FAC1502 Assignment 2 Financial Accounting Concepts Exam
Questions and Answers
Dashboard Calendar
Dashboard / My courses / FAC1502-23-S1 / Welcome Message / Assessment 2
Question 1
Not yet
answered The financial manager of Steven Traders hired an inexperienced bookkeeper, on 1 February 20.19, who was immediately required to assist with the creation of an allowance for credit
Marked out losses (current financial year ends on 28 February 20.19). The auditors of Steven Traders raised an audit finding in the previous financial period, stating that trade and other receivables were overstated
of 2.00 since no allowances for credit losses has been created although there was evidence that some of the debtors did not pay their accounts in the previous financial
periods.
The financial manager wants to avoid this audit finding in the current financial period. The financial manager requested the bookkeeper to write a memo and indicate which accounts will be affected
when the allowance for credit losses is created? The bookkeeper has written the following statement down and requires you to confirm whether the statement is true or false when the allowance for
credit losses is created.
Trade receivables control account balance in the general ledger will only be reduced when the actual credit losses are verified, by either;
debiting the allowance for credit losses and crediting trade receivable/control account, or by
Select one:
debiting the credit losses and crediting trade receivable/control account (while the allowance for credit losses remain unchanged).
True
False
Question 2
Not yet
answered
Ms. T Tlale a debtor of JJ Stores owed R5 004 to JJ Stores which has been overdue for the past 7 months. Interest at 15% per annum must be charged on overdue accounts. The interest has not
Marked out been recorded in the books of JJ Stores.
of 4.00
What will the correct ledger entries of JJ Stores to record the interest on the overdue account of Ms. T Tlale be?
Instructions:
Drag the correct answer into the correct space. An
option can be used more than once.
Ms. T Tlale/trade receivables 437.85 Interest income 437.85
control
Interest expenses Ms. T Tlale/trade receivables Interest income
control
62.55 750.60417
Question 3
Not yet
answered Indicate whether the following statement is true or false:
Marked out Select
At one:of the financial year after the year-end adjustments are recorded in the general ledger accounts, the accountant will then prepare a pre-adjustment trial balance.
the end
of 1.00
True
False
,Question 4
Not yet
answered
On 1 April 20.17 Trak Traders took up an insurance contract with Blue Sky Insurers for 24 months. The insurance policy was effective with immediate effect and
Marked out of stipulated that all premiums for a year (a period of 12 months starts from 1 April each year) are due by 1 April each year.
1.00 Dashboard Calendar
An extract from the list of balances of Trak Traders at year-end, reflected the
following balances: 28 February 20.19 28 February 20.18
Dashboard / My courses / FAC1502-23-S1 / Welcome Message / Assessment 2
Premiums paid during the year ended *R17 520 *R19
020
payments for 12 months*payments for 12 months
The amount for insurance premiums and the short-term adjustment to be disclosed in the statement of financial position of Trak Traders as at 28 February 20.19 will be …
Instructions:
Use a full stop to indicate any decimals (eg: 1000.01)
Round off to the nearest Rand (eg: 50.56 is 51)
Only show the amount, do not show the R (eg: 12141.72)
Answer: 19105.00
Question 5
Not yet
answered Please choose the correct option for the given scenario.
Marked out
of 4.00
On comparison of the journals with the bank statement it was noted that cash sales
for 30th of June 20.22 was banked but it did not reflect on the bank statement. The a credit entry as deposits not yet credited in the bank reconciliation
bookkeeper will record statement.
…
On comparison of the journals with the bank statement it was noted that bank
charges for R350 reflected in the debit column of the bank statement only. The bank charges in the cash payments journal.
bookkeeper will record the R350 as …
Cash withdrawn to restore the petty cash float will … decrease the bank account.
A favourable general ledger bank balance will be recorded on … the debit side of the bank reconciliation statement.
Question 6
Not yet
answered Fatima, the owner of Fatima Traders keeps incomplete records of the business transactions. The following information is available.
Marked out
of 1.00
FATIMA TRADERS
Balances as at 28 February 20.1:
20.0 20.1
R R
Vehicles at cost………………………………………………… 28 800 28 800
Furniture and equipment at 26 500 26 500
cost………………………….......
Inventory…………………………………………….................. 21 770 ?
Trade receivables control……..……………………………..... 8 870 12 350
Bank (favourable)…………………………………………........ 25 000 20 000
Long-term borrowings……….……………………………........ 30 000 15 000
Trade payables control………..……………………………….. 9 500 12 700
Accrued expenses……………………..…………………......... 3 400 2 300
Prepaid expenses………………………………………………. 360 365
Additional information:
A physical inventory count revealed that the following was on hand on 28 February 20.1:
R
Inventory 28 669
Stationery 625
Packing materials 150
The total amount of trading inventory for Fatima Traders as at 28 February 20.1 will be?
NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)
Answer: 28669.00
,Question 7
Not yet
answered Indicate whether the following statement is true or false regarding the periodic
Marked out inventory system. The cost of sales is determined via entries in the trading account of
of 1.00
the business entity.
Dashboard Calendar
Dashboard / My courses / FAC1502-23-S1 / Welcome Message / Assessment 2
Select one: True
False
Question 8
Not yet
answered
On 1 May 20.18 Venus Traders entered into a new two-year advertising agreement with Tino Advertising Agency. The advertising agreement was effective with
Marked out immediate effect
of 1.00 and stipulated that Venus Traders would pay R2 430 per month to Tino Advertising Agency for advertising services that would be provided by Tino Advertising
Agency on a monthly basis. Tino Advertising Agency has performed all the necessary advertising services that was required from them since the effective date
of the advertising agreement for the current financial period (the current financial period ends on 28 February 20.19).
The pre-adjustment trial balance for the year ended 28 February 20.19 reflected advertising expenses for an amount of R26 720 as well as accrued
advertising expenses of R5 170 on 1 March 20.18 (the beginning of the current financial period). On 20 April 20.18 Venus Traders paid the advertising
expenses that was outstanding from the previous financial period, but the bookkeeper completely forgot to record this transaction in the accounting books of
Venus Traders. The advertising expenses not applicable to the current financial period must still be provided for.
The correct amount to be disclosed for advertising expenses in the statement of profit or loss and other comprehensive income for the year ended 28
February 20.19 is ...
Instructions:
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Round off to the nearest Rand (eg: 50.56 is 51)
3. Only show the amount, do not show the R (eg: 12141.72)
Answer: 21870.00
Question 9
Not yet
answered On 2 January 20.08, a tenant of XYZ Dealers, did an electronic funds transfer of R200 000 into XYZ Dealers business bank account. The monthly rental is R14
Marked out 500 per month. The financial year-end is 31 December 20.8.
of 4.00
What will the closing transfer entry for the transaction on 31 December 20.8 be?
Instructions:
Drag the correct answer into the correct
space. An option can be used more than
once.
Rental income 26 000
Income received in 26 000
advance
Rental income Income received in Accrued income Profit or loss account
advance
200 000 174 000 14 500
, Question 10
Not yet
answered You are given the following extract of the post-adjustment trial balance for Arch Traders for the financial year ended 30 June 20.2.
of
Marked
7.00 out ARCH TRADERS
Dashboard CalendarAS AT 30 JUNE 20.2
BALANCES
Debit Credit
Dashboard / My courses / FAC1502-23-S1 / Welcome Message / Assessment
R 2 R
Sales……………………………………………….. 1 200 000
Cost of sales..…………………………………..... 560 000
Wages and salaries... 112 000
………………………….....
Credit losses………………………………………. 3 000
Water and 12 000
electricity………………………………
Settlement discount 2 500
granted……………………..
Settlement discount 3 500
received…………………....
Telephone expenses…………………………….. 15 000
Depreciation………………………………………. 55 000
Bank charges.……………………………………. 2 000
Rental income.…………………………………... 168 000
Additional information
(a) The bookkeeper of Arch Traders found an invoice for R5 000 which was not entered in the sales journal.
(b) Received an invoice from Quick Couriers for an amount of R1 700 for carriage on purchases that needs to be paid. No entries were made in the books of
Arch Traders regarding this transaction.
(c) The rental income was received for 15 months.
The correct disclosure of the income elements in the statement of profit or loss and other comprehensive income for the year ended 30 June 20.2 will be ...
Instructions:
Drag the correct answer into the correct
space. An option can be used more than
once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the accounts column and a 0 in the amounts column.
Sales 1 200 000
Settlement discount granted 3 500
Revenue 1 202
500
Other income 134 400
Rental income 134 400
Credit losses recovered 0
Gross income 1 368 000
Credit losses Net profit Settlement discount granted Gross income Rental income Settlement discount received
Credit losses recovered Other income Revenue N/A Sales Cost of sales
Gross profit
644 300 1 191 500 0 (555 800) (560 000) (561 200) 1 202 500 137 900 134 400 (558 800) 3 000 1 202 500 778 700 3 500
137 400
168 000 1 368 000 1 200 000 645 000 808 000 (558 200) 1 205 000 640 000 1 195 000
Question 11
Not yet
answered Indicate whether the following statement is true or false:
Marked out Prepaid expenses should be included in the statement of profit or loss and other comprehensive income.
of 1.00
Select one:
True
False
Questions and Answers
Dashboard Calendar
Dashboard / My courses / FAC1502-23-S1 / Welcome Message / Assessment 2
Question 1
Not yet
answered The financial manager of Steven Traders hired an inexperienced bookkeeper, on 1 February 20.19, who was immediately required to assist with the creation of an allowance for credit
Marked out losses (current financial year ends on 28 February 20.19). The auditors of Steven Traders raised an audit finding in the previous financial period, stating that trade and other receivables were overstated
of 2.00 since no allowances for credit losses has been created although there was evidence that some of the debtors did not pay their accounts in the previous financial
periods.
