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APPLIED ACCOUNTING (Second Paper)
NQF LEVEL 4
NOVEMBER EXAMINATION
(3011004)
12 November 2014 (X-Paper) 09:00–12:00
A nonprogrammable calculator may be used.
This question paper consists of 19 pages, 1 addendum and 3 answer sheets.
NATIONAL CERTIFICATE (VOCATIONAL)
(3011004) -2- NC200(E)(N12)V
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TIME: 3 HOURS
MARKS: 200
INSTRUCTIONS AND INFORMATION 1. 2. 3. 4. 5. 6. 7. 8.
Answer ALL the questions. Answer SECTION A and QUESTION 3.4 (SECTION C) on the ANSWER SHEET provided. Use appropriate accounting software for SECTION B and SECTION C. A separate set of books is used for SECTION B and SECTION C. Read ALL the questions carefully. Use the table below to guide you on how much time to spend answering each question. After printing, arrange all your printouts in the order stipulated in this question paper. Marks will be deducted if this instruction is not followed. Write neatly and legibly.
QUESTIONS TOPICS MARKS RECOMMENDED
TIME GUIDE
SECTION A
1 Short theoretical questions 20 20 minutes
SECTION B
2 Practical on accounting software
110 1 hour 40 min
SECTION C
3 Practical on accounting software
70 1 hour
TOTAL 200 3 hours
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SECTION A QUESTION 1 1.1 Complete the following sentences by choosing the correct word(s) within
brackets. Write only the word(s) next to the question number (1.1.1–1.1.10) on the ANSWER SHEET.
1.1.1 (Trade discount/Cash discount) is a reduction in the purchase price
when goods are purchased. This type of discount is indicated on the invoice but is not included in the double-entry records.
1.1.2 Service fees on the bank statement will be recorded in the cash
(receipts/payments) journal.
1.1.3 Interest charged on overdue accounts is done once all the journals
and documents have been (processed/updated) for the month.
1.1.4 Using a computerised accounting system, information can be
accessed in a matter of minutes. This is considered to be (an advantage/a disadvantage) to the business.
1.1.5 The (duplicate receipt/deposit slip) number is used as the
reference in the cash receipts journal.
1.1.6 When payment for packing material is recorded in the petty cash
payments journal, VAT is (charged/not charged).
1.1.7 To complete a VAT201 form, the (tax type report/VAT account in
the general ledger) needs to be printed.
1.1.8 Adjustments are done (monthly/yearly) in a computerised
accounting system.
1.1.9 Recording of the take on (rand values/quantities) of inventory is
done in the inventory journal.
1.1.10 The suppliers opening balances are broken down into different
(periods/invoices) in an age analysis. (10 × 1)
(10)
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1.2 Determine whether the following transactions will be classified as input VAT,
output VAT or if no VAT is applied. Write only INPUT, OUTPUT or NO VAT next to the question number (1.2.1–1.2.7) on the ANSWER SHEET.
1.2.1 Payment of insurance 1.2.2 Making a cash sale 1.2.3 Writing off depreciation 1.2.4 Writing off a customer's debt as irrecoverable 1.2.5 Expenses for end of year staff function 1.2.6 Receiving commission 1.2.7 Interest received from outstanding debt (7 × 1) (7) 1.3 Calculate the selling price for a flat screen TV if the cost price is R5 890 and
the mark-up is 175% on the cost price.
(3) [20]
TOTAL SECTION A: 20
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SECTION B QUESTION 2 INSTRUCTIONS 1. 2. 3. 4. 5.
Open the account system of Blue Mango (BLUE), which has already been loaded on your computer. Select SETUP. Select COMPANY PARAMETERS. Select COMPANY DETAILS, select the Company name section and click on 'Educational Number'. Press CTRL+SHIFT+T and insert your EXAMINATION NUMBER in the block that appears.
Blue Mango has been using accounting software to record all their transactions. The accountant, however, is on maternity leave and the owner, Mr L. Packery, has approached you to do the processing for October 2014.
