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IHA521S- INTRODUCTION TO HOSPITALITY AND TOURISM ACCOUNTING- 1ST OPP- JUNE 2023 |
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nAmlBIA unlVERSITY
OF SCIEnCE Ano TECHnOLOGY
FACULTY OF COMMERCE, HUMAN SCIENCESAND EDUCATION
DEPARTMENT OF ECONOMICS, ACCOUNTING AND FINANCE
QUALIFICATION CODE: 07BHOM
& 07BOTM
COURSE CODE: IHA521S
LEVEL: 6
COURSE NAME: INTRODUCTION TO HOSPITALITYAND
TOURISM ACCOUNTING
SESSION: JUNE 2023
DURATION: 3 HOURS
PAPER: THEORY AND CALCULATIONS
MARKS: 100
FIRST OPPORTUNITY EXAMINATION QUESTION PAPER
EXAMINERS
Sheehama, K.G.H.
MODERATOR Odada, L.
INSTRUCTIONS
• Answer ALL four (4) questions in blue or black ink only. NO PENCIL.
• Start each question on a new page, number the answers correctly and clearly.
• Write clearly, and neatly showing all your workings/assumptions.
• Work with at least four (4) decimal places in all your calculations and only round
off only final answers to two (2) decimal places.
• Questions relating to this examination may be raised in the initial 30 minutes after
the start of the examination. Thereafter, candidates must use their initiative to deal
with any perceived errors or ambiguities and any assumptions made by the
candidate should be clearly stated.
PERMISSIBLE MATERIALS
• Silent, non-programmable calculators
THIS QUESTION PAPER CONSISTS OF _8_ PAGES (including this front page)
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QUESTION 1
(40 MARKS)
Answer this question ON the Answer Sheet provided and write down the letter that, in your
opinion, represents the correct answer:
1. What term is used for day-to-day dealings that are recorded in the book
of accounts of a business?
A. Business dealings
B. Bookkeeping
C. Business transactions
D. Accounting
2. Accounts receivables are increased by ...... and accounts payables are decreased by .........
A. Debits, Credits
B. Debits, Debits
C. Credits, Debits
D. Credits, Credits
3. When an owner contributes an asset into the business, it is called .....
A. Drawings
B. Income
C. Owner's equity
D. Sales
4. A company receives an order in April, posts the goods in May, and receives
payment in June. In this case, under the realization principle, revenue is
earned in which month?
A. April
B. May
C. June
D. None
5. Difference between sales and gross profit is called:
A. Net sales
B. Gross profit
C. Cost of goods sold
D. Net profit
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6. A sum of expenses and net profit is called:
A. Net loss
B. Gross profit
C. Cost of goods sold
D. Gross loss
7. If total liabilities increased by N$4 000, then
A. Assets must have decreased by N$4 000.
B. Owner's equity must have decreased by N$4 000.
C. Assets must have increased by N$4 000 and owner's equity must have decreased by
N$4 000.
D. Assets and owner's equity each increased by N$2 000.
8. lftotal assets increased by N$5 000, then
A. Assets must have decreased by N$5 000.
B. Owner's equity must have decreased by N$5 000.
C. Assets must have increased by N$5 000 and owner's equity must have decreased by
N$5 000.
D. Assets and owner's equity each increased by N$2 500.
9. Which of the following statements is false?
A. to increase cash, debit the account
B. to increase revenue, credit the account
C. to decrease a liability, debit the account
D. to increase a liability, debit the account
10. Which ofthe following series of accounts all have debit balances?
A. building, cash, accrued salaries
B. building, salary expense, prepaid rent
C. building, depreciation expense, accrued rent
D. building, accumulated depreciation, cash
11. Which of the following series of accounts all have credit balances?
A. bank-overdraft, creditors, drawings
B. bank-overdraft, creditors, interest expense
C. capital, depreciation expense, sales
D. capital, accumulated depreciation, sales
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12. State which one of the following errors would be discovered because of preparing a trial
balance:
A. The credit column of account has been overstated by N$100.
8. Drawings of N$200 has been entered in both drawings and bank account.
C. A transaction has been completely omitted from the books of account.
D. A transaction has been entered incorrectly in both accounts e.g. as N$59 instead of
as N$95.
