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Support Pack 2 | Grade 10

CAPS

Accounting
Exemplar examination: June

This revision pack for Accounting Grade 10 provides support for

learners revising the most important concepts and principles covered
in the CAPS curriculum, by providing practice exams. This pack offers a
sample of the June examination.
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Grade 10 Time: 2 hours
ACCOUNTING
June Marks: 200
EXAMINATION

INSTRUCTIONS AND INFORMATION

Read the instructions below carefully and follow them precisely.

1. Answer ALL the questions.

2. Workings must be shown in order to achieve part-marks.

3. Non-programmable calculators may be used.

4. Always answer questions in dark pencil or blue/black ink.

5. Candidates will lose points for:

The omission of important dates
The use of non-accepted abbreviations
Overwriting figures
Redundant entries/foreign items

6. Use the information in the table below as a guide when answering the question
paper. Try NOT to deviate from it.

Question Topic Marks Time allocation

1. Theory; multiple choice 16 10 minutes

2. Salaries and wages 38 23 minutes

3. Final accounts 50 30 minutes

4. General Ledger 45 27 minutes

5. General Journal 20 12 minutes

6. Accounting equation 31 18 minutes

TOTAL
200 120 minutes

1
QUESTION 1 [16 marks; 10 minutes]
THEORY; MULTIPLE CHOICE

1.1 The discount allowed to a debtor for early payment is:

A. an asset B. a liability
C. an income D. an expense. (2)

1.2 The GAAP principle that is used when stationery not used during the financial
year, is deducted from the Stationery account at the end of the financial year is
called the:
A. historical cost principle B. materiality principle
C. matching principle D. business entity rule principle. (2)

1.3 The GAAP principle that says assets purchased by the business are entered at
cost price in the accounting records of business is called the:
A. historical cost principle B. materiality principle
C. matching principle D. business entity rule principle. (2)

1.4 The entry in the accounting records of the business when the telephone
account for the last month of the financial year has not yet been paid is:
A. Dr Accrued Income, Cr Telephone
B. Dr Telephone, Cr Bank
C. Dr Telephone, Cr Accrued Expenses
D. Dr Prepaid Expenses, Cr Telephone (2)

1.5 When stationery is returned to the supplier, the following entries are made in
the General Ledger:
A. Dr Discount Received, Cr Creditors Control
B. Dr Bank, Cr Stationery
C. Dr Creditors Control, Cr Stationery
D. Dr Stationery, Cr Creditors Control (2)

1.6 The Income Received in Advance account is a/an:

A. asset B. liability
C. income D. expense. (2)

1.7 A physical stocktake at the end of the financial year reflects stock on hand of
R78 900. According to the books, however, the Trading Stock account shows a
balance of R80 100. The entries in the General Ledger will be:
A. Dr Drawings, Cr Trading Stock, R1 200
B. Dr Trading Stock, Cr Closing Stock, R1 200
C. Dr Trading Stock, Cr Trading Stock Surplus, R1 200
D. Dr Trading Stock Deficit, Cr Trading Stock, R1 200. (2)

1.8 The source document used when goods are returned to a supplier is:
A. an invoice B. a debit note
C. a credit note D. a cheque counterfoil. (2)

2
QUESTION 2 [38 marks; 23 minutes]
SALARIES AND WAGES

The information below relates to the salary of E Williams, an employee of

Claremont Traders for the month of May 2020.

INFORMATION
Salary table:
Year Annual increase Annual salary

1 R13 000 R249 000

2 R13 000 R262 000

3 R13 000 R275 000

4 R13 000 R288 000

5 R16 640 R304 640

6 R16 640 R321 280

Kayla earns a gross salary of R24 000 per month and has the following deductions:
Retire Well Pension Fund: 5% of gross salary
PAYE 32% of gross salary after pension has been deducted
Health Medical Aid Fund: R2 290
UIF 1% of gross salary

Claremont Traders also make certain contributions to assist employees:

Pension fund: rand-for-rand basis
Medical aid: 40% of employee’s contribution up to a maximum
of R1 800
UIF 1% of gross salary
Skills Development Levy: 1% of gross salary

