Accounting English Paper 1 2015 Questions and Answers Part 1
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Question 1
Concepts
1.1.1 | Bank overdraft | Π |
1.1.2 | Dishonored cheque | Π |
1.1.3 | Debit order | Π |
1.1.4 | Stale cheque | Π |
Bank Reconciliation
Explain how this loss of R24 000 would be treated in the books.
Any one valid response ΠΠ
Expected responses:
Enter in CPJ and describe as loss due to theft.
Apply rule of prudence to reduce Bank and to record a loss.
Explain how Roy can prevent a loss of this nature in the future. Provide two points.
Any two valid responses ΠΠ
Expected responses:
Insist that all cash collected is deposited into the Bank daily.
Division of duties where one person collects cash and another deposits the cash.
Check documentation on a daily basis; receipts must equal deposits.
Calculate the correct bank account balance on 31 October 2014.
16 160 Π – 2 710 Π – 1 650 Π + 450 Π - 24 000 Π = overdraft of 11 750 Ρ one part correct
Give a suitable reason for the entry from the Bank Reconciliation Statement of the amount incorrectly debited, R 2500.
Any suitable reason ΠΠ
Possible reasons:
The bank had in error shown a cheque of another client in the current banking account of the business.
The bank duplicated an entry (example bank charges, debit order) on the debit side of the bank statement.
The office assistant of Manto Traders takes money from the cash register to make payments for business expenses.
Explain why this is bad accounting practice.
Any valid explanation ΠΠ
Expected responses:
All cash must be deposited intact to ensure that internal control is not compromised.
This will lead to abuse and the possibility of fraud because there will be no authorization or documentation.
Provide one point of advice to Roy.
Any one valid point ΠΠ
Expected responses:
Stop this practice immediately and use the petty-cash system for daily expenses.
Creditors’ Reconciliation
Creditors’ Ledger of Nkomazi Traders Malelane Suppliers (CL7)
Balance per Ledger Account | 47 064 |
Error corrected on Invoice 346 | ΠΠ– 1 512 |
Adjustment of discount on C207 | ΠΠ1000 |
Correction of error on Invoice 135 | ΠΠ6 929 |
Interest | Π29 |
one part correct | Ρ39 652 |
Creditor’s Reconciliation Statement on 30 September 2014
Balance as per Creditor’s Statement | 40 271 | ||
Credit note incorrectly recorded | (816 x 2) | (1 632) | ΠΠ |
Discount not yet recorded | (2 532) | ΠΠ | |
Trade discount omitted | (981) | Π | |
Invoice issued after statement date | 4 526 | Π | |
Balance as per Creditors Ledger | one part correct | 39 652 | Ρ |
Question 2
Calculate the value of the closing stock of 145 television sets on 28 February 2015 using the FIFO method.
ΠΠ | ΠΠ ΠΠ | |
R411 | 750 | + (55 x R4 875) |
= R679 | 875Ρ | one part correct |
Calculate the cost of sales.
R385 000 + R1 765 500 – R14 625 – R679 875 = R1 456 000 | ||||
Π | Π | ΠΠ | Ρ | Ρ |
one part correct | ||||
Calculate the average mark-up % achieved for the year.
R847 800 ÷ R1 456 000 x 100 = 58,2% | ||
ΠΡ | Ρ | Ρ one part correct |
Provide a calculation to prove whether the information given by the cleaner is true or not.
Π Π Π Π | ||
70 + 360 – 3 – 276 | = 151 | |
On hand | = 145 | Π |
Missing | = 6 | Π |
Jane is concerned that the final stock of 145 television sets is not appropriate for her business. Provide a calculation or figures to support her opinion and explain.
Calculation/Figures:
Any valid figures: ΠΠ
days
Or
679 875 x 365 = 170 days
1 456 000 1
Or
Compare stock on hand (145 units) to total sales (276 units)
Explanation: ΠΠ
Not appropriate as stock will last at least 6 months