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1 DRITIIBIH UI'IIVERSITY OF SCIENCE RITD TECHNOLOGY QUALIFICATION: DIPLOMA IN BUSINESS PROCESS MANAGEMENT QUALIFICATION CODE: 06DBPM LEVEL: 5 COURSE: BUSINESS ACCOUNTING 1 A' COURSE CODE: BAC511S DATE: NOVEMBER 2017 SESSION: 1 DURATION: 2HOURS MARKS 60 1StOPPORTUNITY EXAM EXAMINER: MRS W GERTZE MODERATOR: MRS Z MARITZ 1 THIS EXAMINATION PAPER CONSISTS OF 5 PAGES (INCLUDING THIS FRONT PAGE) 2 INSTRUCTIONS 21 Answer ALL questions 22 Please write down your answers in the answer book provided 23 Start each question on a new page 24 Write neatly and Clearly 25 Show all your workings

2 Question 1 (10 marks) a) Outline your understanding of the term sole trader Explain in sufficient details two advantages of setting up a business as a sole trader entity (4 Marks) b) Accounting concepts and conventions are of fundamental importance in the preparation of financial statements With the aid of relevant examples, outline your understanding on the following concepts/conventions i Accruals ii Going Concern (4 Marks) Explain the main advantage of dealing with zero rated supply as opposed to an exempt supply for a business organisation (2 Marks) (Total 10 marks)

3 for Question 2 (15 marks) M Salt & Pepper is a company operating in the spice industry The yearend is 30 June 2017 The following transactions took place during June 2017 ignore VAT June, 2 Purchased goods on credit at a cost of N$ June, 5 Sold goods on credit for N$ June, 21 Receivables paid N$ by cheque June, 28 Purchased a delivery vehicle costing a total of N$ form Toyota Dealers Paid by cheque Required: Show the effect (+ for increase / transactions on the accounting equation decrease and the amount) of each of the above (8 marks) Date Asset Owner s equity Liabilities eg +500 (purchases 1 March debit) +500 (Creditorcredit) Part B Use the information in Part A above Now assume that, in Part B, VAT is applicable and that all parties are registered VAT vendors Also assume that the amounts stated above are inclusive of VAT, as applicable 1 Provide the journal entry in order to record the purchase of the vehicle on 28 June 2017 (5 marks) 2 How would your answer in number 1(above) differ if Salt & Pepper purchased a passenger car? In your answer, show what the cost of the vehicle would be (2 marks)

4 Vehicles, Vehicle Question 3 (35 marks) The following balances appeared in the records of Stoney Traders, a general dealer trading in Windhoek CBD on 28th February 2017: N$ Equipment at cost price Vehicles at cost price Accumulated depreciation Equipment (01 March 2016) Accumulated depreciation (01 March 2016) Inventory (01 March 2016) Debtors (Accounts Receivables) Provision (Allowance) for bad debts 400 Cash in Bank Capital (Johannes) Drawings Creditors Purchases Purchases returns Salaries and wages Rent paid Advertising Insurance 960 Electricity Sundry expenses 240 Sales Sales returns The following additional information is provided: i Inventory on hand on 28 February 2017, was valued at N$ 80, 000 ii Depreciation to be provided as follows: a b Equipment, 5% per annum on cost using straight 20% per annum on reducing balance method line method iii Insurance prepaid as at 28 February 2017, amounts to N$ 160 iv Provision (Allowance) for bad debts should be increased to N$ V Rent of N$ 1, 000 for the period 01 September 2016 to 28 February paid and this has not been recorded in the books 2017 has not been

5 Required: a Journalise the above adjustments number (i) to (v) Ignore narrations (11 marks) Prepare the statement of profit or loss and other comprehensive income for the year ended 28 February 2017, and (11 marks) 0 A statement of financial position as at 28 February 2017 (13 marks) (Total 35 marks)