QUESTION 1
1. Service
2. Current income
3. Service undertaking
4. Trading entities
5. Trading stock
6. Cost of sales
7. Assets
8. Income
9. Accounting cycle
10. Double entry principle
11. Creditors control
12. Current liability
13. Debtors control
14. Current asset
15. Profit
16. Loss
17. Profit
18. Gross profit
19. Net profit
20. General ledger
QUESTION 2
1. Owners’ equity
2. Income
3. Current assets
4. Expense
5. Expense
6. Non-current assets
7. Current assets
8. Non-current liabilities
9. Expense
10. Expense
QUATION 3
1. E Petty cash voucher
2. C Duplicate receipt
3. F Bank statement
4. A Duplicate invoice issued
5. B Cash register roll
6. D Original invoice received
QUESTION 4
Explanation
1. c Transactions are being transferred monthly to the general ledger.
2. a The total amount of wages paid out during the month.
3. b Credit balance in the bank account indicates the total amount owed to
the bank. The business withdrew more than was deposited in the bank.
4. b Commission will increase the profit because it was not taken into
account.
5. c Packing material is an expense. Expenses decrease the profit the
owner will receive.
6. c The balance always indicates the closing balance of transactions of the
previous month. Expenses decrease the profit of the owner.
7. c The R15 500 is the cost price of all the equipment purchased by the
business. Equipment with no further use by the business will be sold at
a lower price.
8. a A balance on the credit side indicates a liability from the previous
month.
9. d A balance on the credit side indicates an income received during the
previous months that will increase the owners’ equity because the profit
increase.
10. c The total in the bank column indicates all money paid out during the
month.
QUESTION 5
1. Fixed deposit Non-current assets
2. Vehicles Non-current assets
3. Capital Owners’ equity
4. Cash float Current assets
5. Drawings Owners’ equity
6. Wages Expenses
7. Stationery Expenses
8. Rent paid Expenses
9. Trading stock Current assets
10. Computers Non-current assets
11. Bank (Ct) Current liability
12. Creditors control Current liability
13. Advertisement Expense
14. Cost of sales Expense
15. Rent income Income
16. Mortgage bond Non-current liability
17. Furniture Non-current asset
18. Consumable stores Expense
19. Telephone Expense
20. Salaries Expense
21. Water and electricity Expense
22. Commission received Income
23. Interest on fixed deposit Income
24. Interest on loan Expense
25. Debtors control Current asset
26. Land and buildings Non-current asset
27. Sales Income
28. Interest on current account Income
29. Commission income Income
30. Drawings Income
31. Petty cash Current asset
32. Favourable bank balance Current asset
33. Loan Non-current liability
34. Insurance Expense
35. Bank charges Expense
QUEATION 6
1. Decrease
2. Cash register roll
3. Bank statement
4. Profit motive
5. Payments
6. Direct deposit/EFT receipt
7. Increase
8. Decrease
9. Luca Pacioli
10. Bank charges
11. Receipt
12. Duplicate
13. Bank
14. Cash
15. Overdraft
16. Bank statement
17. Bank deposit slip
18. Statement of account
19. Invoice issued
20. Interest on current account
QUESTION 7
A. Source document
B. Subsidiary journals
C. Posting to the general ledger.
D. Trial balance
E. Financial statements are drawn up
F. Analyse and evaluate the financial statements to be able to make managerial
decisions.
QUESTION 8
1. True
2. True
3. False
4. True
5. True
6. False
7. True
8. False
9. False
10. False
QUESTION 9
1. K Bank statement
2. N Cash register roll
3. I Receipt
4. Q Debit card
5. P Liabilities and income
6. E Deposit
7. W Drawing
8. R. Gross profit
9. D. Profit mark-up
10. A Service undertaking
11. O. Cash receipts journal
12. C. Double entry rule: for each debit there must be a corresponding
credit.
13. P. Liabilities and income
14. S. Cash payments journal
15. J. Owners’ equity
16. U. Interest on current account
17. H. Asset and expense accounts
18. L. Overdrawn bank
19. B. Interest income
20. X. Fixed deposit
QUESTION 10
1. Expense
2. Expense
3. Current liability
4. Expense
5. Income
6. Non-current asset
7. Non-current liability
8. Current asset
9. Non-current asset
10. Expense
11. Expense
12. Income
13. Expense
14. Non-current asset
15. Expense
16. Current liability
17. Income
18. Non-current liability
19. Current asset
20. Non-current asset
QUESTION 11
1a. Bank Money paid to decrease he loan.
1b. CRJ Money received to increase the loan
1c. R13 700 8 700 + 9 000 – 4 000
2a. a (2 and 3) CRJ – debit cost of sales and credit trading stock
CPJ –trading stock is purchased and debited. Money was paid
and bank will be credited.
2b. R10 800 10 000 + 9 400 – 8 600
2c. b (i and iii) Credit purchases
Cost of sales when goods were sold.
3. D (15 000) Income (20 000 + 11 000) – expenses (12 000 + 4 000)
4. b Transfer to the general ledger.
5. b Investment
QUESTION 12
1. True The trial balance will not balance if there is no credit for each
corresponding debit.
2. True The trial balance does balance although a transaction was not
made because not debit of credit transactions were completed.
3. False The totals will not be the same if the two legs of the transaction are
on the same side.
4. True At the end of each month all transactions are being transferred to
the general ledger.
5. True Income and expenses are being recorded in the nominal accounts
section.
6. True Assets = Owners equity + Liabilities
7. False Liabilities increase on the credit side.
8. True Assets increase on the debit side.
QUESTION 13
1. Bank charges Expense
2. Debtors control Current assets
3. Cost of sales Expense
4. Creditors control Current liability
5. Trading stock Current assets
6. Services rendered Income
7. Cash float Current assets
8. Consumable stores Expense
9. Sales Income
10. Drawings Equity
11. Postage Expense
12. Interest on overdraft Expense
13. Mortgage bond Non-current liability
14. Stationery Expense
15. Bank overdraft Current liability
QUESTION 14
1 a Account number
b Month
c Day
d Details
e Fol
f Amount
2 a Balance
b R30
c CRJ
d Total payments/sundry accounts
e b/d
f R9 000
3 a b/d
b Cost of sales
c CPJ
d R62 000
e b/d
f R9 000
4 a Sales
b Bank
c Debtors allowance
d R82 000
e R39 000
f c/d
QUESTION 15
1. Bank
2. Debit card
3. Receipt
4. Cash register roll
5. Bank statement
6. Cash register roll
7. Bank statement
8. Credit side
9. Debit side
10. Bank statement
QUESTION 16
1. 100% 1 500
40%
140% 1 500 x 140/100 2 100
2. 2 100 – 1 500 600
3. 100% 13 200 x 100/120 11 000
120% 13 200
4 220% 13 200 x 220/120 24 200
5. y/100 x 1 000 = 3 000 300%
6. 1 000 x 400/100 4 000
7. y/100 x 1 440 – 640 800 = 640 80%
8. 1 440 – 640 800
