FAC1502 Accounting Revision Exercises with
Complete Solutions
QUESTION 1 – THE FINANCIAL POSITION
The following information relates to Peter Skhothane, a service entity:
PETER SKHOTHANE
TRIAL BALANCE AS AT 28 FEBRUARY 20.1
R
Capital ?
Drawings 35 950
Vehicles 60 500
Land and buildings 100 000
Plant and equipment 31 500
Inventory 9 500
Trade receivables control 19 855
Trade payables control 17 160
Bank overdraft 25 000
Petty cash 640
Mortgage secured by land and buildings 37 500
Use the accounting equation to calculate the capital amount.
QUESTION 2 – ASSETS
What is the difference between the following two transactions with regard to the
assets?
Vehicles bought for delivery purposes.
Vehicles bought for selling purposes.
,QUESTION 1 – THE FINANCIAL POSITION
Assets = Equity + Liabilities or
Equity = Assets - Liabilities
Capital – Drawings = (Vehicles + Land and buildings + Plant and equipment +
Inventory
+ Trade receivables control + Petty cash) – (Trade payables
control
+ Bank overdraft + Mortgage secured by land and
buildings)
Capital - R35 950 = R(60 500 + 100 000 + 31 500 + 9 500 + 19 855 + 640) –
R(17 160 +
25 000 + 37 500)
Capital - R35 950 = R221 995 – R79
660
Capital - R35 950 = R142 335
Capital – R(35 950 + 35 950) = R142 335 + R35 950
Capital = R178 285
QUESTION 2 – ASSETS
Vehicles bought for delivery purposes – non-current assets,
Vehicles. Vehicles bought for selling purposes – current assets,
Inventory.
, UESTION 1 - BASIC ACCOUNTING EQUATION & DOUBLE ENTRY SYSTEM
Toto Electrical is a service business. The business is not registered for VAT. Toto
Electrical uses the perpetual inventory system. The following transactions were
entered into by Toto Electrical during September 20.5:
September
4 Electrical repair service rendered on credit to L Logo – R1 200.
10 Advertising fees paid by credit card of the business – R350.
15 Electrical tools and equipment bought from Top Electrical for cash –
R8 500.
20 L Logo did a direct payment into the bank account of Toto
Electrical in part payment of their account – R700.
22 Electrical repair service rendered for cash – R4 050.
23 The owner took electric wires from the inventory of the business for
own use – R450.
28 Bought electric wires on credit from Wires Inc – R3 000.
30 Wages paid cash – R5 000.
REQUIRED
For each of the transactions listed above, indicate the effect of the transaction
on the accounting equation. Use a “+” sign to indicate an increase and a “–”
sign to indicate a decrease in the elements of the accounting equation. Also
indicate the General Ledger Accounts affected.
Where applicable assume that the bank balance is positive.
Example: Owner deposited R25 000 directly into the bank account of the business.
General ledger accounts
Date Assets = Equity + Liabilities
Dr Cr
Example + R25 000 + R25 000 + 0 Bank Capital
Complete Solutions
QUESTION 1 – THE FINANCIAL POSITION
The following information relates to Peter Skhothane, a service entity:
PETER SKHOTHANE
TRIAL BALANCE AS AT 28 FEBRUARY 20.1
R
Capital ?
Drawings 35 950
Vehicles 60 500
Land and buildings 100 000
Plant and equipment 31 500
Inventory 9 500
Trade receivables control 19 855
Trade payables control 17 160
Bank overdraft 25 000
Petty cash 640
Mortgage secured by land and buildings 37 500
Use the accounting equation to calculate the capital amount.
QUESTION 2 – ASSETS
What is the difference between the following two transactions with regard to the
assets?
Vehicles bought for delivery purposes.
Vehicles bought for selling purposes.
,QUESTION 1 – THE FINANCIAL POSITION
Assets = Equity + Liabilities or
Equity = Assets - Liabilities
Capital – Drawings = (Vehicles + Land and buildings + Plant and equipment +
Inventory
+ Trade receivables control + Petty cash) – (Trade payables
control
+ Bank overdraft + Mortgage secured by land and
buildings)
Capital - R35 950 = R(60 500 + 100 000 + 31 500 + 9 500 + 19 855 + 640) –
R(17 160 +
25 000 + 37 500)
Capital - R35 950 = R221 995 – R79
660
Capital - R35 950 = R142 335
Capital – R(35 950 + 35 950) = R142 335 + R35 950
Capital = R178 285
QUESTION 2 – ASSETS
Vehicles bought for delivery purposes – non-current assets,
Vehicles. Vehicles bought for selling purposes – current assets,
Inventory.
, UESTION 1 - BASIC ACCOUNTING EQUATION & DOUBLE ENTRY SYSTEM
Toto Electrical is a service business. The business is not registered for VAT. Toto
Electrical uses the perpetual inventory system. The following transactions were
entered into by Toto Electrical during September 20.5:
September
4 Electrical repair service rendered on credit to L Logo – R1 200.
10 Advertising fees paid by credit card of the business – R350.
15 Electrical tools and equipment bought from Top Electrical for cash –
R8 500.
20 L Logo did a direct payment into the bank account of Toto
Electrical in part payment of their account – R700.
22 Electrical repair service rendered for cash – R4 050.
23 The owner took electric wires from the inventory of the business for
own use – R450.
28 Bought electric wires on credit from Wires Inc – R3 000.
30 Wages paid cash – R5 000.
REQUIRED
For each of the transactions listed above, indicate the effect of the transaction
on the accounting equation. Use a “+” sign to indicate an increase and a “–”
sign to indicate a decrease in the elements of the accounting equation. Also
indicate the General Ledger Accounts affected.
Where applicable assume that the bank balance is positive.
Example: Owner deposited R25 000 directly into the bank account of the business.
General ledger accounts
Date Assets = Equity + Liabilities
Dr Cr
Example + R25 000 + R25 000 + 0 Bank Capital
