Question 23 of 27

3.0 Points

XYZ Club is a non- profit organisation that was started by 160 members on 1 January 2018. The objective of XYZ Club is to address gender-based violence that is faced by South African citizens, by conducting workshops, road shows and counselling to perpetrators, victims and those who have not yet experienced it. The constitution of XYZ Club indicated the following:

Entrance fees to join the club amount to R250 per member and it should be capitalised.

In order to prepare the financial statements for the current financial period ended 31 December 2019, the bookkeeper presented the following information regarding the finances of the club to members at a meeting held on 31 December 2019:

Entrance fees:

65 new members joined the club and each member paid their entrance fees of R250.

Which of the following statements are correct with regard to entrance fees paid by the new members in the current financial period?

(a) Entrance fees for the current financial period will form part of the accumulated funds.

(b) The journal entry to record entrance fees would be as follows:

Description	Debit	Credit
Dr. Bank account	R16 250
Cr. Membership fee account		R16 250

(c) The journal entry to record entrance fees would be as follows:

Description	Debit	Credit
Dr. Membership fee account	R16 250
Cr. Entrance fee account		R16 250

(d) The journal entry to record entrance fees would be as follows:

Description	Debit	Credit
Dr. Bank account	R16 250
Cr. Entrance fee account		R16 250

(e) Entrance fee will be shown in the income and expenditure statement as revenue.

• A. (d) and (e)
• B. (a) and (b)
• C. (a) and (d)
• D. (a), (d) and (e)
• E. (c) and (a)

Question 24 of 27

3.0 Points

Isolation Traders paid an insurance premium of R10 824 on 1 March 2019 for 12 months. Upon the inspection of the pre-adjustment trial balance for the year ended 31 May 2019, the bookkeeper noticed that insurance premiums amounting to R7 380 for the period starting 1 June 2018 until 28 February 2019, were paid in the previous financial period. The bookkeeper also noticed that, the insurance premium paid on 1 March 2019 has not yet been recorded in the books, and no adjustment has been processed and no reversal has been processed relating to insurance premium paid in the previous financial period.

The amount for insurance expense to be shown in the statement of profit or loss and other comprehensive income for the year ended 31 May 2019 will be ?

• A. R15 498
• B. R10 824
• C. R8 118
• D. R10 086
• E. R2 706