Introductory Financial Accounting
FAC1501
Exam October/November 2019
Question 1 (20 marks) (24 minutes)
This question consists of ten (10) MULTIPLE CHOICE QUESTIONS. Select for each question only ONE
alternative that you consider to be correct and then indicate in brackets the chosen option on the
answer sheet next to the question number, for example Question 1 1 (A).
, 2 Marks per question.
1.1 Which combination of statements regarding assets is not correct?
(i) An asset decreases on the debit side.
(ii) An asset will be classified as non-current when it is expected to be converted into money in
the entity’s normal operating cycle.
(iii) Assets are resources controlled by the entity.
(iv) An asset increases on the credit side.
A. (i), (ii) (iv)
B. (i), (iii)
C. (ii), (iii), (iv)
D. (i), (iv)
E. (ii), (iii)
1.2 Which one of the following statements is a characteristic of a sole trader?
A. It is a legal entity distinct from its owner.
B. There is no succession in event of death of owner.
C. It pays its corporate tax at 28% like companies.
D. It is owned by minimum 7 and no maximum number of people.
E. It needs a big amount of capital to setup.
1.3 The business sells merchandise for R8 550 inclusive of VAT, what will the VAT output amount be
if VAT is calculated at 14%?
A. R7 500
B. R1 050
C. R1 197
D. R9 747
E. R1 400
Answer:
14
114
× 𝑅8 550 = 𝑅1 050
1.4 The business purchases merchandise for R8 550 exclusive of VAT, what will the VAT input
amount payable be if the seller is a VAT vendor and VAT is chargeable at 14%?
A. R7 500
B. R1 050
C. R1 197
D. R9 747
E. R1 400
Answer:
14
100
× 𝑅8 550 = 𝑅1 197
FAC1501
Exam October/November 2019
Question 1 (20 marks) (24 minutes)
This question consists of ten (10) MULTIPLE CHOICE QUESTIONS. Select for each question only ONE
alternative that you consider to be correct and then indicate in brackets the chosen option on the
answer sheet next to the question number, for example Question 1 1 (A).
, 2 Marks per question.
1.1 Which combination of statements regarding assets is not correct?
(i) An asset decreases on the debit side.
(ii) An asset will be classified as non-current when it is expected to be converted into money in
the entity’s normal operating cycle.
(iii) Assets are resources controlled by the entity.
(iv) An asset increases on the credit side.
A. (i), (ii) (iv)
B. (i), (iii)
C. (ii), (iii), (iv)
D. (i), (iv)
E. (ii), (iii)
1.2 Which one of the following statements is a characteristic of a sole trader?
A. It is a legal entity distinct from its owner.
B. There is no succession in event of death of owner.
C. It pays its corporate tax at 28% like companies.
D. It is owned by minimum 7 and no maximum number of people.
E. It needs a big amount of capital to setup.
1.3 The business sells merchandise for R8 550 inclusive of VAT, what will the VAT output amount be
if VAT is calculated at 14%?
A. R7 500
B. R1 050
C. R1 197
D. R9 747
E. R1 400
Answer:
14
114
× 𝑅8 550 = 𝑅1 050
1.4 The business purchases merchandise for R8 550 exclusive of VAT, what will the VAT input
amount payable be if the seller is a VAT vendor and VAT is chargeable at 14%?
A. R7 500
B. R1 050
C. R1 197
D. R9 747
E. R1 400
Answer:
14
100
× 𝑅8 550 = 𝑅1 197
