FAC1502 Assessment 1 - Practice Questions and Solutions

FAC1502 Assessment 1 - Practice Questions and Solutions


Question 1
Which of the following statement/s are incorrect?
a. Trade payables and long-term loans are examples of debts that an
entity can have
b. Assets may be exchanged for other assets
c. The conversion of an obligation into equity is way in which an
obligation can be settled
d. A vehicle financed by a bank is an example of an asset, which is
controlled by entity but not owned by the entity until the final
instalment is paid
e. Debentures and the current portion of a long-term borrowing are
examples of non-current liabilities


A. d and e
B. c, and e
C. e
D. c
E. a, b, c and d



Question 2
An entity has the following balances : Bank: R3 000; Vehicles: R12 000;
Trade payables: R2 000
The equity of the entity according to the basic accounting equation is
A. R13 000
B. R15 000
C. R17 000
D. R2 000
E. R3 000




Question 3
Indicate whether the following statement is true or false
The elements of the financial statements that measure the financial
performance are income and expense
A. True
B. False

, Question 4
Use the following information to calculate the missing figure by using the
Basic Accounting Equation
R

Bank 32 000
Vehicles 40 000
Equipment ?
Capital 128 000


A. R72 000
B. R56 000
C. R136 000
D. R120 000
E. R200 000




Question 5
The following rules are applicable to equity in the general ledger:
A. GENERAL LEDGER
Dr Equity. Cr
Balance
+


B. GENERAL LEDGER

Dr.Equity. Cr
Balance
+ +


C. GENERAL LEDGER
Dr Equity. Cr
Balance
+


D. GENERAL LEDGER
Dr Equity. Cr