Bookkeeping and Accounting 1

Transcription

1 BOOBUS1 JUNE 2013 EXAMINATION DATE: 12 JUNE 2013 TIME: 14H00 16H30 TOTAL: 100 MARKS DURATION: 2½ HOURS PASS MARK: 40% (QL-11 / AU-55) Bookkeeping and ing 1 THIS EXAMINATION PAPER CONSISTS OF 2 SECTIONS: SECTION A: CONSISTS OF: (i) 10 MULTIPLE-CHOICE QUESTIONS (10 MARKS) (ii) 10 MATCHING-STATEMENT QUESTIONS (10 MARKS) ANSWER ALL THE QUESTIONS SECTION B: CONSISTS OF 4 QUESTIONS ANSWER ALL THE QUESTIONS (80 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. NOTE: YOU MAY USE A NON-PROGRAMMABLE CALCULATOR. DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 1 OF 10

2 SECTION A (20 MARKS) ANSWER ALL THE QUESTIONS (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 In the general ledger of a business, a credit refers to: an increase in expense accounts. an increase in income accounts. a decrease in income accounts. a neutral affect. 2. The bank statement received from the bank is a reflection of the transactions on the account of the business. The bank statement will reflect deposits as debits. The bank statement will reflect deposits as credits. The bank statement will reflect payments as credits. The bank statement will not reflect deposits. 3. Opening inventory + Purchases Purchases returns + Carriage on purchases + Customs duties Closing inventory: Net profit Owner's equity Cost of sales Total assets 4. A debtors allowances journal is used for: recording credit sales. recording returns on credit purchases. summarising rebates on services previously offered to customers on credit and recorded in the appropriate journal. summarising credit purchases. 5. Total assets Total liabilities equals: fixed assets. owner's equity. non-current liabilities. net profit. DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 2 OF 10

3 6. The business received a cash cheque for R3 300 as monthly rent from Peter Porter. He is a tenant and is a registered VAT vendor, and uses our building for business purposes. What document will be used to record the transaction and could be offered as proof of the payment? Cash slip Cheque counterfoil Cheque Cash receipt 7. Generally, the supply of goods attracts VAT. However, certain basic foodstuffs, e.g. brown bread, milk, fruit, etc. do not attract VAT. Select the appropriate VAT supply category for these basic foodstuffs. Standard rated supplies Non-allowable items Exempt supplies Zero-rated supplies 8. In bookkeeping, interest on loan is classified as a(n): expense account that decreases economic benefits. income account that increases economic benefits. balance sheet account. expense account that increases economic benefits. 9. A business that is registered for VAT is called a VAT vendor. It is compulsory to register with the South African Revenue Services as a VAT vendor if the annual turnover exceeds: R R R R The form of ownership that allows a minimum of 2 and a maximum of 20 individuals is called a: sole trader. partnership. private company. public company. [10] DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 3 OF 10

4 (ii) MATCHING-STATEMENT QUESTIONS Match the statements in Column B to the terms in Column A. Write down the answers only, for example 1.. COLUMN A COLUMN B 1. current assets the outflow of inventory are calculated at the point of sale 2. gross profit retained by the business so that relevant bookkeeping payment entries are made in appropriate subsidiary journal 3. periodic inventory system a cheque that was recorded in the cash book payments over six months ago but has never been presented to the bank for payment 4. credit note resources that are likely to converted into cash within one year 5. cheque counterfoil (e) another business undertaking which owes money to the business enterprise concerned for the credit sale of merchandise 6. general ledger (f) sales minus cost of sales 7. debtor (g) an account prepared by the bank for each customer who has a current bank account. It reflects the deposits and withdrawals from the account 8. remittance advice (h) a document that records the cancellation of a sale 9. bank statement (i) summarises the bulk entries that are made in subsidiary journals. 10. stale cheque (j) the outflows of inventory are not recorded at the point of sale (k) a statement showing adjustments necessary to the statement received from the creditor to arrive at the correct payment amount [10] [20] DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 4 OF 10

5 SECTION B (80 MARKS) ANSWER ALL THE QUESTIONS QUESTION 1 The following are miscellaneous transactions for DOO-DAAH DEALERS for March The business is a registered VAT vendor and trades only with registered VAT vendors who can provide tax invoices. The business charges 14% VAT on all its sales. The business uses the perpetual inventory method. The business makes use of separate VAT input and VAT output accounts. You are required to: Show how each transaction will affect the accounting equation and the affect on the general ledger accounts. Write only the missing information denoted by the letters i. x. on your answer sheet provided. Example: The owner issued a personal cheque for R as a capital contribution. debited credited Asset = Owner's equity Example Bank Capital (h) + liabilities Answer: (h) TRANSACTIONS Bought equipment from Fast Equip, R7 700 (excluding VAT). Issued a business cheque. debited Equipment VAT input Asset = credited Bank i. ii. Owner's equity + liabilities (3) Services rendered, R4 425,00 (including VAT). Issued a cash invoice. debited credited Bank i. VAT output Asset = Owner's equity ii. + liabilities iii. (5) DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 5 OF 10

6 The owner contributed his personal computer and printer (equipment) to the business, R All legislative requirements have been met for the full VAT amount to be deducted. debited i. iv. credited Capital Asset = ii. v. Owner's equity iii. + liabilities (7) The trading inventory at DOO-DAAH DEALERS is marked up by 120% on cost (before any given trade discounts). Cost of the product in rand value (excluding vat) % mark up on cost Profit mark up (rand value) excluding vat Selling price (excluding vat) R4 720,65 i. ii. iii. (5) [20] QUESTION 2 The following list of assets and liabilities appeared in the books of Contessa Enterprises on 28 February 2012, the last day of the financial year. Amount Bank (favourable) Capital Cash float 600 Creditors Debtors Equipment Land and buildings Loan from Zumba Bank Petty cash Trading inventory Vehicles You are required to: Calculate the following values of Contessa Enterprises as at 28 February 2012: the total of the non-current assets (5) the total of the current assets (7) the total liabilities (4) owner's equity (4) [20] DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 6 OF 10

