Western Cape Education Department

Curriculum (FET)

ACCOUNTING
REVISION 2023
(updated – cheques out)

Grade 12
Term 3 Activities

Term 3 Revision:
 Budgeting
 VAT
(Reconciliations and Fixed Assets were included in the Term 2 revision
material)

This revision program is designed to assist you in revising the critical content and skills covered during the 3 rd
term. The purpose is to prepare you to understand the key concepts and to provide you with an opportunity to
establish the required standard and the application of the knowledge necessary to succeed in the NCS
examination.
Term 1, 2 and 3 Revision material collectively cover ALL the topics in the Gr 12 curriculum. This material supplements
the Gr 12 Revision PACK that was issued in January 2020.
Revision Activities Accounting Term 3, 2023

SUCCESS IN ACCOUNTING
1. Know the formats or layouts of the: (for the topics in this book)
- Cash Budget
- Projected Statement of Comprehensive Income (Projected Income Statement)
- VAT Control account in the ledger
2. UNDERSTAND and KNOW:
- basic Accounting concepts, e.g. income, expenses, assets, liabilities, etc.
- rules for AOL (to help you in your thinking process)
- basic calculations, e.g. interest on loan/investment, depreciation, etc.
3. Work through as many past examination papers and other resources (e.g. Telematics material) as
you can. Do it over and over until you understand exactly what is required (also the questions in this guide)
4. Your success in the final exam will depend on how much EXTRA time you put into your preparation.
5. Work on your OWN and against TIME to practise managing your time in the exam room.
6. Work with a PLAN! A study timetable will help you to organise your time available for studying and
revision and ensure that you have covered all topics. (see the checklist on pg 4).
7. Take responsibility for your OWN LEARNING especially now that contact time with your teacher is
limited. You can only control YOUR time so spend it wisely. Your teacher will always support you
when you have a good work ethics and WANT to work hard.
8. Make sure you are always using your own calculator to know exactly how it works. It should not let you
down in a test or exam.
9. These topics are 'easy scoring' topics, so preparing these topics well, will ensure that you earn marks for
basic calculations (+, -, x, ÷) and applying Gr 11 knowledge and skills. REVISE these topics thoroughly.
10. The basic concepts and calculations (listed with each topic in this material) are explained in your textbook
and in the Gr 12 2020 Revision PACK (issued to schools and teachers in January 2020 covering all the
topics for the year). You may also refer to the lessons made available in Term 2 and 3 (links included)

Budgeting and VAT are PAPER 2 topics

Solutions:
https://wcedeportal.co.za/eresource/142126

2
Revision Activities Accounting Term 3, 2023

Test your knowledge / Pre- or Post Test

(Check your basic knowledge before and after completing the activities provided)

BUDGETING
Write down the correct option from those given in brackets. Answer
1. The net profit forecasted for the next three months will appear in the
(Cash Budget / Projected Income Statement)
2. The reason for preparing a Cash Budget is to (improve internal control /
estimate cash needed for the short term)
3. Rent income for the next three months is budgeted at R8 000 of which
R2 000 is in advance. The amount for rent income in the Projected
Income Statement for three months will be (R6 000 / R2 000 / R8 000)
4. Credit sales will be included in the cash budget as (cash from debtors /
payments to creditors)
5. (Bad debts / Cash from debtors) will appear in the Projected Income
Statement
(5)
Calculations for Budgeting
Provide the formulae for the following: (no need to show amounts):
Calculation Formulae
6. Net Cash surplus on a budget

7. Mark-up% achieved

Average Debtors collection

8.
period in days
Average Creditors Payment
9.
period in days
10. Acid test ratio
(5 x 2) (10)
VAT (Value Added Tax)
TRUE / FALSE (Rewrite the FALSE statements to be true)
Statement T/F Corrected statement
1. The Standard VAT rate in South
Africa in 2020 is 16%
2. All goods and services are subject to
the standard VAT rate.
3. A business with a turnover above
R1million has to register for VAT.
(3 x 2) 6
Complete the table below by ticking in the relevant column
VAT accounted for as Effect of VAT payable to SARS
Transaction VAT-output VAT-input Increase Decrease
4. Sales of goods
5. Purchase of fixed assets
6. Petty Cash payments
7. Bad debts recovered
4
[25]

