1 The following are users of financial information except: a. Potential Shareholders b. Existing Shareholders c. Lenders d. None of the above 2 Which one of the following is not a qualitative characteristic of financial information? a. Faithful representation b. Accountability c. Verifiability d. Relevance 3 Which of the following basic accounting equations are correct? a. AO=AL b. A=L+O c. Both A and B d. None of the above 4 The following is an example of an intangile asset: a. Manufacturing plant b. Motor vehicle c. Laptop d. Laptop Software 5 Which of the below reflects the financial position of the business on a specific date? a. Balance Sheet b. Income Statement c. Cash Flow Statement d. None of the above 6 Which of the following provides details about the movement of money with regard to investing and financing activities? a. Balance Sheet b. Income Statement c. Cash Flow Statement d. None of the above 7. When preparing financial statements, creditors will be reflected as: a. Trade and other receivables b. Trade and other Payables c. Equity d. Other income 8. Which of the following is not an asser? a. Buldings b. Land c. Cash d. Loan fram the bark 9. Which of the following is a liability? a. Bulidings b. Land c. Cash d. Loan from the bark 10 The following are the assets and liabilities of Today Tradiers. What is the amount of Equity? VehiclesTradingStockRInvestmentsRTradeDebtorsRTradeCreditorsR4000010000120000R100000140000 a. R200000 b. R210000 c. R220000 d. R 100000 Question 2 20 Marks True / False Questions Indicate if the following statements are true or false. Provide your answers as True / Faise: For example: 2.1 False. 2.1 The concept of prudence means to only include relevant information in the financial statements. 2.2 The going concern principle assumes that a business will continue its business activities for the foreseeable future. 2.3 The debtors cantral acoaunt and debtor's ledger are not part of the double antry system. 2.4 Accrued expenses are expenses that are incuurred diuning the financial period but that have nat yat been paid. 2.5 in arder qualify as a current liability, the payment procediure must be less than a year (12 manths) and meet the recognition criteria for them to be inciuded in the financial statements. 8 Which of the following is not an asset? a. Buildings b. Land c. Cash d. Loan from the bank 9 Which of the following is a liability? a. Buildings b. Land c. Cash d. Loan from the bank 10 The following are the assets and liabilities of Today Traders. What is the amount of Equity VehiclesTradingStockRInvestmentsRTradeDebtorsRTradeCreditorsR4000010000120000R100000140000 a. R200000 b. R210000 c. R220000 d. R100000 Question 2 20 Marks True / False Questions Indicate if the following statements are true or false. Provide your answers as True / False: Foi example: 2.1 False. 2.1 The concept of prudence means to only include relevant information in the financial statements. 2.2 The going concern principle assumes that a business will continue its business activities for the foreseeable future. 2.3 The debtors control account and debtor's ledger are not part of the double entry system. 2.4 Accrued expenses are expenses that are incurred during the financial period but that have not yet been paid. 2.5 In order qualify as a current liability, the payment procedure must be less than a year (12 months) and meet the recognition criteria for them to be included in the financial statements. 2.6 A credit balance on the Bank Statement indicates an unfavourable balance. 2.7 The most recent purchases will be considered as closing stock in the FIFO stock valuation method. 2.8 Wages paid to the factory cleaner is considered to be indirect labour. 2.9 Rent paid for the factory building is regarded as a variable cost. 2.10 Carriage on purchases of raw materials is regarded as an indirect material cost Question 3 10 Marks The following information relates to Edu Traders for May 2022 The accountant of Edu Traders has been newly appointed and has requested your help with the finalisation of the bank reconciliation for the business. The following information has been provided to you: 1 Before the bank statement was received, the Bank Account showed a favourable balance of R19 400 on 31 May 2022. 2 Extract from the Bank Reconciliation Statement on 30 April 2022 Outstanding deposit (dated 24 April 2022) R31 560 Outstanding payments: a. Cheque 501 (dated 23 November 2020) R2 350 b. EFT R15 400 c. Cheque 555 (dated 1 July 2021) R9 450 Cheque 501 does not appear in the May Bank Statement NB: The EFT of R15 400 appears in the May Bank Statement. The outstanding deposit of R31 560 does not appear in the May Bank Statement. An investigation shows that this is cash paid by a debtor and has not been deposited. The amount must be written off. The following still needs to be taken into account: Items appearing in the May Bank Statement but not in the journals: - Bank charges of R1 060 - A deposit of R4 500 made by another business. The bank will correct this error in June 2022. - Interest on favourable balance R313 Items appearing in the journals but not in the May Bank Statement: - A deposit of R21 343 made on 31 May 2022 - Cheque 597 (dated 15 June 2022), R14 350 - An EFT payment appeared correctly in the Bank Statement as R5 678. The Cash Journal shows this EFT as R6 578. Required: 3.1 Calculate the correct Bank Account balance on 31 May 2022. Indicate whether this is favourable or unfavourable. 3.2 Calculate the bank statement balance on 31 May 2022. Question 4 The following relates to Dress outfitters: The business manufactures clothing products. The information relates to school dresses which is one of the products they manufacture. Dresses are manufactured according to orders received and there is no work-in-progress. The financial year ended on 30 April 2022. Additional information: Raw Materials Manufacturing one dress requires 1,6 metres of fabric *Normal time comprises a 5-day week of 8 hours per day. The factory operates for 46 weeks each year Factory overhead costs The following costs were extracted from the records on 30 April 2022 Factory rent is split according to floor space occupied. The dress-making section occupies 320m2 of the total factory space of 1280m2.15% of the total water and electricity account must be allocated to the dressmaking section. Insurance on factory equipment was paid up to 30 June 2021. Dress-making equipment comprises 1/3 of the total factory equipment. Only one of the six cleaners, Susan, was allocated to the dressmaking section. Susan earns 10% less than the other five cleaners. Total variable costs amounted to R1094700 (R61,50 per unit) Fixed costs, comprising factory overhead costs and administration costs, totalled R229 500 Required 4.1 Complete the Factory Overhead Cost Note for the school dresses. ( 15 Marks) 4.2 Calculate the total cost of production of school dresses produced (5 Marks) 4.3 Calculate the cost of this wastage to the business (Show wastage in Meters and Rands) (5 Marks) 4.4 You have identified a concern about the direct labour cost for the school dresses, prepare an explanation with supporting. Provide possible causes and solutions to this problem. (8 Marks) 4.5 Calculate the number of units required to break even, and comment briefly on the current volumes of the business (5 Marks) 4.6 Calculate the extra profit that would be earned if an additional 500 dresses are made and sold. Assume that all costs are unchanged. (2 Marks)