The financial manager wants to avoid this audit finding in the current financial period. The financial manager requested the bookkeeper to write a memo and indicate which accounts will be affected
when the allowance for credit losses is created? The bookkeeper has written the following statement down and requires you to confirm whether the statement is true or false when the allowance for
credit losses is created.
Trade receivables control account balance in the general ledger will only be reduced when the actual credit losses are verified, by either;
debiting the allowance for credit losses and crediting trade receivable/control account, or by
Select one:
debiting the credit losses and crediting trade receivable/control account (while the allowance for credit losses remain unchanged).
True
False
Question 2
Not yet
answered
Ms. T Tlale a debtor of JJ Stores owed R5 004 to JJ Stores which has been overdue for the past 7 months. Interest at 15% per annum must be charged on overdue accounts. The interest has not
Marked out been recorded in the books of JJ Stores.
of 4.00
What will the correct ledger entries of JJ Stores to record the interest on the overdue account of Ms. T Tlale be?
Instructions:
Drag the correct answer into the correct space. An
option can be used more than once.
Ms. T Tlale/trade receivables 437.85 Interest income 437.85
control
Interest expenses Ms. T Tlale/trade receivables Interest income
control
62.55 750.60417
Question 3
Not yet
answered Indicate whether the following statement is true or false:
Marked out Select
At one:of the financial year after the year-end adjustments are recorded in the general ledger accounts, the accountant will then prepare a pre-adjustment trial balance.
the end
of 1.00
True
False
,Question 4
Not yet
answered
On 1 April 20.17 Trak Traders took up an insurance contract with Blue Sky Insurers for 24 months. The insurance policy was effective with immediate effect and
Marked out of stipulated that all premiums for a year (a period of 12 months starts from 1 April each year) are due by 1 April each year.
1.00 Dashboard Calendar
An extract from the list of balances of Trak Traders at year-end, reflected the
following balances: 28 February 20.19 28 February 20.18
Dashboard / My courses / FAC1502-23-S1 / Welcome Message / Assessment 2
Premiums paid during the year ended *R17 520 *R19
020
payments for 12 months*payments for 12 months
The amount for insurance premiums and the short-term adjustment to be disclosed in the statement of financial position of Trak Traders as at 28 February 20.19 will be …
Instructions:
Use a full stop to indicate any decimals (eg: 1000.01)
Round off to the nearest Rand (eg: 50.56 is 51)
Only show the amount, do not show the R (eg: 12141.72)
Answer: 19105.00
Question 5
Not yet
answered Please choose the correct option for the given scenario.
Marked out
of 4.00
On comparison of the journals with the bank statement it was noted that cash sales
for 30th of June 20.22 was banked but it did not reflect on the bank statement. The a credit entry as deposits not yet credited in the bank reconciliation
bookkeeper will record statement.
…
On comparison of the journals with the bank statement it was noted that bank
charges for R350 reflected in the debit column of the bank statement only. The bank charges in the cash payments journal.
bookkeeper will record the R350 as …
Cash withdrawn to restore the petty cash float will … decrease the bank account.
A favourable general ledger bank balance will be recorded on … the debit side of the bank reconciliation statement.
Question 6
Not yet
answered Fatima, the owner of Fatima Traders keeps incomplete records of the business transactions. The following information is available.
Marked out
of 1.00
FATIMA TRADERS
Balances as at 28 February 20.1:
20.0 20.1
R R
Vehicles at cost………………………………………………… 28 800 28 800
Furniture and equipment at 26 500 26 500
cost………………………….......
Inventory…………………………………………….................. 21 770 ?
Trade receivables control……..……………………………..... 8 870 12 350
Bank (favourable)…………………………………………........ 25 000 20 000
Long-term borrowings……….……………………………........ 30 000 15 000
Trade payables control………..……………………………….. 9 500 12 700
Accrued expenses……………………..…………………......... 3 400 2 300
Prepaid expenses………………………………………………. 360 365
Additional information:
A physical inventory count revealed that the following was on hand on 28 February 20.1:
R
Inventory 28 669
Stationery 625
Packing materials 150
The total amount of trading inventory for Fatima Traders as at 28 February 20.1 will be?
