FACULTY OF MANAGEMENT SCIENCES

DEPARTMENT: ACCOUNTING ECONOMICS AND FINANCE

QUALIFICATION: DIPLOMA IN ACCOUNTING AND FINANCE

QUALIFICATION CODE: 06BDAF LEVEL: 5

COURSE: FINANCIAL ACCOUNTING 101 COURSE CODE: FAC511S

DATE: JANUARY 2016 SESSION: SECOND

DURATION: 3 HOURS MARKS: 100

FIRST OTPPORTUNITY EXAMINATION QUESTION PAPER

EXAMINER(S)
G JANSEN, C MAHINDI, Z MARITZ, M DIKUUA

MODERATOR: E MUSHONGA

THIS QUESTION PAPER CONSISTS OF 4 PAGES

(Excluding this front page)

INSTRUCTIONS

1. Answer ALL the questions.

2. Write clearly and neatly.
3. Number the answers clearly.
QUESTION 1 (20
Marks)
1.1. List the five (5) elements of financial statements.
(5)

1.2. Identify two (2) different users of financial information and briefly explain the type
of information needed for each type of user.
(4)

1.3. List any four (4) qualitative characteristics of financial accounting information
that have been identified in the conceptual framework in the international
financial
reporting standards.

(4)
1.4. Explain briefly what you understand by the following accounting terms:
i). Going concern
(2)
ii). Dual concept
(2)
iii). An accrual
(2)
iv). IFRS
(1)
QUESTION 2 (40
Marks)
You are given the following March 2015 transactions for Book Den, a book seller (which
has been in operation for a few years) in Windhoek. Book Den makes use of the
periodic inventory system.
i) Bought office equipment to the value of N$ 15 000 with a cheque on 5 March.

ii) Sold books to the value of N$ 22 000 on 12 March to the Namibia University of
Science and Technology on credit. These books were originally purchased
by Book Den for N$ 13 800 on 8 March by cheque and this was not yet
recorded.

iii) Paid the insurance for the month amounting to N$ 4 300 via internet banking on
14 March.

iv) Purchased stationery on credit from Waltons, amounting to N$ 1 950 on 20

March.

v) Bought books from a publisher in South Africa amounting to N$ 48 000 on credit

on 22 March. One week after the books were delivered, the owner of Book
Den realised that some of the books sent by the publisher were not for his
shop. He immediately returned the books and the publisher sent a credit
note to him on the same day amounting to N$13 000.

vi) Due to the fact that Book Den is such a good customer, the publisher provided
Book Den with 5% discount on the outstanding amount. This discount was
given by the publisher on 28 March.

Required:
a) Prepare the journal entries (general journal) for the above transactions for the
month of March.
(14 Marks)

b) Post the transactions in (a) above to the General Ledger.

(16 Marks)

c) Balance off the ledger accounts in (b) and extract a trial balance as at 31
March 2015.
(10 Marks)
NB: VAT should not be accounted for.
QUESTION 3 (40
Marks)
The following balances appeared in the records of Cash Build, a general dealer
trading in Windhoek’s Northern Industrial area on 28th February 2016:

N$
Equipment at cost price 6 000

Vehicles at cost price 24 000

Accumulated depreciation – Equipment (01 March 2015) 3 000
Accumulated depreciation – Vehicle (01 March 2015) 11 712
Inventory (01 March 2015) 122 400
Debtors (Accounts Receivables) 26 000
Provision (Allowance) for bad debts 800
Cash in Bank 60 000
Capital 156 000
Drawings 48 000
Creditors 82 000
Purchases 314 000
Purchases returns 10 088
Salaries and wages 22 880
Rent paid 6 960
Advertising 2 400
Insurance 1 920
Electricity 2 560
Sundry expenses 480
Sales 380 000
Sales returns 6 000
The following additional information is provided:
i. Inventory on hand on 28 February 2016, was valued at N$ 160 000.
ii. Depreciation to be provided as follows:
a. – Equipment , 5% per annum on cost using straight line method
b. – Vehicles, 20% per annum on reducing balance method
iii. Insurance prepaid as at 28 February 2016, amounts to N$ 320.
iv. Provision (Allowance) for bad debts should be increased to N$ 2 000.
v. Rent of N$ 2 000 for the period 01 September 2015 to 28 February 2016
has not been paid and this has not been recorded in the books.

Required:
a. Journalise the above adjustments number (i) to (v). Ignore narrations. (12
marks)
b. Prepare the statement of profit or loss and other comprehensive income
for the year ended 28 February 2016 and (16
marks)
c. A statement of financial position as at 28 February 2016. (12
marks)

END OF EXAMINATION PAPER