REQUIRED
Use the information given to answer these questions.
2.1 Draw up E Williams’ salary scale. (5)
2.2 In which year of employment is E Williams? (1)
2.3 After 2020, for how many more years does E Williams still have to work
before he earns the maximum salary? (1)
2.4 Calculate E Williams’ total deductions for May 2020. (9)
2.5 Calculate the contributions the business will make towards
E Williams’ salary. (6)
2.6 What is the total salary expense for Claremont Traders to employ
E Williams? (3)
2.7 Using E Williams’ salary information for May 2020, draw up the
following accounts in the General Ledger (all employees were paid at
the end of May):
Creditors for Salaries (5)
Medical Aid Fund (6)
UIF Contribution (2)

3
QUESTION 3 [50 marks; 30 minutes]
FINAL ACCOUNTS

On 28 February 2014 the following balances appeared in the books of Young

Traders.

REQUIRED
Take into account the information in the Trial Balance and adjustments to draw up
the following accounts in the General Ledger:

3.1 Capital(5)
3.2 Sales(5)
3.3 Trading account (8)
3.4 Profit and Loss account (32)

INFORMATION
Adjustments and additional information
• An investment was made in a fixed deposit on 1 May 2013. On 1 December
2013, the bank informed the business that the interest rate had been reduced
from10% p.a. to 8% p.a. There is still some interest outstanding on the fixed
deposit. Interest is not capitalised.
• No entry was made for stationery bought for R700 on credit from a supplier.
• An invoice for goods sold on credit for R550 on 28 February 2014 had not
been entered in the relevant journal. The business uses a profit mark-up of
120% on cost.
• The insurance account includes an annual premium of R6 000 which was paid
on 31 May 2013.
• The bank statement was received after the Pre-adjustment Trial Balance was
drawn up and contained the following:
A stop order for insurance on the owner’s son’s personal car of R1 800
Service fees, R650
Interest on overdraft, R165
• A cheque received from a debtor had been returned by the bank marked R/D.
The entry to cancel the cheque was correctly entered into the Cash Payments
Journal, but the discount R25, which had previously been allowed, was not
cancelled yet.
• A debtor, whose account had been written off as bad in the previous financial
year, paid R500 on 28 February 2014. The amount was entered in the Cash
Receipts Journal but posted to the Debtors Control account. Correct the error.
• An amount of R9 000 for rent was received in advance from the tenant.
• Electricity and water used during the year amounted to R29 475.
• The business donated trading stock costing R150 to the UTurn Charity. The
bookkeeper incorrectly entered the amount as Drawings.
• A physical stocktake on 28 February 2014 showed the following on hand:
Trading stock, R77 000
Packing material, R1 800
• Depreciation on vehicles is calculated at 15% p.a. according to cost price method
(NOTE: The business only has one vehicle which was bought on 1 June 2019).
Depreciation on equipment is calculated at 10% p.a. on the diminishing balance.

4
Young Traders
Pre-Adjustment Trial Balance on 28 February 2014
Debit Credit
Balance Sheet accounts
Capital 500 000
Drawings 59 290
Land and buildings 274 000
Equipment 130 000
Vehicles 130 000
Accumulated depreciation on equipment 46 400
Fixed deposit – NB Bank 24 000
Trading stock 77 705
Debtors control 46 480
Creditors control 27 104
Bank overdraft 17 776
Nominal accounts
Sales 771 250
Cost of sales 339 750
Debtors’ allowances 23 800
Advertising 35 000
Bank charges 10 500
Discount allowed 8 900
Discount received 13 880
Electricity and water 29 845
Insurance 18 000
Packing materials 29 800
Salaries and wages 153 700
Rent income 45 000
Stationery 15 880
Telephone 12 760
Interest on overdraft 3 400
Interest on fixed deposit 1 400
1 422 810 1 422 810

5
 QUESTION 4 [45 marks; 27 minutes]
GENERAL LEDGER

HJ Office Supplies sells a wide range of office equipment for cash and credit at a
mark-up of 50% on cost. All purchases and returns of trading stock are on credit.

