Question 1

1. A
2. B
3. B
4. C
5. C

Question 2

2.1.

Principle of Separation

Financial and accounting operations must be separated, i.e., handling of cash and recording the
movement thereof should be done by different persons.

Principle of Responsibility

Responsibility for the performance of the job must be clearly stated so there may be no room for doubt
or confusion.

Principle of Skepticism

Too much confidence should not be pinned on one individual. Trusted officials or employees have
committed nearly all frauds.

2.2.

The purpose of a bank reconciliation is to ensure the additions and deductions on the bank statement
are compared (or reconciled) with the items that are entered in your company's general ledger. If there
are differences, such as outstanding payments or deposits in transit, they can be noted as timing
differences.

2.3.
2.3.1.

Ruth

Cash book (bank column)

Date Details N$ Date Details N$

31-dec- Bank 140 31-dec- Balance b/d 2450
21 21
Balance c/d 2424 Bank interest 20
Rose 94

2564 2564
01-jan- Balance b/d 2424
22
2.3.2.
 Ruth
Bank Reconciliation Statement at 31 December 2021

N$ N$
debit balance on bank statement -2623
Add:
amounts not yet credited: Cash Sales 362
bank error 35
397
less: cheques not yet presented -198
adjusted cash book balance -2924

Question 3

2.1.

Error 3 Commission

Error 4 Omission

Error 5 Principle

2.2.

date details dr Cr
N$ N$
31-Jan-20 Simone 1360
Simon 1360
( correction error of commission )

Stationery 70
cash 70
( correction error of omission )

Sales Returns 380

Sales 380
( correction error of principle )

2.3.

Saara

Suspense Account

date details N$ date details N$

31-Jan- rent receivable 2000 31-Jan- Difference in trial b 2220
 20 20
purchases returns 380 wages 540
sales returns 380
2760 2760

2.4.

Yes

Errors affecting the trial balance have all been discovered as the suspense account has been cleared

2.5.

This can be an error in the recognition, measurement, presentation, or disclosure in financial statements
that are caused by mathematical mistakes, mistakes in applying GAAP, or the oversight of facts existing
when the financial statements were prepared.

2.6.

No effect Increase Decrease

Draft profit 48 500

Error 1 540

Error 2 2000

Error 3 X

Error 4 70

Error 5 1400

Error 6 760

2760 2010 750

Question 4

date receipts issues value of stock total amount remaining units net
balance
N$ N$ N$
Jun-01 6300 6300 350 6300

300 6000 6000 650 12300

Jun-12 800 95000 95000 1450 107300

 Jun-24 900 18550 -18550 550 88750

Jun-30 150 3750 -3750 400 85000

Jul-06 600 13200 13200 1000 98200

Jul-15 300 7500 -7500 700 90700

Jul-31 500 11300 -11300 200 79400

Question 5

5.1.

Statement of Comprehensive Income for the year ended 31 July 2018.

Sales 288250
Less cost of sales (210300)
Opening 16472
Purchases 201852
Less closing (7410)
Less carriage outwards (614)

Gross profit 77950

Add other income 3780
Rent income 3780

Operating income 81730

Less expenses (35678.2)

Wages 8807
Stationery 3437
Interest on loan 610
Insurance 3600
Bad debts 500
Depreciation 18724.2
Net profit 46051.8

Statement of Financial Position as at 31 July 2018

Assets
Land and buildings 100000
Vehicles 65960.8
Equipment 18455
Inventory 7410
Debtors 15786
Bank 8000
Cash 2721
Prepaid expense 600
Total Assets 218932.8

Equity and liabilities

Capital 167581
Drawings -15817
Profit 46051.8
Creditors 11400
Loan: S bank 10000
Suspense account 210
Income received in advance 945
Total Equity and liabilities 218932.8