Question 1:

Q.1.1 For each of the following statements indicate if the statement is true or false. In your answer book you need only write the number of the question and then state true or false. Q.1.1.6 – True. Questions where more than one answer are given will not be marked.

True False
Q1.1.1 1 Direct deposits are an
example of an adjusting
Q 1.1.2 Bank charges are an example
of a timing difference
Q.1.1.3  Interest on overdraft is an
example of a timing
Q.1.1.4  Debit order is an example of
an adjusting difference
Q.1.1.5  Bank understates a deposit on
the bank statement is an
example of a timing


Q.1.2 Stella owns a retail shop called Stella’s General Dealers. She sells goods mostly for cash and two of her cash customers are Galaxy Stores and Milkway Dealers. She also sells goods on credit to Apollo Stores. Stella’s General Dealers also purchases goods for cash and on credit from only one supplier called Concorde Stores.

Match the term in column A with the correct statement in column B.
In your answer booklet you need only write the number of the question from Column A and the letter of the correct answer from Column B. e.g. Q.1.2.6 – J

Q.1.2.1 Creditors/Accounts payable control A. Concorde Stores
Q.1.2.2 Creditor B. Apollo Stores
Q.1.2.3 Debtors List C. General ledger
account that provides
us with an exact
amount of how much
is being owed to us
from credit sales
Q.1.2.4 Debtor D. General ledger
account that provides
us with an exact
amount of how much
we owe from credit
Q.1.2.5 Debtors/Accounts receivable control E. The list that is totalled
and compared with
the balance of the
debtor’s control
account at the end of
each month
    F. Galaxy Stores
    G. Milkyway Dealers
    H. Subsidiary ledger that
details the outstanding
amount that a
company or an
organization owes
(payable to) its
vendors or suppliers,
complete with all the
balance and account

Question 2 (Marks: 50)

Q.2.1 Stella a friend of yours recently started her own business. She was told that she needs to perform a bank reconciliation every month, but she does not understand what this entails.
Q.2.1.1 Briefly explain to Stella the bank reconciliation process (6)
Q.2.1.2 Stella has heard that there are 2 types of awareness differences, she would like to
know what they are. Provide the 2 classifications of awareness differences (2)
Q.2.1.3 Explain to Stella why there would be differences between the transactions
recorded by the business and the bank (4)
Q.2.1.4 Provide 1 example of each of the following:
1. Error committed by the bank
2. Error committed by the business
3. Adjusting differences where the business is not aware of a particular transaction
4. Adjusting differences where the bank is not aware of a particular transaction (4)
Q.2.1.5 Explain to Stella the difference between a stop order and debit order (6)

Q.2.2 You have been provided with the following summary of cashbook receipts and cashbook payments for December 2022 before any adjustments have been made:

Day Details Amount


Dec 3 Cash 3 000
Dec 9 Azara Stores 3 000
Dec 12 Cash 1 850
Dec 17 Pieces Traders 1 000
Dec 31 Mr Zodiac 1 300
  Day Details Amount


  Dec 3 Jhb City Council (EFT) 1 500
  Dec 5 Cash 4 100
  Dec 9 Mr Scorpio (EFT) 1 750
  Dec 16 Cash 1 300
  Dec 31 Miss Hermes (EFT) 2 100

In addition you have received the following bank statement at 31 December 2022:

  Dec 1 Balance (favourable


    3 700
  Dec 3 Cash   300 4 000
  Dec 5 EFT Jhb City Council 1 500   2 500
  Dec 5 Cash 1 400   1 100
  Dec 10 Azara Stores   3 000 4 100
  Dec 11 EFT Mr Scorpio 1 750   2 350
  Dec 14 Cash   1 850 4 200
  Dec 19 Cash 1 300   2 900
  Dec 29 EFT Mr Apollo   8 500 11 400
  Dec 30 Bank charges 500   10 900
  Dec 30 Debit order 4 000   6 900

Additional Information
• The cash deposit made on the 3rd of December was correctly recorded in the cash book
• The cash payment made on the 5th of December was correctly recorded by the bank
• Opening favourable balance of Bank Account at 1 December 2022: R3 700


Q.2.2.1 From the information provided above calculate the corrected cashbook receipts and cashbook payments totals after taking into account all the adjustments required.
Show all your workings. (10)

Q.2.2.2 Using the amounts obtained in Q.2.2.1 above post to the bank account in the general ledger.
Balance the Bank general ledger account. (6)
Q.2.2.3 Prepare a bank reconciliation statement as at 31 December 2022. (12)

Question 3 (Marks: 40)

