LEGBUS2 JUNE 2012 EXAMINATION DATE: 7 JUNE 2012 TIME: 09H00 11H00 TOTAL: 100 MARKS DURATION: 2 HOURS PASS MARK: 40% (ED-48) LEGAL SECRETARY THIS EXAMINATION PAPER CONSISTS OF 2 SECTIONS: SECTION A: CONSISTS OF: (i) 10 MULTIPLE-CHOICE QUESTIONS (10 MARKS) (ii) 10 TRUE OR FALSE QUESTIONS (10 MARKS) (iii) 10 MATCHING-STATEMENT QUESTIONS (10 MARKS) SECTION B: CONSISTS OF 5 QUESTIONS (70 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 ARE ALLOWED TO USE A NON-PROGRAMMABLE CALCULATOR. DAMELIN CORRESPONDENCE COLLEGE JUNE 2012 PAGE 1 OF 7
SECTION A (30 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 1.. 1. Which of the following documents cannot be used to verify an individual's source of income? SARS documentation (less than 12 months old) an IRP5 certificate supplied by the individual s employer six months ago a payslip from the current employer which is two months old a letter of appointment dated 18 months ago 2. A ledger is a book that: is the same as the window purchase account. summarises the deposits made to the bank. contains the separate accounts of each particular class. keeps records of fees received only. is used to record the minutes of a financial meeting. 3. The bank reconciliation statement is a statement that is prepared to reconcile: the cashbook entries against those entries shown in the bank's books. what you have bought against what you have earned. all your ledger accounts with the bank statement. your investments at different banks. 4. It is not necessary to issue a tax invoice if the value of the supply does not exceed: R15. R20. R50. R100. 5. In the context of VAT output, tax is the tax that is: charged by practitioners on all taxable fees. payable by a practitioner to a registered vendor. payable to SARS for SITE. payable to a country importing goods from RSA. DAMELIN CORRESPONDENCE COLLEGE JUNE 2012 PAGE 2 OF 7
6. An IT3(B) income tax certificate should be issued for: all VAT payments received by a practitioner. payments made to consultants. salaries paid to any person earning less than R60 000 a year. interest that accrued to clients as taxable income. 7. Which of the following is not an unethical practice of clients? refusal to pay contractors for work done delay of payments failure to provide information on time bullying of contractors or subcontractors to reduce their tendered amount changing the agreed plan 8. The legally recognised place of residence is known as: a postal address. a registered property. domicilia. a prime residence. a street address. 9. What type of a sale is a sale for a trademark? a cash sale a credit sale a sale of immovable property area a sale of movable property a sale of incorporeal property 10. The terms, not necessarily spelled out but implied (expressed indirectly), which the law attaches to specific types of contracts are known as: sub-clauses of the contract. the naturalia of a contract. indirect conditions. agency clauses. ratification of a contract. [10] DAMELIN CORRESPONDENCE COLLEGE JUNE 2012 PAGE 3 OF 7
(ii) TRUE OR FALSE QUESTIONS Choose whether the following are True or False. Write only true or false for your answers. 1. Accounts that have been debited can be classified as income or liabilities. 2. You will need to balance your cashbooks sometimes, usually when the auditor is coming. 3. The tax invoice must contain the following details: the tax registration number; the words 'tax invoice'; an invoice number; the name and address of the recipient; details of the services rendered; the amount of the fee; the tax charged and the rate thereof; and the total amount due. 4. Indemnity insurance means that the insurer undertakes to pay the insured or his or her beneficiary a fixed amount of money if a specific event occurs. 5. One of the legal requirements for an agency is that the principal must exist. 6. Where the first party fails to fulfil his or her obligations under a contract, the second party may seek an order from the court compelling him or her to do what he or she has promised. Such an order is known as one for specific performance. 7. Statutory Law is that law which is enacted by government departments and authorised by the Director General. 8. Special damages are damages that the court awards to compensate for a loss where the amount cannot be calculated. 9. The setting-out point that the contractor uses as his or her reference point is the dumpy level. 10. The purpose of a trial balance is to verify the arithmetical accuracy of the entries, postings, additions, and balances of all the relevant records. [10] DAMELIN CORRESPONDENCE COLLEGE JUNE 2012 PAGE 4 OF 7
(iii) 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. transaction the act of making an agreement official 2. bookkeeping rules things that do not have a physical existence 3. instructed correspondent the document that comprises the certificate of ownership of immovable property 4. ratification substitution of a new clause for the old one 5. deeds office a proposal, by one party, of the terms for entering into a binding contract 6. incorporeal property (f) a business deal that is being negotiated or that has been settled 7. novation (g) a clause that voluntarily relinquishes any rights by a party to a contract 8. title deed (h) apply to all types of businesses 9. waiver (i) the party that receives and acts upon the instruction to render a particular service on behalf of another attorney elsewhere 10. offer (j) an executive arm of government, for the registration of certain acts and contracts [10] [30] DAMELIN CORRESPONDENCE COLLEGE JUNE 2012 PAGE 5 OF 7
SECTION B (70 MARKS) QUESTION 1 List the information that must be obtained before an application for the opening of a bank account for a legal partnership will be considered. [10] QUESTION 2 Record the following transactions in the appropriate cashbook and balance your cashbook: 1. On 2 April 2011, client Barry deposits R60 000 in cash with the firm to be held in trust pending settlement of a civil claim. 2. On 2 April 2011, client Callie pays the firm R75 000 in cash to be held by the firm on her behalf pending registration of transfer of a flat she bought from Jackson. 3. On 2 April 2011, client Denton deposits R37 500 in cash with the firm being the purchase price of a vacant piece of land. The deed of sale authorises the firm to invest the money on her behalf pending transfer. You invest the money with Capitec Bank. 4. On 2 April 2011, client Justin pays in R45 000 in cash to be held in trust pending settlement of a divorce action. 5. After revision of the firm's trust cash position, it is decided to invest R125 000 in a trust investment at ABSA Bank. 6. On 30 April 2011, the firm decides to withdraw all the trust investments and receives R37 750 from Capitec Bank and R126 500 from ABSA Bank. 7. You pay over the interest amounts received to the beneficiaries, that is, R250 for Denton, and R1 500 for the Fidelity Fund. [20] QUESTION 3 Your friend is about to get married, and has various ideas about her assets after marriage. Write a brief note to her explaining the meaning of the following: antenuptial contract (4) in community of property (2) out of community of property (3) the accrual system (1) [10] DAMELIN CORRESPONDENCE COLLEGE JUNE 2012 PAGE 6 OF 7
QUESTION 4 Explain the obligations of the following parties in terms of the law of contract: the contractor the client the principal agent [20] QUESTION 5 Briefly explain the difference between tender drawings and construction drawings. (2) Explain why it is important that the contractor keeps a set of tender drawings in a safe place. (2) List the kinds of changes we can experience on a building contract. (3) What site services does the contractor need to identify from the drawings? (2) What is the link between project specifications and the construction drawings? (1) [10] [70] Section A: 30 marks Section B: 70 marks TOTAL: 100 MARKS DAMELIN CORRESPONDENCE COLLEGE JUNE 2012 PAGE 7 OF 7