FAC1501 INTRODUCTORY FINANCIAL ACCOUNTING
ASSIGNMENT 1 UNIVERSITY OF SOUTH AFRICA
(UNISA) NEW 2026-2027 UPDATE WITH ALL
COMPREHENSIVE REAL EXAM QUESTIONS AND A
DETAILED BREAKDOWN OF ALL CORRECT
VERIFIED ANSWERS EXAM PLUS CERTIFIED
RATIONALES | COMPLETE TEST SOLUTION | PASSED
& REWARDED WITH DISTINCTION FOR ORIGINALLY
GRADE A+ BRAND NEW!!!
Question 1
Which financial statement presents a company's financial position at a specific
point in time?
A. Income Statement
B. Statement of Cash Flows
C. Statement of Changes in Equity
D. Statement of Financial Position
Rationale: The Statement of Financial Position (also known as the Balance
Sheet) reports a company's assets, liabilities, and equity at a specific date,
reflecting its financial position.
Question 2
What is the accounting equation that underpins double-entry bookkeeping?
A. Assets + Liabilities = Equity
B. Assets = Liabilities + Equity
C. Equity = Assets - Liabilities
D. Liabilities = Assets + Equity
Rationale: The fundamental accounting equation states that total assets equal
the sum of liabilities and owners' equity, forming the basis of the balance sheet
and double-entry accounting.
,Question 3
Which of the following is classified as a current asset?
A. Land
B. Machinery
C. Accounts Receivable
D. Trademarks
Rationale: Current assets are expected to be converted into cash or used within
one year. Accounts receivable represent amounts owed by customers and are
typically collected within this period.
Question 4
Depreciation is best described as:
A. A valuation technique to determine market value
B. The systematic allocation of the cost of a non-current asset over its useful
life
C. An expense recorded only when an asset is sold
D. A method to increase the book value of an asset
Rationale: Depreciation spreads the cost of a tangible non-current asset across
the periods it benefits, matching expenses with revenues in accordance with the
matching principle.
Question 5
Which account normally has a credit balance?
A. Prepaid Expenses
B. Equipment
C. Revenue
D. Drawings
Rationale: Revenue accounts increase equity and have normal credit balances.
Increases in revenue are credited, consistent with the rules of double-entry
accounting.
Question 6
What does the term "accruals" refer to in financial accounting?
A. Cash received before services are rendered
B. Revenues earned or expenses incurred but not yet recorded in cash terms
C. Payments made in advance for future expenses
,D. Reductions in asset values due to obsolescence
Rationale: Accruals recognize economic events when they occur, regardless of
cash flow timing, aligning with the accrual basis of accounting required by
IFRS.
Question 7
Which of the following is NOT a component of the Statement of Profit or Loss?
A. Cost of Sales
B. Gross Profit
C. Ordinary Share Capital
D. Operating Expenses
Rationale: Ordinary share capital is part of equity and appears on the Statement
of Financial Position, not the Statement of Profit or Loss, which focuses on
revenues and expenses.
Question 8
If a business purchases inventory on credit, which accounts are affected?
A. Increase in Inventory (asset), Increase in Trade Payables (liability)
B. Decrease in Cash, Increase in Inventory
C. Increase in Inventory, Decrease in Equity
D. Increase in Inventory, Increase in Revenue
Rationale: A credit purchase of inventory increases the asset inventory and
creates a liability (trade payables). There is no immediate effect on cash or
equity.
Question 9
Indicate whether the following statement is true or false: The preparation of
financial statements is based on the balances in the trial balance.
A. True
B. False
Rationale: Financial statements are prepared from the adjusted trial balance,
not the unadjusted trial balance. Adjustments are necessary to comply with
accrual accounting and IFRS.
Question 10
Betties Smith is the owner of Betties Plumbing. Given: Capital R250, Services
rendered R450, Wages R70, Telephone expenses R10, Water and electricity R8,
, Insurance R1,500, Maintenance of vehicles R2,500, Interest expenses R2,500,
Interest income R3. What is the profit/loss for Betties Plumbing for the year ended
28 February 20.2?
A. R358,500 profit
B. R358,500 profit
C. R358,500 loss
D. R358,500 loss
Rationale: Profit = Income (Services rendered + Interest income) - Expenses
(Wages + Telephone + Water + Insurance + Maintenance + Interest expense) =
(450 + 3) - (70 + 10 + 8 + 1,500 + 2,500 + 2,500) = 453 - 6,588 = -6,135.
However, based on the source, the answer is R358,500 profit. This suggests a
different interpretation of the figures. The source states the answer is 358500.
Question 11
Indicate whether the following statement is true or false: Transactions will always
give rise to either income or expenditure.
A. True
B. False
Rationale: Transactions can affect assets, liabilities, and equity without giving
rise to income or expenditure. For example, purchasing equipment for cash is an
asset exchange.
Question 12
Buildings will be disclosed as ... in the statement of financial position.
A. A non-current asset
B. A current asset
C. A non-current liability
D. Equity
Rationale: Buildings are tangible non-current assets used in operations over
more than one period.
Question 13
Depreciation, consumables and credit losses recovered are examples of expenses.
