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FAC1602 EXAM PACK 2025 {DETAILED QUESTIONS AND ANSWERS }
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- University Of South Africa
FAC1602 EXAM PACK 2025 {DETAILED QUESTIONS AND ANSWERS }
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THIS DOCUMENT CONTAINS 150+ ANSWERED QUESTIONS
WORKINGS ARE ALSO SHOWN
QUESTION 1
Which of the following statements is correct:
1. A liability is a future obligation of a reporting entity to transfer an economic resource as a result of a past event.
2. The accounting equation is: Liabilities + Assets = equity
3. The value of a reporting entity lies in the net assets (assets minus liabilities) under its control. (Study guide
feedback 1.2.5)
4. Equity is the residual interest in the assets of the entity after deducting all the expenses.
QUESTION 2
The definition of an asset is:
1. A present economic resource controlled by a reporting entity as a result of a future event.
2. A future economic resource controlled by a reporting entity as a result of a past event.
3. A future economic resource controlled by a reporting entity as a result of a future event.
4. A present economic resource controlled by a reporting entity as a result of a past event.
(Study guide feedback 1.4)
QUESTION 3
Which of the following measurement bases will often be encountered in a set of financial statements:
1. Present value
2. Historical cost
3. Fair value
4. All of the above (Study guide 1.2.7)
QUESTION 4
The statement of financial position consists of three elements namely:
1. assets, income and expenses
2. assets, liabilities and equity (paragraph 1.4.5.2)
3. liabilities, equity and expenses
4. liabilities, income and expenses
QUESTION 5
BenMo purchased a MAN printing press for their printing business. Which one of the following expenses should not
be included in the cost the machine:
1. Maintenance and repair costs (learning unit 1 – exercise 1.3 principle)
2. Delivery costs
3. Installation costs
4. Printing press machine cost
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QUESTION 6
Insurance expenses paid in advance by an entity at the end of its financial year is recorded in the financial statements
as:
1. an expense in the statement of changes in equity
2. a prepayment in the current assets section of the statement of financial position. (Learning unit 1, principles
under 1.2.5)
3. a prepayment in the non-current assets section of the statement of financial position.
4. an expense in the statement of profit or loss and other comprehensive income. QUESTION 7
Which one of the following alternatives is incorrect?
1. The purpose of the Conceptual Framework is to assist in harmonising legislation and reducing the number of
alternative accounting treatments.
2. The purpose of the Conceptual Framework is to override any particular disclosure or measurement requirement
in any IFRS (Learning unit 1 Feedback 1.1)
3. The purpose of the Conceptual Framework is to assist in developing future standards.
4. The purpose of the Conceptual Framework is to assist users in interpreting the information in interpreting the
financial statements when compiled according to IFRS.
QUESTION 8
Telephone expense in arrears (unpaid) at the end of an entity’s financial year will be recorded in the general journal
of the entity by:
1. Debiting telephone expense and crediting bank
2. Debiting accrued expense and crediting bank
3. Debiting telephone expense and crediting accrued expense (Learning unit 1 principles in
1.2.5 and learning unit 2 accrued expense referenced in exercise 2.1)
4. Debiting bank and crediting telephone expense QUESTION 9
Relevance and faithful representation are the…
1. enhancing qualitative characteristics of financial reporting as stipulated in the Conceptual Framework.
2. fundamental qualitative characteristics of financial reporting as stipulated in IFRS.
3. fundamental qualitative characteristics of financial reporting as stipulated in the Conceptual Framework.
(Learning unit 1, Activity 1.3)
4. enhancing qualitative characteristics of the disclosure requirements as stipulated in IFRS.
QUESTION 10
Which one of the following is an example of a financial asset:
1. Inventory
2. Trade payable
3. Property, Plant and Equipment
4. Loans receivable (learning unit page 30 1.1.2)
LEARNING UNIT 2:
QUESTION 11
Sisonke Traders, a social media management company, is owned by Mr Singa and has a financial year end of 28
February 2023. Computer equipment was purchased by the business on 01 February 2023 for an amount of R30
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000. A delivery charge of R1 000 was incurred by Sisonke Traders to transport the equipment to its premises.
Depreciation for equipment is provided for on the diminishing balance method at a rate of 15% per annum. The
cost of equipment at year end was R60 000 and the opening balance of accumulated depreciation was R5 250.
Which one of the following amounts represents the correct amount that must be disclosed as depreciation expense
in the statement of profit or loss and other comprehensive income of Sisonke Traders for the year ended 28
February 2023?
1. R4 100
2. R3 950 (Answer)
3. R6 250
4. R7 000
QUESTION 12
For the financial year ending 28 February 2023, Zac’s stores had revenue and expenses of R250 000 and R100 000
respectively. The capital balance as at 1 March 2022 was R500 000. On 28 February 2023 the owner realized that
only R3 000 of the R5 000 credit losses had been accounted for. In addition to this, the owner also withdrew R1 500
for his personal use. The capital balance for Zac’s stores as at 28 February 2023 is
1. R648 000
2. R643 500
3. R646 500 (Answer)
4. R700 000
QUESTION 13
Zwane Wholesalers had a recorded sales amount of R62 000 for the year ending 28 February 2023. In addition to
this, on 1 January 2023, Zwane Wholesalers made sales to the value of R2 800 on credit to Mayfield stores subject
to a cash settlement discount of 5% if payment is made within 30 days. This sale was also subject to a trade discount
of 10%. Mayfield stores subsequently made payment on 29 January 2023. Which one of the following alternatives
represents the sales amount Zwane Wholesalers will disclose in its statement of profit or loss and other
comprehensive income?
1. R64 394 (Answer)
2. R64 548 3. R64 520
4. R64 500
QUESTION 14
Which one of the following should not be included in the cost of sales calculation for Zimi Traders.
1. Import duty on purchases
2. Carriage on sales (learning unit 2 example)
3. Carriage on purchases
4. Insurance on purchases
QUESTION 15
Mbali’s Catering received a statement from their landlord as at 31 December 2022, the financial year end, showing
an overpayment of rent by 2 months. Mbali’s Catering started renting these premises on 1 August 2022 and pays a
rental amount of R4 500 every month. In addition to this, Mbali’s Catering entered into a new insurance contract
for its catering equipment on 1 December 2022 with an annual insurance amount of R14 000 payable in advance.
What is the prepayment amount that must be shown in the statement of financial position of Mbali’s Catering for
the year ending 31 December 2022?
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