FAC1501
EXAM PACK
,INTRODUCTORY FINANCIAL ACCOUNTING - FAC1501
OCTOBER-NOVEMBER
EXAM ANSWERS
QUESTION 1 – Multiple-choice questions
1.1
Answer: (3) Inventory account
Under the perpetual inventory system, purchases of inventory are recorded directly in
the Inventory account.
Final answer: 3
1.2
Answer: (1) Weighted average method
The weighted average method calculates an average cost per unit by dividing the total
cost of goods available for sale by the total number of units available.
Final answer: 1
1.3
Given:
Purchases = R500 000
Purchases returns = R5 000
Settlement discount received = R2 000
Net purchases:
,\[ R500\,000-R5\,000-R2\,000 \]\[ =\boxed{R493\,000} \]
Donations and drawings of inventory are not included in net purchases.
Answer: (3) R493 000
1.4
Sales = R700 000
Sales returns = R8 000
Revenue:
\[ R700\,000-R8\,000=\boxed{R692\,000} \]
Answer: (1) R692 000
1.5
Given:
Opening inventory = R900 000
Purchases = R500 000
Purchases returns = R30 000
Freight charges on purchases = R15 000
Settlement discount received = R9 000
Closing inventory = R700 000
Net purchases:
\[ 500\,000-30\,000+15\,000-9\,000 =R476\,000 \]
Cost of goods available for sale:
\[ 900\,000+476\,000=R1\,376\,000 \]
, Cost of sales:
\[ 1\,376\,000-700\,000 =\boxed{R676\,000} \]
Answer: (3) R676 000
The information for Questions 1.1–1.5 appears in the first section of the exam paper.
1.6
The owner deposits R100 000 into the business bank account.
The business receives an asset (Bank) and the owner's capital increases.
Debit: Bank
Credit: Capital
Answer: (1)
1.7
Furniture is purchased on credit for R60 000.
Assets increase because furniture increases.
Liabilities increase because the amount owed to the supplier increases.
Answer: (3) Assets will increase and liabilities will increase
1.8
Cash sales of R5 000 involve:
Debit: Bank
Credit: Sales
Answer: (4) Bank and sales
EXAM PACK
,INTRODUCTORY FINANCIAL ACCOUNTING - FAC1501
OCTOBER-NOVEMBER
EXAM ANSWERS
QUESTION 1 – Multiple-choice questions
1.1
Answer: (3) Inventory account
Under the perpetual inventory system, purchases of inventory are recorded directly in
the Inventory account.
Final answer: 3
1.2
Answer: (1) Weighted average method
The weighted average method calculates an average cost per unit by dividing the total
cost of goods available for sale by the total number of units available.
Final answer: 1
1.3
Given:
Purchases = R500 000
Purchases returns = R5 000
Settlement discount received = R2 000
Net purchases:
,\[ R500\,000-R5\,000-R2\,000 \]\[ =\boxed{R493\,000} \]
Donations and drawings of inventory are not included in net purchases.
Answer: (3) R493 000
1.4
Sales = R700 000
Sales returns = R8 000
Revenue:
\[ R700\,000-R8\,000=\boxed{R692\,000} \]
Answer: (1) R692 000
1.5
Given:
Opening inventory = R900 000
Purchases = R500 000
Purchases returns = R30 000
Freight charges on purchases = R15 000
Settlement discount received = R9 000
Closing inventory = R700 000
Net purchases:
\[ 500\,000-30\,000+15\,000-9\,000 =R476\,000 \]
Cost of goods available for sale:
\[ 900\,000+476\,000=R1\,376\,000 \]
, Cost of sales:
\[ 1\,376\,000-700\,000 =\boxed{R676\,000} \]
Answer: (3) R676 000
The information for Questions 1.1–1.5 appears in the first section of the exam paper.
1.6
The owner deposits R100 000 into the business bank account.
The business receives an asset (Bank) and the owner's capital increases.
Debit: Bank
Credit: Capital
Answer: (1)
1.7
Furniture is purchased on credit for R60 000.
Assets increase because furniture increases.
Liabilities increase because the amount owed to the supplier increases.
Answer: (3) Assets will increase and liabilities will increase
1.8
Cash sales of R5 000 involve:
Debit: Bank
Credit: Sales
Answer: (4) Bank and sales