Steven owns and runs a store called Zodiac General Dealer. He allows goods to be sold on credit. Zodiac’s year-end is 28 February.
Steven went over all information pertaining to debtors to find out why the Debtors Control balance was not the same as the total of the Debtors List.
He discovered the following:
1. Invoice 209 for R4 270 made out to B Baker was entered into the account of C Baker in error.
2. The Debtors Allowances column in the Debtors Allowances Journal was added incorrectly as R21 790. The correct amount was R24 790.
3. An invoice made out to Mr Asher was incorrectly recorded as R16 840 in the Debtors Journal. The invoice was for R16 480. The incorrect amount was also posted to the Debtors ledger.
4. Interest of R270 should have been added to Miss Capricorn’s account. The bookkeeper had forgotten to do this and had not made any entries for this.
5. Connor Davis paid R4 950 after receiving a 10% settlement discount. These transactions were correctly recorded in the cashbook receipts and general journal respectively. The bookkeeper posted the general journal entries to the general ledger, but not to the individual account of Connor Davis in the debtors ledger.
6. On the 25 February 2023 Zodiac received R8 300 from Michaela Walsh. Michaela
Walsh’s account was previously written off as a bad debt in December 2022. The receipt now received was entered into the Debtors Control column in the Cashbook receipts. The total of the debtors control column was posted to the debtors control general ledger account.
7. The Debtors control balance on 28th February 2023: R42 640
8. The Debtors List Balance on 28th February 2023: R48 490

Zodiac sent the following statement of account to a debtor, Antares Stores:


TO: Antares Stores DATE: 28 February 2023 STATEMENT NO: 2/2023

Balance     15 700  
Invoice 16 16 680   32 380  
Invoice 28 12 560   44 940  
Credit note 12   1 230 43 710  
Invoice 46 9 780   53 490  
EFT   9 291 44 199  
Discount   489 43 710  
Interest 118   43 828  
Invoice 65 15 620   59 448  
Interest 647.60   60 095.60  

• 5% discount granted if paid within 30 days of statement date.
• Debt must be paid within 60 days of statement date.
• Interest charged at 2% per month on balances 90 days overdue

11 330 118 16 267.60  

Q.3.1 On 28 February 2023 Steven noticed that the balance in the Debtors Control account was different to the total of the Debtors List.
Explain why the balance of the Debtors Control account and the total of the
Debtors List should balance.

Q.3.2 Prepare the general journal entry required to correct the mistake noted in 1 above.
Journal narration is required. You may ignore the Document number and folio

Q.3.3 Reconcile the debtors control account to the debtor’s list by making the corrections and adjustment for the items listed 2 to 6 above. Enter the adjustment correction amount in the appropriate column in the table below. Total the columns as marks will be awarded to the totals:

Incorrect balance on

28 February




Q.3.4 In your own words explain what you understand by a debtors age analysis. (3)

Q.3.5 Prepare the journal entry to record the settlement discount granted, should Antares Stores pay the R16 268 current amount owing within 30 days.
Journal narration is not required. You may ignore the Document number and
folio columns. (5)

Q.3.6 Prepare the journal entry to record the interest receivable, should Antares Stores
fail to pay the 90 days outstanding debt of R32 380. (4)

Q.3.7 There is an error on the statement of account of Antaras Stores sent by Zodiac
General Dealers above. Identify the error and explain why it is an error. (2)

Q.3.8 Antares Stores complained that they paid another R10 000 in cash towards their debt so they should not have been charged interest. This payment was not reflecting on their statement. Steven found that his bookkeeper forgot to deposit the cash and enter it in the records. The cash was deposited on the 15th of March 2023.
Explain to Antares Stores when this amount will appear on their statement. (1)

Q.3.9 Write down in which column on the bank statement (debit/credit) the R10 000
will appear once it has been deposited. (1)

Q.3.10 In which journal will the R10 000 be recorded? (1)

Q.3.11 Zodiac General Dealers has come to the realisation that interest is not an effective way of getting their debtors to pay.
• Do you agree or disagree that this has been an effective method to get debtors to pay on time?
• Provide 2 reasons as to why you agree or disagree
• Provide 1 alternative method Zodiac General Dealers could use to ensure that Antares Stores pays within 60 days of the statement date. (4)

Get Answers on Above Questions on Accounting

Answer 1: 

    True False
Q1.1.1 Direct deposits are an
example of an adjusting
Q1.1.2 Bank charges are an example
of a timing difference
Q1.1.3 Interest on overdraft is an
example of a timing
Q1.1.4 Debit order is an example of
an adjusting difference
Q1.1.5 Bank understates a deposit on
the bank statement is an
example of a timing


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