correct answer. 1.9.2.1 Historic cost COLUMN A 1.9.2.2 Accrual principle 1.9.2.3 Conservatism 1.9.2.4 Materiality 1.9.2.5 MANCOSA Realisation principle Financial Reporting and Analysis A B D COLUMN B Interest on overdraft is shown separately in the financial

statements. C An entry is made immediately in the books for an invoice received for goods purchased. The method and rate of depreciation on vehicles is the same as the previous years. Rent income for the last month of the financial year was not yet received but was taken into consideration to calculate the net profit. E The account of a debtor who is experiencing financial difficulty is written off. 22

INFORMATION The balance sheet of a business as at 01 January 20.15 included the following items: Transactions During the week ended 07 January 20.12 the following transactions took place: - Inventories were sold for R165 000 cash; these inventories had cost R120 000 Sold inventories for R345 000 on credit; these inventories had cost R255000 Received cash from debtors totalling R270 000 The owners introduced R1 500000 cash into the business Ten computers were purchased on credit, R150 000 Bought inventories on credit for R210000 Paid creditors a total amount of R195000 in settlement of accounts