ACBP5111Ea (1) .PDF 2008

21
2021

MODULE NAME: MODULE CODE:
ACCOUNTING 1A ACBP5121/d/w
ACCOUNTING 1A ACBP5111/d/e/f/p/w

ASSESSMENT TYPE: EXAMINATION (PAPER ONLY)
TOTAL MARK ALLOCATION: 180 MARKS
TOTAL HOURS: 3 HOURS (+15 minutes reading time)
INSTRUCTIONS:
1. Please adhere to all instructions in the assessment booklet.
2. Independent work is required.
3. Five minutes per hour of the assessment to a maximum of 15 minutes is dedicated to
reading time before the start of the assessment. You may make notes on your question
paper, but not in your answer sheet. Calculators may not be used during reading time.
4. You may not leave the assessment venue during reading time, or during the first hour or
during the last 15 minutes of the assessment.
5. Ensure that your name is on all pieces of paper or books that you will be submitting. Submit
all the pages of this assessment’s question paper as well as your answer script.
6. Answer all the questions on the answer sheets or in answer booklets provided. The phrase
‘END OF PAPER’ will appear after the final set question of this assessment.
7. Remember to work at a steady pace so that you are able to complete the assessment within
the allocated time. Use the mark allocation as a guideline as to how much time to spend on
each section.
Additional instructions:
1. This is a CLOSED BOOK assessment.
2. Calculators are allowed.
3. For multiple‐choice questions, give only one (1) response per question. The marker will
ignore any question with more than one answer, unless otherwise stated. You should,
therefore, be sure of your answer before committing it to paper.
4. Answer All Questions.
5. Ensure that you have received a special answer booklet (with forms drawn up) for entering
your answers. If you have not received an answer booklet, request one from the invigilator
before starting the assessment. Answer all questions in the answer booklet provided.
6. Show all calculations, where applicable (marks may be awarded for this).

© The Independent Institute of Education (Pty) Ltd 2021
Page 1 of 14
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Question 1 (Marks: 20)
Choose the most appropriate alternative from the options provided for each of the following
questions. Write down only the letter of your choice next to the corresponding number in your
answer booklet. For example: Q.1.1 (f)
Note: Where applicable, assume a VAT rate of 15%.

Q.1.1 Qualitative characteristics of financial statements prepared in accordance with (1)
IFRS include the following:

(a) Relevance and faithful representation.
(b) Accrual principle.
(c) Principle of prudence.
(d) Revenue recognition convention.

Q.1.2 The following stakeholders use the financial information of a business: (1)
i. Investors.
ii. Lenders.
iii. Management.
iv. Customers.

(a) i and iii.
(b) i and ii and iii.
(c) iii only.
(d) All of the above.

Q.1.3 The owner’s equity of a business is R550 000. The total liabilities of the business (1)
amounts to R100 000. Which of the amounts below reflects the value of the assets
of the business?

(a) R450 000.
(b) R650 000.
(c) R600 000.
(d) None of the above.
Page 2 of 14
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Q.1.4 From the list below, which one is an asset? (1)
i. Office equipment.
ii. Interest on fixed deposit.
iii. Printing.
iv. Vehicles.

(a) i only.
(b) i and iv only.
(c) i, ii and iii only.
(d) i, ii and iv only.

Q.1.5 A business must register for VAT if their turnover is expected to be more than: (1)

(a) R4 million.
(b) R3 million.
(c) R2 million.
(d) R1 million.

Q.1.6 These goods are zero rated supplies in terms of VAT: (1)
i. Petrol and diesel.
ii. Brown bread.
iii. Life assurance.
iv. Entertainment expenditure.

(a) i and ii.
(b) i, ii and iii.
(c) i, ii and iv.

Page 3 of 14
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Q.1.7 A cash transaction can be defined as follows: (1)

(a) A transaction that is settled within 30 days of it taking place.
(b) A transaction that is settled at the point of sale.
(c) A transaction that automatically qualifies for discount.
(d) A transaction that will be settled within a period of 30–60 days so as to qualify
for a discount.

Q.1.8 A cashbook payment for equipment will have the following effect on the (1)
accounting equation:

(a) It will decrease assets only.
(b) It will increase assets only.
(c) It will increase and decrease assets.
(d) It will decrease assets and increase expenses.

Q.1.9 When we pay a creditor, the transaction will be recorded in the following journal: (1)

(a) Cashbook receipts journal.
(b) Cashbook payments journal.
(c) Debtors journal.
(d) Creditors journal.

Q.1.10 The _________ is the source document to record goods purchased on credit. (1)

(a) Original credit invoice.
(b) Duplicate credit invoice.
(c) Original credit note.
(d) Duplicate credit note.

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Q.1.11 The perpetual inventory system is also known as: (1)

(a) The continuous inventory system.
(b) The periodic inventory system.
(c) The LIFO inventory system.
(d) The FIFO inventory system.

