Accounting Cycle - Question Pack - 2024

School of Accountancy |
Skool vir Rekeningkunde
ACCOUNTING CYCLE
Question pack
Class exercises
Question 1 Accounting equation

Question 2 Correcting journals
Question 3 Correcting journals
Question 4 Correcting journals (2023)
Question 5 Bank reconciliation (2023)
Question 6 Debtors (2021)
Question 7 Creditors account (2019)
Question 8 Creditors (2022)
Old questions

Question 11 Settlement statement (2017)
ILP questions
Question 12 General journal 21+22 Feb

Question 13 Correcting journals (2016) 28+29 Feb
Question 14 Settlement statement (2016) 6+7 March
Progress questions
Question 15 Correcting journals (2017) 23 Feb

Question 16 Bank reconciliation (2022) 8 March
Assignments
Question 17 Correcting journals (2022) 1 March

Question 18 Debtors and creditors (2020) 6 March
FINANCIAL ACCOUNTING 178 – ACCOUNTING CYCLE QUESTION PACK
QUESTION 1
Giepie Shoes is an entity that manufactures shoes and sells them to wholesalers.
The entity uses a perpetual inventory system and the following balances appeared in the trial balance
on 1 January 2010:
Capital 100 000

Creditors 12 000
Debtors 23 000
Fixed assets 50 000
Cash 14 000
Inventory 25 000
The following transactions occurred during the year
1. Purchase leather for R8 500 on credit from SR Leathers.
2. Cash sale to ABC Traders to the value of R18 300, the cost price of the shoes was R8 000.
3. Pay a creditor GF Burger by cheque of R8 500. This settles Giepie’s outstanding debt.
4. The owner donates his vehicle, which cost R100 000 five years ago, to the entity. The vehicle
is currently worth R30 000.
5. Pays the water and electricity bill of R8 100.
6. Purchase soles on credit from TR Trainers for R19 300, trade discount of 10% must still be
taken into account.
7. Return incorrectly coloured leather to the value of R950 to SR Leathers.
8. ABC Traders return shoes to the value of R1 900. The amount is paid back to them in cash.
The cost price of the shoes is R800.
9. A contractor has done repair work to the factory and was paid R7 200.
10. Stationary to the value of R800 is bought for cash.
11. Pay SR Leathers the outstanding debt. Giepie had no outstanding debt at SR Leathers at the
beginning of the year.
12. A debtor, TR Terblanche became insolvent and his total outstanding debt of R7 100 must be
written of as bad debt.
13. A truck was in an accident and the cash cost for the entity after the insurance pay-out was
R4 200 to repair it.
14. The owner took shoes with a cost price of R1 000 for own use.
15. A machine is upgraded to the value of R18 200 so that it can cut leather faster. It is paid
immediately.
2
16. Pay a creditor, SC Lawry, R1 520 and no discount is granted.
17. Giepie sells shoes to the value of R25 000, trade discount of 10% is granted and the cash is
received immediately. The cost price of the shoes is R15 000.
18. The owner donates shoes with a cost price of R800 (and a selling price of R1 350) to the local
children’s’ home.
REQUIRED
Show the effect of above-mentioned transactions on the following accounting equation of Giepie:
Fixed Assets + Debtors + Cash + Inventory + Expenses = Capital + Creditors + Income
3
QUESTION 2
Zulu Spears is a sole proprietor trading in African artwork. The entity uses a perpetual inventory
system. The following balances, with the exception of the owner’s Capital account, appeared in the
general ledger on 28 February 2001, the end of the financial year:
Loan owing to ABC Bank 30 000

Creditor control 31 786
Bank overdraft 1 291
Motor vehicles at cost price 63 820
Accumulated depreciation for motor vehicles 18 224
Fixed deposit 40 000
Building at carrying value 30 000
Debtor control 12 194
Inventory 35 875
Sales 339 201
Sales returns 2 002
Cost of sales 161 581
Interest on fixed deposit received 3 900
Interest on loan paid 5 175
Electricity costs paid 12 853
Telephone costs paid 16 298
Fuel and maintenance on motor vehicles 11 293
Depreciation 4 206
Salaries and wages paid 31 608
Withdrawals by owner 24 420
Sales and administration costs 21 360
Security cost paid 16 280
Purchase returns 1 856
Additional information
1. The entity's bookkeeper erroneously recorded only purchases and costs when the amounts
owing were paid. The interest earned in respect of the fixed deposit was also erroneously only
recorded in the cash receipt journal when it was received, from where it was directly transferred
to the particular ledger account.
2. The fixed deposit of R40 000 was made on 1 July 1998 for a period of 4 years and earns interest
at a rate of 9% per annum, payable monthly.
3. The entity entered into a contract with a security company on 1 January 2000 for a period of 24
months in terms of which the monthly cost amounted to R1 480 for the full period contracted.
4. The owner took two pieces of artwork with a total cost price of R3 850 from inventory for use in
his private residence, for which no accounting entries were made.
5. Several pieces of art with a total cost price of R2 674 were given to clients as presents during
December 2000 for advertising purposes, for which no accounting entries were made.
4
6. The entity’s motor vehicle was repaired on 28 February 2001 at a cost of R364, for which no
invoice was received and consequently no further accounting entries were made.
7. The loan owing to ABC Bank was incurred on 1 June 1998. The loan is redeemable in equal
annual instalments of R8 000 each on 1 June every year and interest is charged at a rate of 15%
per annum, payable monthly. (The instalment i.r.o. 1 June 2000 was paid on that date.)
8. Both the invoices for the electricity costs amounting to R1 079 and the telephone costs
amounting to R1 304 in respect of February 2001 were only received during March 2001. No
accounting entries were made to date for these particular costs.
9. An employee’s salary of R2 500 for March 2001 was already paid to him on 27 February 2001.
No accounting entries relating to this had been made to date.
REQUIRED
Journalise the above-mentioned transactions and correcting journals in the general journal of Zulu
Spears for the year ending 28 February 2001. Closing entries and journal narrations are not required.
5
QUESTION 3
Myca Traders is a sole proprietor, trading in building material. The entity uses a perpetual inventory
system and is not registered for VAT.
The following balances, with the exception of the owner’s Capital account, appeared in the general
ledger of the entity on 28 February 2002, the end of the financial year, before the closing journal
entries were made:
R
Delivery vehicle at cost price 143 972
Debtors control 51 537
Inventory at cost price 116 529
Fixed deposit at ABC Bank 24 000
Buildings at carrying value 150 000
Cash in bank 2 106
Creditors control 73 927
Loan owing to DEF Bank 56 000
Accumulated depreciation - Delivery vehicle 58 281
Allowance for credit losses of debtors - 1 March 2001 3 472
Interest on fixed deposit received in advance - 1 March 2001 220
Interest on fixed deposit received 2 200
Security cost paid in advance - 1 March 2001 3 485
Security cost paid 37 580
Interest on loan paid in advance - 1 March 2001 750
Interest on loan paid 8 500
Freight on sales 11 972
Sales 828 814
Cost of sales 471 602
Bank charges 1 394
Electricity owing - 1 March 2001 463
Electricity costs paid 5 026
Sales and administration costs 89 391
Depreciation 22 792
Bad debt written off 14 284
Bad debt recovered 3 291
1. The entity’s bookkeeper erroneously recorded only purchases of inventory in the purchase
journal. All other purchases and costs were only recorded when the respective amounts owing
were paid, which amounts were transferred from the cash payment journal directly to the relevant
ledger accounts. The interest earned in respect of the fixed deposit was also only recorded in the
cash receipt journal when it was received, from where it was transferred directly to the particular
ledger account.
2. The owner took building material with a cost price of R17 296 from inventory on 14 July 2001 to
improve his home, for which no accounting entries were made to date.
3. The fixed deposit was made during 2000 at ABC Bank and earns interest since that date at 11%
per annum, payable monthly.
6
4. The entity entered into a security contract on 1 July 2000 in terms of which the monthly security
cost amounted to R3 485 till 30 June 2001 and increased to R3 875 per month from 1 July 2001
till 30 June 2002. The security cost is payable monthly.
5. The loan from DEF Bank is due since 11 May 2000. Interest is charged on the loan at a rate of
15% per annum, payable monthly. The loan is repayable in equal annual instalments of R4 000
each on 31 May every year. All instalments were paid to date.
6. The invoice for the electricity costs amounting to R501 in respect of February 2002 was only
received during March 2002. No accounting entries were made to date in this regard. All previous
accounts were settled during the year.
7. R2 106 of the bad debt recovered, is amounts that were written off as bad debts during the
current financial year, while the balance is amounts written off as bad debts during the previous
financial year.
8. The amount for the debtors control in the list of balances above includes an amount of R1 037
owed by a debtor whose estate was declared insolvent during February 2002.
9. The allowance for credit losses of debtors was calculated correctly as R3 015 on 28 February
2002.
REQUIRED
Journalise the above-mentioned transactions and correcting journals in the general journal of Myca
Traders for the year ending 28 February 2002. Closing entries and journal narrations are not required.
(NB! – You may assume that all the journals, with the exception of the general journal, had been
closed before any adjustments were made.)
7
QUESTION 4 (2023) (18 marks; 32 minutes)
Green Ltd. (Green) is a company based in Stellenbosch which sells bicycles. They are not registered
as VAT vendors. Green uses a perpetual inventory system, and their year-end is 31 January.
You receive the following extract from the general ledger of Green on 31 January 2023:
Description Debit Credit

