ACCOUNTING

GRADE 7 – EXAM

INSTRUCTIONS

 Answer all questions.

 Use a black or dark blue pen. You may use an HB pencil for any diagrams,
tables or graphs.
 Write your answer to each question in the space provided.

INFORMATION

 The total mark for this paper is 70.

 The number of marks for each question or part is shown in brackets []

1. Define or provide an understandable explanation for each of the given words

a) Accounting

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b) Trade receivable

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c) The Three Column Cash book

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d) Debit note

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e) Cheque

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GRADE 7 – EXAM

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2. Choose the correct option A, B, C or D

2.1. Which task is not performed by an accountant?

A. monitoring the progress of the business B. preparing financial statement

C. reporting on the trading results D. writing up a three column cash book

2.2. What is the accounting equation?

A. assets = capital – liabilities B. capital = assets + liabilities

C. capital = assets – liabilities D. liabilities = assets + capital

2.3. The balance of which account may appear on the debit side of a trial balance?
A. Carriage inwards B. Purchases returns

C. Rent receivable D. Sales

2.4. Which account will appear in the sales ledger?

A. Dan, a credit supplier B. Gill, a credit customer

C. Sales D. Sales return

2.5. The following account appeared in Anna’s ledger:

a) Which statement is correct?

A. On 5 January Jodie sold goods, $500, to Anna.
B. On 7 January Anna returned goods, $20, to Jodie.
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GRADE 7 – EXAM

C. On 29 January Anna paid Jodie $300

D. On 31 January Jodie owed Anna $180

2.6. What is the purpose of a trial balance?

A. to calculate the capital of the business

B. to prove the arithmetical accuracy of the double entry

C. to summarise the assets and liabilities

D. to locate and correct errors in the ledger accounts

2.7. Which transaction will be entered in both the purchases ledger and the
nominal (general) ledger?

A. Cash paid for goods for resale B. purchase of office furniture by cheque

C. returns of goods by a credit customer D. returns of goods to a credit supplier

2.8. Kate sells goods on credit to Kylie. Kate does not allow cash discount. On 1
May Kylie owed Kate $350. The following documents were exchanged in May:

May $

4 invoice 421

8 debit note 112

10 credit note 92

19 cheque 350

26 invoice 171

a) How much did Kylie pay on 31 May to settle her account?

A. $148 B. $150 C. $498 D. $610

2.9. Zodwa sold goods on credit to Elspeth.

a) Which document did Elspeth issue when she returned these goods?
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GRADE 7 – EXAM

A. credit note B. debit note C. invoice D. statement

2.10. Which one is not an asset?

A. Trade receivable B. trade Payable

C. A huge amount of stock D. fixtures and equipment

2.11. The only liability is…

A. Trade receivable B. trade Payable

C. inventories D. premises

3. Answer the following questions with clarity and objectivity

3.1. What is the difference between trade discount and cash discount?

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3.2. Suggest 1 reason and explain why a supplier may allow a trade discount?

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3.3. What is meant by the term balance?

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GRADE 7 – EXAM

3.4. Suggest two why it may be necessary to prepare a trial balance

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4. On 4 February Ann purchased 24 boxes of oil that that was charged $25 000,
on credit from Maria. The terms of trade were:

15% trade discount on orders

1
2 % cash discount if account paid by the end of the month.
2

a) Calculate the unit price showing your working?

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b) Which amount did Ann enter in her accounts on 4 February? Show your
working

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c) Which document was prepared when this transaction took place?

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d) Who issued the document?

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GRADE 7 – EXAM

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e) What is the difference between sales return and purchases return?

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f) List 1 reasons why it may be necessary to return goods to a supplier

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5. Complete the missing figures (from I to V) on the given document [5]

Trade Supplies
345 London Road
Hightown
Dinesh
110 Long Road
Northwood 31 October 20–1
Date Details Debit Credit Balance
20-1 $ $ $
Oct
1 Balance 909 I. _________
4 Sales 1161 II. ________
11 Sales Return 99 III. _______
14 Cheque 911 IV. _______
21 Discount 50 V. ________

a) Name this document

 ACCOUNTING
GRADE 7 – EXAM

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b) Suggest one reason for the issue of the document.

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c) State the amount owing by Dinesh on 31 October 20–1.

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d) Name the document sent by Trade Supplies to Dinesh on 4 October and 11

October.

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e) Calculate the percentage rate of discount allowed on 27 October showing

your work

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6. Mamata is a trader and she provided the following information for the year
ending 20-6:

December

1- Mamata started business with a capital of $20 000 which she

transferred into a business bank account
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GRADE 7 – EXAM

2 - Paid rent of premises, $650, by standing order

5 - Purchased goods, $9 500, on credit from Lodi Road Traders

9 - Withdrew $150 from the bank account for office use

14 Paid advertising expenses, $90, in cash

18 - Sold goods, $4 120, on credit to Central Dealers

23 Paid Lodi Road Traders’ account by cheque

26 - Bought motor vehicle, $5 760, and paid by credit transfer

28 Mamata took $3 000 from the business bank account for personal
use
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GRADE 7 – EXAM

a) Enter these transactions in the books of Mamata. [5]

b) Balance the cash book on 31 December. [3]

Mamata
Cash Book
Dr Cr
Date Details Folio Bank Date Details Folio Bank
$ 20-6 $
20-6 20-6
Dec Dec

On the details column you CANNOT write verbs like received, invested, rented and paid. Write nouns as you learnt
 ACCOUNTING
GRADE 7 – EXAM

7. Prepare the trial balance at 31 December 20–6. [8]

Mamata
Trial balance at ________________________

Debit Credit
$ $