3
Revision Activities Accounting Term 3, 2023

2023 TOPIC CHECKLIST

PAPER 1 
COMPANIES: Concepts
Unique ledger accounts
Concepts relating to GAAP & IFRS
Accounting equation
Trading account; Profit & loss a/c; Appropriation accounts
Statement of Comprehensive Income (Income Statement)
Statement of Financial Position (Balance Sheet) & Notes
Cash Flow Statement (with notes / calculations)
Analysis and interpretation of financial statements (incl. financial indicators for Paper 1)
Analysis and interpretation of published financial statements
Audit report
Ethical behaviour and corporate governance in financial governance
FIXED ASSETS: valuation for reporting purposes in the fin.statements, incl. additions, disposals &
depreciation
INVENTORY: inventory valuation for reporting purposes (FIFO, WA & Specific Identification)
Professional bodies & Code of Conduct
Financial indicators for PAPER 1
Gross profit on sales; Gross profit on cost of sales; Net profit on sales; Operating expenses on sales; Operating profit on
sales; Current ratio; Acid test ratio; Stock turnover rate; Stock holding period; Average debtors’ collection period; Average
creditors’ payment period; Solvency ratio; Debt equity ratio (gearing); Return on shareholders’ equity; Return on total
capital employed; Net asset value per share; Dividends per share; Earnings per share; Dividend pay-out rate
PAPER 2
RECONCILIATIONS: Analysis and interpretation of:
Bank reconciliation
Debtors' reconciliation (Age analysis, debtors list vs debtors control)
Creditors reconciliation (statement vs creditors list (CL); CL vs creditors control)
VALUE-ADDED TAX: CALCULATIONS for amount payable to / receivable from SARS
MANUFACTURING: Concepts
Production Cost Statement with notes
Abridged (Short-format) Income Statement with notes
Analysis and interpretation of cost information & unit costs
Break-even point and contribution per unit
BUDGETS: Analysis, interpretation and comparison of Projected Income Statement for sole traders /
companies
Analysis, interpretation and comparison of Cash Budget for sole traders or companies
INTERNAL CONTROL & AUDIT PROCESSES
Cash management
Fixed asset management (movement and use)
Debtors & Creditors (in terms of collection / payment and impact on liquidity)
Income & expenses (operational efficiency or profitability) can be combined with budgets)
Financial indicators for Paper 2
FIXED ASSETS: Interpretation and recording of movement of fixed assets, incl depreciation and asset disposal
INVENTORY: Perpetual and periodic systems; validation, valuation and calculation of inventories
Ethical behaviour in financial environment
Financial indicators for PAPER 2
Gross profit on cost of sales; Net profit on sales; Operating expenses on sales; Operating profit on sales; Stock turnover rate;
Stock holding period; Average debtors’ collection period; Average creditors’ payment period; BEP

4
Revision Activities Accounting Term 3, 2023

BUDGETING (Paper 2)
Know the following on Budgeting
cash budget | capital budget | long-term budget | medium-term budget | budget period | fixed
Basic stock base | budgeted vs actual figures | income vs cash receipts | expenses vs cash payments |
concepts cash surplus | cash shortfall | bank overdraft | projected statement of comprehensive income
(projected income statement)
cash from debtors | debtors collection schedule | payments to creditors | creditors payment
schedule | % mark up to determine cost of sales | interest on loans and/or fixed deposits | capital
Calculations
amount of a fixed deposit or loan based on the % interest p.a. | the purchase amount of a fixed asset
item based on the monthly depreciation

Exam 'Tips'
 You may not be required to prepare a full cash budget, but only missing figures to assess your knowledge of the
format of a budget as well as your arithmetic skills (+, - , x, ÷ )
 Only do the calculations required - do not 'question' an amount given. It is sometimes given for a purpose so that you
cannot 'guess' the calculation by manipulating given figures.
 It may be necessary to complete a debtors' collection or creditors' payment schedules - know these in order to do it in
rough IF necessary.
 NB: Purchases = Cost of Sales (cash or credit) where purchases amounts are not given.
 Any deficit (payments are more than receipts) must be indicated in brackets ( ) and must be subtracted from a
positive bank balance (added to a negative bank balance).
 One month’s closing balance is ALWAYS the opening balance of the next month.
 A Cash Budget for a sole trader OR a company may be required. The only difference is the items included:
Company budgets will plan for:
- Receipts: Issuing of new shares
- Payments: Buy back of shares; payout of dividends; directors fees; audit fees