R R
Fixed deposit 165 000
Debtors control 398 500
Security expense 31 800
Security paid in advance – 31 January 2022 9 200
Loan 400 000
Allowance for credit losses of debtors - 31 January 2022 30 000
1. The bookkeeper of Green is unsure about the application of the accrual principle and therefore did
not apply it to all the relevant transactions.
2. The fixed deposit was made on 1 June 2019 and has not changed since that date. The fixed
deposit earns interest at 7% per annum. Due to system errors, all the interest for the period
1 January 2022 to 28 February 2023 was received in the current financial year. The entries for the
2022 financial year were processed correctly. The bookkeeper processed only the following entry
when the interest was received:
Dt Bank (SFP) 13 475

Cr Interest received (P/L) 13 475
3. Green entered into a security contract on 31 May 2021 in terms of which the monthly security cost
amounted to R2 300 till 31 May 2022 and increased to R2 650 per month from 1 June 2022. The
security cost is payable for 12 months in advance on 31 May each year.
4. The loan was entered into on 1 August 2020 and bears interest at 11% per annum since that date.
The loan is repayable in annual instalments of R100 000 each starting on 1 August 2021. The
interest is paid monthly in cash and all payments are up to date, but the accountant has not
processed the entries for January 2023.
8
5. The following information is available with regards to debtors for the current financial year:
Debtor Bad debt written off Bad debts recovered

A Abbot 15 000
D Daneel 11 000
G Gordon 5 000
H Hlongwane 8 500
A Abbot 12 000
Total 34 500 17 000
The bookkeeper debited the Bad Debts expense account with R34 500, and credited the Debtor’s
control account with the same amount. For the bad debts recovered, the accountant debited the
Bank account and credited the Debtors’ control account with R17 000.
6. The allowance for credit losses is calculated as 5% of the balance of the Debtors’ control account.
7. On 12 December 2022, green received an order for 2 bicycles with a cost price of R23 000 each
and a selling price of R57 500 in total. The client was required to pay a deposit of R5 750 on
17 December 2022.
The bicycles were delivered to the client on 22 January 2023, on which day the client also settled
the outstanding balance.
The bookkeeper has not processed any entries for this transaction.
8. Upon trying to balance the trial balance, you determine that the creditors column in the cash
payment journal was added with R230 too much and transferred as such.
REQUIRED Sub Total

total
Provide the missing and correcting journal entries in the general journal of
Green Ltd. for the year ending 31 January 2023.
The heading, dates and closing journal entries are not required. 16
Communication skills 2
TOTAL MARKS 18
9
Rainbow Colours (Pty) Ltd. (Rainbow) sells paint to wholesalers. Rainbow is registered as a VAT
vendor (assume a VAT rate of 15%) and the year end is 30 June.
You received the following information:
Bank reconciliation statement on 31 December 2022
Balance per bank statement 458 204

Outstanding deposit 7 300
Outstanding deposit 11 250
Balance per general ledger 476 754
Cash receipts journal of Rainbow for January 2023:
Date Description Total VAT Sales Debtors

16/01 LovePaint 114 290 114 290
31/01 Cash sales 126 500 16 500 110 000
240 790 16 500 110 000 114 290
Cash payment journal of Rainbow for January 2023:
Date Description Total VAT Salaries and wages Creditors Other

03/01 DO: security 2 400 2 400
03/01 DO: insurance 3 213 419 2 794
05/01 EFT: Telkom 1 840 1 840
25/01 EFT: wages 4 118 4 118
25/01 EFT: salaries 8 529 8 529
25/01 EFT: salaries 31 627 31 627
25/01 EFT: UIF 399 399
25/01 EFT: PAYE 7 687 7 687
59 813 419 44 274 1 840 13 280
* DO = debit order
1. Apart from the following and other obvious errors, the bank statement is correct in respect of all
other items and contains no adding errors.
2. The totals of the cash receipt journal and cash payment journal have already been posted to the
Bank account in the general ledger. You may assume there were no adding errors.
3. The deposit on 10 January 2023 was a direct deposit made to LoveHair by a debtor.
4. The deposit on 25 January 2023 was a direct deposit made to Rainbow by a debtor.
5. The deposit on 31 January 2023 was a direct deposit of cash for the month.
10
Bank statement on 31 January 2023
Transaction History (2023-01-31 12:24:53)
RAINBOW COLOURS (PTY) LTD. ABSA

PO BOX 100 4051234567
MATIELAND
7602
Statement for Period 2023-01-01 - 2023-01-31 Page 1 of 1
Date: Transaction Description Amount Balance

