Adjustments - Assessment

1.

Multiple Choice

20 sec

1 pt

A debtor with a credit balance of R500 must be transferred to the Creditors’ Ledger.

Increase debtors control and decrease creditors control

Increase debtors control and increase creditors control

Decrease debtors control and decrease creditors control

Decrease debtors control and increase creditors control

2.

Multiple Choice

1 min

1 pt

Provision for bad debts must be adjusted to

3% of debtors.

Balance of Debtors control account is (R44 500 - 500)

Balance of Provision for bad debts is R1 500

Provision for bad debts is an expense of R1 320

Provision for bad debts is an expense of R180

Provision for bad debts is an income of R1 320

Provision for bad debts is an income of R180

3.

Multiple Choice

2 mins

1 pt

Rent has been received for 14 months, R137 640. The rent

increased by R930 on 1 January 2017.

What's the entry in the financial statements for 30 June 2020?

Rent income + 20 000. Accrued income +20 000

Rent income -9 831. Income received in advance +9 831

Rent income -20 460. Income received in advance +20 460

Rent income -19 662. Income received in advance +19 662

4.

Multiple Choice

30 sec

1 pt

Prepaid expenses in respect of R7 050 for sundry expenses have not been brought into account.

How will this affect the financial statements?

Sundry expenses - R7 050 Prepaid expense + R7 050

Sundry expenses + R7 050 Prepaid expense - R7 050

Sundry expenses - R7 050 Prepaid expense - R7 050

Sundry expenses + R7 050 Prepaid expense + R7 050

5.

Multiple Choice

1 min

1 pt

There were two directors at the start of the accounting period. Directors’ fees of R900 000 have been paid for the first half of the accounting period. On 1 May 2017 a third director was appointed. The end of the year is 30 June.

All three directors earn the same monthly fee. Provide for the outstanding fees owed to the directors.

Which calculation is correctly adding the directors fee?

900 000 / 2 = 450 000 / 6 = 75 000pm

75 000 x (6 + 6 + 2) = R1 050 000 added to directors fees

900 000 / 12 months = 75 000pm

75 000 x 12 months = R900 000 added to directors fees

900 000 / 2 = 450 000

450 000 / 12 = 37 500

37 500 x 2 = 75 000 to be added to directors fees

900 000 / 3 = 300 000

300 000 x 2 = 600 000 to be added to directors fees

6.

Multiple Choice

2 mins

1 pt

A physical stock count on 30 June 2017 reflected the stock on hand as R1 138 960.

Stock to the value of R1 040 was returned by a debtor after the stock taking.

Balance of Trading stock on the pre-adjustment TB -

R1 133 000. How will this be treated in the financial statements?

Trading stock deficit as expense - R 7 000

Trading inventory will be an asset of - R1 138 960

Trading stock deficit as expense - R 7 00

Trading inventory will be an asset of - R1 133 000

Trading stock deficit as income - R 7 000

Trading inventory will be an asset of - R1 133 000

Trading stock deficit as expense - R 7 000

Trading inventory will be an asset of - R1 133 000

7.

Multiple Choice

1 min

1 pt

A new vehicle was purchased on

1 May 2020 for R300 000. This has been properly recorded.

Which statement is the most correct?

A new vehicle was bought

A new vehicle was bought and recorded. The cost price of Vehicles changed and to get the opening value (old vehicles) R300 000 must be subtracted. Vehicles will be depreciated for the months used.

All vehicles will be depreciated with the same value and the same time.

A new vehicle was bought and recorded. The cost price of Vehicles changed and to get the opening value (old vehicles) R300 000 must be subtracted. Vehicles will be depreciated at the same rate and for the same number of months.

8.

Multiple Choice

2 mins

1 pt

Depreciation on equipment is calculated at 10% p.a. on the cost price. Note that equipment with cost price R44 000 was taken over by one of the directors on 30 June 2020 for personal use for R24 000 cash (This has been recorded in the Bank and Asset Disposal Account, no other entries has been made). Accumulated depreciation on 1 July 2019 was R11 000.

Which answer states all adjustments in the statementment of comprehensive income correctly?

Depreciation +4 400

Loss on sale of asset +4 600

Depreciation +3 300

Loss on sale of asset +5 700

Depreciation +11 000

Loss on sale of asset +9 000

Depreciation +11 000

9.

Multiple Choice

30 sec

1 pt

Balance on 1 July 2016 R384 000

Interest charged

Monthly instalments in terms of the loan

agreement (12 x R8 800) (Instalments include

interest). R105 600

Balance on 30 June 2017 R336 000

What interest was charged?

8 800

48 000

57 600

105 600

10.

Multiple Choice

30 sec

1 pt

Land was purchased for R1 500 000 for future expansion.

An amount was also paid to Langley Construction for:

*Extension to the existing factory area, R600 000.

*Tiling of the office block, R75 000.

How will this be recorded in the financial statements?

Land and buildings +R2 175 000

Repairs +R0

Land and buildings +R1 575 000

Repairs +R600 000

Land and buildings +R2 100 000

Repairs +R75 000

Land and buildings +R1 500 000

Repairs +R675 000

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