Calculations
Mark-up % Sales - Cost of sales X 100 Answer must be in:
Cost of sales …%
% Increase/Decrease New amount - Old amount X 100
Old amount …%
Given: Interest on loan: Amount of interest x 100 x 12 months
% p.a. and amount % interest R ….
Required: Calculate Loan amount NB: Use the same calculation for a fixed deposit

Items NOT in Cash budget (Non-cash items)

Depreciation; Bad debts; Discount allowed; Discount received
Projected Income Statement
Format for Projected Income Statement is similar to an Income Statement, but is prepared per month.
Items NOT in Projected Income Statement
Purchase of assets; Purchase of stock; Receipts from debtors; Payments made to creditors; Drawings;
Capital contributions; Issued shares; Buy back of shares
Internal control
- Compare the actual with the budgeted amounts. Possible problems related to expenses or income can be
identified and recommendations made based on these comparisons.
- Decide whether the expense or income has been well controlled/managed or not.

5
Revision Activities Accounting Term 3, 2023

ACTIVITY 1 Company Budgeting, Debtors collection & Analysis

(35 marks; 25 minutes)
Asanda Ltd is registered with an authorised share capital of 750 000 ordinary shares.
REQUIRED:
1.1 Refer to Information A.
Calculate the cash expected to be collected from debtors during November 2019. (7)
Note that no discounts are allowed and provision for bad debts applies.
1.2 Refer to Information F.
(20)
Calculate the missing amounts denoted by (a) to (f) on the Cash Budget.
1.3 A young shareholder is of the opinion that the company should not spend money
on staff training - they should employ trained personnel.
1.3.1 Explain why Asanda Ltd spends money on staff training. Give ONE
(2)
reason.
1.3.2 What can Asanda Ltd do to ensure that trained staff remain in their
(2)
employment? Give ONE point.
1.4 Management was critised about their advertising policy not being effective.
(4)
Comment on this by explaining TWO points.

INFORMATION
A. Incomplete Debtors Collection Schedule for the three months in 2019:
Month Credit Sales September October November
July 106 000 12 720
August 104 500 47 025 12 540
September 93 000 37 200 41 850
October 102 000 40 800
November 111 600
TOTAL collection from debtors 95 190

B. Cash Sales is 40% of total sales.

C. Cost of Sales figures:

September October November
96 875 106 250 116 250

D. Cash purchases amounts to 20% of total purchases. Stock sold in a month is replaced in the same
month (the business maintains a base stock)
E. Creditors for stock purchases are paid in the month following the purchase (30 days) to take
advance of a 5% discount.

6
Revision Activities Accounting Term 3, 2023

F. Extract of the Cash Budget for the two months ending November 2019:
October November
Receipts
Cash Sales 68 000 74 400
(1.1)
Cash from Debtors 95 190
Rent income (a)
Interest on investment
Additional shares 513 000
Total Receipts
Payments
Cash Purchases of stock 21 250 (b)
Payment to creditors 73 625 (c)
Salaries & Wages 126 400 133 984
Repayment of loan - (d)
Interest on loan 2 000 1 750
Staff training programme - 18 000
Advertising 7 140 (e)
Ordinary Share dividends - (f)
Vehicle instalment 4 750 4 750
Sundry Expenses
Total Payments

G. The rent will increase by 7,5% on 1 November 2019.

H. Advertising is a fixed percentage of budgeted cash sales.

I. On 1 September 2019, 515 000 ordinary shares were in issue.

Additional shares will be issued on 1 October 2019 at R5,40 per share.
An interim dividend of 15 cent per share will be paid on 30 November 2019. The new shareholders
will qualify for interim dividends.
J. Part of the loan will be repaid on 1 November 2019. Interest on loan at 10% p.a. is payable on the
last day of each month. Interest on loan is not capitalised.

35

7
Revision Activities Accounting Term 3, 2023

Nov 2019, Q6
ACTIVITY 2: BUDGETING (40 marks; 25 minutes)
The financial year-end of Carpets Galore (Pty) Ltd is 31 October 2019. Thembi Tsomi is the only
shareholder and director.
2.1 Indicate amounts in the appropriate blocks for the Cash Budget and Projected
Income Statement for three months ending 31 January 2020.
 A printer costing R40 800 will be bought for cash on 30 November 2019.
Depreciation will be R680 per month.
 On 1 January 2020, R48 000 will be paid for a 12-month insurance contract.
 A loan of R100 000 will be received from Viva Bank on 31 December 2019. This
will be repaid in equal instalments over 20 months, commencing on 31 January
2020. Interest at 12% p.a. is paid monthly and is not capitalised. (11)