Balance Brought Forward 458 204
2023-01-01 DEPOSIT Ref: P Dlamini 7 300 465 504
2023-01-02 DEPOSIT: cash 11 250 476 754
2023-01-02 MONTHLY ACC FEE -690 476 064
2023-01-03 DEBIT:EXTERNAL ADT Security -2 760 473 304
2023-01-03 DEBIT:EXTERNAL SANTAM insurance 3 213 476 517
2023-01-05 IBANK PAYMENT Telkom Dec2022 -1 840 474 677
2023-01-10 IBANK CREDIT Ref: R Botha 1 000 475 677
2023-01-16 IBANK CREDIT Ref: LovePaint 114 920 590 597
2023-01-25 IBANK PAYMENT Petersen Wages -4 118 586 479
2023-01-25 IBANK PAYMENT Ndlovu Salary -8 592 577 877
2023-01-25 IBANK PAYMENT FROM ABSA BANK 500 578 387
2023-01-25 IBANK PAYMENT TO ABSA BANK Jacobs Salary -31,627 546 760
2023-01-25 IBANK PAYMENT: SARS - UIF Jan’23 399 547 159
2023-01-25 IBANK PAYMENT: SARS - PAYE Jan’23 -7,687 539 472
2023-01-30 INTERNET BANK FEE -184 539 288
2023-01-30 DEBIT:EXTERNAL Wi-Fi connection -1 725 537 563
Balance Carried Forward 537 563
11
REQUIRED Sub Total

total
(a) Prepare the supplementary Bank account, properly closed off, in the
general ledger of Rainbow Colours (Pty) Ltd. for the month ended
31 January 2023.
Dates are not required. 11
Communication skills 1 12
(b) Prepare the bank reconciliation statement for the month ended
31 January 2023. 6 6
(c) With reference to the Conceptual Framework for Financial Reporting,

name the principle which was applied for the transaction on
5 January 2023 and explain how the principle was applied.
You do not need to quote the relevant definition in your answer. 2 2
TOTAL MARKS 20
12
FunkyTunes is a sole proprietorship that sells music instruments. FunkyTunes uses a perpetual
inventory system and is registered for VAT (assume a VAT rate of 15%). The accountant is busy
finalising some of the accounting records for the month ended 31 January 2020.
The following accounting records regarding the debtors of FunkyTunes are supplied to you:
Cash receipt journal for the month ended 31 January 2020
Date Receipt Details Total VAT Debtors Cash sales Other

January
05 712 H Stoop 1 035 135 900
08 714 - 718 Cash 27 600 3 600 24 000
12 457 M Lubbe 1 150 1 150
21 923 B Zaba 575 515
27 418 S Ntondo 2 300 2 300
31 Interest 150 150
received
32 810 3 735 4 865 24 000 150
Sales journal for the month ended 31 January 2020
Date Invoice Details Total VAT Sales

January
05 582 S Ntondo 966 126 840
06 583 M Lubbe 456 56 400
12 586 B Fouche 920 120 800
14 587 B Riley 1 000 1 000
22 590 S Ntondo 345 45 345
3 687 347 3 385
The accountant prepared the following debtors control account in the general ledger:
Debtors control
1 Jan 2020 Balance 14 800
31 Jan 2020 Sales (SJ) 3 340 31 Jan 2020 Bank (CRJ) 4 865
VAT (SJ) 347
31 Jan 2020 Balance 13 622
18 487 18 487
1 Feb 2020 Balance 13 622
13
1. Assume there are no adding errors in the information provided.
2. According to the agreement with debtors, interest of 2% per month is levied on all the outstanding
debt at the beginning of each month, irrespective of when the sale took place or when the balance
was settled. Interest for January 2020 must still be recorded.
3. According to the duplicate deposit slip (receipt nr 923), the amount deposited was R575.
4. It was discovered that the accountant recorded the sales transaction to Mr M Lubbe on
6 January 2020 at a VAT rate of 14% in the Sales journal. The correct VAT rate was however used
on the invoice. The correct sales amount was R400 excluding VAT.
5. A trade discount of 10% was granted on the sales transaction with Mrs B Fouche on
12 January 2020, however the accountant forgot to take in into account when he recorded it in the
Sales journal.
6. The sales transaction of R1 150 on 14 January 2020 was made to Mrs B Riley, who is not
registered for VAT.
7. Included in the debtors control account opening balance of R14 800, is an amount of R2 140 due
by Mr S Ntondo.
Marks
REQUIRED
Sub
Total
total
(a) Prepare the supplementary debtors control account in the general ledger
of FunkyTunes for the month ended 31 January 2020.
Close the account properly off.
No heading or dates are required. 8 8
(b) Calculate the balance for Mr S Ntondo as it would appear in the debtors’
list on 31 January 2020. 2 2
TOTAL 10
14
You were recently appointed as the accountant of Laat-waai. Laat-waai is an entity that trades in car
tyres for race cars in Cape Town, is not a registered VAT vendor and applies a perpetual inventory
system. Laat-waai has one creditor, Tyres for Africa, a supplier in Port Elizabeth. Trade discount of
30% is granted on all purchases from Tyres for Africa.
You received the following monthly statement from Tyres for Africa on 2 March 2019:
Date Details Debit Credit

R R
2019
Jan. 28 Amount due 257 566
30 Invoice L653 68 542
Feb. 02 Payment received 143 540
3 Invoice L654 28 968
5 Interest 3 649
8 Credit note LK18 5 784
9 Payment received 168 983
13 Invoice L656 45 831
20 Invoice LL543 9 701
20 Credit note LK19 568
24 Debit note SD44 547
26 Invoice L657 78 441
27 Amount due 462 856
637 353 637 353
You received the following (correct) information:
1. An extract from the cash payment journal of Laat-waai:
Date Details Cheque # Total Creditors Purchases

02/02 Tyres for Africa 146 R143 540 R143 540
2. You received invoices, of which all purchases were on credit, with the following information:
a. Invoice L654 is for tyres purchased to the value of R28 968 on 3 February 2019.
b. Invoice L655 is for tyres purchased to the value of R14 873 on 11 February 2019.
c. Invoice L656 is for tyres purchased to the value of R45 881 on 13 February 2019. The invoice
includes goods of R4 587 on which only a 15% trade discount was granted.
d. Invoice L657 is for tyres purchased to the value of R78 441 on 26 February 2019.
e. Invoice L658, to the value of R41 210, was for tyres ordered on 20 February 2019. These
goods were sent free-on-board Port Elizabeth on 28 February 2019. The tyres only arrived at
Cape Town Harbour on 3 March 2019 and was transported to Laat-waai’s premises on the
same day.
3. Debit note SD44 was issued by Tyres for Africa for goods returned to Wheels-for-wheels.
4. Invoice LL543 is for tyres purchased to the value of R9 701 on 20 February 2019 by Laat-wiel.
Apart from obvious errors, the monthly statement is correct in respect of all other items.
15
Marks
REQUIRED
Sub-
Total
total
Compile the creditors control account (for Tyres for Africa), properly closed
off, in the general ledger of Laat-waai for the month ending 28 February 2019.
Also compile the settlement statement to Tyres for Africa as at 28 February
2019.
Dates are not required.
Round off to the nearest Rand. 15
Total 16
16
You are the accountant of Yskoud Ltd. (‘Yskoud’) who sells ice-cream. Yskoud purchases all their
inventory from one supplier, Creamy Dreams Ltd. (‘Creamy Dreams’). Both Yskoud and Creamy
Dreams are registered VAT-vendors. A VAT rate of 15% is applicable.
The agreement between Yskoud and Creamy Dreams states that Yskoud receives a trade discount of
10% on all purchases.
The following monthly statement was received from Creamy Dreams on 4 March 2022:

R R
2022
Jan 26 Amount due 10 324
28 Invoice 852 1 357
30 Credit note C57 575
Feb 03 Receipt 634 6 900
03 Interest levied 69
11 Invoice 930 2 323
16 Invoice 971 2 938
19 Credit note C68 707
20 Invoice 1004 2 070
24 Invoice 1088 2 800
25 Receipt 973 11 106
25 Amount due 3 506
22 387 22 387
The student who did vacation work for Yskoud, compiled the following ledger account of Creamy
Dreams in the creditors’ ledger for February 2022:
Creamy Dreams
Date Details Amount Date Details Amount
03/02 Bank 6 900 01/02 Balance 11 106
16/02 Inventory (971) 2 555 11/02 Inventory (930) 2 020
VAT (971) 383 VAT (930) 303
19/02 Inventory (D23) 615 20/02 Inventory (1004) 1 800
VAT (1004) 270
25/02 Bank 11 106 22/02 Inventory (1088) 2 345
VAT (1088) 365
28/02 Inventory (1112) 3 000
VAT (1112) 450
28/02 Balance 100
21 659 21 659
Balance 100
17
1. Apart from the following and other obvious errors, the monthly statement is correct in respect of
all other items:
2. You can assume that the student who compiled the ledger account, made no casting errors.
3. Invoice 1004 shows no trade discount.
4. Debit note D23 is in respect of goods returned on this date.
5. The amount indebted on 31 January 2022 was settled in full on 25 February 2022.
6. Invoice 1112 was issued by Creamy Dreams for goods Yskoud purchased on 28 February 2022.
Marks
REQUIRED
Sub Total
total
(a) Compile a supplementary ledger account for Creamy Dreams in the

creditors’ ledger of Yskoud for the month ended 28 February 2022.
Dates and headings are not required. 9 9
(b) Compile the settlement statement to Creamy Dreams as on

28 February 2022. 6 6
TOTAL 15
18
Gates Galore (Pty) Ltd. is a company that sells and installs security gates in Johannesburg. Their
year-end is 30 September and they make use of the perpetual inventory system. The accountant
struggled with the following transactions and asked for your assistance:
1) Gates Galore (Pty) Ltd. also provides security services to Scared (Pty) Ltd. from 1 July 2012 at
R10 000 per month. The contract stipulates that the amount will increase by 10% annually on
1 July. The accountant only made the following entry for the year:
Dr Bank (SFP) 136 400

Cr Security cost paid (P/L) 136 400
Upon further investigation the following account was found in the trial balance:
Security income received in advance – October 2013 R11 000
2) Gates Galore (Pty) Ltd. incurred a loan of R100 000 at Secure Bank on 1 November 2013. The
loan bears interest at 12% per year. The loan is repayable in 10 equal instalments on 31 October
every year.
The following account appears in the trial balance:

Interest paid R10 000
3) Gates Galore (Pty) Ltd.’s purchase agent came across a bargain purchase where they received a
5 % trade discount on 20 sets of gates with an original cost price of R3 000 per set on 10
December 2013. The gates were barely offloaded at Gates Galore (Pty) Ltd.’s premises when a
developer bought all 20 sets in cash on 11 December 2013 at R3 200 per set. The accountant did
not want to go through all the paper work on 11 December 2013 and only made the following
entry:
Dr Bank (SFP) 4 000

Cr Profit on sale (P/L) 4 000
4) Gates Galore (Pty) Ltd. ordered a delivery vehicle from Toyota on 25 September 2014 and paid a
10% deposit of R18 000 on this date. The delivery vehicle was delivered at the premises on
29 September 2015. The only entry made by the accountant was:
Dr Deposit (SFP) 18 000

Cr Bank (SFP) 18 000
REQUIRED Marks
Prepare the correcting journal entries for the above-mentioned transactions in the
general journal of Gates Galore (Pty) Ltd. for the year ended 30 September 2014.
Closing entries and journal narrations are not required. 12
Communication skills 1
TOTAL MARKS 13
19
School Stuff (Pty) Ltd. is a company that sells textbooks and stationary. School Stuff (Pty) Ltd.’s year-
end is on 31 January, they use a perpetual inventory system and are not registered for VAT purposes.
The inexperienced accountant approached you for assistance with the following transactions:
1. School Stuff (Pty) Ltd. paid a deposit of R5 000 on a purchase transaction for pens and pencils on
20 January 2015. This transaction was correctly recorded. The pens and pencils were delivered on
3 February 2015 and the rest of the purchase price (R45 000) was paid in cash on the same day.
The inexperienced accountant recorded the transaction by debiting inventory and crediting bank
with R45 000.
2. The following transactions have not been recorded:
a. Akker Primary School purchased goods to the value of R28 800 (with a cost price of R24 000)
for cash from School Stuff (Pty) Ltd. on 7 December 2015 and received a 10% trade discount
on the transaction.
b. In January 2016 the primary school however realised that they purchased the wrong paint
colour, which was part of their purchase on 7 December 2015, and therefore returned the
paint, with a cost price of R2 000 and normal selling price of R2 400, on 8 January 2016.
Instead of refunding the primary school, School Stuff (Pty) Ltd. provided them with a voucher
to use at a later stage when they want to purchase goods again.
c. Some of the returned paint (cost price of R500) was used to paint the wall in the store in
January 2016. This wall was covered in ugly stains and needed to be fixed.
3. The creditors’ reconciliation was done by the creditors' clerk on 31 January 2016 for School Stuff
(Pty) Ltd.’s account at Buy Bulk Books (Pty) Ltd. Buy Bulk Books (Pty) Ltd. is the only creditor of
School Stuff (Pty) Ltd. The accountant hasn’t however had any time to consider or record the
reconciling items. The items were as follows:
a. School Stuff (Pty) Ltd.’s payment on 27 January 2016 of their outstanding account (as on 31
October 2015), reflects in their own records, but not on Buy Bulk Books (Pty) Ltd.’s
statements on 29 January 2016.
b. The same statement of Buy Bulk Books (Pty) Ltd. (29 January 2016) indicates interest of
R425 on outstanding payments.
c. School Stuff (Pty) Ltd. incorrectly recorded an invoice from Buy Bulk Books (Pty) Ltd. as
R1 119 instead of R1 191.
4. School Stuff (Pty) Ltd. purchased a new desk from Furniture Galore Ltd. for R14 250 on 1 March
2015. Furniture Galore Ltd. is registered for VAT. The inexperienced accountant capitalised the
desk for R12 500 after he claimed input VAT on the transaction. He also already wrote off
depreciation on the capitalised amount, at 15% per annum on the straight line method, and
recorded it on 31 January 2016.
20
5. The general manager ordered an air conditioner from Light Air (Pty) Ltd. on 25 January 2016. The
accountant recorded the following journal entry:
Dr Office expenses (P/L) 12 000

