3. 1.1.4. Which one of the following statements concerning posting to the ledger is false?

   1. Increases in liability accounts are recorded on the credit side.

   2. Increases in income accounts are recorded on the credit side.

   3. Increases in capital are recorded on the debit side.

   4. Increases in asset accounts are recorded on the debit side.

      Use the format below in your answer booklet.

4 1 = (4)

NO.	ANSWER
1.1.1
1.1.2.
1.1.3.
1.1.4.
1.1.5.

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1

1.2. For each of the following transactions write down the account to be Debited and Credited. Draw up the following table in your answer book. 5 1 = (5)

NO.	Name of account in the General Ledger
	Debit	Credit
e.g	Bank	Interest on fixed deposit
1.2.1

TRANSACTIONS:

1. 1.2.1. The proprietor made an Electronic Funds Transfer (EFT) of R100 000, as his initial capital contribution, into the business account.

2. 1.2.2. Purchased consumables on credit from Trump Supplies.

3. 1.2.3. Received R400 from a debtor whose account had been written off as irrecoverable two months ago.

4. 1.2.4. Water and electricity payment of R600 was wrongly posted to the telephone account in the general

ledger. Correct this error. 1.2.5. Cash sales of merchandise, R380.

1.3. INVENTORY METHODS The following information has been extracted from the accounting records of

FURNITURE MART in respect of basic fridge unit stocks for June 2017.

Date JUNE	Details	No. of Units	Cost per unit	Total R
01	Opening inventory	5	R 1 400	7 000
07	Purchase from supplier	7	R 1 400
16	Purchase from supplier	4	R 1 500
25	Purchase from supplier	2	R 1 600
30	Sales for the month	15	---------

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Required:

1. 1.3.1 Calculate the number of units in the closing inventory.

2. 1.3.2 Calculate the value of the closing inventory using the FIFO METHOD

3. 1.3.3 Calculate the value of the closing inventory using the WEIGHTED AVERAGE METHOD.

(1 mark)

(2 marks) (3 marks)