2.2 Refer to Information A: Debtors' Collection Schedule.

Thembi is preparing projections for the period commencing 1 November 2019.
Thembi does not grant discount for early payment.
Calculate the % of debtors:
 Who settle their accounts in the 2nd month following the credit sales transaction
month (3)
 Written off as bad debts at the end of the 3 rd month following the credit sales
transaction month (4)
2.3 Refer to Information B: Projected Income Statement for September and October.
2.3.1 Office workers are unhappy with the increase that Thembi gave them on
1 October 2019. Explain what she should say to them. Provide TWO points.
Quote figures or a calculation. (6)
2.3.2 Thembi pays her son, Jacob, to deliver and install carpets for customers.
She budgets R2,80 per metre for this. Comment on the control of this
expense. Quote figures or a calculation. (4)
2.3.3 A new competitor commenced trading in the area on 1 September 2019.

 Provide figures to illustrate the impact on sales in September. (2)

 Explain THREE decisions that Thembi took in October in response to the
new competitor. Quote figures or a calculation. (6)

2.3.4 Stock sold is replaced in the same month. 50% of the stock is bought on
credit. Creditors are paid in the month following the purchases month to
receive a 5% discount.

Calculate the actual amount payable to creditors in November 2019. (4)

8
Revision Activities Accounting Term 3, 2023

INFORMATION:
A. Debtors' Collection Schedule for the period ending 31 January 2020:

CREDIT COLLECTIONS
SALES NOV. 2019 DEC. 2019 JAN. 2020
August R80 000 R17 600
September 90 000 67 500 R19 800
October 100 000 75 000 R22 000
November 120 000 90 000
R94 800 R112 000

B. Information identified from the Projected Income Statement:

SEPTEMBER 2019 OCTOBER 2019

Projected Actual Projected Actual
Metres sold 5 000 m 3 800 m 5 000 m 6 000 m
Selling price per metre R100 R100 R100 R88
Cost price per metre R60 R60 R60 R60
Sales: cash R400 000 R310 000 R400 000 R132 000
: credit 90 000 70 000 100 000 396 000
Total sales 490 000 380 000 500 000 528 000
Cost of sales (300 000) (228 000) (300 000) (360 000)
Gross profit 190 000 152 000 200 000 168 000
Director's fees 50 000 50 000 50 000 40 000
Wages: Office workers 9 200 9 200 9 200 11 040
Salary: Salesperson 20 000 20 000 20 000 0
Commission: Salesperson 0 0 0 52 800
Advertising 5 000 5 000 5 000 5 000
Packing materials 2 500 1 900 2 500 2 550
Delivery and installation
14 000 14 000 14 000 16 800
of carpets
Staff training 15 000 0 15 000 40 000

40

9
Revision Activities Accounting Term 3, 2023

ACTIVITY 3: CASH BUDGET (Companies) (35 marks; 20

minutes)
You are provided with a partially completed Cash Budget of Madikwe Souvenirs Ltd.
REQUIRED:
3.1 Identify the following:
 Price paid per share for the re-purchase of the shares in October.
 Bank balance at the end of September. (3)
3.2 Calculate and comment on the percentage increase that the employees will get in
October. (6)
3.3 Calculate the figures represented by A – C. (16)
3.4 The owner is not happy with the rent. He plans to terminate the rent agreement on
1 October 2016 and purchase the property.
 According to the Cash Budget, how would he pay for the property?
 Apart from saving on rent expense, provide TWO advantages for buying the
property.
 Provide TWO disadvantages of buying the property. (10)

INFORMATION:
A. MADIKWE SOUVENIRS LTD.
CASH BUDGET FOR THE TWO MONTHS ENDING 31 OCTOBER 2016
CASH RECEIPTS SEPTEMBER OCTOBER
Cash sales A 1 681 120
Collections from debtors 787 500 B
Mortgage loan (1 October 2016) 500 000
Interest on fixed deposit 3 000
Fixed deposit and interest 366 000
TOTAL RECEIPTS 2 670 700 3 331 680
CASH PAYMENTS
Cash purchases of inventory 948 000 900 600
Payments to creditors 623 438 C
Wages and salaries 322 500 341 850
Director’s fees 400 000 600 000
Interest on loan 7 000
Interest on overdraft 5 400
Operating expenses 487 500 487 500
Rent expense 27 000
Land and building (cost price) 910 000
Rates on property 1 520
Advertising 110 600 168 112
Repurchase of shares - see Info B (i) 52 000
TOTAL PAYMENTS 2 919 038 4 074 382
Surplus (deficit) ? (742 702)
Bank balance at beginning of month 86 525 (161 813)
Bank balance at end of month ? ?

