WorksheetsReconciliations and Asset Disposal
Total questions: 13
Worksheet time: 25mins
The statement indicated that permission was granted to Safe Insure to receive a monthly payment for insurance from the current account of Best Traders. This is known as a/an:
debit order
stop order
EFT
cheque
The statement indicated two interest entries, one debit entry for R200 and one credit entry for R300. The correct entries that the accountant has to make in the financial records of Best Traders are
debit interest on current account with R200 and credit interest on overdraft with R300.
credit interest on current account with R300 and debit interest on overdraft with R200.
debit or credit either interest on current account or interest on overdraft with the net result of R100.
no entry, as there is an error on the bank statement because the bank statement can’t reflect both a debit and a credit entry for interest.
Which of the following procedures best describes the reconciliation of cash?
The bank balance on 31 January 2022 in the General Ledger is compared to the end balance of the bank statement received.
The bank balance on 28 February 2022 in the General Ledger is compared to the opening balance of the bank statement received.
Cash deposits in the CRJ are compared to the credit entries on the bank statement to ensure that cash deposited corresponds.
Cash deposits in the CRJ are compared to the debit entries on the bank statement to ensure that cash deposited corresponds.
Wok This Way owes an amount of R20 000 to a creditor. A discount of R400 is received for early settlement of the account.
Wok This Way owes an amount of R20 000 to a creditor. A discount of R400 is received for early settlement of the account.
- 400 asset
- 400 equity
+ 400 asset
+ 400 equity
+ 400 equity
- 400 liabilities
- 400 equity
+ 400 liabilities
The EFT amount for settling the account is:
R20 800
R20 400
R20 000
R19 600
Eggcellent Eats, a wholesaler, supplies goods on credit to Thai Tanic. A credit note was issued to Thai Tanic for the omission of trade discount on the last invoice sent to them. The accountant of Eggcellent Eats recorded the credit note incorrectly as an invoice in the account of Thai Tanic. Which entry must the accountant of Eggcellent Eats make in the account of Thai Tanic to rectify the error?
Debit the account with the amount of the credit note.
Debit the account with double the amount of the credit note.
Credit the account with the amount of the credit note
Credit the account with double the amount of the credit note.
Lord of the Fries purchases frozen chips from Phat Tato. Lord of the Fries paid Phat Tato R11 400 after taking into consideration 5% discount for early payment. Phat Tato did not allow the discount as the payment from Lord of the Fries cleared late in the bank account of Phat Tato.
Which of the following entries best reflect the correction(s) that Lord of the Fries has to make in their subsidiary ledger?
Credit the account of Phat Tato in the Creditors Ledger.
Credit the account of Phat Tato in the Debtors Ledger
Debit the account of Phat Tato in the Creditors Ledger.
Debit the account of Phat Tato in the Debtors Ledger
What was the amount of discount calculated by Lord of the Fries?
R570
R600
R228
R114
Time to Dye is a hairdresser. Anne, the owner, debited one of her clients, Sally’s account twice. Sally has paid the full amount owed as she did not pick up on the error. The accountant identified the error. Which entry must Anne make?
No entry must be made, as Sally did not pick up on the error.
Debit Sally's account with the amount incorrectly debited.
Credit Sally's account with the amount incorrectly debited.
Credit Sally's account with double the amount incorrectly debited.
Badger Transport bought a second-hand vehicle on credit for delivery purposes. The purchase price was R600 000. The vehicle was resprayed and branded in the colours of Badger Transport. This amounted to R190 000 and was paid in cash. Included in the R190 000 was R45 000 for a major service of the vehicle, as well as the replacement of the brakes. Licence fees amounted to R3 000 for the year and an EFT was made for this amount.
The following balances are an extract from the records of Cool Features on 1 March 2021:
Vehicles R1 350 000
Accumulated depreciation on vehicles R270 000
Additional information:
(i) Depreciation is calculated at 20% per year on cost.
(ii) A new vehicle was purchased on credit for R450 000 on 31 October 2021.
What would the NET EFFECT on the accounting equation be?
- 552 000 on asset
+ 48 000 on equity
- 600 000 on liabilities
- 407 000 on asset
+ 193 000 on equity
- 600 000 on liabilities
- 552 000 on asset
- 48 000 on equity
+ 600 000 on liabilities
+ 407 000 on asset
- 193 000 on equity
+ 600 000 on liabilities
Calculate the depreciation for the year ending 28 February 2022.
R360 000
R300 000
R270 000
R210 000
On 28 February 2022 Cool Features had two vehicles according to the asset register. On which date was the first vehicle purchased?
1 March 2020
1 September 2020
1 March 2021
1 September 2021
Equipment consists of 5 identical machines. The balance sheet indicates that the total cost of the equipment is R580 800. The auditor does not agree with this figure as the last unit purchased (unit 5) was not recorded in the financial records. This unit was purchased on credit for R5 000 more than units 3 and 4. These two units were purchased at a price of 20% higher than the original purchase price of units 1 and 2.
What was the original purchase price of unit 1 and 2 per unit?
R145 200
R132 000
R116 000
R116 160
Calculate the correct amount that should be included in the balance sheet.
R731 000
R585 800
R575 800
R744 200
Calculate the depreciation amount for the year.
R97 920
R160 000
R471 680
R409 600
Calculate the difference in the carrying value of vehicles between the end of the 2020 and the end of the 2021 financial year.
R160 000
R97 900
R62 080
R409 600
At which rate is depreciation calculated?
10%
15%
20%
25%
The accountant of Pow Chow introduced the following measures with regards to assets:
(i) Acquisitions and disposals of assets must be duly authorised by at least two of the three partners.
(ii) All assets in the asset register must be physically inspected on the last day of the financial year in order to verify its existence.
(iii) Non-current assets must be registered in the name of one or more of the partners of the partnership.
(iv) Depreciation at carrying value will be recorded on either the date of disposal, or on financial year-end in the records of the partners.
(v) Depreciation is calculated annually by using either the cost or carrying value of assets depending on which one renders the smallest effect on profits for that year.
Which of these are proper internal control measures?
(i) and (ii)
(i), (ii) and (iv)
(ii), (iii) and (iv)
(iii), (iv) and (v)
Old equipment (cost of R140 000) and accumulated depreciation of R137 000 on 1 July 2021 was sold at carrying value on 31 March 2022. Depreciation is calculated at 20% per year on cost. Calculate the profit on asset disposal.
R0
R1
R3 000
R21 000
Choose at least THREE steps to asset disposal.
Transfer the cost price of asset concerned
Debit the cost price of asset sold to vehicles account
Transfer the accumulated depreciation of asset sold
Calculate profit or loss on sale of an asset
