QUESTION 1: BANK RECONCILIATIONS, INTERNAL CONTROL AND CONCEPTS [63 marks] QUESTION 1.1 CONCEPTS [5 marks] Complete each of the following sentences. 1.1.1 A cheque that is more than six months old will not be cashed by the bank because it is a / an … (1) 1.1.2 Permission granted to a third party to automatically receive monthly payments from the current account of a business is known as a / an… (1) 1.1.3 A charge made by the bank against the account holder in order to operate the banking account is … (1) 1.1.4 An item shown as an ‘unpaid’ cheque on the Bank Statement will be regarded as a / an … (1) 1.1.5 A facility whereby the business can use more money than they have in their current banking account is a / an … (1)

QUESTION 2 CONCEPTS AND CREDITORS’ RECONCILIATION [23 Marks] QUESTION 2.1 CONCEPTS [4 marks] 2.1 Concepts relating to creditors are given in COLUMN A and descriptions in COLUMN B. Choose the correct description from the drop down list to match the concept in column A.

3 A comparison of the Bank reconciliation statement of 31 January 2021 with the Bank statement for February 2021 received from Golden Bank, revealed the following:     3.1 The outstanding deposit of R3 218 appeared on the Bank statement of February 2021.     3.2 Cheque no. 101 for R1 489 was paid by the bank on 11 February 2021.     3.3 Cheque no. 102 for R350 was issued to Flash Lighting Traders for trading stock purchased on credit.  The cheque was lost and the payment stopped.  It was replaced by cheque no. 135.  No entries were made.  Cheque no. 135 has not yet been presented by Flash Lighting Stores for payment.     3.4 Cheque no. 104 for R950, dated 15 March 2021, is still outstanding.   4 A comparison of the Bank statement for February 2021 with the cash journals showed the following differences:     4.1 A debtor, B Usoro, deposited R860 directly into the business’ bank account.     4.2 An unpaid cheque for R566, received from a debtor, S Ally, was returned by the bank marked “refer to drawer (R/D)”.     4.3 A stop order for R800 in favour of Sun Insurers was for the following:       Buildings and content of the business                    R650       Owner’s private vehicle                                        R150     4.4 The following costs were debited against the business’ current account by Golden Bank:       Service charges   R55       Cash deposit fee R36       Levies R11     4.5 Golden Bank credited the business’ current account with R54 interest.     4.6 Cheque no. 131 for R695 in favour of the City Treasurer for electricity of the business appeared correctly in the Bank statement for February 2021.  The cheque appeared in the Cash Payment Journal as R569.  Correct the error.     4.7 A deposit of R4 000 made on 28 February 2021 does not appear on the bank statement.     4.8 The following cheques were not presented to the bank for payment:            No 132 R1 639            No 133 R1 051     4.9 The bank statement shows a favourable balance of R5 000 on 28 February 2021.  

QUESTION 1:  63 marks; 50 minutes Topic of the question This question integrates: Reconciliations   Bank Reconciliation Statements Concepts Internal Control   QUESTION 2:  23 marks; 18 minutes Topic of the question This question integrates: Reconciliations   Creditors Reconciliation Statements Concepts   QUESTION 3:  64 marks; 52 minutes Topic of the question This question integrates: Fixed assets   Asset Disposal Internal control Problem Solving

QUESTION 3 ASSET DISPOSAL INTERNAL CONTROL AND PROBLEM SOLVING [64 MARKS] You are provided with the partially completed ledger accounts of Brightstar Traders.    REQUIRED:   3.1   Answer the following questions:     3.1.1 Calculate or name the missing information numbered A – D. (6)   3.1.2 In which section of the ledger will “Accumulated depreciation on vehicles” be found? (2)   3.1.3 Depreciation on vehicles is calculated on the cost.  Calculate the percentage at which depreciation is written off each year. (4)   3.1.4 On which date was the vehicle that was sold, originally bought? (4)   3.1.5 Refer to the Asset disposal account.  How was the asset sold? (2)   3.1.6 Calculate depreciation on the unsold vehicles on 28 February 2021, the end of the financial year.  (Use the percentage as calculated in 3.1.3) (5)   3.1.7 Calculate the amount for depreciation as it would appear in the Income statement on 28 February 2021. (4)   3.1.8 Calculate the profit made on the sale of the vehicle. (3) 3.2 On the evening of 28 February 2021, the new vehicle is stolen.  The business is properly insured.     3.2.1 Calculate the book value on the new vehicle that was stolen, as on 28 February 2021. (Assume that the accumulated depreciation is R3 600 on the new vehicle). (3)   3.2.2 Which two measures can the business apply to improve their internal control?   (4) 3.3 Record the following transactions, by completing the table in the answer book:     3.3.1 Bought trading stock on credit, R30 000. (4)   3.3.2 Return trading stock, R1 300, to the supplier. (4)   3.3.3 Sold old equipment, which originally cost R15 000, on 28 February 2021.  The accumulated depreciation on the equipment on the date of sale, amounted to R9 000.  The business sold the equipment for R5 900 cash.  The business made a loss of R100 with the sale of the asset. (10)