The following setup has ALREADY BEEN CREATED in the books of Blue Mango: (a) ENTRY TYPES
NUMBER ENTRY TYPE
01 Cash receipts journal
02 Cash payments journal
03 General journal
04 Customers' journal
05 Suppliers' journal
06 Customers' allowances journal
07 Suppliers' allowances journal
08 Petty cash receipts journal
09 Petty cash payments journal
10 Bad debts journal
11 Interest charged journal
12 Stock journal
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(b) PERIODS Blue Mango's financial year runs from 1 June 2014 to 31 May 2015. October
2014 is the 5th period.
(c) VALUE ADDED TAX (VAT) VAT will be captured according to the invoice basis. Refer to the attached
ADDENDUM 1 concerning the admissible deductions with regard to INPUT TAX.
(d) CUSTOMERS Mr Packery has only sold for cash in the past, but has decided that as from
October he will also sell on credit.
(e) SUPPLIERS
SUPPLIER CODE SUPPLIER BALANCE ON 1 OCTOBER 2014
S001 Hair Zone R24 000,00
S002 Head Rocks R12 000,00
S003 Be Gorgeous R8 900,00
(f) INVENTORY Inventory is marked up at 120% on the cost price.
INVENTORY CODE INVENTORY ITEM
CCI01 Cordless curling iron
CFI02 Ceramic flat iron
CI03 133 mm curling iron
CIS04 4 in 1 curling iron set
FSD05 Freestanding dryer
HD06 Hood dryer
HS07 Hair steamer
PC08 Professional clippers
PHD09 Professional 1 800 W hairdryer
PHD10 Professional 2 200 W hairdryer
UD11 Universal diffuser
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(g) TERM CODES • 6% discount within 30 days
• 4% discount within 30 days
(h) TAKE ON BALANCES Take on balances have already been processed. REQUIRED:
• Use the source documents and information provided below to record the transactions in the appropriate journals and generate documents in period 5 (October 2014) in the books of Blue Mango.
• Continue to use the account structure for the general ledger that has been set up. If there is NO account to enter a transaction into, such an account must be created.
• Print all the documents and journals after processing. When printing journals, select 'print with contras'.
• Update the documents and journals.
• See page 14 for a full list of the printouts to be handed in for marking. Hand in the printouts in the same order as on page 14. FIVE marks will be deducted if printouts are not handed in in the correct order as required by the question paper.
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CREDIT PURCHASES OF INVENTORY
Tax Invoice BE643
VAT NO: 4840199501
1137 Burnett Street Hatfiled
0083
QTY DESCRIPTION UNIT PRCE TOTAL
20 Professional clippers R805,00 R16 100,00
5 Hair steamer R172,73 R863,65
10 Universal diffuser R239,09 R2 390,90
7 4 in 1 curling iron set R555,00 R3 885,00
Subtotal R23 239,55
Discount R1 161,97
14% VAT R3 090,87
Total due R25 168,45
TO: Blue Mango 110 Lancaster Ave Randburg
TERMS:
5% trade discount 4% discount within 30 days
Be Gorgeous
11/10/14
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• Using code MPF12, create the new inventory item 'Mini portable flat iron'.