10
Revision Activities Accounting Term 3, 2023

B. Additional information:
(i) A shareholder owning 10 000 shares has financial difficulty. The directors agreed
to buy back his shares in October. The average issue price is R5,00.
(ii) The mark-up is 70%.
(iii) Sales:
Cash sales Credit sales
July R1 968 750 R843 750
August 1 837 500 787 500
September ? 805 800
October 1 681 120 ?
(iv) 30% of sales are on credit.
(v) Debtors are collected as follows:
- 70% in the month after the sales transaction.
- 28% in the second month after the sales transaction.
- 2% will be written off as bad.
(vi) Stock is replaced in the same month that it is sold.
(vii) 60% of inventory purchases are for cash.
(viii) Creditors are paid within 30 days (in the month after the purchase transaction in
order to receive 5% discount.
35

ACTIVITY 4: PROPLEM SOLVING (21 marks; 15 minutes)

Jabu runs a crafts store outside Stellenbosch near a wine farm which attracts may overseas tourists
and local visitors. She specialises in hand made African cultural curios and goods and also offers
traditional dance shows for an extra income.
REQUIRED:
Jabu has come to you for advice as she believes her budget is fair. Study the information and
budget below and answer the following questions:
4.1 Do you think the workers have a reason to be upset? Discuss, quoting TWO figures in
your explanation. (9)
4.2 Explain to Jabu what areas you think the bookkeeper could be concerned about.
Discuss TWO areas. Quote figures. (6)
4.3 Give Jabu advice on what she could do to improve the situation. Discuss TWO
measures. (6)
INFORMATION
A. Jabu employs 40 workers from the district who are involved in making the curios and goods on
site. Recently she has signed a contract to sell her goods in England and Germany and as a
result is expecting her turnover to increase by 50%.
Jabu has prepared a budget for the next year based on the last financial year's figures and the
expected increase in turnover.
Her workers are however unhappy with this budget and have threatened to stop working. Her
bookkeeper, Randy, has also indicated that the budget has not been drawn up on sound
financial decisions.

11
Revision Activities Accounting Term 3, 2023

B. JABU's CRAFT STORE

CASH BUDGET FOR THE YEAR ENDED 31 DECEMBER 2019
Actual figures Budgeted figures
CASH RECEIPTS (2018) (2019)
Cash Sales 1 000 000 700 000
Credit Sales 100 000 950 000
Loan from SFW 600 000
Fee income from cultural dancing shows 200 000 240 000
TOTAL RECEIPTS 1 300 000 2 490 000

CASH PAYMENTS
Wages for workers 480 000 518 400
Salary - manager 120 000 150 000
Drawings 288 000 576 000
Materials to produce curios/goods 140 000 224 000
Loan repayment 30 000
Interest on loan 90 000
Sundry expenses 185 000 222 000
TOTAL PAYMENTS 1213 000 1 810 000
Surplus (Deficit) 87 000 679 600
Bank - opening balance 25 000 112 000
Bank - closing balance 112 000 791 600

21

12
Revision Activities Accounting Term 3, 2023

VALUE ADDED TAX (Paper 2)

Know the following on VAT
compulsory vs voluntary registration | standard VAT rate (15%) | zero-rated items | exempted
Basic
items output VAT | input VAT | VAT control account | VAT inclusive amounts | VAT exclusive
concepts
amounts SARS
Calculations VAT payable / owing to SARS | VAT receivable from / owing by SARS

Calculations (All answers in Rand)

VAT payable to SARS Output VAT – Input VAT
VAT receivable from SARS Input VAT - Output VAT
VAT exclusive Total x 15 .
100
VAT inclusive Total x 15 .
115
Summary of VAT input / output transactions
Increases (+) / Decreases (-)
the VAT amount to/from SARS
Opening balance on VAT Control a/c (Output VAT): Credit +
OR Opening balance on VAT Control a/c (Input VAT): Debit -
Output VAT on...:
Sales (cash and credit) +
Services rendered to customers (Fee income) +
Drawings by owner (may also be shown as a decrease of Input VAT) +
Goods/Stock returned to creditors or suppliers (creditors allowances) +
Discount received (from creditors) +
Bad debts recovered +
Input VAT on...:
Purchases of good/stock/assets (cash and credit) -
Services expenses (e.g. water, electricity, etc) -
Goods/stock returned by debtors (debtors allowances) -
Discount allowed (to debtors) -
Bad debts written off -

