Question

The financial result of a business is evident in the ______________.

1. A Statement of Comprehensive Income

2. B Statement of Financial Position

3. C Statement of Cash Flows

4. D Assets section of the Statement of Financial Position

1.3 _____________ account is not an example of an expense account.

1. A Trading inventory deficit

2. B Interest on loan

3. C Discount allowed

D Motor vehicles
1.4 Which one of the following does not match the correct source document to the kind of transaction?

A B C D

Source document	Kind of transaction
Duplicate receipt	Cash received from debtors
Duplicate credit note	Credit sale of goods
Bank statement	Bank charges
Original credit note	Return of goods to credit

1.5 Which of the following accounts increase by means of a debit entry in the ledger?

1. A Vehicles and Stationery

2. B Capital and Investments

3. C Rent income and Loan

4. D Equipment and Creditors control

1.6 The advertising account of Skype Stores included an amount of R1 200 that was paid for advertising for the period 01 November 2015 to 31 October 2016. Which of the following alternatives represent the correct double entry to record the required adjustment on
29 February 2016, the end of the financial year?

1.7 The following information was extracted from the books of Munster Wholesalers on 30 September 2015:

(1)

	Account debit	Account credit	Amount (R)
A	Accrued expenses	Advertising	R800
B	Prepaid expenses	Advertising	R400
C	Prepaid expenses	Advertising	R800
D	Advertising	Prepaid expenses	R800

(3)

September		Units of inventory	Unit Cost price
01 15 18 30	Opening inventory Purchases Purchases Sales for September	5 000 20 000 2 000 24 000	R20 R21 R22

The value of inventory on 30 September 2015, using the first-in-first-out method, is ________.

1. A R66 000

2. B R60 000

3. C R65 000

4. D none of the above

00 2

(3)

1.8 Simplex Stores received R720 from a debtor who was declared insolvent. This amount equals 60% of the total debt. If the balance of the debtor’s account is written off, the bad debt will amount to ___.

1. A R480

2. B R1 080

3. C R432

4. D none of the above.

1.9 The following balances appeared in the books of Tredwell Stores on 29 February 2016, the end of the financial year:

(3)

	R
Purchases	384 000
Sales	888 000
Opening inventory	60 000
Closing inventory	72 000
Carriage on purchases	30 000

The gross profit for the year ended 29 February 2016 is _____________.

1. A R344 000

2. B R486 000

3. C R462 000

4. D none of the above

00 3

(3)

1.10 The post-closing trial balance of Bendit Traders on 29 February 2016 included the following balances:

	R
Bank (CR balance)	60 000
Debtors control	80 000
Creditors control	100 000
Accrued expenses	14 000
Petty cash	2 000
Accrued income	6 000
Income received in advance	4 000
Prepaid expenses	8 000
Current portion of long-term borrowings	40 000

The current liabilities of Bendit Traders on 29 February 2016 amount to __________.

1. A R218 000

2. B R158 000

3. C R178 000

4. D none of the above

00 4

Answer 1

Please give positive ratings so I can keep answering. It would help me a lot. Please comment if you have any query. Thanks!

The financial result of a business is evident in the	A Statement of Comprehensive Income
D Motor vehicles	account is not an example of an expense account.
1.4 Which one of the following does not match the correct source document to the kind of transaction?
Duplicate credit note	Credit sale of goods
1.5 Which of the following accounts increase by means of a debit entry in the ledger?	A Vehicles and Stationery
1.6 The advertising account of Skype Stores included an amount of R1 200 that was paid for advertising for the period 01 November 2015 to 31 October 2016. Which of the following alternatives represent the correct double entry to record the required adjustment on 29 February 2016, the end of the financial year?
Option D
Account Debit	Advertising
Account Credit	Prepaid expenses
Amount	R 800
1.7 The following information was extracted from the books of Munster Wholesalers on 30 September 2015:
Periodic FIFO
Date	Cost of Goods available for sale			Cost of Goods sold			Inventory Balance
	No. of Units	Cost per unit	Amount	No. of Units	Cost per unit	Cost of Goods sold	No. of Units	Cost per unit	Inventory Balance
1-Sep	5,000.00	20.00	100,000.00	5,000.00	20.00	100,000.00	-	20.00	-
15-Sep	20,000.00	21.00	420,000.00	19,000.00	21.00	399,000.00	1,000.00	21.00	21,000.00
18-Sep	2,000.00	22.00	44,000.00			-	2,000.00	22.00	44,000.00
Total	27,000.00		564,000.00	24,000.00		499,000.00	3,000.00		65,000.00
Answer is Option C. RM 65,000.
1.8 Simplex Stores received R720 from a debtor who was declared insolvent. This amount equals 60% of the total debt.
Solution
60% of amount is R 720.
100% of amount is R 1,200 i.e. R 720/60%
40% of R 1,200 is R 480 i.e., R 1,200*40%.
Answer is Option A. RM 480.
1.9 The following balances appeared in the books of Tredwell Stores on 29 February 2016, the end of the financial year:
Calculation of cost of goods sold:
Opening inventory	60,000.00
Add: Purchases	384,000.00
Less: Closing Inventory	72,000.00
Cost of goods sold	372,000.00
Calculation of gross profit:
Sales	888,000.00
Less:
Cost of goods sold	372,000.00
Carriage on purchases	30,000.00
Gross profit	486,000.00
Answer is Option B. RM 486,000.
1.10 The post-closing trial balance of Bendit Traders on 29 February 2016 included the following balances:
Calculation of current liabilities:
Bank (CR balance)	60,000.00
Creditors control	100,000.00
Accrued expenses	14,000.00
Income received in advance	4,000.00
Current portion of long-term borrowings	40,000.00
Current liabilities	218,000.00
Answer is Option A. RM 218,000.