Question 1 (Marks: 10) Q.1.1 Indicate on which side of the account (Debit or Credit) the following will DECREASE. Q.1.1.1 Vehicles Q.1.1.2 Internet costs Q.1.1.3 Commission income Q.1.1.4 Mortgage loan Q.1.1.5 Salaries and Wages Q.1.1.6 Bank Q.1.1.7 Creditors/creditors control EEEEEEE Q.1.2 Define a liability as defined in the Conceptual Framework of Accounting. Question 2 (Marks:40) Q.2.1 On 31 December 2020, the Sell and Serve Shop showed the following income and (15) expenses for the financial year, i.e., the financial period is from 1 January 2020 to 31 December 2020 R 650 000 120 000 6 000 Sales Service Income Interest Income Salaries and Wages Rates and Taxes Water and Electricity Stationary Maintenance Professional Fees 175 000 60 000 46 000 24 000 56 000 108 000 Required: Calculate the profit or loss for the year ended 31 December 2020. Clearly indicate profit or loss. Q.2.2 Classify the following items as an asset, liability, equity, income or expense by indicating the correct classification next to the question number. Q.2.2.1 Land and Buildings. 2.2.2.2 Advertising. Bank Overdraft. (1) (1) Q.2.2.3 (1) Q.2.2.4 Debtors. (1) (1) (1) Q.2.2.5 Cash Float. Q.2.2.6 Profit on Sale of Asset Q.2.2.7 Rent Income. Q.2.2.8 Wages. Q.2.2.9 Loan from ABC Bank. Q.2.2.10 Drawings (1) (1) (1) (1) (15) Q.2.3 U. Ugly opened a shop in September 2021 under the name of Ugly Traders. The following transactions took place: Day Transaction 1 Mr U. Ugly transferred R150 000 from his personal bank account to the bank account of Ugly Traders as an initial capital contribution 5 Office furniture was bought from The Office Limited for R25 000 on credit. Paid R500 from Petty Cash for an advertisement in the local newspaper. 12 Sold Inventory to the value of R65 000 in the month; customers paid via cash payments. Salaries for the month was paid via EFT, R20 000. Ugly Traders uses a periodic inventory system. 7 25 Required: Analyse the transactions above into the accounting equation. Clearly indicate the debit/credit account and increase or decrease in the element E.G. Electricity was paid via the business bank account via EFT on the 4, R2 000 Day Assets = Owners Equity + Liabilities Cr Bank Dr Electricity -2 000 4 -2 000