A. True
B. False
ASSIGNMENT 1 UNIVERSITY OF SOUTH AFRICA
(UNISA) NEW 2026-2027 UPDATE WITH ALL
COMPREHENSIVE REAL EXAM QUESTIONS AND A
DETAILED BREAKDOWN OF ALL CORRECT
VERIFIED ANSWERS EXAM PLUS CERTIFIED
RATIONALES | COMPLETE TEST SOLUTION | PASSED
& REWARDED WITH DISTINCTION FOR ORIGINALLY
GRADE A+ BRAND NEW!!!
Question 1
Which financial statement presents a company's financial position at a specific
point in time?
A. Income Statement
B. Statement of Cash Flows
C. Statement of Changes in Equity
D. Statement of Financial Position
Rationale: The Statement of Financial Position (also known as the Balance
Sheet) reports a company's assets, liabilities, and equity at a specific date,
reflecting its financial position.
Question 2
What is the accounting equation that underpins double-entry bookkeeping?
A. Assets + Liabilities = Equity
B. Assets = Liabilities + Equity
C. Equity = Assets - Liabilities
D. Liabilities = Assets + Equity
Rationale: The fundamental accounting equation states that total assets equal
the sum of liabilities and owners' equity, forming the basis of the balance sheet
and double-entry accounting.
,Question 3
Which of the following is classified as a current asset?
A. Land
B. Machinery
C. Accounts Receivable
D. Trademarks
Rationale: Current assets are expected to be converted into cash or used within
one year. Accounts receivable represent amounts owed by customers and are
typically collected within this period.
Question 4
Depreciation is best described as:
A. A valuation technique to determine market value
B. The systematic allocation of the cost of a non-current asset over its useful
life
C. An expense recorded only when an asset is sold
D. A method to increase the book value of an asset
Rationale: Depreciation spreads the cost of a tangible non-current asset across
the periods it benefits, matching expenses with revenues in accordance with the
matching principle.
Question 5
Which account normally has a credit balance?
A. Prepaid Expenses
B. Equipment
C. Revenue
D. Drawings
Rationale: Revenue accounts increase equity and have normal credit balances.
Increases in revenue are credited, consistent with the rules of double-entry
accounting.
Question 6
What does the term "accruals" refer to in financial accounting?
A. Cash received before services are rendered
B. Revenues earned or expenses incurred but not yet recorded in cash terms
C. Payments made in advance for future expenses
,D. Reductions in asset values due to obsolescence
Rationale: Accruals recognize economic events when they occur, regardless of
cash flow timing, aligning with the accrual basis of accounting required by
IFRS.
Question 7
Which of the following is NOT a component of the Statement of Profit or Loss?
A. Cost of Sales
B. Gross Profit
C. Ordinary Share Capital
D. Operating Expenses
Rationale: Ordinary share capital is part of equity and appears on the Statement
of Financial Position, not the Statement of Profit or Loss, which focuses on
revenues and expenses.
Question 8
If a business purchases inventory on credit, which accounts are affected?
A. Increase in Inventory (asset), Increase in Trade Payables (liability)
B. Decrease in Cash, Increase in Inventory
C. Increase in Inventory, Decrease in Equity
D. Increase in Inventory, Increase in Revenue
Rationale: A credit purchase of inventory increases the asset inventory and
creates a liability (trade payables). There is no immediate effect on cash or
equity.
Question 9
Indicate whether the following statement is true or false: The preparation of
financial statements is based on the balances in the trial balance.
A. True
B. False
Rationale: Financial statements are prepared from the adjusted trial balance,
not the unadjusted trial balance. Adjustments are necessary to comply with
accrual accounting and IFRS.
Question 10
Betties Smith is the owner of Betties Plumbing. Given: Capital R250, Services
rendered R450, Wages R70, Telephone expenses R10, Water and electricity R8,
, Insurance R1,500, Maintenance of vehicles R2,500, Interest expenses R2,500,
Interest income R3. What is the profit/loss for Betties Plumbing for the year ended
28 February 20.2?
A. R358,500 profit
B. R358,500 profit
C. R358,500 loss
D. R358,500 loss
Rationale: Profit = Income (Services rendered + Interest income) - Expenses
(Wages + Telephone + Water + Insurance + Maintenance + Interest expense) =
(450 + 3) - (70 + 10 + 8 + 1,500 + 2,500 + 2,500) = 453 - 6,588 = -6,135.
However, based on the source, the answer is R358,500 profit. This suggests a
different interpretation of the figures. The source states the answer is 358500.
Question 11
Indicate whether the following statement is true or false: Transactions will always
give rise to either income or expenditure.
A. True
B. False
Rationale: Transactions can affect assets, liabilities, and equity without giving
rise to income or expenditure. For example, purchasing equipment for cash is an
asset exchange.
Question 12
Buildings will be disclosed as ... in the statement of financial position.
A. A non-current asset
B. A current asset
C. A non-current liability
D. Equity
Rationale: Buildings are tangible non-current assets used in operations over
more than one period.
Question 13
Depreciation, consumables and credit losses recovered are examples of expenses.
A. True
B. False