Q.1.12 Calculate the cost of sales on 28 February 2021 for Mawasha Traders, a sole trader (1)
using the periodic inventory system:
Inventory at 1 March 2020: R15 000
Inventory at 28 February 2021: R20 000
Purchases for the year: R10 000
Import duties: R2 000

(a) R7 000.
(b) R15 000.
(c) R20 000.
(d) R5 000.

Q.1.13 The balancing in the debtors ledger is done: (1)

(a) After each transaction.
(b) Only on a weekly basis.
(c) Only on a monthly.
(d) Only annually.

Q.1.14 Entries in the credit column of an individual creditor in the creditors ledger will (1)
________ the amount owing to the creditor.

(a) Increase.
(b) Decrease.
(c) Not have any effect on.
(d) Increase and decrease.
Page 5 of 14
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Q.1.15 Gross wages are: (1)

(a) Wages before deductions.
(b) Wages after deductions.
(c) Wages before PAYE only.
(d) Wages after PAYE only.

Q.1.16 If the overtime rate is 1½ times the normal rate of R100 per hour and an employee (1)
works 10 hours overtime, the total received in overtime pay would be:

(a) R100.
(b) R1 000.
(c) R1 500.
(d) R666.67.

Q.1.17 Calculate the gross profit made in the following transaction: Goods sold for R1 900 (1)
were marked up at 25% on cost.

(a) R1 520.
(b) R380.
(c) R475.
(d) R1 425.

Q.1.18 Closing transfers are to include: (1)

(a) Closing off of all income accounts at year end.
(b) Closing off of all expense accounts at the year end.
(c) Transfer of all the gross profit in the trading account to the profit and loss
account.

Page 6 of 14
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Q.1.19 The bookkeeping cycle: (1)

(a) Includes the accounting cycle and ends with the annual financial statements.
(b) Is the yearly cycle to balance the bank account.
(c) Is a monthly cycle that ends with a trial balance.
(d) None of the above.

Q.1.20 Which one of the following source documents will be used to make an entry in the (1)
general journal?

(a) Original credit note.
(b) Journal voucher.
(c) Duplicate credit invoice.
(d) Duplicate credit note.

The following relates to Blue Traders for the month of April 2021:
Blue Traders only sells two products, namely, Aquariso and Magento.
Goods purchased (Aquariso) R23 000 (including VAT)
Goods purchased (Magento) R?
Goods sold (Magento) R22 000 (excluding VAT)
Goods sold (Aquariso) R?

Additional information:
 Blue Traders uses the perpetual inventory system.
 All goods are sold only for cash only.
 All goods purchased in April were sold in April.
 Goods are sold at a mark‐up of 25% on selling price for both products.
 All parties involved are registered VAT vendors and all goods purchased or sold are a
standard‐rated supply.
 VAT is levied at 15%.

Show all workings as marks will be awarded for this. Round to the nearest rand.
Page 7 of 14
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Required:
Calculate the following:‐
Q.2.1 The total cost of sales incurred by Blue Traders during April 2021. (5)

Q.2.2 The total sales revenue earned by Blue Traders during April 2021. (5)

Q.2.3 The gross profit earned by Blue Traders during April 2021. (3)

Q.2.4 The VAT input claimable by Blue Traders during April 2021. (3)

Q.2.5 The VAT output payable by Blue Traders during April 2021. (3)

Q.2.6 The VAT payable or refundable for the month of April 2021. You must clearly state (4)
whether the VAT is payable or refundable.

Q.2.7 There are 3 categories of accounts that are part of the accounting equation. These
are assets, liabilities and owner’s equity. For each of the items listed below state
which category the item would fall under:‐
Q.2.7.1 VAT input. (1)
Q.2.7.2 VAT output. (1)

Page 8 of 14
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You are the bookkeeper of Green Traders and the owner is Nontokozo Khumalo. The business is a
registered VAT vendor and trades only with registered VAT vendors that can provide tax invoices.
The business charges 15% VAT on all its sales. All amounts are inclusive of VAT, unless VAT is not
applicable.
As the bookkeeper, you have been provided with the source documents for the month of May
2021 necessary for the preparation of the journals specified below. The business uses the
perpetual inventory system. “OIN”, “OCN”, “CC” and “JV” are the source document codes below
for renumbered original invoices, re‐numbered original credit notes, cheque counterfoils and
journal vouchers respectively.
Source documents of Green Traders for the month of May 2021:
Date Details Source Document Description Amount
No. (R)
1 Star Dealers OIN125 Trading inventory purchased 23 000
on credit. Including
VAT.
5 Star Dealers OCN106 Trading inventory returned 1 150
to the supplier. Including
VAT.
8 Cash CC861 Drew a cash cheque for 1 200
petty cash.
9 Star Dealers CC862 Payment made to Star 13 000
Dealers. No settlement
discount was received
because the account was not
paid in full.
11 Moon CC OIN126 Trading inventory purchased 18 400
on credit. Excluding
VAT.
12 Nontokozo CR347 Nontokozo Khumalo 16 100
Khumalo (the contributed cash to the
owner) business.

