1.

Question

28 February 2021

Equipment R20000, Accumulated depreciation R16000.Depreciation is calculated at 20% p.a. on a

diminishing method.

An old equipment was disposed for R1500.00 cash on 1 December 2020. The equipment originally
costed R3000.00. The accumulated depreciation for previous years is R700. The profit/Loss for the
disposed equipment is:

Answer: R 455.00

2. Question

28 February 2021

Equipment R20000, Accumulated depreciation R16000.Depreciation is calculated at 20% p.a. on a

diminishing method.

An old equipment was disposed for R1500.00 cash on 1 December 2020. The equipment originally
costed R3000.00. The accumulated depreciation for previous years is R700.

The depreciation for the year for the disposed equipment is:

Answer: R 345.00

3. Question

28 February 2021

Equipment R30000, Accumulated depreciation R50000.Depreciation is calculated at 10% p.a. on

cost.

An old vehicle was disposed for R20000.00 cash on 31 August 2020. The vehicle originally costed
R25000.00. The accumulated depreciation for previous years is R3000. The profit/Loss for the
disposed equipment is:

Answer: R 750.00

4. Question

28 February 2021

Equipment R30000, Accumulated depreciation R50000.Depreciation is calculated at 10% p.a. on

cost.

An old vehicle was disposed for R20000.00 cash on 31 August 2020. The vehicle originally costed
R25000.00. The accumulated depreciation for previous years is R3000.

The Current years depreciation for the disposed vehicle is

Answer: R 1 250 at 6 months of R2500

5. Question

Which method of depreciation is used when the cost of an asset is written off in equal amounts over
its expected economic life?

Answer: Fixed Installment / Cost method

6. Question

Partnerships pay tax according to the profits made by the business.

Answer: False

7. Question

Capital represents the investments contributed by the owners of the business plus retained profits.

Answer: True

8. Question

For every debit entry there must be a credit entry

Answer: Principle of double entry

9. Question

The statement of changes in equity reports on changes in the financial position of an enterprise on a
certain date:

Answer: False

10. Question

Creditors are recorded under equity element in an Accounting Equation

Answer: False

11. Question

Creditors have no interest in the financial statements of private company

Answer: False
12. Question

Identify the relevant transactions for the following entry:

Assets Owners’ Equity Liabilities

+ R 3 000 000 + R 3 000 000 0

Answer: The owner contributed capital of R 3000000 to the business

13. Question

Identify the relevant transaction for this entry:

Assets Owners’ Equity Liabilities

+R 20 000 + R20 000

Answer: Bought inventory on credit for R20 000

14. Question

Identify the relevant transaction for this entry:

Assets Owners’ Equity Liabilities

-R100 000 0 -R100 000

Answer: R100 000 cash paid to creditors

15. Question
16. Question

Capital R100000, drawings R6000, NET profit R7000. Owners’ equity in the statement of financial
position will be R113000

Answer: False

17. Question

Cash Float R2000, Bank overdraft R5000, Prepaid expenses R3000. Current liabilities in the
statement of financial position will be R5000

Answer: True

18. Question

Cash budgets are used to report on financial performance of an enterprise for a particular period.

Answer: False – Statement of Comprehensive income

19. Question

A loan obtained from ZZ Bank will be recorded as a cash outflow under financing activities in the
Statement of Cash Flows.

Answer: True

20. Question

The following information is disclosed in the Statement of Financial Position: Bank overdraft R15
000, Cash float R2 000, Prepaid Expenses R 3000. Current liabilities in the Statement of Financial
Position will amount to R15 000.

Answer: True (Overdraft is the only liability)

21. Question

The following information is disclosed in the Statement of Financial Position:

Capital R100 000, drawings R6 000, net profit R7 000. Owners’ equity in the Statement of Financial
Position will amount to R101 000.

Answer: True
Equity may be viewed as the residual claim that the owner(s) has on the assets of the organisation after all the
liabilities have been settled. It normally consists of two parts viz. that which is invested in the entity and that
which is earned by the entity and left in the entity (i.e. retained profits).
22. Question

In which of the following financial statements will “changes in working capital” be reported

Answer: Statement of cash flows

23. Question

An insolvent debtor paid GH Traders R 3500 which represented 80% of the amount owed. The
balance on her account must be written off. These transactions have not been recorded.

Which of the following statements is correct in respect of the above transactions?

Answer: B. The debtor owed R 4 375.00

24. Question

A recognition test assists with deciding whether items should be included in the financial
statements. Which characteristics of a financial statement does this refer to?

Answer: A: Reliable

25. Question

On 29 February 2020, the end of the financial year the loan account had a balance of R 90 000 and
the interest on loan account reflected a total of R 10 800. The interest rate is 12% per annum and
interest is not capitalized.

Note: A repayment of R 10 000 is made on 1 September of each year. The repayment on 1

September 2019 has been recorded.

In view of the above, which one the following statements is true?

Answer: B The interest expense for the year is R 11 400.00

26. Question

Which one of the following is used in the determination of the financial position of an entity?

Answer: Accumulated Depreciation

27. Question

Which of the following will be reflected in the Cash flow from Operating activities of a statement of
cash flows?

Answer: Adjusted Depreciation

28. Question

Which of the following will be reflected as a cash inflow in the statement of cash flows of an entity?

Answer: Decrease in accounts receivable

29. Question

Which of the following will appear as a debit entry in a pre-adjustment trial balance of a sole trader?

Answer: Salaries

30.