. Mr J James is the owener of an enterprise trading as James Traders. At 31 May 2003 the enterprise
had the following assets and liabilities:
R
Delivery vehicle 140 000
Inventory 30 000
Bank (overdraft) 10 000
Creditors 120 000
Debtors 100 000
Accumulated depreciation: vehicles 20 000
Prov...
,1. Mr J James is the owener of an enterprise trading as James Traders. At 31 May 2003 the enterprise
had the following assets and liabilities:
R
Delivery vehicle 140 000
Inventory 30 000
Bank (overdraft) 10 000
Creditors 120 000
Debtors 100 000
Accumulated depreciation: vehicles 20 000
Provision for bad debts 5000
Which one of the following amounts reflects the owner’s equity of James Traders at 31 May 2003?
A R115 000
B R125 000
C R140 000
D R160 000
2. Capital Limited, who’s financial year ends 28 February 2003, paid R3 000 advertising costs in respect
of the twelve months ended 30 April 2003.
Which one of the following accounts refelcted the balance after adjustments and closing transfers, as
indicated at the end of the financial year of Capital Limited?
A Accrued expenses: debit balance of R500
B Advertising costs: credit balance of R1 500
C Advertising income: credit balance of R500
D Prepaid expenses: debit balance of R500
3. T Swart, the owner of Swart Trading took goods with a selling price of R1 800 for his own use Selling
prices are determined by a mark-up of 33 ⅓% on cost price. The perpetual inventory system is in use.
Which one of the following alternatives represens the general ledger accounts as well as the effects
of the transaction on the accounting equation on Swart Trading?
General ledger accounts Accounting equantion
Debit Credit A = L + E
A Drawings Purchases +1350
-1350
B Drawings Inventory -1800 -1800
C Drawings Inventory -1350 -1350
D Drawings Sales +1800 +1800
,4. A business (registered for VAT) purchased 60 items at R22,80 each, 14% VAT inclusive. The items are
marked to earn a 20% mark-up on cost.
Which one of the following alternatives represents the difference between the cost price and selling
price, relating to the sale of 50 of these items?
A R200
B R228
C R240
D R288
5. The following information relates to the 2002/2003 financial year of Concord Traders:
R
Sales 360 000
Purchases 298 000
Inventory on hand at 30 June 2002 28 000
Inventory on hand at 30 June 2003 36 000
Purchases returns 9 000
Railage on sales 18 000
Customs and import duties 6 000
Railage on purchases 1 000
Which one of the following alternatives represents the gross profit percentage on sales of Concord
Traders for the year ended 30 June 2003?
A 20%
B 25%
C 15%
D 18%
6. Mr L Shakir started an accounting oractice on 1 January 2002 with R120 000 in the bank. His monthly
drawings amounted to R20 000. On 31 December 2002, the end of this financial year, his accounting
records reflected a bank overdraft of R84 000, with office equipment and debtors amounting to
R180 000 and R60 000 respectively.
Which one of the following amounts represents the preactice’s average monthly income for the year
ended 31 December 2002?
A R18 000 ???
B R23 000
C R33 000
D R47 000
7. Which one of the following statements regarding value added tax (VAT) is false?
A VAT on credit sales is eventually debited to SARD: VAT account.
B The VAT on goods purchased or services received is input VAT.
C VAT on cash purchases is eventually debited to the SARS: VAT account
D There are two rates of VAT for taxable supplies.
, 8. It was ascertained that the purchases returns journal of Soccaboots had been overcast by R1 000.
Which one of the following general ledger accounts of Soccaboots will be affected by this error?
A Debtors control
B Creditors control
C Sales
D Purchases
9. The following information for May 2003 was obtained from the records of Charles Traders:
R
Total sales for the month 90 000
Cash receipts from debtors 65 600
Discount allowed in respect of abovementioned receipts from debtors 1 800
Additional information:
(a) The correct balance on the debtors control account at 1 May 2003 was R51 000
(b) The sales journal was undercast by R2 000.
(c) Cash sales for the month amounted to R24 000.
(d) A debtor was declared insolvent, and his balance of R1 500 mst still be written off as bad debts.
Which one of the following amounts represents the correct balance on the debtors control account
of Charles Traders at 31 May 2003?
A R53 100
B R51 900
C R50 100
D R53 400
10.The financial year of Bon Jovi ends on 31 May. The balance on the discount allowed account on 31
May 2003 was R1 500.
Which one of the following alternatives, represents the correct closing journal entry for the discount
allowed account of Bon Jovi?
A May 31 Trading account 1500
Discount allowed 1500
B May 31 Discount allowed 1500
Trading account 1500
C May 31 Profit and loss account 1500
Discount allowed 1500
D May 31 Discount allowed 1500
Profit and loss account 1500
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