FAC1501/1502 — Financial Accounting
Assignment 1 Solutions
UNISA
UNIVERSITY OF SOUTH AFRICA
Department of Financial Accounting
FAC1501 / FAC1502
FINANCIAL ACCOUNTING
ASSIGNMENT 1 — COMPLETE SOLUTIONS
Academic Year 2026
SECTION A: MULTIPLE CHOICE QUESTIONS (20 Marks)
Answer ALL questions. Each question carries 2 marks. Choose the BEST answer.
Question 1
Which accounting concept requires that expenses be matched with the revenues they helped generate
in the same accounting period?
A. The Going Concern concept
B. The Matching (Accrual) concept ✔
C. The Materiality concept
D. The Historical Cost concept
Correct Answer: B
Explanation: The matching concept states that expenses must be recognized in the same period as the
revenue they help generate, regardless of when cash is paid.
Question 2
A business purchased equipment for R50 000 cash. How would this transaction affect the accounting
equation?
A. Assets increase by R50 000; Liabilities increase by R50 000
B. Assets decrease by R50 000; Owner's equity decreases by R50 000
C. Assets remain unchanged (cash decreases; equipment increases by R50 000) ✔
D. Assets increase by R50 000; Owner's equity increases by R50 000
FAC1501/1502 Financial Accounting | Sample Assignment 1 | Page 1 of 8
, FAC1501/1502 — Financial Accounting
Assignment 1 Solutions
UNISA
Correct Answer: C
Explanation: Purchasing equipment for cash is an asset exchange transaction — one asset (cash)
decreases while another asset (equipment) increases by the same amount. Total assets remain the
same.
Question 3
According to the South African Companies Act, which financial statement shows a company's financial
position at a specific point in time?
A. Income Statement (Statement of Profit or Loss)
B. Statement of Changes in Equity
C. Statement of Financial Position (Balance Sheet) ✔
D. Statement of Cash Flows
Correct Answer: C
Explanation: The Statement of Financial Position (Balance Sheet) presents assets, liabilities, and equity
at a specific date — it is a snapshot, not a period report.
Questions 4 – 10: Summary Answer Table
(Full working shown in Section B where applicable)
Question Correct Option Concept/Topic Tested
Q4 B Double-entry bookkeeping — debits and credits
Q5 A Depreciation — straight-line method
Q6 D VAT and GST — input/output tax
Q7 C Bank reconciliation — outstanding cheques
Q8 B Inventory valuation — FIFO method
Q9 A Accrued expenses — adjusting entries
Q10 C Owner's equity — drawings vs dividends
[20 marks]
SECTION B: ACCOUNTING EQUATION (20 Marks)
Question 11 — Analysis of Transactions
Thembi started a sole proprietorship, Thembi's Trading, on 1 March 2025. Analyse the effect of each
transaction on the accounting equation.
FAC1501/1502 Financial Accounting | Sample Assignment 1 | Page 2 of 8
Assignment 1 Solutions
UNISA
UNIVERSITY OF SOUTH AFRICA
Department of Financial Accounting
FAC1501 / FAC1502
FINANCIAL ACCOUNTING
ASSIGNMENT 1 — COMPLETE SOLUTIONS
Academic Year 2026
SECTION A: MULTIPLE CHOICE QUESTIONS (20 Marks)
Answer ALL questions. Each question carries 2 marks. Choose the BEST answer.
Question 1
Which accounting concept requires that expenses be matched with the revenues they helped generate
in the same accounting period?
A. The Going Concern concept
B. The Matching (Accrual) concept ✔
C. The Materiality concept
D. The Historical Cost concept
Correct Answer: B
Explanation: The matching concept states that expenses must be recognized in the same period as the
revenue they help generate, regardless of when cash is paid.
Question 2
A business purchased equipment for R50 000 cash. How would this transaction affect the accounting
equation?
A. Assets increase by R50 000; Liabilities increase by R50 000
B. Assets decrease by R50 000; Owner's equity decreases by R50 000
C. Assets remain unchanged (cash decreases; equipment increases by R50 000) ✔
D. Assets increase by R50 000; Owner's equity increases by R50 000
FAC1501/1502 Financial Accounting | Sample Assignment 1 | Page 1 of 8
, FAC1501/1502 — Financial Accounting
Assignment 1 Solutions
UNISA
Correct Answer: C
Explanation: Purchasing equipment for cash is an asset exchange transaction — one asset (cash)
decreases while another asset (equipment) increases by the same amount. Total assets remain the
same.
Question 3
According to the South African Companies Act, which financial statement shows a company's financial
position at a specific point in time?
A. Income Statement (Statement of Profit or Loss)
B. Statement of Changes in Equity
C. Statement of Financial Position (Balance Sheet) ✔
D. Statement of Cash Flows
Correct Answer: C
Explanation: The Statement of Financial Position (Balance Sheet) presents assets, liabilities, and equity
at a specific date — it is a snapshot, not a period report.
Questions 4 – 10: Summary Answer Table
(Full working shown in Section B where applicable)
Question Correct Option Concept/Topic Tested
Q4 B Double-entry bookkeeping — debits and credits
Q5 A Depreciation — straight-line method
Q6 D VAT and GST — input/output tax
Q7 C Bank reconciliation — outstanding cheques
Q8 B Inventory valuation — FIFO method
Q9 A Accrued expenses — adjusting entries
Q10 C Owner's equity — drawings vs dividends
[20 marks]
SECTION B: ACCOUNTING EQUATION (20 Marks)
Question 11 — Analysis of Transactions
Thembi started a sole proprietorship, Thembi's Trading, on 1 March 2025. Analyse the effect of each
transaction on the accounting equation.
FAC1501/1502 Financial Accounting | Sample Assignment 1 | Page 2 of 8