Page 9 of 14
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13 Planet Traders CC863 Cash purchase of trading ?

inventory for R13 000
(excluding VAT) less a 10%
trade discount.
14 PSA Stationers CC864 Cash purchase of stationery. 805
Including
VAT.
16 Moon CC OCN107 Trading inventory returned 2 530
to the supplier. Including
VAT.
18 Penny Furnishers CC865 Purchased a couch 13 800
(furniture) for the reception Including
area and paid cash. VAT.
20 Moon CC CC866 Settlement of account with ?
Moon CC, less 5% settlement
discount. (Balance owing at
the beginning of the month:
R6 000.) (Round to nearest
rand.)
20 Moon CC JV348 5% settlement discount ?
received from Moon CC for
settlement of the account.
(Refer to cheque no. CC866.)
21 Cash CC867 Drawings by the owner. 3 000
31 Cash CC868 Drew a cash cheque to pay 18 760
the weekly wages.

Required:
Use the relevant transactions given above to complete Q.3.1 – Q.3.4 for Green Traders for the
month of May 2021.

Q.3.1 Cashbook payments (CBP1). Total the creditors control and Inventory columns only (27)
in the cashbook payments.
Page 10 of 14
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Q.3.2 Creditors Journal (CJ1). The creditors journal does not have to be totalled. (8)

Q.3.3 Creditors Allowances Journal (CAJ1). The creditors allowance journal does not have (8)
to be totalled.

Q.3.4 General journal. Narrations are required. (7)

FAIZ General Dealers, a registered VAT vendor, has several debtors and creditors. All debtors and
creditors are registered for VAT, and deal in standard rated supplies. VAT is charged at 15%.
The following balance appeared in the books of FAIZ General Dearlers on 1 March 2021:
Sally Knowall (Debtor) (D34) Dr Balance R12 000.

The following transactions took place during the month of March 2021:
Date Details of transaction
1 FAIZ General Dealers sold goods on credit to Sally Knowall, R46 000 (including VAT).
5 FAIZ General Dealers realised that an error was made on the previous invoice. The
invoice was undercast by R4 000 (excluding VAT). Sally was contacted in this regard
and she accepted the corrected amount.
8 Sally Knowall settled her account balance as at 5 March 2021 and took advantage of
the 2% settlement discount FAIZ General Dealers had offered her for prompt
payment. Round to the nearest rand.
9 FAIZ General Dealers sold goods on credit to Sally Knowall, R10 000 (excluding VAT).
15 Egoli Bank informed FAIZ General Dealers that Sally Knowall’s cheque, received on the
8th was dishonoured due to insufficient funds.
18 Sally Knowall bought goods on credit, R15 000 excluding VAT.
23 Sally Knowall returned goods purchased on the 18th for R2 750 (including VAT)

31 Sally Knowall’s lawyer informed FAIZ General Dealers that Sally Knowall had been
liquidated. Her lawyer sent a cheque constituting a payment of 30 cents in the rand.

The rest of the debt was written off.

Required:
Q.4.1 Prepare the individual account of Sally Knowall (D34) in the debtors ledger of FAIZ (40)
General Dealers from the information provided above for the month of March
2021.
Page 11 of 14
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Round to the nearest rand where applicable.
Note: In the “Document Number” column in your answer booklet provide only the
correct name of the document, document numbers and transaction codes are not
required.
Page 12 of 14
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During the week ending 31 May 2021, the following hourly‐paid employees were employed by Crème Traders for a week that consists of 40 hours:
Employee No. of hours Wages per hour Pension fund PAYE/SDL UIF remuneration PAYE
worked Normal Overtime (Employee’s remuneration (R) (R)
(R) (R) contribution) (R)
(R)
T Mabatho 48 60 75 200 2 800 3 600 260
S Khumalo 40 70 85 250 2 550 3 550 260
W Garden 44 80 95 300 3 280 4 480 280
F Ahmed 38 90 105 350 3 260 4 660 290

Additional information:
 All employees are paid by EFT on the Friday of the week ending
 All other payments are made on the last day of each month via EFT
 All employees belong to SOFT Pension fund. The employer contributes double what the employee pays to their pension fund
 All employees are obliged to contribute R10 per week to the staff bereavement fund
The following totals/opening balances on 24 May are applicable:
Debit Credit
EMP201 control 3 250

Page 13 of 14
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Required:
Q.5.1 Complete the wages journal (WJ5) for Crème Traders for the week ending 31 May 2021. (34)

Q.5.2 Prepare the EMP201 control ledger account as at 31st May 2021. (11)

END OF PAPER
Page 14 of 14

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21

Q.1.7 A cash transaction can be defined as follows: (1)

Q.1.11 The perpetual inventory system is also known as: (1)

Q.1.19 The bookkeeping cycle: (1)

13 Planet Traders CC863 Cash purchase of trading ?

Q.5.2 Prepare the EMP201 control ledger account as at 31st May 2021. (11)

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