FINANCIAL ACCOUNTING 1

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1 FINBUS2 JUNE 2013 EXAMINATION DATE: 3 JUNE 2013 TIME: 09H00 12H00 TOTAL: 100 MARKS DURATION: 3 HOURS PASS MARK: 40% (BUS-AC1) FINANCIAL ACCOUNTING 1 THIS EXAMINATION PAPER CONSISTS OF 5 QUESTIONS: ANSWER ALL THE QUESTIONS (100 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. AN ACCOUNTING ANSWER BOOK WILL BE PROVIDED. DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 1 OF 6

2 ANSWER ALL THE QUESTIONS (100 MARKS) QUESTION 1 (a) (b) Mention three reasons why it is important to draw up a cash flow statement for a business. (3 2 = 6) Provide definitions for the following: i. assets ii. liabilities iii. equity (3 2 = 6) (c) Refer to the information below. Identify and explain which is: i. a current liability (2) ii. a non-current liability (4) S Swano operates a computer consultancy business. He decides to raise finance in order to expand his business. He obtains the following loans on 1 January 2013 (his financial year is 28 February 2013): A loan of R from his brother, which should be repaid on 30 June A loan of R from his bank, which should be repaid in equal installments on 31 December 2013 and 31 December DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 2 OF 6

3 (d) The following is the trial balance of Lavinia Dacum, operating as Dacum Estate Agents, for the financial year ending 28 February 2012: Show the closing journal entries for the year ended 28 February DACUM ESTATE AGENTS TRIAL BALANCE AT 28 FEBRUARY 2012 Debits Credits Commission Advertising expenses Accounting fees Salaries Motor vehicle expenses Debtors Bank Capital Creditors Interest received Motor vehicle Equipment Long-term loan: SBDC Drawings (14) [32] QUESTION 2 Information for Makron Wholesalers follows below. Open and balance / close off the following three general ledger accounts: Trading inventory Sales Cost of sales Information: On 1 June Makron had inventory on hand with a cost price of R The following purchases were made during the month: June 10 Purchases goods on credit for R Purchases goods by cheque for R8 000 The following sales were made during the month: June 15 Sold goods on credit for R (cost of sales amount to R5 000) June 25 Sold goods for R6 000 cash (cost of sales amount to R3 000) The value of inventory on hand at 30 June as established per physical inventory take is R [15] DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 3 OF 6

4 QUESTION 3 You are provided with the completed Post adjustment Trial Balance for ABC Traders, on 28 February 2013, below. Post-adjustment Trial Balance Capital account Drawings Long-term loan Motor vehicles Office equipment Furniture and fittings Provision for depreciation: Motor vehicles Office equipment Furniture and fittings Fixed deposit Stock Debtors Provision for bad debts Bank Creditors Sales Sales returns Purchases Purchases returns Freight inwards Customs duty Discount received Interest received Advertising Bad debts Bank charges Discount allowed Electricity and water Freight outwards Insurance Interest on loan Motor vehicle expenses Postage and telephones Printing and stationery Repairs and maintenance Salaries and wages Travelling and entertainment Accounting fees Accrued expenses Accrued income 750 Prepaid expenses Stationery stock 750 Depreciation: (Motor vehicles R12 000, Office equip R2 400, F & F R1 500) Complete the balance sheet with notes, on 28 February Closing stock was valued at R [27] DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 4 OF 6

5 QUESTION 4 The accountant of Sin Sing Restaurant discovered the following facts and errors when comparing the statement received from Fruit Juices Ltd. with the firm's own records: Information: 1. The credit balance on Fruit Juices' ledger account was R645 on 31 March Fruit Juices' Statement for March 2013 that reflects an amount due of R1 241, does not reflect a payment of R300 that was made by Sin Sing on 28 March. 3. A credit note, No for R165, dated 27 February 2013 and taken into account by Sin Sing during March 2013, does not appear on Fruit Juices' statements for either February or March. 4. An invoice, No for R50, is shown as a credit note on Fruit Juices' statement. 5. An invoice for R630 was erroneously resolved in Sin Sing's purchases journal as R An invoice, No for R61 appears on Fruit Juice's statement, although no such invoice or merchandise was ever received from Fruit Juices. 7. An addition error of R100 in favour of Sin Sing Restaurant was made on the statement from Fruit Juices. (a) (b) (c) Calculate the amount owing by Sin Sing Restaurant to Fruit Juices Limited at 31 March Record the journal entry/entries with narrations that may be necessary in the books of Sin Sing Restaurant to reflect any adjustment(s). Correct the errors, if any, in the March statement from Fruit Juices, so that Sin Sing Restaurant can return it to Fruit Juices with a remittance for the correct amount owing as at 31 March [14] DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 5 OF 6

6 QUESTION 5 Explain the following manufacturing accounts terminology and provide an example of each: (a) Work-in-progress (2) (b) Prime costs (provide example) (5) (c) Factory overheads (provide example) (5) [12] [100] TOTAL: 100 MARKS DAMELIN CORRESPONDENCE COLLEGE JUNE 2013 PAGE 6 OF 6

ACCOUNTING AND FINANCE

ACCBUS4 NOVEMBER 2012 EXAMINATION DATE: 5 NOVEMBER 2012 TIME: 09H00 12H00 TOTAL: 100 MARKS DURATION: 3 HOURS PASS MARK: 40% (BUS-AF / PD-58) ACCOUNTING AND FINANCE THIS EXAMINATION PAPER CONSISTS OF 2