Question 1 [22 Marks]

Read the below statement and answer the question that follows:

The objective of accounting is to convert financial data into meaningful information for its users by recording, estimating, and summarising data. There are two main branches of accounting, namely, managerial accounting and financial accounting.
Provide a summary comparison between managerial accounting and financial accounting. [12 Marks]
Study the below table and answer the question that follows.

Column A Column B
i.          Non-profit company A. Relevance and faithful presentation
ii.         Financial Accounting B. May not offer securities to the general public
iii.        Fundamental qualitative


C. Institute of Directors
iv.        Materiality D. Owners are called shareholders
v.         IFRS E. The maximum marginal tax rate
vi.        Luca Pacioli F. Components of relevance
vii.       Sole proprietorship G. Incorporated for public benefit
viii.      Private Company H. International Financial Reporting Standards
ix.        45 percent (%) I.    The precision of information is required
x.         Companies J. Accounting equation
  K. Owner bears all the financial risks involved with

the business

  L. The Father of Accounting
  M. May offer securities to the general public
  N. Data must be relevant and flexible

Match items listed in Column A with those listed in Column B. Write down only the letter of your choice next to the corresponding number. For example: (i). B
(ii). L (10 Marks)

Question 2 [28 Marks]

Read the below scenario and answer the question that follows.

You are provided with the following list of assets and liabilities that appeared in the books of Craig Wholesalers for the financial ending 28 February 2023.

Petty cash 1 500
Mortgage loan 300 000
Vehicles 125 000
Overdraft facility 28 000
Trading stock 50 000
Equipment 33 000
A loan from Boston City Bank (R60 000 repayable by 29

February 2024)

200 000
Land and buildings 250 000
Cash float 2 000
Accounts receivable 45 000
Accounts payable 93 000


Calculate the following values of Craig Wholesalers as of 28 February 2023:

I. The total of the non-current assets (2 marks)
II. The total of the current assets (2.5 marks)
III. The total of the non-current liabilities (2.5 marks)
IV. The total of the current liabilities (2 marks)
V. The owner’s wealth (equity) (3 marks)

Craig Wholesalers specialises in the trade of Cell phones. On 01 June 2023, the accounting equation of the business was as follows:

Assets = Equity + Liabilities
R300 000 R75 000 R225 000

Craig Wholesalers entered into the following transactions during June 2023.

Date Details
02 The owner, Mr Craig, made a capital contribution of R50 000 into the business. This was done through a cash deposit into the business’s bank

account by Mr Craig.

04 Bought trading inventory on credit for R12 000.
06 Paid R800 for fuel of the delivery vehicle from petty cash
07 Received a payment of R6 000 from a debtor as payment of his account
10 Sold trading stock for R10 000 cash. The trading stock was initially

bought at the cost of R3 000

11 Mr Craig took a cell phone and gave it to his niece as a gift on her 16th

birthday. The cell phone was initially bought for R7 000

15 Purchasing packing material on credit for R2 000
18 Made an EFT payment of R3 000 to the local municipality for rates and


22 Paid for repairs and maintenance of R4 000 from petty cash.
23 Purchased office refreshments by EFT for R500
26 Sold a cell phone for R15 000 on credit. The cell phone was initially

bought for R10 000.

29 Paid casual wages of R2 500 from petty cash.


Calculate Mr Craig’s equity in his business on 30 June 2023 by showing the effect of each individual transaction on the accounting equation. (16 marks)

Day Assets (R) Owner’s equity (R) Liabilities (R)


300 000 75 000 225 000
e.g. 02 +50 000 +50 000  

Question 3 [14 Marks]

Gibson Eateries is a registered VAT vendor and only deals with VAT-registered parties. Assume that the business acquires the following considerations and that the VAT Act has been adhered to in all instances. Complete the following table for Gibson Eateries by marking the correct block at each supply listed. (14 Marks)

Considerations Standard- rated


Zero- rated


Exempt supply Non- allowable


E.g., Petrol   X    
E.g., Trading stock X      
E.g., White bread for staff lunches       X
E.g., Life insurance premiums     X  
Telephone bill        
Brown bread purchased by a

restaurant to make sandwiches for resale

Water and electricity bill        
Diesel for use in the delivery vehicle        
Staff lunches        
Sale of a portion of a business as a

going concern

Tables and chairs for the restaurant        
A delivery vehicle that does not fit the

description of a passenger vehicle

Short-term insurance premiums        
A double cab vehicle        
Interest on bank overdraft        
Stove for use in the primary activities

of the business


Question 4 [36 Marks]

Liz Botha Wholesalers is a newly established business that specialises in the furniture trade, and the business is registered as a VAT vendor. Liz Botha Wholesalers has a trading policy of buying and selling only on a cash basis and buying only from suppliers who are registered VAT vendors. The business started trading on March 2023. The bookkeeper has supplied you with the below information for the month of March 2023:
List of duplicate receipts and cash invoices issued.

Day Details Doc no. Additional information Total amount

received (R)

03 Cash sales 001 Cost of goods sold, exclusive of

VAT = R7 000

11 000
06 Liz Botha RC001 Capital contribution by the owner 54 000
08 All-Star


B/S Direct deposit – Bank loan 150 000
15 Cash sales 002 Mark-up on cost = 25% 8 000
20 Cash sales 003 Cost of goods sold, exclusive of

VAT = R5 500

9 000
24 Cash sales 004 Mark-up on cost = 33.33% 21 000
31 All-Star


B/S Interest received on a fixed

savings account


List of EFTCs and bank statement debits.

Day Details Doc no. Additional information The total amount paid


01 Petty cash B/S Cash for the petty cash box 3 000
02 Sweet


EFTC Trading stock bought. The amount

includes freight costs for R4 000

22 000
05 Levy’s Food EFTC Lunch with clients 1 000
11 Gab’s Wholesalers EFTC Merchandise bought 8 000
14 BCC


EFTC Bought coffee machine for staff


1 400
17 UNICEF EFTC Donation to UNICEF 2 500
25 S. Zulu EFTC Salary of the store admin 9 500
30 Buffalo City


EFTC Monthly rates and taxes (assessed

rates portion = R800)

2 000
31 King’s


B/S Monthly business rent debit order

on the bank statement

15 000
31 All-Start


B/S Bank charges on the bank




Prepare the following for Liza Botha Wholesalers for March 2023:

I. Cash Receipts Journal (18 marks)

Use the below Cash Receipts Journal table format to record the transactions:



Day Details Analysis of


Bank VAT


Sales Sundry accounts Cost of


Amount Details

II. Cash Payments (18 marks)

Use the below Cash Payments Journal table format to record the transactions:



Day Details Bank VAT




Sundry Accounts
Amount Details

Answers to Above Questions on Accounting

Answer 1: Managerial accounting and financial accounting are important concepts of accounting and there exist significant differences between both these concepts. The main purpose of managerial accounting is to provide sufficient information to the managers, with the objective of allowing them to take relevant decisions within the organisation. Financial accounting is all about providing financial information to the external stakeholders such as investors, creditors in order to allow them to take important decisions about the organisation.

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