NB: Instructions
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Only show the amount, do not show the R (eg: 12141.72)
Answer: 28669.00
,Question 7
Not yet
answered Indicate whether the following statement is true or false regarding the periodic
Marked out inventory system. The cost of sales is determined via entries in the trading account of
of 1.00
the business entity.
Dashboard Calendar
Dashboard / My courses / FAC1502-23-S1 / Welcome Message / Assessment 2
Select one: True
False
Question 8
Not yet
answered
On 1 May 20.18 Venus Traders entered into a new two-year advertising agreement with Tino Advertising Agency. The advertising agreement was effective with
Marked out immediate effect
of 1.00 and stipulated that Venus Traders would pay R2 430 per month to Tino Advertising Agency for advertising services that would be provided by Tino Advertising
Agency on a monthly basis. Tino Advertising Agency has performed all the necessary advertising services that was required from them since the effective date
of the advertising agreement for the current financial period (the current financial period ends on 28 February 20.19).
The pre-adjustment trial balance for the year ended 28 February 20.19 reflected advertising expenses for an amount of R26 720 as well as accrued
advertising expenses of R5 170 on 1 March 20.18 (the beginning of the current financial period). On 20 April 20.18 Venus Traders paid the advertising
expenses that was outstanding from the previous financial period, but the bookkeeper completely forgot to record this transaction in the accounting books of
Venus Traders. The advertising expenses not applicable to the current financial period must still be provided for.
The correct amount to be disclosed for advertising expenses in the statement of profit or loss and other comprehensive income for the year ended 28
February 20.19 is ...
Instructions:
1. Use a full stop to indicate any decimals (eg: 1000.01)
2. Round off to the nearest Rand (eg: 50.56 is 51)
3. Only show the amount, do not show the R (eg: 12141.72)
Answer: 21870.00
Question 9
Not yet
answered On 2 January 20.08, a tenant of XYZ Dealers, did an electronic funds transfer of R200 000 into XYZ Dealers business bank account. The monthly rental is R14
Marked out 500 per month. The financial year-end is 31 December 20.8.
of 4.00
What will the closing transfer entry for the transaction on 31 December 20.8 be?
Instructions:
Drag the correct answer into the correct
space. An option can be used more than
once.
Rental income 26 000
Income received in 26 000
advance
Rental income Income received in Accrued income Profit or loss account
advance
200 000 174 000 14 500
, Question 10
Not yet
answered You are given the following extract of the post-adjustment trial balance for Arch Traders for the financial year ended 30 June 20.2.
of
Marked
7.00 out ARCH TRADERS
Dashboard CalendarAS AT 30 JUNE 20.2
BALANCES
Debit Credit
Dashboard / My courses / FAC1502-23-S1 / Welcome Message / Assessment
R 2 R
Sales……………………………………………….. 1 200 000
Cost of sales..…………………………………..... 560 000
Wages and salaries... 112 000
………………………….....
Credit losses………………………………………. 3 000
Water and 12 000
electricity………………………………
Settlement discount 2 500
granted……………………..
Settlement discount 3 500
received…………………....
Telephone expenses…………………………….. 15 000
Depreciation………………………………………. 55 000
Bank charges.……………………………………. 2 000
Rental income.…………………………………... 168 000
Additional information
(a) The bookkeeper of Arch Traders found an invoice for R5 000 which was not entered in the sales journal.
(b) Received an invoice from Quick Couriers for an amount of R1 700 for carriage on purchases that needs to be paid. No entries were made in the books of
Arch Traders regarding this transaction.
(c) The rental income was received for 15 months.
The correct disclosure of the income elements in the statement of profit or loss and other comprehensive income for the year ended 30 June 20.2 will be ...
Instructions:
Drag the correct answer into the correct
space. An option can be used more than
once.
If an options has been provided and it is not applicable to the specific questions please put N/A in the accounts column and a 0 in the amounts column.
Sales 1 200 000
Settlement discount granted 3 500
Revenue 1 202
500
Other income 134 400
Rental income 134 400
Credit losses recovered 0
Gross income 1 368 000
Credit losses Net profit Settlement discount granted Gross income Rental income Settlement discount received
Credit losses recovered Other income Revenue N/A Sales Cost of sales
Gross profit
644 300 1 191 500 0 (555 800) (560 000) (561 200) 1 202 500 137 900 134 400 (558 800) 3 000 1 202 500 778 700 3 500
137 400
168 000 1 368 000 1 200 000 645 000 808 000 (558 200) 1 205 000 640 000 1 195 000
Question 11
Not yet
answered Indicate whether the following statement is true or false:
Marked out Prepaid expenses should be included in the statement of profit or loss and other comprehensive income.
of 1.00
Select one:
True
False