DATE DESCRIPTION QUANTITY AMOUNT
18/10/14 Ceramic flat iron @ R681,82 5 R3 409,10
Hood dryer @ R603,00 6 R3 618,00
Mini portable flat iron @ R340,91 30 R10 227,30
133 mm curling iron @ R818,18 5 R4 040,90
SUBTOTAL R21 345,30
4% Discount R853,81
AMOUNT EXCL VAT R20 491,49
14% VAT R2 868,81
TOTAL INCLUSIVE VAT R23 360,30
TERMS • 6% discount within 30 days • 4% trade discount
TAX INVOICE
Invoice Number: IN7968
To: Blue Mango 110 Lancaster Ave Randburg
VAT REG NO: 4420116552 : 031 271 8228
HAIR ZONE
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TO: Blue Mango 110 Lancaster Ave Randburg
22/10/14
ITEM UNIT
PRICE QUANTITY TOTAL
Professional 1 800 W hairdryer 204,55 5 1 022,75
Professional 2 200 W hairdryer 250,00 8 2 000,00
Terms: 4% discount within 30 days
SUBTOTAL 3 022,75
14% VAT 423,19
TOTAL 3 445,94
TAX INVOICE
HR641
VAT NO: 4420106777 TEL: 0861 777 000 FAX: 0861 777 000
Head Rocks
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CREDIT RETURNS OF INVENTORY BY BLUE MANGO
DATE SUPPLIER DETAILS
15/10/14 Be Gorgeous 2 x Professional clippers – Motor faulty
1 x Universal diffuser – Damaged plug
Tax Invoice BE723
VAT NO: 4840199501
1137 Burnett Street Hatfiled
0083
QTY DESCRIPTION UNIT PRCE TOTAL
5 Freestanding dryer R505,45 R2 527,25
Subtotal R2 527,25
Discount R252,72
14% VAT R318,43
Total due R2 592,96
TO: Blue Mango 110 Lancaster Ave Randburg
TERMS:
10% trade discount
Be Gorgeous
30/10/14
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CREDIT AND CASH SALES
• This is the first month that credit sales are taking place.
• Mr Packery approved the credit applications of 'By the Blade' and 'Mane Attraction'. The coding will start with 'C01'. Create the two customers with the information provided below.
• All tax invoices must have the following message: 'Great Christmas specials in November'.
• CZ99 is the cash sales account which is used for cash transactions.
• Insert the names of all cash customers on the document generated to record the cash sale.
• All cash customers receive a 6% cash discount.
DATE CUSTOMER ITEM PURCHASED EARLY PAYMENT TERM
03/10/14
By the Blade 3 Newton Road Witbank 1035
Contact: Jose Tel: 0846163461 Credit limit: R30 000,00
5
2
2
5
x
x
x
x
Cordless curling iron
Hood dryer
Professional 2 200 W hairdryer
133 mm curling iron
2% trade discount
6% discount within 30 days
13/10/14 Cash Sales
(Crisp Edge)
10
13
6
5
x
x
x
x
Mini portable flat iron
4 in 1 curling iron set
Universal diffuser
Hair steamer
17/10/14
Mane Attraction 8 Stuart Street Balfour 2410
Contact: Lily Tel: 017-773-1728 Credit limit: R25 000,00
2
5
x
x
Professional clippers
Professional 2 200 W hairdryer
6% trade discount
4% discount within 30 days
CREDIT RETURNS OF INVENTORY TO BLUE MANGO
DATE CUSTOMER DETAILS
08/10/14 By the Blade 1 x Professional 2 200 W hairdryer – Broken nozzle
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CASH REGISTER ROLLS
13/10/14
Cash Register Roll
CRR23
R30 171,97
CASH RECEIPTS
BLUE MANGO CASH RECEIPT
Cash receipt number: 43 Date: 20/10/14
Cash received from: Mr Packery
In payment of: Capital received
Amount: Fifty thousand rand only R50 000,00
Received by: Bongo Malgas
BLUE MANGO CASH RECEIPT
Cash receipt number: 44 Date: 25/10/14
Cash received from: Hair Affair
In payment of: Commission received*
Amount: Twenty five thousand rand only R25 000,00
Received by: Bongo Malgas
*Create an account for commission received.
