Question 1 a business has the following balances on their year-end Pre-Adjusted Trial Balance: Trade Receivables = R22 000 Bad Debts = R1 000 How much will the business record under Current Assets as Trade Receivables? Select one: a. R1 000 b. R21 000 c. R23 000 d. R22 000

Question 2 A sole trader has the following items in the book accounts: Sales R60 000; Cost of Sales R50 000; Opening Stock R10 000; Purchases R40 000; Wages R20 000 and Office Rent R10 000. What is the value of gross profit /loss? Select one: a. Loss: R70 000 b. Profit: R10 000 c. Loss: R20 000 d. Loss: R10 000 Question 3 The following ledger balances make up a companys trial balance: Sales = 153 400 Purchases = 53 600 Non-current assets = 62 800 Payables = 36 400 Receivables = 64 600 Cash at bank = 28 400 Capital = 19 600 What is the total of the credit column of the trial balance? Select one: a. R418 800 b. R189 800 c. R211 800 d. R209 400

Question 4 In the financial statements issued by large companies like Imperial Chemical Industries (ICI) the amounts stated are rounded off to the nearest million Rands. The reason for this is________. Select one: a. to show how big their company is b. because this is currently fashionable c. the materiality concept d. to keep details secret from rival companies

Question 5 On a classified balance sheet, Wages Payable would be classified as a __________. Select one: a. Long-term asset b. Long-term liability c. Current liability d. Current asset

Question 6 What would be the consequence of not making adjustment entry for accrued expense? Select one: a. Understatement of capital b. Overstatement of liabilities c. Understatement of liabilities d. Overstatement of expenses Question 7

________ is the gross inflow of economic benefits. Select one: a. Expenses b. Liabilities c. Income d. Assets

Question 8 Which of the following principle is used for recording a revenue? Select one: a. Matching Principle b. Cost Principle c. Realization Principle d. Objectivity Principle

Question 9 The following information that relates to the business of AA Ltd at 31 December 2015: Debtors Control = R136 000 Provision for doubtful debts = R12 000 Mr A, a debtor, was written as irrecoverable after AA Ltd learnt that his business had been liquidated, R1 300. Mr X, a debtor whose debt was previously written off managed to pay up R3 000. The Provision for doubtful debts must be adjusted to 10% of debtors. How much will be recorded as Trade Receivables in the Statement of Financial Position?

Select one: a. R125 400 b. R122 400 c. R121 230 d. R124 000

Question 10 Which option forms part of the source documents? Select one: a. Receipt b. General ledger c. Cash receipts journal d. Bank statement

Question 11 A car was purchased for R5500. Its residual value was estimated to be R500 while its monthly depreciation expenses are R100 using straight line method. Which of the following is the annual rate of depreciation? Select one: a. 2% b. 20% c. 24% d. 25%

Question 12 If rent expenses = R5 000; insurance expenses = R4 000; and prepaid rent expenses = R3 000, what amount of total expenses will be shown in the statement of profit or loss and other comprehensive income? Select one: a. R8 000 b. R9 000 c. R6 000 d. R12 000

Question 13 Which of the following is recorded on the debit side of the debtors control account? Select one: a. Cash sales b. Sales returns c. Credit sales d. Cash receipts from debtors

Question 14 Discount received is entered on which side of a creditor control account? Select one: a. Credit side b. Debit side c. It will affect bank and discount received account d. No accounting treatment required

Question 15

Frank sold goods to the value of R5000 (cost price R2800) to his best friend on credit. Which two accounts are affected with R5000?