7 QUESTION 3 On 1 September 2012, Sunhill Traders owed R5 427 to their suppliers, while their customers owed an amount of R9 276 to them. Cash book receipts of Sunhill Traders 30 September 2012 Fol. CBR7 Bank Debtors Vat output Sales Sundry account Cost of sales , , , , , ,12 Cash book payments of Sunhill Traders 30 September 2012 Bank Creditors Vat input Trading Sundry inventory account , , , ,27 Fol, CBP7 Sundry accounts Creditors journal of Sunhill Traders 30 September 2012 Fol, CJ7 Creditors Vat input Trading inventory Sundry accounts , , , ,13 Creditors allowances journal of Sunhill Traders 30 September 2012 Fol, CAJ7 Creditors Vat output Trading inventory Sundry accounts 40992, , , ,00 Debtors journal of Sunhill Traders 30 September 2012 Fol, DJ7 Debtors Vat output Sales Cost of sales , , , ,78 Debtors allowances journal of Sunhill Traders 30 September 2012 Fol, DAJ7 Debtors Vat intput Sales returns Cost of sales , , , ,88,00 The following totals were extracted from the general journal of Sunhill Traders (Fol. GJ7) on 30 September Doc no Day Details Fol Debit Credit JV26 4 Creditors (M. Tango) C Debtors (M. Tango) D (Balance transferred) JV32 16 Credit losses VAT input Debtors (B. Foxy) D (Amount written off as irrecoverable) JV37 20 Interest income Debtors (N. Sambo) (Reversal of interest charged) D6 JV39 22 Interest expense Creditors C (interest charged by creditor on overdue account DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 7 OF 10

8 You are required to: Use the information and the totals given above which were obtained from the journals to prepare the DEBTORS CONTROL account (Fol. B8). Balance the account as on 30 September (10) You are the bookkeeper of Flip Flop Traders. The business is a registered VAT vendor and trades only with registered VAT vendors. The business charges 14% VAT on cost of sales. All amounts are inclusive of VAT unless VAT is not applicable. As the bookkeeper, you have been provided with the following vouchers: Day Voucher number Details of transaction 2 JV8 The owner, Ms Ntimbi, contributes a passenger vehicle valued at R to the business 9 JV9 The owner, Ms Ntimbi, took a power drill from the stock for personal use. The drill was originally bought from a distributor for R3 000, including VAT. No reduction in value has taken place. 16 JV10 Received correspondence from V Strela's attorneys. The letter served to inform us that V Strela has been declared insolvent. The outstanding amount (R1 500) must be written off as irrecoverable. 23 JV11 Longhi Suppliers gave 6% discount on the outstanding balance of R JV12 It was realised that packing materials purchased on credit during July 2012 for R7 440 (including VAT) was debited to the Postage and stationery account in error. Correct this error. 29 JV13 Received a statement of account from a creditor (Ricky Martin) showing a debit for interest at 6,5% on the outstanding amount of R925, since our account has been overdue for 30 days longer than the agree terms. Total (inclusive of vat) R C ????? You are required to: Use the relevant transactions from those given above to complete the General Journal for the month of August The General Journal is shown below. Write down only the missing information denoted by i. vii. on your answer sheet. Note: You are only required to use the relevant transactions. DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 8 OF 10

9 General journal of flip flop traders august 2012 Fol. GJ7 Doc. Day Details Fol. Credit Debit No. R C R C i. 2 Vehicles Capital (Owner contributed passenger vehicle to the business) JV9 9 Drawings VAT output ii. (Owner takes merchandise for own use) JV10 16 Credit losses VAT input iii. Debtors (V Strela) (V Strela's account written off as irrecoverable) JV11 23 Creditors (Longhi Suppliers) iv. VAT output Settlement discount received (Settlement discount received on early settlement) JV12 26 v. vi. (Correction of error) JV13 29 Interest expense vii. Creditors (Ricky Martin) (Interest charged by creditor on our overdue account) (10) [20] QUESTION 4 The following information is obtained from the books of Wigwam Traders. Information 1. The bank account had a credit balance on 1 July A comparison of the bank statement with the Cash book (receipts) and the Cash book (payments) on 31 July 2012 revealed the following: The bank statement showed a debit balance of R The bank had not yet credited the deposits of R9 000 (CS124) and R1 112,50 (CS125), which were made on 31 July The following cheques had not yet been presented for payment: Cheque Number 3123: R1 100,00 Cheque Number 3128: R437,50 DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 9 OF 10

10 3. A cheque of R1 587,50 received from D. Cubano (a debtor), had been dishonoured on account of insufficient funds. 4. The bank had charged the current account of Wigwam Traders with the following amounts: Bank charges R550,00 Interest on overdraft R337,50 5. The bank statement showed the monthly stop order for R2 187,50 in favour of Intense Insurers. This was to pay the fire insurance premium. 6. E. Supro deposited R4 100 directly into the current account of Wigwam Traders as part payment of his account. 7. The bank statement showed a debit order to transfer R500 to the bank account of Levi Skiros, the owner's son, for his monthly transport to school. 8. Cheque 3120 was undercast by R Cheque LK456 was incorrectly debited to the business's account, R Cheque 3130 was erroneously debited twice on the bank statement, R500. You are required to do the following: Prepare the Bank Reconciliation Statement on 31 July Provide suitable headings and relevant references. [20] [80] Section A: 20 marks Section B: 80 marks TOTAL: 100 MARKS DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 10 OF 10