Cr Creditors (SFP) 12 000
Marks
REQUIRED Sub-
Total
total
Journalise abovementioned transactions and corrections in the general journal
of School Stuff (Pty) Ltd. for the year ended 31 January 2016.
If no accounting correction is needed for the reconciling items in number 4,
briefly explain why not, and also where the transaction will be shown.
Journal narrations are required.
Closing journals and headings are not required.
Round off to the nearest Rand.
Show all calculations clearly. 17
Total 18
21
Your application for vacation work at MyChef was successful and you were asked to help with the
creditors’ account of their largest supplier, HealthShop. MyChef is a sole proprietorship that was
established a year ago. The entity trades in the supply of homemade meals to houses of clients.
MyChef is not registered for VAT purposes. MyChef makes use of the perpetual inventory system.
Unfortunately the owner does not have a sound accounting knowledge and therefore a good system is
not in place.
The owner provided the following documents to you:
Monthly statement from HealthShop Ltd. for the period ended 25 February 2017:

R R
2017
Jan. 26 Amount owing 4 765
27 Invoice HS323 495
30 Receipt HSK197 3 150
Feb. 01 Credit note HSKR47 276
03 Interest levied 42
25 Receipt HSK201 2 750
25 Amount owing 1 662
7 564 7 564
Extract from the cash payment journal of MyChef for the month ended 28 February 2017:
Date Details Cheque# Total Creditors Purchases Details
25/02 HealthShop 414 R2 750 R2 750
1. Apart from the following and other obvious errors, the monthly statement is correct in respect of
all other items. You can assume that the previous month’s reconciliation was done correctly and
correspond to the monthly statement of the previous month.
2. The information in the cash payment journal and cash receipt journal agree with the bank
statement of MyChef for the month ended 28 February 2017.
3. It is HealthShop’s policy to levy interest of 13% on a monthly basis on any outstanding balance
on the 26th of every month. HealthShop also grants a trade discount of 20% on all purchases
MyChef makes.
22
4. At further investigation of the original invoices, you noticed the following:

i. Invoice HS339 shows an amount owing of R603.
ii. Invoice HS362, to the amount of R883, was issued for goods MyChef purchased on 2
February 2017. The invoice inter alia includes an item of R288, the amount after a trade
discount of 10% was deducted.
iii. Invoice HS379 shows a telephonic order to the value of R395, which was not received by
MyChef.
iv. Invoice HS392, to the amount of R550, was issued by HealthShop for goods MyChef
purchased on 27 February 2017.
5. Debit note A712 (to the value of R125) was in respect of goods returned to HealthShop on 25
February 2017.
Marks
REQUIRED
Sub-
Total
total
(a) Prepare the creditors account for HealthShop in the general ledger of
MyChef for the month ended 28 February 2017.
Round off to the nearest Rand.
Show all calculations clearly.
No headings or dates are required. 7.5 7.5
(b) Compile the settlement statement on 28 February 2017 to reflect the

amount owing to HealthShop.
Headings are not required.
Round off to the nearest Rand. 6.5 6.5
(c) Briefly explain to the owner of MyChef why it is important to compile

monthly reconciliations and control accounts for the entity. 1 1
Total 15
23
QUESTION 12
Gigabyte is an enterprise that trades in computers and computer programmes. The following
accounting activities, inter alia took place during April 2007:
Apr 02 The owner gave one of his personal vehicles to the enterprise for use as a delivery vehicle.
The vehicle that cost R150 000 3 years ago, now has a value or R110 000.
03 Receive a cheque of R13 500 from Dell Ltd for settlement of their account.
04 Pay an amount of R18 810 to M Mecer, a creditor.
05 Pay R305 to Eskom for payment of electricity costs for March 2007.
07 Sell old equipment with a book value of R3 000 for R3 750 cash.
08 Buy packaging material of R2 250 from P Packaging on which 20% discount is allowed
(Purchase invoice, 175V).
11 Sell computer programmes of R2 700 on which 20% trade discount is allowed (Cash invoice,
C48/13). The cost price for this computer programmes is R1 350.
12 Buy computers of R130 800 on credit from Sahara PC’s on which discount of 10% is
allowed.
13 Sell 2 computers for R7 600 each (with a cost price of R3 800 each), to Eikestad Sound on
which 15% discount is allowed (Sales invoice, W13/89)
15 The owner took a computer and gave it to his son as a birthday present. The cost price of
the computer is R5 500 and the sales price R7 000.
16 Order a new delivery vehicle from Stellenbosch Motors for R180 000 to be delivered on
1 May 2007, and issue a cheque of R18 000 as a deposit.
17 Send a debit note with a value of R200 to P Packaging in respect of a summation error (too
much) on the invoice received on 8 April 2007.
19 The computer programmes sold on 11 April 2007 contained viruses and the purchaser
cancelled the transaction. Gigabyte made a cash refund to the purchaser.
20 Sell computers with a cost price of R7 500 for R15 000 cash, on which 20% trade discount is
allowed.
21 Send a credit note to Eikestad Sound for the value of R730 (cost price of goods are R429)
i.r.o. a previous sales transaction.
22 Buy computer programmes with a value of R8 000 from Exel Ltd, on which trade discount of
10% is allowed (Cash invoice, EXK54)
23 Send a damaged computer with a value of R13 400 (cost price after discount) back to
Sahara PC i.r.o. the purchases on 12 April 2007.
25 Receive R2 280, from a debtor W Word as payment of the amount owing by them.
24
26 Do an EFT to P Point, for payment of the amount of R6 600 owing to them.
28 Receive a direct deposit of R135 from Posbank i.r.o. interest for April 2007 on a fixed
deposit of R17 000 which was made during January 2005.
29 Pay the salary of N Smit for April 2007, via electronic transfer of R3 292, after statutory
deductions of R1 208 was made from his gross salary.
30 Receive a statement from Telkom in respect of telephone costs for April 2007, R520. No
payment has been made.
REQUIRED
Record the above accounting activities in date sequence in the general journal of Gigabyte for
April 2007. It is not necessary to provide journal narrations.
Assume a perpetual inventory system is used.
25
Bike (Pty) Ltd. (‘Bike’) is a company that sells bicycles and also service bicycles. The company’s year-
end is 30 November and they are not registered for VAT purposes. Bike uses a perpetual inventory
system.
The accountant asks your help with the following transactions:
1) The owner took a bicycle, with a cost price of R15 000, for himself in July 2015. The accountant
recorded this transaction correctly. The owner returned this bicycle to the shop on 2 November
2015 after which this same bicycle was donated to an orphanage on 29 November 2015. The two
transactions in November 2015 have not yet been recorded.
2) Bike issued a credit note for goods (with a cost price of R40 500) that were returned by All Things
Bicycle (Pty) Ltd. on 30 November 2015. The goods were originally sold for R48 600. This
transaction has not yet been recorded.
3) Bike incurred a loan at BigBank on 1 June 2015 for R300 000. The loan agreement stipulates that
interest is charged at a rate of 12% per year on the original capital amount, payable once every
six months (together with the capital repayment) in cash. Interest is capitalised to the loan account
and then from there reduced as soon as its paid. The capital repayment will occur over a period of
five years with two payments payable on 30 November and 31 May every year. The accountant
did not know how to record the debit leg of only the payment on 30 November 2015 and only
credited bank with R48 000.
4) Order a new display cabinet for R20 000 to be delivered on 4 January 2016, and issue a cheque
of R10 000 as a deposit. No entry has been made for this transaction.
5) Included in the bank charges general ledger account for the year ended 30 November 2015 is:
a. R7 250 for interest received as per the bank statement, and
b. R980 which was a debit order on the bank statement for Bike’s Telkom account.
6) The owner serviced his son and daughters’ bicycles at the shop. Servicing a bicycle amounts to
R600 per bicycle. This transaction has not been recorded.
7) Bike signed a contract on 31 December 2014 to obtain the services of One-Call-Away-Security

