Each of the questions below has four (4) alternatives. Choose the most correct alternative for each of the questions/statements. Write down the number of the question in your answer book and the letter corresponding to your choice next to the question number. (10 x 2 marks) 1.1.1 A cheque is referred to as stale when: a. The cheque is endorsed b. The cheque is six months old c. A cheque has been issued and there are no funds in the bank account d. Information on the cheque is missing 1.1.2 A stop order can be described as: a. An instruction to the bank to stop paying out funds on your behalf b. An arrangement with the bank where you give the bank permission to pay someone on your behalf c. Permission granted to someone to withdraw funds from your account d. An arrangement that can be cancelled by approaching the business with which you signed the stop order. 1.1.3 Trade payables or creditors are: a. Customers to whom a business renders a service where there is a delay in the cash received for the services rendered b. Suppliers to a business with whom a delay in cash payment has been negotiated c. Goods purchased from suppliers of a business that uses the periodic method of recording inventory d. An expense of the business. 1.1.4 In the statement of cash flows, which one of the following is it not possible to consider as an investing activity? a. The cash payment to acquire inventory b. The cash payment to acquire property c. The cash payment to acquire shares in another company d. The cash payment to acquire goodwill in another company 2 1.1.5 Which one of the following will result in a decrease in the cash position in a company? a. The acquisition of a mortgage bond b. The decrease in accounts receivable c. The increase in accounts payable d. The increase in inventory 1.1.6 The following information was extracted from the ledger of Umhlanga Traders on 30 June 2018, the end of the financial year: The gross profit for the year ended on 30 June 2018 is________. a. R270 000 b. R310 000 c. R330 000 d. R731 000 1.1.7 Tanzania Traders received R1 470 from a debtor after deducting 2% discount for prompt payment of account. Which one of the following statement is correct? a. Original debt was R1 499, 40 b. The discount allowed is R30. c. The debtors Control account will decrease by R1 470 altogether. d. The discount allowed is R350 1.1.8 The net sales of Quinton Stores for April 2018 amounted to R900 000. If the goods were sold at cost plus 50%, the cost of sales for April 2018 is_______. a. R600 000 b. R450 000 c. R1 800 000 d. R350 000 Opening Inventory Closing Inventory Purchases Carriage on purchases Sales R 100 000 80 000 240 000 10 000 600 000 3 1.1.9 The following information was extracted in the trial balance of Naidoo Enterprise on 28 February 2018. Equipment cost R 30 000 Vehicles R 80 000 Prepaid Expenses R 15 000 Income received in advance R 12 000 Provision for bad debt R 2 000 Accrued Income R 6 000 Accrues Expense R 5 600 Account Payable R 2 000 Account Receivable R 3 000 According to the above information, the total value of current assets is________. a. R 22 000 b. R134 000 c. R 27 800 d. R 23 400 1.1.10 MS Stores was granted a loan of R100 000 by Sen Bank on 1 June 2017. In terms of the loan agreement, repayments of R10 000 per annum will be made over a period of 10 years starting from 1 June 2018. The amount in respect of this loan that will be shown under non-current liabilities in the Balance sheet on 28 February 2019 (end of the Financial year) is________. a. R100 000 b. R90 000 c. R80 000 d. R70 000