Select one: a. Debit: Bank account Credit: Sales account b. Debit: Sales account Credit: Bank account c. Debit: Debtors control Credit: Bank account d. Debit: Debtors control Credit: Sales account

Question 16 An unfavourable cash account closing balance will __________. Select one: a. appear on debit side of the bank statement b. appear on credit side of the bank statement c. not appear on either debit or credit side of the bank statement because it is only recorded in business records d. appear on either credit or debit side of the bank statement depending on how significant the balance is

Question 17 The double entry system is based on_______. Select one: a. the historical cost concept b. the prudence concept c. going concern concept d. the principle of duality

Question 18 A trial balance fails to agree by R1 000. Which of the following errors could have caused its difference? Select one: a. A rent payment of R500 had been debited to a non-current asset account b. A R1 000 cheque paid to a supplier had been credited to the suppliers account in the payables ledger c. A non-current asset costing R500 had been credited to the purchases account d. A R1 000 cheque received from a customer, F Bloggs, has been credited to J Bloggs account in the payables ledger

Question 19 What journal entry would be posted if a sole trader starts a business by introducing his cash savings and a car into the business? Select one: a. Dr Bank Cr Motor vehicles Cr Bank b. Dr Motor vehicles Dr Bank Cr Capital c. Dr Capital Cr Motor vehicles Cr Bank d. Dr Motor vehicles Cr Capital Cr Bank

Question 20 Assets can be classified into two main categories. Trade Receivables and Inventory are in the category of_____. Select one: a. fixed assets b. current assets c. capital assets d. liquid assets

Question 21 Credits are used to record_______. Select one: a. increases to assets, and decreases to expenses, liabilities, and owners' equity b. decreases to assets and increases to expenses, liabilities, revenues, and owners' equity c. decreases to assets and expenses and increases to liabilities, revenues, and owners' equity d. increases to assets and expenses and decreases to revenues, liabilities, and owners' equity

Question 22 Expenses relevant to the accounting period which remain unpaid by period end should be______. Select one: a. included in with expenses paid and shown as a liability at the period end b. included with expenses paid and shown as an asset at the period end c. deducted from amount already paid and shown as a liability at the period end d. ignored until they are paid for in the next period

Question 23 What is the value of cost of sales if: Sales R60 000; Closing stock R10 000; Opening Stock R10 000; Purchases R50 000; Wages R20 000 and Office Rent R10 000? Select one: a. R10 000 b. R50 000 c. R70 000 d. R30 000

Question 24 Which option describes the balance in the accumulated depreciation account? Select one: a. Depreciation expense written off in an accounting period b. The cumulative sum of all depreciation expenses from the date of asset's acquisition to the present date. c. The cumulative sum of all depreciable asset from the date of asset's acquisition to the present date. d. A liability account

Question 25 A business has cash of R1 100, trade payables of R2 500, a mortgage liability of R8 000 and land of R16 000. What is the capital balance? Select one: a. R10 500 b. R16 000 c. R20 400 d. R6 600

Question 26 The amount for cash and cash equivalents does NOT include______. Select one: a. cash amounts in the petty cash b. deposits on demand c. deposits with a notice of over 12 months d. bank balances

Question 27 During the bank reconciliation process________. Select one: a. bank charges will be updated in the Cash Receipts Journal b. outstanding deposits will be updated in the Cash Receipts Journal c. R/D cheques will be recorded in the Cash Receipts Journal d. R/D cheques will be recorded in the Cash Payments Journal

Question 28 Which account, when having a normal balance, would be shown at the credit side of a trial balance? Select one: a. Cash account b. Bank account c. Accrued expenses account d. Equipment account

Question 29 A trade debt of R12 400 is to be written off as bad and the Allowance for doubtful debts increased from R38 200 to R41 900. The net effect on the profit for the year would be_________.

Select one: a. a decrease by R12 400 b. a decrease by R16 100 c. a decrease by R8 700 d. a decrease by R54 300 Question 30

Question text Sparky Traders always pay their electricity bill in advance. Which entries will they record to effect the adjustment at the end of their financial year? Select one: a. Debit: Electricity expense Credit: Accrued electricity expense b. Debit: Electricity expense Credit: Prepaid expense c. Debit: Accrued electricity expense Credit: Electricity expense d. Debit: Prepaid electricity expense Credit: Electricity expense