(Pty) Ltd. from 1 February 2015. An amount of R10 080 was paid to One-Call-Away-Security (Pty)
Ltd. on the day that the contract was signed, to secure their services for a 12-month period. The
accountant recorded the transaction by debiting security cost and crediting bank with the amount
that has been paid.
8) Receive a credit note from Dirt (Pty) Ltd. when three bicycles, with a combined cost price of
R75 000, was sent back. This transaction has not yet been recorded.
9) The debtors control account has a balance of R87 000 at year end (this balance was R77 200 on
30 November 2014). The accountant determines that R1 740 of debtors will not be recoverable.
Uncertainty also exist over a further 5% of the debtors control balance (áfter irrecoverable debtors
have been taken into account). The 2014 financial statements disclose debtors (included in
current asset in the statement of financial position) as R72 000. These transactions have not yet
been recorded.
26
Marks
REQUIRED Sub-
Total
total
Prepare the correcting and missing journal entries for the above-mentioned
transactions in the general journal of Bike (Pty) Ltd. for the year ended
30 November 2015.
Closing journal entries and journal narrations are not required.
Round amounts off to the nearest Rand.
Show all calculations clearly. 19
Total 20
27
Cloud Help is an entity that bottles and distributes water. The entity only has two creditors, namely
Bottles for Africa (where plastic bottles and caps are purchased), and Printing Genius (where labels
are purchased). Since there are only two creditors, Cloud Help does not make use of a creditor’s sub
ledger. Each creditor has a separate account in the general ledger.
Cloud Help is not registered as a VAT vendor and uses a perpetual inventory system.
Cloud Help and Bottles for Africa has the following agreement:
 Cloud Help receives 12% discount on all purchases.
 All purchases made before the 15th of each month, must be paid by Cloud Help by the 28th of that
month.
Bottles for Africa send the following statement to Cloud Help:
26/12/2015 Balance due 8 323

28/12/2015 Payment received – thank you 6 580
29/12/2015 Invoice 1058 2 090
05/01/2016 Invoice 1997 2 418
12/01/2016 Invoice 2725 3 135
15/01/2016 Invoice 3013 2 000
19/01/2016 Invoice 3864 2 835
25/01/2016 Balance due 21 711
24 546 24 546
1. You may assume that there were no adding errors on the monthly statement.
2. Upon closer investigation, a typing error was detected on invoice 1058, the total of the invoice
should be R2 070.
3. Invoice 2725 includes an amount of R1 125 at a discount of 10%.
4. Invoice 3013 was made out to Cloud Accounting.
5. On 14 January 2016 Cloud Help returned goods to Bottles for Africa.
The accountant became sick and could not finish the ledger account. Below is the ledger account for
Bottles for Africa, as prepared by the accountant, up to 26 January 2016:
Creditor: Bottles for Africa

01/01/16 Balance 3 813
14/01/16 Inventory (debit note) 1 800 05/01/16 Inventory (F1997) 2 481
12/01/16 Inventory (F2725) 3 135
19/01/16 Inventory (F3864) 2 835
26/01/16 Inventory (F4430) 1 412
28
The accountant tried to process the transactions below with Printing Genius from home, but had
trouble with the internet:
1. Payment of December 2015’s overdue account to the value of R1 610. The system for 2015 did
not want to open from home, and the accountant only processed the following journal entry:
Dr Consumables (P/L) 1 610

Cr Bank (SFP) 1 610
2. The invoice for January 2016 to the value of R1 980, was only received on 15 February 2016. No
entries have been made for this, as the payment will only be made on 1 March 2016.
Marks
REQUIRED
Sub-
Total
total
(i) Show the correcting journal entries with regards to the transactions with
Printing Genius in the general journal of Cloud Help for the month ending
31 January 2016.
Journal narrations and the heading to the general journal are not
required. 2 2
(ii) Prepare the supplementary ledger account, properly closed off, for
Bottles for Africa in the general ledger of Cloud Help for the month ending
31 January 2016. 7
(iii) Prepare the settlement statement for Bottles for Africa as at

31 January 2016. 5 5
Total 15
29
Fixa Ltd. (Fixa) is an entity that produces and sells cell phone accessories on the campus of
Stellenbosch University. Fixa also provides a cell phone repairs service. Fixa is not registered for VAT
and uses a perpetual inventory system. The financial year end is 31 December.
The accountant at Fixa only works part-time and is very inexperienced. The transactions below have
not been accounted for, except where indicated otherwise:
1. Buy 60 cell phone covers on credit at R16 per item from EStore Ltd., who grants a trade discount
of 10% on all purchases that Fixa makes. The goods were received on 3 January 2017.
2. Sell 13 covers with a normal selling price of R21 each and grant a cash discount of 5%. The
covers was part of the purchase made in number 1, on 3 January 2017. The accountant accounted
for the cost of the goods by debiting cost of sales with R234, and crediting inventory with R234.
The accountants` calculation reads: “13 units times R18 cost per unit”.
3. The security expense for December 2016 was in arrears (it was recorded correctly in December).
Pay the security expense in arrears of R8 500, as well as January 2017’s security expense on
31 January 2017. An annual escalation of 6% in the cost of security per month occurs at the end of
December.
4. Order 75 Bluetooth earpieces from OneSung Ltd. on 11 January 2017. Each earpiece carries a
cost of R82. No discount is applicable between Fixa and OneSung Ltd. On the same day purchase
110 chargers from OneSung Ltd. at R34 per unit and pay in cash.
5. Purchase 15 sets of earphones from EStore Ltd. at a normal cost price of R10 each on 13 January
2017. To record this transaction the accountant debited inventory with R150 and credited bank
with R150.
6. Fixa has a fixed deposit of R35 000. Interest is earned at 11% per annum. Interest for January
2017 has not been received yet.
7. Included in the interest income account you find the following:
a. R1 250 that relates to services rendered for cash.

b. R650 that was paid for Wifi on 21 January 2017.
8. The telephone account was received on 30 January 2017 and amounts to R465 for January 2017.
9. Fixa`s technical staff attended a new technologies conference in January 2017. A total of 3
members attended the conference at a cost of R1 750 per person, although one staff member was
only a temporary employee. The accountant accounted for the payment of conference fees as
follows:
DT Training Expense (P/L) 3 500

DT Wages (P/L) 1 750
CT Bank (SFP) 5 250
30
10. On 26 January 2017 one of the premium phone makers recalled one of its products due to it
chatching fire when charging. As a result, Fixa could not sell any of the chargers they acquired
from OneSung Ltd. on 11 January 2017. OneSung Ltd agreed to repay the full cost of the chargers
that Fixa acquired as well as an additional payment of R5 per charger as an apology, and Fixa
returned the charges.
Marks
REQUIRED Sub-
Total
total
Provide the correcting and missing journal entries in the general journal of
Fixa Ltd. for the month ending 31 January 2017.
Journal narrations and dates are not required.
Give a brief reason if no journal entry is needed.
Ignore VAT.
Closing journal entries are not required.
Round off to the nearest Rand. 17
Total 18
31
Ignore VAT.
You are the accountant of Health Ltd. (‘Health). The management approached you to assist them with
the bank account’s balance in the general ledger, which did not correspond with the bank statement
balance.
Below is an extract from the financial records of Health. You can assume that the information contains
no casting errors:
Bank reconciliation statement on 30 November 2021

