Question 3.8 The year-end of Mbuzana Traders, a business entity owned by Mr Zulu, is 31 December. On 1 January 2021, the statement received from the municipality showed that the company had overpaid by R2 500. Mbuzana Traders received electricity accounts for the four quarters starting 1 January 2021 and ending 31 December 2021 for R3 500, R3 570, R2 750 and R3 000 respectively. On 31 December 2021, the municipal account reflected a balance of R2 000 owing. Which one of the following alternatives represents the correct amount that must be disclosed as electricity expense in the statement of profit or loss and other comprehensive income of Mbuzana Traders for the year ended 31 December 2021?

1. R12 500

2. R17 320

3. R17 500

4. R13 500

5. R 8 500

Question 3.9 Under what circumstances can the profit on an equity instrument carried at fair value be recorded in other comprehensive income?

1. When the profit or loss is capable of recycling

2. When the equity investment is available for sale

3. When the equity investment is held for trading

4. When the equity investment is not held for trading

Question 3.10

Which one of the following alternatives is correct?

1. All income and expenses included in profit or loss arise from ordinary activities of the entity.

2. Income and expenses included in other comprehensive income are always recycled into the statement of profit or loss at the end of the holding period of the related asset or liability.

3. The statement of profit or loss is the only source of information about an entitys financial performance for the period.

4. In principle, all income and expenses are included in the statement of profit or loss.

Question 3.11

Which one of the following expenses should be included in cost of inventories sold during the year?

1. Carriage on purchases

2. Insurance on deliveries

3. Carriage on sales

4. Depreciation on delivery vehicle

Question 3.12

Which one of the following measurement bases is not categorised as part of the current value measurement base in the Conceptual Framework?

1. Value in use

2. Current cost

3. Fair value

4. Transaction cost

Question 3.13 Which one of the following statements is correct?

1. The statement of profit or loss and other comprehensive income has to show the results for one year

2. The statement of profit or loss and other comprehensive income includes dividends paid.

3. The statement of profit or loss and other comprehensive income illustrates a business financial performance.

4. The statement of profit or loss and other comprehensive income illustrates a business financial position.

Question 3.14

Which type of adjustment occurs when cash is either received or paid, but the related income or expense is not reportable in the current period?

1. Offsetting

2. Aggregation

3. Accrual

4. Cash