QUESTION 1
Adjusting journal entries are....
Journal entries in order to adjust the nominal accounts in the general ledger.
Journal entries at the end of the business’ financial year.
Ledger accounts balances drawn from the trial balance adjusted to reflect fair presentation of profits in the statement of profit or loss.
All of the above
2 points
QUESTION 2
Indicate which statement is not based on the Accrual basis of Accounting.
When an amount owing, which clearly will not be recovered, cannot be kept in the records as an asset.
All expenses incurred in order to produce income should be charged to that income in the year in which it was earned.
The period when earned or incurred is irrelevant for accrual basis of accounting
Income is reported when earned, and •expenses, when incurred.
2 points
QUESTION 3
Explain the following:
Prepaid expenses
Is an expense which was paid during a certain reporting period, but which relates to a future period.
An expense which relates to a certain reporting period but which is still unpaid at the end of that reporting period.
Is the systematic allocation of the depreciable amount of an asset over its useful life.
Is the amount owing by a receivable that should be written off.
2 points
QUESTION 4
Categorise the following:
Prepaid expenses
Assets
Liability
Income
Expenses
1 points
QUESTION 5
Categorise the following:
Depreciation
Assets
Liability
Income
Expenses
1 points
QUESTION 6
Categorise the following:
Income received in advance
Assets
Liability
Income
Expenses
1 points
QUESTION 7
Categorise the following:
Income receivable
Assets
Liability
Income
Expenses
1 points
QUESTION 8
Explain the following:
Accrued expenses
Is an expense which was paid during a certain reporting period, but which relates to a future period.
An expense which relates to a certain reporting period but which is still unpaid at the end of that reporting period.
An income prepaid is revenue received during a ceratin reporting period but which relates to a future period.
A revenue which relates to a fixed reporting period, but is still to be received at the end of the reporting period concerned.
2 points
QUESTION 9
Explain the following:
Income received in advance
Is an expense which was paid during a certain reporting period, but which relates to a future period.
An expense which relates to a certain reporting period but which is still unpaid at the end of that reporting period.
An income prepaid is revenue received during a ceratin reporting period but which relates to a future period.
A revenue which relates to a fixed reporting period, but is still to be received at the end of the reporting period concerned.
2 points
QUESTION 10
Explain the following:
Income receivable
Is an expense which was paid during a certain reporting period, but which relates to a future period.
An expense which relates to a certain reporting period but which is still unpaid at the end of that reporting period.
An income prepaid is revenue received during a ceratin reporting period but which relates to a future period.
A revenue which relates to a fixed reporting period, but is still to be received at the end of the reporting period concerned.
2 points
QUESTION 11
Ruda is the owner and operator of Ruda Traders, an Accounting consulting business.
She has asked you to assist her with the following transaction that took place in the current accounting period regarding depreciation.
The following balances appeared in the financial records of Ruda Traders on 1 April 20.19, the begining of the financial year:
Vehices (Cost Price) R 50 000
Accumulated depreciation: Vehicles (1/04/20.19) R7 500
Deprecation on vehicles should be calculated @ 15% on cost.
The recording of adjusted journal entry for depreciation would be:
a.
Debit Accumulated depreciation with R15 000 and credit depreciation with R15 000.
b.
Debit Accumulated depreciation with R7 500 and credit depreciation with R7 500.
c.
Debit depreciation with R7 500 and credit accumulated depreciation with R7 500.
d.
Debit depreciation with R15 000 and credit accumulated depreciation with R15 000.
2 points
QUESTION 12
Rent was received for 13 months, R26 000.
The account should be adjusted at year-end. Chooce the correct year-end journal entry from the above give transaction.
Debit Income received in advance with R2 000 and credit Rent income with R2 000.
Debit Rent income with R2 000 and credit Income received in advance with R2000.
Debit Rent income with R26 000 and credit Income received in advance. with R26 000.
Debit Rent income with R24 000 and credit Income received in advance. with R24 000.