Balance per bank statement 146 775
Less: Outstanding EFT nr: 98 3 510
99 1 575
100 1 710 (6 795)
139 980
Plus: Outstanding deposit 11 250
Balance per bank general ledger account 151 230
Extract from Cash receipts journal of Health Ltd. for December 2021:
Date Deposited (R) Sales Services Debtors

rendered
Dec 6 30 285 30 285
15 73 710 73 710
18 57 375 57 375
31 26 325 26 325
187 695 131 085 56 610
Extract from Cash payment journal of Health Ltd. for December 2021:
Date EFT nr: Paid (R) Inventory Creditors Salaries Lease

Dec 3 101 3 750 3 750
10 102 6 270 6 270
103 5 190 5 190
104 17 400 17 400
15 105 22 200 22 200
20 106 4 125 4 125
27 107 38 400 38 400
30 108 7 650 7 650
109 75 000 75 000
179 985 37 785 28 800 75 000 38 400
6. Apart from the following and other obvious errors, the bank statement is correct in respect of all
other items.
7. The totals of the Cash receipt journal and Cash payment journal have already been posted to the
Bank account in the general ledger.
32
8. The debit order on the bank statement on 15 December, was for short-term insurance taken out by
Health.
9. According to the duplicate deposit slip, R73 710 was deposited on 15 December. This relates to
sales made.
10. The deposits on 23 December and 31 December were direct deposits made by debtors.
11. EFT nr. 98 was for a payment to a creditor. The bank details the creditor provided, was however
incorrect and the payment did not go though.
12. EFT nr. 104 was paid to settle a creditor’s account of R14 700.
13. EFT nr. 107 was paid for monthly lease of premises of R38 400.
14. EFT nr. 108 was paid to settle a creditor’s account.
15. EFT nr. 109 for R75 000 was transferred to pay salaries.
PEACH BANK: Bank statement of Health Ltd. for December 2021
Date Transaction Dt Cr Balance

30 Nov Balance 146 775
1 Dec Deposit 11 250 158 025
EFT 99 1 575 156 450
3 Dec
EFT 100 1 710 154 740
Deposit 38 925 193 665
5 Dec
EFT 101 3 750 189 915
Error corrected 38 925 150 990
6 Dec
Deposit 30 285 120 705
EFT 104 7 400 113 305
12 Dec
EFT 102 6 270 107 035
Deposit 73 170 180 205
15 Dec EFT 103 5 190 175 015
Debit order 3 000 172 015
Deposit 57 375 229 390
18 Dec EFT 105 22 200 207 190
Bank charges 225 206 965
Deposit 24 750 231 715
23 Dec
EFT 106 4 125 227 590
27 Dec EFT 107 34 800 192 790
31 Dec EFT 109 5 700 187 090
33
Marks
REQUIRED
Sub
Total
total
Write a memorandum to the management of Health Ltd. in which you set out
the following:
 Compile a supplementary bank account in the general ledger for the
month ended 31 December 2021, which includes the corrections of any 8
errors.
 Prepare the bank reconciliation statement on 31 December 2021. 9
 Briefly explain the purpose of the bank reconciliation statement. 2
Dates and headings are not required.
Total 20
34
HAND IN ON 1 MARCH 2024
ChairCo is a sole proprietorship that manufactures and sells different types of chairs. ChairCo is not
registered as a VAT vendor and makes use of a perpetual inventory system.
The following balances appeared inter alia in the trial balance of ChairCo on 31 March 2021:
Account R
Inventory 159 900

Sales 3 973 497
Cost of sales 2 567 820
Interest received on fixed deposit 186 726
Insurance charges paid 47 010
Bad debt recovered 16 920
Profit with sale of equipment 9 900
Insurance cost paid in advance (1 April 2020) 4 680
Bank (positive) 235 440
Fixed deposit 2 100 000
Factory (carrying amount) 5 700 000
Debtors’ control 170 400
Allowance for credit losses (1 April 2020) 1 500
Creditors’ control 268 020
1. ChairCo’s accountant made the following errors and the relevant items were transferred to the
specific ledger accounts as follows:
 The accountant only recorded the interest earned on the fixed deposit when it was received.
The fixed deposit was made on 1 April 2016 for a period of fifteen years and earns interest at
a rate of 10.3% per year, payable monthly.
 The accountant only recorded the insurance charges when it was paid. ChairCo entered into
a contract with an insurance company on 1 February 2020. The contract is for a period of 2
years, in terms of which the monthly cost amounts to R4 680 per month for the first year and
increases to R4 890 per month for the next year.
2. The following errors in the general journal and subsidiary journals were detected while the trial
balance was reviewed on 30 April 2021:
 The total of the creditors’ column in the purchase journal was casted short with R51 and
transferred as such.
 A payment of R899 to a creditor, was recorded in the relevant journal as R988.
35
3. The following journal entry was made by the accountant in the general journal for the year ended
31 March 2021.
Dt Inventory (SFP) 14 000

Cr Bank (SFP) 14 000
(Paid a deposit on 10 March 2021 for chairs ordered which is
expected to be delivered on 5 April 2021)
4. The accountant debited donations (and credited inventory) with R6 000 when the owner took six
chairs to furnish his son’s apartment for his first year of study.
5. The following entries have not yet been recorded:
 Wood was purchased at R139 500 from Knysna Wood, a creditor of ChairCo, on 23 October
2020 and a 10% trade discount on the purchase must still be taken into account. The debt
was settled on 18 April 2021.
 Bad debts for the current year amounted to R24 300.
 A loan contract of R3 600 000 was incurred with Green Bank on 1 June 2020. The loan bears
interest of 9.5% per annum on the capital amount outstanding, payable monthly. All interest
payments are up to date.
 A client, Lekka-Lekka Bistro, returned chairs (normal selling price: R13 500; cost price
R8 850) on 31 December 2020. A 5% trade discount was granted to the client with the initial
sale. The cash was repaid on the day the chairs were returned. The original transaction was
correctly recorded.
 The management reconsiders allowance on credit losses annually as a percentage of the
outstanding debtors on year-end. The proposed percentage is 1% on 31 March 2021.
 The invoice for telephone costs amounted to R2 340 for March 2021 and was only received
and paid in April 2021.
6. An amount of R8 940 of the bad debt recovered, is debt that was written off as bad debts during
the current financial year, while the balance is amounts that had been written off as bad debts
during the previous financial year.
Marks
REQUIRED
Sub Total
total
(a) Journalise the abovementioned transactions and corrections the

general journal of ChairCo for the year ended 31 March 2021.
Dates, journal narrations and closing journal entries are not required. 22.5
Communication skills 1 23.5
(b) Indicate at which amount the debtors must be shown on the

statement of financial position on 31 March 2021.
A heading is not required. 1.5 1.5
TOTAL 25
36
HAND IN ON 6 MARCH 2024
HotFire Ltd. (HotFire) is an entity that trades in fire extinguishers and other fire prevention goods and
is situated in Stellenbosch. HotFire applies a perpetual inventory system. The newly qualified
bookkeeper of the entity (who did not attend his Financial Accounting classes in his first year of
studies) prepared the following in respect of March 2019:
Information relating to the Debtors cycle
Debtors control
Particulars Amount Particulars Amount
Opening balance b/f 74 120 Sales returns (SRJ) 5 010
Sales (SJ) 38 700 Interest levied on debtors 470
*Allowance for credit losses 4 700 Bank (CRJ) 28 410
Balance c/d 86 360

