Exam (elaborations)
Exam (elaborations) FAC 1601 (FAC1601) ABOUT FINANCIAL ACCOUNTING VOLUME 2 (8TH EDITION), ISBN: 9780639008677
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FAC1601 assignment 03 semester 02 2022
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FAC1601 Assignment 5 (ANSWERS) Semester 2 2024 - DISTINCTION GUARANTEED
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FAC1602 Assignment 5 (ANSWERS) Semester 2 2024 - DISTINCTION GUARANTEED
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FAC1602 Assignment 5 (COMPLETE ANSWERS) Semester 2 2024 - DUE 12 November 2024; 100% TRUSTED Complete, trusted solutions and explanations.
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9/26/22, 8:30 AM Assessment 3: Attempt reviewStarted on Sunday, 25 September 2022, 7:19 PM
State Finished
Completed on Sunday, 25 September 2022, 9:19 PM
Time taken 2 hours
Question 1
Complete
Marked out of 2.00
A close corporation is a legal entity, which implies that it is not liable to pay for obligations and can acquire assets in its own name.
a. False
b. True
Question 2
Complete
Marked out of 2.00
Which one of the following alternatives is correct?
a. A close corporation is taxed separately from its members only during its last year of operation
b. A close corporation is taxed separately from its members
c. A close corporation is not taxed separately from its members as members are liable for the entity’s tax in their individual capacity
based on the balance of individual loans they owe to the entity
d. A close corporation is taxed 50% of the profits separately from its members and the other half is taxed directly on the members in
their personal capacity
Question 3
Complete
Marked out of 2.00
Which one of the following alternatives is incorrect?
a. A close corporation can enter into contracts and cannot be sued as a legal person in its own right.
b. A close corporation may give financial assistance to a person to acquire an interest in the close corporation.
c. A close corporation can have up to ten natural persons as members.
d. A close corporation continues to exist under its registered name irrespective of a change in its membership.
https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=5819672&cmid=299798 1/11
, 9/26/22, 8:30 AM Assessment 3: Attempt review
Question 4
Complete
Marked out of 2.00
Which one of the following alternatives is correct?
a. The liability of a member for the obligations of the close corporation is limited to the extent of the member's contribution to the
close corporation less distributions already paid to the members.
b. The liability of a member for the obligations of the close corporation is limited to the extent of the member's contribution to the
close corporation.
c. The liability of a member for the obligations of the close corporation is limited to the extent of the member's contribution to the
close corporation and members’ loans advanced to the business.
d. The liability of a member for the obligations of the close corporation is limited to the extent of the member's contribution of the
least active members in the close corporation.
Question 5
Complete
Marked out of 2.00
Which one of the following alternatives is correct journal entry to record income tax expense for a close corporation?
a. Debit “Income tax expense” profit or loss and Credit “SARS (income tax)” liability
b. Credit “Income tax expense” profit or loss and Debit “SARS (income tax)” liability
c. Credit “Bank” asset and Debit “SARS (income tax)” liability
d. Debit “Bank” asset and Credit “SARS (income tax)” liability
Question 6
Complete
Marked out of 2.00
Which one of the following alternatives is false regarding the loans advanced to the members of the close corporation?
a. Loans to members of the close corporation are recorded as current assets and interest may be charged on the amount owing to the
close corporation.
b. Loans to members of the close corporation are recorded as current assets unless clearly indicated that they are repayable in less
than 12 months.
c. If the terms of the loan is that interest is capitalised, the interest correctly calculated should be added to the loan capital to increase
the balance owing to the close corporation.
d. Interest on loans to members of the close corporation’s may not be charged if the loan is advanced 1 month before the close
corporation’s financial year end.
https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=5819672&cmid=299798 2/11
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