ACTIVITY 1: VAT (21 marks; 15 minutes)

Alba Supplies deals in music equipment. They are a registered VAT Vendor. They use the periodic
inventory system. Goods bought and sold are subject to 15% VAT.
REQUIRED:
1.1 Calculate the weighted average value per sound system for the year ended
(5)
30 April 2019. (Round off to the nearest rand.)
1.2 Calculate the Cost of Sales for the financial year ended 30 April 2019. (5)
1.3 Calculate the Gross Profit for the year ended 30 April 2019. (4)
1.4 Calculate the VAT payable or receivable for the period March and April 2019.
(7)
Indicate if the VAT is receivable or payable on 30 April 2019.

13
Revision Activities Accounting Term 3, 2023

INFORMATION
A Stock balances:
Date Number of units Price
per unit Total
1 May 2018 27 R1 900 R51 300
30 April 2019 ? ? ?
B Stock purchases:
Date Number of units Price
per unit Total
1 Jun 2018 29 R2 000 R58 000
6 Sep 2018 25 R2 225 R55 625
14 Nov 2018 15 R2 350 R35 250
2 Jan 2019 21 R2 400 R50 400
17 April 2019 30 R2 460 R73 800
TOTAL 120 R273 075
 All recorded prices for purchases of stock are exclusive of 15% VAT.
 Due to effective security measures, there were no missing items.
C Sales:
 115 sound systems were sold during the year.
 Total Sales for the year amounted to R334 236 (including VAT)

D VAT information for March and April 2019:

 On 1 March 2019 the VAT-Control account had a credit balance of R5 800.
 Sales for March and April 2019 were R64 400 (including VAT).
 Purchases of stock during April is exclusive of VAT.
 VAT on other purchases for March and April for which they can claim back VAT,
amounts to R2 100.
21

ACTIVITY 2: VAT (12 marks; 15 minutes)

Mandla Traders is a VAT-registered business. All items are subject to VAT at 15%. The information
relates to the VAT period ended 30 June 2019.
REQUIRED:
2.1 Calculate the amount of VAT either receivable from, or payable to SARS on
30 June 2019. Indicate whether this amount is receivable or payable. (10)
2.2 The owner wants to change the VAT amount on bad debts from R900 to R6 000.
Give ONE reason why you would disagree with him. (2)
INFORMATION:
R
A Balance owing by SARS on 1 June 2019 33 600
B Purchase of trading stock (VAT exclusive) 1 625 000
C Cash and credit sales (VAT inclusive) 2 415 000
D VAT on discount received from suppliers 1 200
E VAT on bad debts written-off 900

14
Revision Activities Accounting Term 3, 2023

15
Revision Activities Accounting Term 3, 2023

ACTIVITY 3: VAT and Analysis (16 marks; 12 minutes)

The information relates to Nkosi Stores for the VAT-period ended 30 June 2020 (two months).
The VAT rate of 15% applies.
REQUIRED:
3.1 Taking into account the errors and omissions, calculate the amount that the
business must pay or receive in respect of VAT. Indicate whether the amount is
receivable or payable. (12)
3.2 The internal auditor discovered that Nkosi does not pay the full amount due for
VAT, but uses the money to pay for business expenses. What advice would you
give to Nkosi regarding this practice? Provide TWO points. (4)

INFORMATION:
A Amount due as per VAT Control account on 1 June 2020, R7 665.

B VAT amounts taken from the journals:

VAT on goods sold (cash and credit) R37 500
VAT on trading stock purchased 21 000
VAT on returns from debtors 750
VAT on goods taken by the owner for personal use 480
VAT on debtors’ accounts written off 915
C Errors and omissions noted:
 Sales (VAT inclusive) during this period were R270 250. The VAT amount
shown above were calculated incorrectly.
 The VAT on discounts received from creditors amounting to R870 was not
recorded in the books of the business.
 An invoice for R1 800 (VAT exclusive) for stationery purchased on credit was
not recorded in the respective journal.

16