FAC1502 TEST 1
(FIRST SEMESTER 2013)
QUESTION 1 (Unisa Assignment 2nd Semester 2012)
1.1
The following steps all form part of the accounting cycle:
(a)
completion of source documents
(b)
reporting in financial statements
(c)
analysis & interpretation of financial statements
(d)
recording of transactions in subsidiary journals & ledgers
(e)
transactions taking place
(f)
decision making by management regarding the analysis & interpretation of the information
Which one of the following alternatives represents the correct sequence in which the above steps usually take
place in the accounting cycle?
(i)
(ii)
(iii)
(iv)
(v)
1.2
(e), (d), (a), (f), (b), (c)
(e), (a), (d), (b), (c), (f)
(d), (e), (a), (f), (b), (c)
(a), (e), (d), (b), (c), (f)
None of the above
Graeme is the proprietor of an entity trading as Simunye General Dealers. At 31 May 2007 the entity had the
following assets and liabilities:
Delivery Truck
R135 000
Inventory
R 45 000
Bank (Favourable)
R 22 500
Creditors
R105 000
Debtors
R 90 000
Which one of the following amounts reflects the equity at 31 May 2007?
(i)
(ii)
(iii)
(iv)
(v)
1.3
R217 500
R187 500
R307 500
R292 500
none of the above
T Smit, the owner of Smitty’s Cycles took goods with a selling price of R3,000 for his own use. Selling prices
are determined by a mark-up of 25% on cost. The perpetual inventory system is in use.
Which one of the following alternatives represents the general ledger accounts as well as the effect of the
transaction on the accounting equation of Smitty’s Cycles?
1
General Ledger Accounts
DEBIT
CREDIT
Drawings
Purchases
2
3
4
5
Drawings
Drawings
Drawings
None of the above
Inventory
Sales
Inventory
ASSETS =
Accounting Equation
LIABILITIES +
-2 400
+3 000
-2 250
EQUITY
+2 250
-2 250
-2 400
+3 000
-2 250
FAC1502 TEST 1
(FIRST SEMESTER 2013)
1.3
Irene Butchery bought R120 000 worth of meat on credit from Fresh Meat Market on 15 March 2004, subject
to a trade discount of 15%. A cash discount of 5% is given if the account is settled within 30 days.
N.B.
IGNORE VAT.
Which one of the following amounts represents the correct amount of the cheque paid to Fresh Meat Market
on 18 April 2004?
(i)
(ii)
(iii)
(iv)
(v)
1.4
R120 000
R102 000
R96 900
R96 000
None of the above
Which one of the following transactions will result in a change in the equity of an entity operating on a bank
overdraft?
(i)
(ii)
(iii)
(iv)
(v)
A cheque issued in payment of a creditors’ account
A cheque issued for payment of salaries
A cheque issued for payment of assets purchased for cash
Property bought on credit
None of the above
(2 x marks per question = 8)
QUESTION 2 (Unisa Tutorial Letter 102/1/2011)
The following transactions took place in the business of Haricool Air Conditioners during September 2010:
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
Harold, the owner of Haricool Air Conditioners, deposited R50,000 as additional capital into the bank
account of the entity.
Harold bought a light utility vehicle (LUV) for the business from Auto Motors at a total price of R28 000 and
paid a deposit of R5 000 by cheque.
Haricool Air Conditioners installed an air conditioner and received R4 000 cash
Purchased four new air conditioners to be installed at a clients during the week, and paid R8 000 by cheque
Invoiced a corporate client for the installation of 10 air conditioners to the value of R42 000
Harold had his private motor vehicle serviced and paid R1 750 with a business cheque.
Charged interest of R150 to the overdue account of a debtor, D Cooldare.
An amount of R5 600 was written off as depreciation on the LUV
NOTE: Haricool Air Conditioners uses a periodic inventory recording system.
Required:
For each of the transactions listed above, indicate what account must be debited and what account must be credited in
the general ledger, as well as the overall effect of each transaction on the elements of the accounting equation. Accept
in all cases that the bank has a favourable balance. Present your answers in the following format:
Question
ASSETS =
+200
EQUITY +
+200
LIABILITIES
0
ACCOUNT
DEBITED
Bank
ACCOUNT
CREDITED
Interest Received
(18 marks)
FAC1502 TEST 1
(FIRST SEMESTER 2013)
Question
1
2
ASSETS +
EQUITY +
LIABILITIES
ACCOUNT
DEBITED
Bank
Vehicles
Creditor (AutoMotors)
Bank
3
+50 000
+28 000
-5 000
+4 000
+50 000
0
0
+4 000
0
+28 000
-5 000
0
4*
5
-8 000
+42 000
-8 000
+42 000
0
0
Purchases
Debtors’ Control
-1 750
+150
-5 600
-1 750
+150
-5 600
0
0
0
Drawings
Debtor (D Cooldare)
Depreciation
6
7
8
ACCOUNT
CREDITED
Capital
Creditor (AutoMotors)
Bank
Sales or Fees Earned or
Services rendered (BUT
NOT INCOME)
Bank
Sales or Fees Earned or
Services rendered (BUT
NOT INCOME)
Bank
Interest Received
Accumulated
Depreciation
*Note: when using the periodic inventory system a Purchases account is used to record all purchases of
inventories.
TOTAL MARKS: 26
TIME ALLOWED: 30 minutes