    ASSET DISPOSAL 2020 Sept. 1 Vehicles GJ (5) 2020 Sept. 1 Debtors control GJ 83 000               Accumulated depreciation on vehicles GJ   (6)                         3.4 PROBLEM SOLVING      Brightstar TV’s sells one brand of television. The owner, Arrie has three branches operating in Pretoria, Prieska and Pofadder. Arrie provided the following figures from the three branches for the financial period ending 28 February 2021.     REQUIRED:     3.4.1 Identify ONE problem in relation to each branch, quoting figures to support you answers. In each case, offer Arrie advice on how to solve the problem. (9)   INFORMATION       Pretoria Prieska Pofadder Number of televisions 500 800 700 Number of televisions sold 380 730 80 Closing stock 120 60 620 Selling price per television R4 200 R4 200 R4 200 Total amount deposit R1 566 000 R3 066 000 R336 000 Advertising per year R30 000 R30 000 R50 000 Salary of manager per month R8 000 R8 000 R16 000     TOTAL 150  

STATEMENT RECEIVED FROM GALAXY WHOLESALERS  GALAXY WHOLESALERS                                                                                                                         Account B123 STATEMENT OF ACCOUNT To: Fredrick Traders       549 Achilles Street       Cape Town Date Details Debit Credit Balance May 1 Balance     57 200 7 Invoice 514 8 200   65 400 10 Debit note 204   480 64 920 14 Cheque   28 800 36 120 20 Invoice 520 5 600   41 720 23 Invoice 529 20 800   62 520 Additional information On comparing the statement and the creditor’s ledger account, the following differences have been discovered: 1 The amount of allowances on 10 May was correct on the statement.  Correct this error. 2 Discount on 14 May was omitted on the statement. 3 Fredrick Traders did not buy any stock on 23 May from Galaxy Wholesalers.  This invoice was incorrectly debited to the account of Fredrick Traders. 4 The statement closed on the 25th of the month.

INSTRUCTIONS   1. Read the following instructions carefully and make sure you follow them.       2. An ANSWER BOOK is provided in which you must answer all the relevant questions.   3. Show ALL calculations to earn part marks.      4. MAKE SURE YOU UPLOAD THE CORRECT ANSWER SHEET!!! INCORRECT UPLOADS =0   MAKE SURE YOU SAVE YOUR FILES CORRECTLY: ACCN GR11E T02 SBA004b YOUR SURNAME YOUR NAME YOUR DOCUMENT MUST BE IN PDF FORMAT.      5. You may use a non-programmable calculator.   6. If you choose to complete your exam by hand, make sure it is neat and legible.  Illegible handwriting = 0.   7. Make use of the time allocation provided for each question.  Try NOT to deviate from it.   ACCN GR11E T2 SBA004b AB (Paper 2).pdf  ACCN GR11E T2 SBA004b AB (Paper 2).docx 

QUESTION 1.2  BANK RECONCILIATION AND INTERNAL CONTROL [58 marks] REQUIRED Use the information below to complete the following: 1.2.1.   Cash Receipt Journal and the Cash Payment Journal of BrightLight Traders for February 2021.  Total only the bank columns in the cash journals. (22) 1.2.2 Prepare the Bank account on 28 February 2021. (6) 1.2.3 Prepare the Bank Reconciliation Statement on 28 February 2021. (12) 1.2.4 Answer the following questions:     1.2.4.1 Why is it important to draw up a monthly bank reconciliation statement? (2)   1.2.4.2 Refer to 3.4.  How will cheque no 104 be treated at the end of the financial year? (4)   1.2.4.3 Briefly explain TWO internal control procedures that the business could put in place in order to avoid cash being stolen.  (4)   1.2.4.4 Give TWO advantages of internet banking. (4)   1.2.4.5 Sally opened a savings account at FNB.  David got a loan from ABSA.  The South African Reserve Bank decided to increase the interest rate. Indicate whether this decision will have positive or a negative impact on Sally and David.  Explain your answer. (4) INFORMATION 1. An extract from the Bank reconciliation statement on 31 January 2021 showed the following:     Debit Credit Credit balance according to bank statement   3 571 Credit outstanding deposit   3 218 Debit outstanding cheques               101 1 489             102 350             104 950   Debit balance according to bank account ??     6 789 6 789   2. Totals of the cash journals on 28 February 2021:     2.1 Cash Receipt Journal           Bank                                        R44 190         Sundry accounts R44 190       2.2 Cash Payment Journal         Bank R42 500         Sundry accounts R42 500    

GENERAL LEDGER OF BRIGHTSTAR TRADERS   VEHICLES 2020 Mar. 1 Balance b/d 310 000 2020 Sept. 1 Asset disposal [C] 150 000 Dec. 1 [A] CJ 144 000 2021 Feb. 28 Balance c/d       [D]         [B]           2021 Mar. 1 Balance b/d                   ACCUMULATED DEPRECIATION ON VEHICLES 2020 Sept. 1 Asset disposal GJ 67 500 2020 Mar. 1 Balance b/d 100 000 2021 Feb. 28 Balance c/d       Sept. 1 Depreciation GJ 7 500           2021 Feb. 28 Depreciation GJ   ?                               2021 Mar. 1 Balance b/d