QUESTION 1 (2 marks)

James Construction Limited used electricity to the value of R25 000 during January 2020. However, the account was only paid in February 2020.

1.1 Identify the accounting principle illustrated above. [1]

1.2 In what month will R25 000 be recognised as an expense? [1]

QUESTION 2 19 marksl Use the accounting equation of \"Assets = Owner's Equity + Liabilities\" and the accounting system of double-entry and debits and credits for the following transactions. Indicate for each transaction by redrawing the example table: What the names of the accounts concerned are Whether the amount in question has a + or effect on the Assets, Owners' equity or Liabilities Whether it has a debit or credit effect from an accounting point of View on the amounts concerned AN EXAMPLE: Rent (R1 000) is paid in cash ACCOUNTS ASSETS EQUITY LIABILITIES DR CR Rent R1 000 R1 000 Bank R1 000 R1 000 2.1 Vehicles worth R300 000 is bought on credit. 2.2 Our debtors repay R1 000. 2.3 R22 500 is repaid towards our creditors. [3x3=9] QUESTION 3 (6 marks} The following records were extracted from Rebus Dealers for the year ended 31 December 2019. Sales R51 000 Creditors R 3 000 Debtors R 5 000 Equipment R 50 000 Bank overdraft R 4 000 Salaries R 9 000 Depreciation R 1 000 Long term loan R 15 000 Capital R 25 000 investment R 33 000 3.1 Prepare a trial balance for Rebus Dealers. [ 1/2 x12 =6] 3.2 Explain why would a company want to exclude liabilities from its nancial statements? [1 x 3 =3]