JUNE 2013 EXAMINATION DATE: 6 JUNE 2013 DURATION: 2 HOURS PASS MARK: 40% (ED-48)

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1 LEGBUS2 JUNE 2013 EXAMINATION DATE: 6 JUNE 2013 TIME: 09H00 11H00 TOTAL: 100 MARKS DURATION: 2 HOURS PASS MARK: 40% (ED-48) THIS EXAMINATION PAPER CONSISTS OF 3 SECTIONS: SECTION A: CONSISTS OF: (i) 10 MULTIPLE-CHOICE QUESTIONS (10 MARKS) (ii) 10 MATCHING-STATEMENT QUESTIONS (10 MARKS) SECTION B: SECTION C: CONSISTS OF 5 QUESTIONS CONSISTS OF 3 INTERPRETATIVE QUESTIONS ANSWER ANY ONE OF THE QUESTIONS (60 MARKS) (20 MARKS) INSTRUCTIONS: 1. Read the following instructions carefully before answering the paper, as failure to act upon them will result in a loss of marks. 2. Write your answers in your answer book, which is provided in the exam. 3. Ensure that your name and student number are clearly indicated on your answer book. 4. Write your answers in either blue or black ink in your answer book. 5. Read each question very carefully before you answer it and number your answers exactly as the questions are numbered. 6. Begin with the question for which you think you will get the best marks. 7. Note the mark allocations for each question give enough facts to earn the marks allocated. Don't waste time by giving more information than required. 8. You are welcome to use diagrams to illustrate your answers. 9. Please write neatly we cannot mark illegible handwriting. 10. Any student caught cheating will have his or her examination paper and notes confiscated. The College will take disciplinary measures to protect the integrity of these examinations. 11. If there is something wrong with or missing from your exam paper or your answer book, please inform your invigilator immediately. If you do not inform your invigilator about a problem, the College will not be able to rectify it afterwards, and your marks cannot be adjusted to allow for the problem. 12. This paper may be removed from the examination hall after the examination has taken place. DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 1 OF 7

2 SECTION A (20 MARKS) (i) MULTIPLE-CHOICE QUESTIONS Choose the correct option for each of the following. Write only the question number and your chosen answer. For instance, if you think that the correct answer for number 1 is, then write it as The bank account into which an attorney is obliged to deposit all money that is received from, or held on behalf of trust creditors is known as: a convenience account. a special savings account. a trust account. a business account. 2. An association of two or more persons with common business interests and a view on making a profit is referred to as: a partnership. a non-profit company. a business association. a friendly company. 3. Anybody who has anything to do with a business, whether as an owner, manager or employee, should report any unusual or suspicious transactions to: SARS. SAPS. FICA. SARB. 4. Cheques drawn and entered in the cashbook that might not yet have been presented for payment by the payee are known as: current cheques. stale cheques. outstanding cheques. pledged cheques. 5. Which one of the following is a business deal that is being negotiated or that has been settled, in bookkeeping? a transaction a contract a cheque a double entry DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 2 OF 7

3 6. Which one of the following are persons or organisations to who we owe money? debtors. borrowers. lenders. creditors. 7. The ledger, which contains income, expense, asset, liability and equity accounts of the practice is known as: the public ledger. the private ledger. the trading ledger. the income ledger. 8. The clause that explains the meaning or use of certain terms in a contract and which is normally found at the beginning of a contract is known as the: the interpretation clause. the execution clause. the index clause. the summary clause. 9. Which one of the following is the clause in the contract where the parties and their witnesses sign to conclude the agreement? the interpretation clause the execution clause the index clause the summary clause 10. In financial leases, you have the use of the asset but: you still need to pay for it. you do not know the final price. you do not have to pay for it. you do not own it. [10] DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 3 OF 7