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CASH DEPOSITS DETAILS
Blue Mango made the following deposits during the month of October 2014:
DATE OF DEPOSIT DEPOSIT REFERENCE NUMBER
13/10/14 DEP25
25/10/14 DEP26
30/10/14 DEP27
CASH PAYMENTS
213 214
Date: 01/10/14 Date: 03/10/14
To: Head Rocks To: Back up Insurance
For:
Settlement of opening
balance
For:
Octobers’ insurance
premium
Amount: R11 800,00 Amount: R 1 120,00
215 216
Date: 15/10/14 Date: 22/10/14
To: SARS To: Hair Zone
For:
Payment of VAT For:
Payment on account
Amount: R11 200,00 Amount: R3 000,00
217
Date: 28/10/14
To: P Preston
For:
Salary
Amount: R16 324,00
BLUE MANGO CASH RECEIPT
Cash Receipt Number: 45 Date: 30/10/14
Cash received from: By the Blade
In payment of: Settlement of account
Amount: ? ?
Received by: Bongo Malgas
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PETTY CASH
BLUE MANGO
PETTY CASH VOUCHER
No.: 06
Date: 12/10/14
For: Pick ‘n Pay – Coffee for staff use
Amount: R89,00
Approved by: Bongo Malgas
BLUE MANGO
PETTY CASH VOUCHER
No.: 07
Date: 26/10/14
For: Pen Inc. – paper clips
Amount: R38,50
Approved by: Bongo Malgas
ADDITIONAL PRINTOUTS REQUIRED:
• Print a customer listing of all the new customers.
• Print a general ledger master listing ONLY for the ‘other income’ financial category.
The following printouts must be generated and handed in for marking in the correct order:
2.1 Suppliers' invoice (36)
2.2 Return and debit note/s (9)
2.3 Tax invoices (31)
2.4 Credit note/s (6)
2.5 Cash receipts journal (8)
2.6 Cash payments journal (8)
2.7 Petty cash payments journal (2)
2.8 Customer listing (7)
2.9 General ledger master listing for 'other income' financial category (3) [110]
TOTAL SECTION B: 110
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SECTION C QUESTION 3 INSTRUCTIONS 1. Open the set of accounts for Office24 (OFFICE), which has already been
loaded on your computer.
2. Select SETUP. 3. Select COMPANY PARAMETERS. 4. Select COMPANY DETAILS, select the company name section and click on
'Educational Number'.
5. Press CTRL+SHIFT+T and insert your EXAMINATION NUMBER in the block
that appears.
REQUIRED:
• Use the information provided below to complete the bank reconciliation process and the month end adjustments for July 2014, period 12, in the books of Office24.
• If there is NO account to enter a transaction into, such an account must be created. Continue to use the account structure for the general ledger that has been set up.
• Print all the journals after processing. When printing journals, select 'print with contras'.
• Update the journals.
• See page 18 for a full list of the printouts to be handed in for marking. Hand in the printouts in the same order as on page 18. FIVE marks will be deducted if printouts are not handed in in the correct order as required by the question paper.
3.1 Complete and print the following:
3.1.1 Cash receipts journal with the additional entries (after the bank reconciliation).
(8)
3.1.2 Cash payments journal with the additional entries (after the bank reconciliation).
(16)
3.1.3 Bank reconciliation statement (after following the reconciliation process).
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• Create an account for bank charges and record all bank charges.
• DD0807 on 08/07/2014 is a direct deposit by the owner for capital contribution.
• DO2107 is a debit order for the municipal water and electricity account. However, an amount of R1 200,00 is for rates.
• Create an account for interest on current account which was received on 30 July 2014.