117 520 117 520
Balance b/f 86 360
*The allowance for credit losses account had a balance of R8 900 on 28 February 2019 and a balance
of R13 600 on 31 March 2019.
Cash receipt journal for the month ended 31 March 2019
Date Receipt Details Total Debtors Cash Other

March sales
05 101 B Louw 1 980 1 980
08 102 Cash 1 040 1 040
15 110 K Kotze 13 000 3 000
31 Cash 740 740
Interest
received
31 124 J Tsabalala 23 430 23 430
40 190 28 410 1 040 740
Sales journal for the month ended 31 March 2019
Date Invoice Details Total Sales* Discount

March allowed
10 147 N Venter 1 700 1 700
17 148 B Msego 24 000 24 500 (500)
20 149 K Kotze 13 000 13 000
38 700 39 200 (500)
*All amounts agree to invoices
37
Information relating to the Creditors cycle
HotFire has a creditor, EveryFire Ltd. (EveryFire), a supplier in Durban. Trade discount of 10% is
granted on all purchases from EveryFire.
You received the following monthly statement from EveryFire on 3 April 2019:

R R
2019
Feb. 27 Amount due 154 008
Mar. 04 Payment received 41 100
4 Invoice H123 18 740
4 Interest 1 789
8 Credit note T141 578
15 Invoice TP740 147 400
20 Invoice T150 19 740
22 Invoice T171 1 002
24 Debit note DN199 5 044
26 Invoice T199 84 111
27 Amount due 262 435
402 503 402 503
Apart from obvious errors and unless stated otherwise, the monthly statement is correct in respect of
all other items.
You received the following (correct) information:
1. An extract from the cash payment journal of HotFire:
Date Details Cheque # Total Creditors

04/03 EveryFire 101 R41 100 R41 100
09/03 NoFire 167 R16 120 R16 120
10/03 EveryFire 191 R14 080 R14 080
2. You received invoices, of which all purchases were on credit from EveryFire, with the following
information:
Date Details Invoice Notes

value
04/03 H123 R81 740
20/03 T149 R24 500 (a)
20/03 T150 R19 740
22/03 T171 R1 002 (b)
26/03 T199 R84 111
(a) Sirens were ordered on 20 March 2019 and were shipped free-on-board Durban on 27 March
2019. The sirens arrived at Cape Town harbour on 1 April 2019 and was transported to
HotFire’s premises in Stellenbosch on 2 April 2019.
(b) Hard hats of R1 002 was purchased and the invoice includes an amount of R370 on which a
7.5% trade discount was granted.
38
(c) Invoice TP740 is for fire cables purchased to the value of R147 400 on 15 March 2019 by
HotStuff Ltd.
3. Debit note DN199 was issued by EveryFire for goods returned to ColdFreeze Ltd.
4. EveryFire charges interest of 2% per month on any outstanding balances of 60 days and more at
the end of every month. Included in the balance outstanding on 28 February 2019 was an amount
of R58 800 that is outstanding 60 days and more.
1. A client who purchased eight smoke detectors on 28 March 2019 with a total invoice amount of R7
500 returned half of the goods to HotFire on 31 March 2019 but the return was not yet recorded.
2. Ignore VAT in this question.
Marks
REQUIRED
Sub-
Total
total
(a) Prepare the supplementary debtors control account, properly closed off, in
the general ledger of HotFire Ltd. for the month ended on 31 March 2019.
Dates are not required. 7
(b) Compile the settlement statement to EveryFire Ltd. as at 31 March 2019.

The heading to the statement and dates are not required. 12 12
Total 20
39

Accounting Cycle - Question Pack - 2024

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Accounting Cycle - Question Pack - 2024

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School of Accountancy |

Skool vir Rekeningkunde

Question 1 Accounting equation

Question 9 Correcting journals (2015)

Question 12 General journal 21+22 Feb

Question 15 Correcting journals (2017) 23 Feb

Question 17 Correcting journals (2022) 1 March

Capital 100 000

The following transactions occurred during the year

1. Purchase leather for R8 500 on credit from SR Leathers.

5. Pays the water and electricity bill of R8 100.

7. Return incorrectly coloured leather to the value of R950 to SR Leathers.

10. Stationary to the value of R800 is bought for cash.

16. Pay a creditor, SC Lawry, R1 520 and no discount is granted.

Fixed Assets + Debtors + Cash + Inventory + Expenses = Capital + Creditors + Income

Loan owing to ABC Bank 30 000

QUESTION 4 (2023) (18 marks; 32 minutes)

Description Debit Credit

Dt Bank (SFP) 13 475

Debtor Bad debt written off Bad debts recovered

REQUIRED Sub Total

QUESTION 5 (2023) (20 marks; 36 minutes)

You received the following information:

Bank reconciliation statement on 31 December 2022

Balance per bank statement 458 204

Cash receipts journal of Rainbow for January 2023:

Date Description Total VAT Sales Debtors

Cash payment journal of Rainbow for January 2023:

Date Description Total VAT Salaries and wages Creditors Other

Bank statement on 31 January 2023

Transaction History (2023-01-31 12:24:53)

RAINBOW COLOURS (PTY) LTD. ABSA

Statement for Period 2023-01-01 - 2023-01-31 Page 1 of 1

Date: Transaction Description Amount Balance

REQUIRED Sub Total

(c) With reference to the Conceptual Framework for Financial Reporting,

QUESTION 6 (2021) (10 marks; 18 minutes)

Cash receipt journal for the month ended 31 January 2020

Date Receipt Details Total VAT Debtors Cash sales Other

32 810 3 735 4 865 24 000 150

Sales journal for the month ended 31 January 2020

Date Invoice Details Total VAT Sales

3 687 347 3 385

1. Assume there are no adding errors in the information provided.

QUESTION 7 (2019) (16 marks; 29 minutes)

Date Details Debit Credit

You received the following (correct) information:

1. An extract from the cash payment journal of Laat-waai:

Date Details Cheque # Total Creditors Purchases

QUESTION 8 (2022) (15 marks; 27 minutes)

Date Details Debit Credit

3. Invoice 1004 shows no trade discount.

4. Debit note D23 is in respect of goods returned on this date.

(a) Compile a supplementary ledger account for Creamy Dreams in the

(b) Compile the settlement statement to Creamy Dreams as on

QUESTION 9 (2015) (13 marks; 23 minutes)

Dr Bank (SFP) 136 400

The following account appears in the trial balance:

Dr Bank (SFP) 4 000

Dr Deposit (SFP) 18 000

QUESTION 10 (2016) (18 marks; 32 minutes)

2. The following transactions have not been recorded:

Dr Office expenses (P/L) 12 000