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MODULE NAME:
MODULE CODE:
ACCOUNTING 1A
ACCT5111/d
ACCOUNTING A
ACCOf131/d
ASSESSMENT TYPE: ASSIGNMENT 1 (PAPER ONLY)
TOTAL MARK ALLOCATION: 100 MARKS
TOTAL HOURS: 10 HOURS
By submitting this assignment, you acknowledge that you have read and understood all the rules
as per the terms in the registration contract, in particular the assignment and assessment rules in
The IIE Assessment Strategy and Policy (IIE009), the intellectual integrity and plagiarism rules in
the Intellectual Integrity and Property Rights Policy (IIE023), as well as any rules and regulations
published in the student portal.
INSTRUCTIONS:
1.
2.
3.
4.
5.
6.
7.
No material may be copied from original sources, even if referenced correctly, unless it is a
direct quote indicated with quotation marks. No more than 10% of the assignment may
consist of direct quotes.
Save a copy of your assignment before submitting it.
Assignments must be typed unless otherwise specified.
All work must be adequately and correctly referenced, where applicable.
Begin each section on a new page.
This is an individual assignment.
Show all workings.
© The Independent Institute of Education (Pty) Ltd 2023
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Question 1
Q.1.1
(Marks: 20)
Financial and accounting information are used by a variety of stakeholders.
(9)
•
Provide three examples of users of financial and accounting information.
•
Give a reason why each user named above would use the information.
•
Indicate if the user will be seen as an internal or external user of the
Financial and accounting information.
Q.1.2
Two of your friends have recently started a small business to pay for their
(4)
university fees. Explain in your own words to your friend why it is important that
the financial statements of their business should have the following two
characteristics: faithful representation and verifiability.
Q.1.3
Name any two other enhancing qualitative characteristics of financial information.
(2)
Q.1.4
Using your own words explain to your friends what a journal is and how these
(5)
should be used in their business. As part of your explanation give two examples of
journals and the types of transactions that they should record in each.
Question 2
Q.2.1
(Marks: 15)
Rethabile is a qualified hairdresser, who has set up a hairdressing salon at her home.
She is not certain about the accounting classifications. You are required to assist her
in correctly classifying the account named in brackets after each transaction. You
must view all transactions from the salon’s point of view. Classify each of the
accounts as either an asset; liability; income or expense. For your answer write
down the question number as well as the classification, study the example before
starting. Remember to classify only the account named in brackets.
Example Advertising in the local newspaper (Advertising) – Expense
Q.2.1.1
Money borrowed from the bank to set up the salon (Loan)
(1)
Q.2.1.2
Amount paid for tea, coffee, sugar, and milk for her clients
(1)
(Refreshments)
Q.2.1.3
Paid wages to her assistant (Wages)
© The Independent Institute of Education (Pty) Ltd 2023
(1)
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Q.2.1.4
Stock purchased of shampoo, conditioners, colour rinses and treatment
(1)
(Inventory)
Q.2.1.5
Cash receipts from customers for services rendered (Services rendered)
(1)
Q.2.1.6
Amounts owed to the suppliers of stock (Creditor)
(1)
Q.2.1.7
Call charges for the telephone used in the salon (Telephone)
(1)
Q.2.1.8
She allows regular customers to pay for services after 45 days (Debtors)
(1)
Q.2.1.9
Water and electricity used in the salon (Water and electricity)
(1)
Q.2.1.10
Hairdryers, flat irons, and other equipment bought for the salon
(1)
(Equipment)
Q.2.2
Give any five examples of cost items (expenses) that businesses have incurred as a
(5)
result of COVID19 since 2020.
Question 3
Q.3.1
(Marks: 20)
The following information is available from MED-Traders:
Items
Amount
(R)
Sales
32 500
Cost of sales
26 000
Water and electricity
3 000
Insurance
350
Stationery
600
Rent expense
1 550
Required:
Q.3.1.1
Calculate the profit or loss for MED-Traders using the accounts in the
(5)
table above. Indicate clearly if it is a profit or a loss and show all your
workings.
Q.3.1.2
Explain how income and expenses will affect owner’s equity.
© The Independent Institute of Education (Pty) Ltd 2023
(3)
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Q.3.2
Fox Enterprises was formed on 1 January 2023, on which date the owner invested
(12)
R60 000 in the business and borrowed R90 000 from BBSV Bank. The following
transactions were entered into during January 2023. For each transaction (including
the money invested by the owner and the loan from BBSV Bank above) give the
impact on the accounting equation. Set you answer out as per the example below
and clearly indicate if the element will increase or decrease. Ignore VAT.
Example: Pay interest on the loan from BBSV bank R1 350.
Day
Assets
Owner’s Equity
Example
-1 350
-1 350
Day
Liabilities
Transaction
4
The owner buys inventory for the business and pays via an EFT R28 000
6
Half of the inventory bought on the 4th is sold for cash. The business uses the
perpetual inventory system and a mark-up at 40% on cost is used for this sale.
10
Buy a couch, display cabinets and tables for the shop (furniture) on credit R45 000
15
Employ a student to help with setting up the inventory in the shop and pay the
casual worker R800 for two days work from petty cash.