REQUIRED
4.1 Complete the Trading Stock and Debtors Control accounts using
the additional information supplied and information already entered
in the account. (32)
4.2 4.2.1 A physical stocktake revealed that R3 200 worth of trading stock
had gone missing. Does the owner of HJ Office Supplies need to
be concerned about this stock shortage? Why? Discuss two
measures they could possibly introduce to prevent or reduce
shortages in the future. (8)
4.2.2 How can the accountant verify (check) that the balance on the
Debtors Control account is correct? (3)
4.2.3 Discuss two measures the accountant could introduce in order to
encourage the debtors to settle their accounts sooner (4)

INFORMATION
General Ledger of H J Office Supplies
Dr    Trading Stock Cr
Date Details Fol. Amount Date Details Fol. Amount
2020 2020
Aug 01 Balance b/d 35 672 Aug 31 * CRJ 2 500
31 Creditors Control * 12 960 Cost of Sales * 7 610
Bank * 9 544 * CAJ 270
Cost of Sales * * * * *

Balance c/d *
* *
2020
Sep 01 Balance b/d *

Dr   Debtors Control Cr
Date Details Fol. Amount Date Details Fol. Amount
2020 2020
Aug 01 Balance b/d 6 210 Aug 31 * CRJ *
31 Sales * * * DAJ 210
Bank (R/D) * 550 * GJ *
* GJ *
Balance c/d *
* *
2020
Sep 01 Balance b/d *

6
Additional information
• During August, debtors settled their accounts and were allowed 10% discount
totalling R820.
• The bank notified HJ Office Supplies that cheques of R550 issued in settlement
of debts of R580 were dishonoured on account of insufficient funds.
• The lawyers notified us that D Mia’s debt of R1 300 must be written off as a
bad debt.
• T Phandle has a credit balance of R350 in the Debtors Ledger. Transfer this
amount to her account in the Creditors Ledger.
• The owner, H James, took trading stock worth R1 500 and stationery of R60 for
his personal use.

QUESTION 5 [20 marks; 12 minutes]

GENERAL JOURNAL

The transactions given were extracted from the records of ISO Traders, owned by
S Mandla, during October 2018.

REQUIRED
Record the relevant entries in the General Journal – ignore entries that would
appear in any other journal.

Note:
• Narrations may be omitted.
• You are not required to complete columns for the Debtors Control and
Creditors Control.

TRANSACTIONS
02 The owner, S Mandla, took merchandise with a selling price of R180 and cost
price of R120 for her own personal use.

08 A Conrad, a debtor, must still be charged interest on her overdue account of

R2 400 at 12% p.a. for 3 months.

12 S Matebe who owes R3 600 has been declared insolvent. His estate will pay out
t40 cents in the rand. Write off the balance of his account.

15 The bank notified ISO Traders that a cheque originally received from M Dollie
for R240 in settlement of a debt of R265 has been returned marked “R/D”:
Insufficient funds.

20 Goods were sold on credit for R550 to M Parker, but were incorrectly posted
to the account of M Narker. Correct the error.

28 The delivery vehicle was serviced on credit at Star Service Station for R1 800.
The bookkeeper posted the entry to the Vehicles account by mistake. Correct
the error.

7
 QUESTION 6 [31 marks; 18 minutes]
ACCOUNTING EQUATION

Analyse the transactions of Momentum Stores according to the example given

below.
Assume the bank balance is favourable unless otherwise stated.

Example
Bought packing material and paid by cheque, R280.
No. Journal General Ledger Effect on:

Account debit Account credit A O L

e.g. CPJ Packing material Bank –280 –280 0

TRANSACTIONS
1. Charged the overdue account of a debtor with interest, R15.
2. Received a credit note for R36 for an overcharge on stationery previously bought
on credit.
3. Invested R6 000 in a fixed deposit, invested for two years at 8% interest p.a.,
payable monthly.
4. Issued a credit note for R27 to a debtor as an allowance on goods that were
damaged while being transported to them.

At this stage the bank account was overdrawn.

5. Paid The Transporter R300 by cheque for carriage on trading stock purchased.
6. Received R72 from D Smith whose account had previously been written off
as bad.