Exam (elaborations)
FAC1502 Assignment 1 Semester 2 2023 - DUE 14 August 2023
- Institution
- University Of South Africa
QUESTIONS AND ANSWERS
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FAC1502Assignment
1 Semester 2
2023 - DUE
14 August
2023
, lOMoARcPSD|24668432
Get in touch 066 077 8000
ASSIGNMENT 01
Semester 02 2020
UNIQUE NUMBER: 855952
DUE DATE: 11 AUGUST 2020
1. The recording and reporting of financial information in South Africa is governed by …
(1) General Accounting Practices.
(2) Financial Reporting Standards.
(3) International Financial Receiving Standards.
(4) International Financial Reporting Standards.
(5) General Accounting Accrued Practices.
Answer: Option 4
Explanation: In South Africa, the recording and
reporting of financial information are
governed by international financial
reporting standards as set by the
Financial Reporting Standards Council
(FRSC) in South Africa.
Refer to: Study guide - Page 5
2. Investors use the accounting information contained in the financial statements to …
(1) Plan and determine future actions to be taken.
(2) Assess the risk and return of an investment in the entity.
(3) Regulate the activities of the entity.
(4) Assess the ability of the entity to pay amounts owing.
(5) Assess the ability of the entity to continue as a going concern.
Answer: Option 2
Explanation: Investors use the accounting information
contained in the financial statements to
assess the risk and return on an
investment in the enterprise.
, lOMoARcPSD|24668432
Refer to: Study Guide - Page 6
3. The accounting equation can be stated as …
(1) Liabilities = Equity + Assets
(2) Assets = Equity - Liabilities
(3) Equity = Liabilities + Assets
(4) Equity = Assets - Liabilities
(5) Assets = Liabilities - Equity
Answer: Option 4
Explanation The equity equals all the assets in the
entity less all the claims against those
assets (liabilities).
Refer to: Study Guide - Page 15
Use the statements provided below to answer question 4:
(a) Asset accounts increase on the credit side and decrease on the debit side of the T
account.
(b) Equity accounts increase on the credit side and decrease on the debit side of the T
account.
(c) Asset accounts increase on the debit side and decrease on the credit side of the T
account
(d) Liability accounts increase on the credit side and decrease on the debit side of the T
account.
4. Which one of the following reflects all the statements that are true?
(1) (a), (b), (c), (d)
(2) (b), (d)
(3) (a), (c), (d)
(4) (a), (b), (d)
(5) (b), (c), (d)
Answer: Option 5
Explanation:
Dr (debit side) Asset accounts (credit
, lOMoARcPSD|24668432
side) Cr
+ (increase) – (decrease)
Dr (debit side) Liability accounts (credit
side) Cr
– (decrease) + (increase)
Dr (debit side) Equity account (credit
side) Cr
– (decrease) + (increase)
Refer to Study Guide - Page 18
5. An example of a non-current asset will be …
(1) inventory
(2) land and buildings
(3) creditors control
(4) debtors control
(5) prepaid expenses
Answer: Option 2
Explanation: Examples of non-current assets are:
Land and buildings
Vehicles
Furniture
Equipment
Machinery
Refer to: Study Guide - Page 25
6. The water and electricity account of R10 000 was paid with a business cheque.
What effect will the above transaction have on the accounting equation?
(1) Equity will increase, and assets will decrease.
(2) Equity will increase, and assets will increase.
(3) Equity will increase, and liabilities will decrease.
(4) Equity will decrease, and assets will decrease.
(5) Equity will decrease, and liabilities will decrease.
Answer: Option 4
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