25
Rent for January and February is paid via an EFT. R6 500 per month.
26
The owner buys data for her private phone using some of the petty cash R200.
31
Pay R10 000 to the furniture creditor via EFT.
© The Independent Institute of Education (Pty) Ltd 2023
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Question 4
Q.4.1
(Marks: 20)
Mikel sent his son, Saka, to the Store to buy groceries and gave him R400. Saka
bought the following items as per the cash slip below. Study the cash slip and then
answer question Q.4.1.1 to Q.4.1.3.
JAM TART
19,99
BAKERY SHOP DESSERT CAKE
49,99
CARRY BAG 24L
3@
0,46
1,38
FRITOS TOM STRIP 4×25GR
9,99
NIKNAKS MZE CHS SNK 5 EA
9,99
ALBANY BROWN BREAD
10,49#
BROWN S/WHICH BREAD 700G 2@
8,79
17,58#
CADBURY CHOMPS 30s
29,90
SHOP HOTDOG ROLLS 12 EA
16,99
ORANGE FIZZ SODA
24,00
KING KORN MALT 1KG
11,90
FLORA MED FAT SPRD TUB
34,90
FLORA MED FAT SPRD TUB
34,90
NYALA SUPER MAIZEMEAL POLY
45,90#
VODAGO R29
29,00
DUE VAT INCL
346,90
------------------------------ - --TENDER------ --- --------------------CASH
400,00
CHANGE
53,10
TOTAL ITEMS:
18
------------------------ ------TAX INVOICE------ --------------------TAXABLE VAL
VAT INCL
#ZERO-RATED
VAT VAL
272,93
35,60
73,97
0,00
E NON-SUPPLY
-----------------------VAT REG NO. 4070106699------------------------
© The Independent Institute of Education (Pty) Ltd 2023
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Q.4.2
2023
Q.4.1.1
Why is the bread and maize meal indicated with a #?
(1)
Q.4.1.2
How much VAT was levied on one “Flora med fat sprd tub”?
(3)
Q.4.1.3
Is the Vodago airtime exempt from tax? Give a reason?
(2)
Suppose a customer purchases goods or services amounting to more than R5 000
(4)
from a store that uses only traditional cash registers.
Would a cash slip with the same information as the one shown above be acceptable?
Give a reason for your answer.
Q.4.3
A factory sells an item to a wholesaler at a mark-up of 5% on cost price. The
(10)
wholesaler sells the item to retailers at a mark-up of 10% on cost price. The
retailers sell the item to the public at a mark-up of 25% on cost price. All
businesses add VAT of 15%.
Required:
Copy the table below and then complete the table by calculating the cost price
(excluding VAT), profit, output VAT and selling price (including VAT and mark-up)
for each of the manufacturers, wholesalers and retailers.
Remember to show all your workings and round to two decimal places.
Details
Manufacturer
Cost Price
Profit
Output VAT
Selling Price
(Excluding
(Including VAT
VAT)
and mark-up)
R900
Wholesaler
Retailers
© The Independent Institute of Education (Pty) Ltd 2023
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Question 5
(Marks: 25)
Parker Traders, is a stationery shop, situated in Woodstock owned by Louzane Muller. The business
is a registered VAT vendor and trades only with registered vendors. All amounts include 15% VAT
where applicable, unless otherwise stated. The business uses a perpetual inventory system, and all
goods are marked up at 20% above cost, before considering any trade discounts. The business
does not expect to award or receive any settlements discounts. Settlement discounts are therefore
incidental in nature.
All money received is banked daily.
The following transactions took place in the month of March 2023:
Date
1
Transactions
Owner, Louzane Muller, contributed R7 500 cash. The amount was deposited directly
in the business bank account.
2
Cash sales for the day of R20 700 including VAT has been made.
3
A cash purchases of R12 000 excluding VAT has been made.
4
Paid telephone account of R518
5
Paid R3 000 towards a loan settlement from SBDV Bank
20
A cash sale of R8 625 including VAT has been made
22
Cash purchases of R6 900 including VAT has been made, before receiving a 5% trade
discount.
28
Paid wages of R1 200
© The Independent Institute of Education (Pty) Ltd 2023
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Required:
Prepare the following subsidiary journals for Parker Traders for March 2023:
Before starting your answer note the following:
•
Document numbers and Folios are not required.
•
Total the Bank columns only.
•
Round to the nearest Rand.
Q.5.1
Cashbook Receipts
(11)
(All money received is banked daily.)
Set your answer out as follows:
CASHBOOK RECEIPTS OF PARKER TRADERS FOR MARCH 2023
Day
Details
Analysis of
Bank
receipts
Q.5.2
Output
Sales
VAT
Sundry accounts
Amount
Cost of
sales
Details
Cashbook Payments
(14)
(All payments were made via an EFT)
Set your answer out as follows:
CASHBOOK PAYMENTS OF PARKER TRADERS FOR MARCH 2023
Day
Name of Payee
Bank
Input
VAT
Inventory
Sundries
Amount
Details
[TOTAL MARKS: 100]
© The Independent Institute of Education (Pty) Ltd 2023
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