(8)
East Bank
Bank Statement Cheque Account 1092488132
DATE DETAILS DEBIT(-) CREDIT(+) BALANCE
01/07/2014 Balance brought forward 42 300,00
05/07/2014 Deposit DS30 23 894.64 66 194,64
08/07/2014 DD0807 50 000.00 116 194,64
08/07/2014 Cash charge 255,08 115 939,56
14/07/2014 Cheque 202 1 300,00 114 639,56
15/07/2014 Cheque 204 7 500,00 107 139,56
17/07/2014 New card issued 105,00 107 034,56
19/07/2014 Deposit DS31 18 400.00 125 434,56
20/07/2014 Cheque 205 1 500.00 123 934,56
21/07/2014 Deposit DS32 11 961.86 135 896,42
21/07/2014 Cash charge 161,49 135 734,93
21/07/2014 Cheque 206 7 000,00 128 734,93
22/07/2014 Deposit DS33 4 628.71 133 363,64
25/07/2014 DO2107 7 298,00 126 065,64
27/07/2014 Cheque 201 26 000,00 100 065,64
30/07/2014 ICA 386.00 100 451,64
30/07/2014 Monthly fee 179,00 100 272,64
31/07/2014 Cheque 208 3 000,00 97 272,64
31/07/2014 Cheque 210 5 000,00 92 272,64
1. TO: Office24 402 Bellair Road Randburg
Date: 31 July 2014
Statement no: 25
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3.2 The following month end adjustments need to be captured for July 2014. The
last note number was NOTE 7.
Make the following printouts and hand them in for marking: 3.2.1 Bad debts journal (7) 3.2.2 General journal (6) 3.3 ADDITIONAL PRINTOUTS REQUIRED: 3.3.1 Detailed customer ledger for all the customers for July 2014. (10) 3.3.2 Income statement for July 2014. (5)
Office24
Write JET Suppliers off as irrecoverable.
JOURNAL VOUCHER 12
DATE: 31/07/14
Office24 An amount of R1 230,00 was posted to the petrol account during July 2014. However this amount was actually for the owner’s personal use.
JOURNAL VOUCHER 13
DATE: 31/07/14
Office24
Charge interest on overdue accounts.
JOURNAL VOUCHER 14
DATE: 31/07/14
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NOTE: The printouts to be handed in, in the following order:
• Cash receipts journal (after the bank reconciliation)
• Cash payments journal (after the bank reconciliation)
• Bank reconciliation
• Bad debts journal
• General journal
• Customer detailed ledger
• Income statement
3.4 VALUE-ADDED TAX (VAT) Use the following information to complete ONLY the calculation of input and output tax of the VAT201 form for Office24. TAX TYPE REPORT FOR JUNE 2014
OUTPUT TAX INPUT TAX NET TAX
TAX INCLUSIVE TAX INCLUSIVE TAX INCLUSIVE
Standard -24561,40 -200000,00 9087,72 74000,00 -15473,68 -126000,00
Capital 0,00 0,00 4298,25 35000,00 4298,25 35000,00
Zero rated 0,00 -2 200,00 0,00 0,00 0,00 -2 200,00
VAT exempt 0,00 -10 000,00 0,00 0,00 0,00 -10 000,00
Bad debts 0,00 0,00 675,44 5 500,00 675,44 -4 500,00
-24 561,40 -212 200,00 14 061,41 114 500,00 -10 500,00 -107 700,00
(10)
[70] TOTAL SECTION C: 70 GRAND TOTAL: 200
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ADDENDUM 1 Admissible deductions with regard to input tax
Is VAT charged? Input VAT deductible
YES NO YES NO
Accounting fees X X
Advertisements X X
Bank charges
Cash charge X X
Monthly fee X X
New card X X
Commission received X X
Consumables X X
Discount allowed X X
Discount received X X
Insurance X X
Interest on cheque account X
Interest on mortgage bond X
Interest received X
Motor vehicle expense X X
Petrol X
Rates X
Refreshments X X
Rent received X X
Salaries and wages X
Staff expenses X
Stationery X X
Telephone X X
Water and electricity X X
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ANSWER SHEET EXAMINATION NUMBER:
SECTION A
QUESTION 1
1.1 1.1.1
1.1.2
1.1.3
1.1.4
1.1.5
1.1.6
1.1.7
1.1.8
1.1.9
1.1.10
(10 × 1) (10) 1.2 1.2.1
1.2.2
1.2.3
1.2.4
1.2.5
1.2.6
1.2.7
(7 × 1) (7) 1.3
(3)
[20]
TOTAL SECTION A: 20
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ANSWER SHEET EXAMINATION NUMBER:
QUESTION 3.4
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