4 (ii) MATCHING-STATEMENT QUESTIONS Match the terms in Column B to the statements in Column A. Write down the answers only, for example 1.. Column A Column B 1. moral rules of conduct that are accepted by people to help them understand the difference between right and wrong a loan contract 2. when no money, only goods, change hands and both parties agree that payment will take place at a later date vis major 3. a transaction in which money is lent by one person or entity to another on condition of repayment rouwkoop clause 4. a contract concluded between a prospective husband and his wife before marriage title deed 5. a superior force, signified as inevitable accident in law (e) evidentiary burden 6. a clause that voluntarily relinquishes any rights by a party to a contract (f) ethics 7. the document that comprises the certificate of ownership of immovable property and records details of the property and particulars of the owner (g) an antenuptial contract 8. a clause stipulating the amount of money needed to pay for the right to dissolve an agreement (h) a credit sale 9. the section of a post office where letters are kept until called for (i) waiver 10. the extent of the evidence that a claimant or plaintiff must produce in order to prove a claim (j) poste restante [10] [20] DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 4 OF 7

5 SECTION B (60 MARKS) QUESTION 1 Explain the reasons why we enter into a legal agreement. [10] QUESTION 2 Differentiate between 'tender drawings' and 'construction drawings'. (2) Why is it important that the contractor keep a set of tender drawings in a safe place? (2) Identify the main changes we find on a building contract. (3) (e) (f) (g) List five types of information that the contractor can gather from drawings. (5) What site services does the contractor need to identify from the drawings? (2) Identify the connection between project specifications and the construction drawings. (1) What is the relationship between the specifications and the bill of quantities? (1) (h) Briefly describe the link between the bill of quantities and the drawings. (2) (i) Is there a possibility of finding conflicting information in the specifications, the drawings and the bill of quantities? If so, briefly explain why. (2) [20] QUESTION 3 Give five examples of a party representing an entity or person. [10] DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 5 OF 7

6 QUESTION 4 Below is a table listing various journals. Briefly indicate the purpose of each journal using a similar table. Type of Journal trust journal fees journal counsel's fees journal correspondent's journal business journal Purpose of Journal [10] QUESTION 5 On 31 March 2006 your business bank statement reflected an overdrawn balance of R ,52. On the same date, your cashbook reflected a debit balance of R18 377,12. Compare your cashbook entries with the bank statement and identify the following differences: (e) (f) (g) interest on the overdraft of R3 384,72 has not been entered in the cashbook. a deposit of R30 223,72 which was entered in the cashbook does not appear on the bank statement. the attorney's monthly life insurance premium stop order for R467,20 is not recorded in the cashbook. a cheque for R4 000 issued to a client, appears only in the cashbook. a cheque for R received from a debtor, has been dishonoured and does not appear in your cashbook. a telegraphic transfer of R for payment of a client's fees account appears on the bank statement, but is not shown in the cashbook. a cheque for R drawn on the trust banking account, has been paid by the bank from the business account in error. You are required to: prepare a bank reconciliation statement as at 31 March 2006; and identify three of the four essential elements necessary to prepare the final reconciliation statement. [10] [60] DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 6 OF 7

7 SECTION C: INTERPRETATIVE QUESTIONS (20 MARKS) ANSWER ANY ONE OF THE QUESTIONS QUESTION 1 In order for contracts to be valid, they must comply with certain criteria. Briefly discuss each of the following criteria for contracts. contracts must have the consensus (agreement) of all parties; contracts must be reasonable; contracts must not be illegal, immoral or prohibited by statute and; contracts must not be in restraint of trade. [20] QUESTION 2 OR Identify the typical clauses found in each of the following types of legal agreements: i. sale of immovable property contract; (6) ii. a lease contract and; (5) iii. an employment contract. (5) Name the headings in a typical sale of immovable property agreement (4) [20] QUESTION 3 OR The financial intelligence centre act (FICA) requires all banks to verify a number of know your client (KYC) principles for any individual who wants to open a bank account and establish a banking relationship or transact with that bank. Identify and describe the requirements for both a South African citizen and a foreign citizen. [20] [20] Section A: 30 marks Section B: 10 marks Section C: 40 marks Section D: 20 marks TOTAL: 100 MARKS DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 7 OF 7