financial Cost
year
Price
[20 marks]
Annual
Accumulated
Depreciation Depreciation
(N$)
(N$)
Carrying Value
(N$)
31 Dec 2016
31 Dec 2017
31 Dec 2018
31 Dec 2019
31 Dec 2020
Question 4
Calculate the missing values from the following table.
No.
Assets (N$)
1
=
Equity (N$)
10 500
2
50 500
3
20 000
4
7 000
6
15 000
+
Liabilities (N$)
3 000
12 300
15 000
18 000
5
[10 marks]
2 000
3 000
8 000
8
Question 5
Indicate which of the following would be revenue items and which would be capital
items in a wholesale bakery:
[8 marks]
No.
Statement
Type of Expenditure
1.1
Bought of a new office equipment.
1.2
Purchase of replacement engine for existing vehicle.
1.3
Cost of altering interior of new vehicle to increase
carrying capacity.
1.4
Cost of motor tax for new truck.
1.5
Legal costs of collecting money owing by debtors.
1.6
Cost of painting business’s name on new vehicle.
1.7
Repair and maintenance of existing office equipment.
1.8
Purchased a new machinery.
9
SECTION C
Answer all questions
[20 marks]
Question 1
The following trial balance was extracted from the books of ITCL at the close of
business on 31 December 2020.
Dr N$
928 000
41 000
3 240
114 000
171 000
29 000
34 000
314 000
8 200
123 160
Purchases and sales
Cash at bank
Cash in hand
Capital account 1 March 2019
Drawings
Office furniture
Rent
Wages and salaries
Discounts
Accounts receivables
Accounts payables
Inventory 1 March 2019
Allowance for credit losses 1 March 2019
Motor vehicle
Motor running costs
Credit loss
Cr N$
1 571 650
1 600
52 450
41 200
4 050
37 500
6 150
7 300
1 743 750
1 743 750
Notes:
(a) Inventory 31 December 2020 N$24 000.
(b) Wages and salaries accrued at 28 February 2020 N$3 400.
(c) Rent prepaid at 31 December 2020 N$2 300.
(d) Motor running costs owing at 31 December 2020 N$720.
(e) Increase allowance for credit losses by N$910.
(f) Provide for depreciation as follows: Office furniture N$3 800; Motor vehicle N$12
500.
(g) Net profit for the year N$23 937.
Required:
a) Prepare a statement financial position as at 31 December 2020.
10
[20 marks]
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End of examination
11