13. Which ratio measures an evaluation of a business' ability to pay its
short term obligations?
A. Current ratio
8. Gross profit ratio
C. Net profit ratio
D. Ability period ratio
14. Debit entries in the ledger accounts will:
A. Increase both assets and liabilities.
8. Decrease both assets and liabilities.
C. Decrease assets and increase liabilities.
D. Increase assets and decrease liabilities
15. Net loss will result if:
A. Operating expenses are less than gross profit.
8. Operating expenses are greater than gross profit.
C. Sales revenues are greater than cost of sales.
D. Operating expenses are greater than cost of goods sold.
16. NamDancer has a dancing school and sells dancing shoes to clients. He won an important
dancing competition. NamDancer proposes to include his dancing skills and experience as
current asset in the statement of financial position. You advised him that this is not
allowed. Which ofthe following accounting rules apply?
A. The rule periodicity rule
8. The realization rule
C. The quantitative rule
D. The prudence rule
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17. A business agreed to write off an amount of N$5 000 owed by accounts receivable as a
bad debt. Which of the following entries in the final accounts should the business now
perform?
A. Charge the bad debt to statement of profit and loss account only
B. Reduce only the value of the accounts receivable balance to allow for the bad debt
C. Reduce the value of the accounts receivable balance AND charge the bad debt to the
statement of profit and loss
D. Increase the value of the accounts receivable balance and add to the gross profit
balance.
18. The following ratio measures how long on average a business takes to
pay off its short-term obligations.
A. Accounts receivables collection period
B. Accounts payables payment period
C. Quick ratio
D. Current ratio
19. Which one of the following accounting rules relates to the timing intervals of drafting
financial statements.
A. Prudence rule
B. Entity rule
C. Periodicity rule
D. Consistency rule
20. What do you divide cost of sales by to work out the inventory turnover?
A. Total costs
B. Total revenues
C. Average inventory
D. Average debtors
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QUESTION 2
(15 MARKS)
You are presented with the following summarized accounts:
Kapana Trading business, statement of profit or loss account for the year to 31 May 2022:
Sales (all credit)
500 000
Less:Cost of sales
350 000
Opening inventory
45 000
Credit purchases
400 000
Closing inventory
(95 000)
Gross profit
150 000
Administrative expenses
30000
Selling and advertising expenses
25 000
Net profit
95 000
Kapana Trading business statement of financial position as at 31 May 2022
Current assets:
Inventory
95 000
Accounts receivables
220 000
Non-current assets (net book value)
Total assets
Current liabilities (accounts payables)
Capital
Net profit
Total Liabilities and capital
315 000
650 000
965 000
300 000
570 000
95 000
965 000
You are required to calculate the following accounting ratios (state the formulae)
a) Gross profit ratio
(3)
b) Current ratio
(3)
c) Acid test ratio
(3)
d) Stock turnover ratio
(3)
e) Accounts receivables collection period
(3)
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QUESTION 3
(25 MARKS)
Tura-Babe, a sole trader, opened a shop on 1 August 2022 and during the first month in
business, the following transactions occurred:
2022
1 August Tura-Babe deposited N$500 000 in the entity's bank account as capital.
1 August Paid rent per EFTfor the premises used for business activities, N$20 000.
6 August A new furniture to the value of N$50 000 was purchased and paid per EFT.
8 August Purchased merchandise for N$100 000 from X-Shopfitters on credit.
15 August Tura-babe returned N$20 000 of the goods to X-Shopfitters.
20 August Sold goods on credit to J Roux for N$40 000.
25 August Amount owed by J Roux was received.
27 August Settled amount owing to X-Shopfitters per EFT,and a discount of 15% was allowed.
30 August Paid N$5 000 per EFTfrom private bank account into her friend bank account.
31 August Tura-Babe paid N$15 000 from the business' bank account into her personal bank
account per EFT.
REQUIRED:
a) Enter the above transactions in appropriate Tura-Babe's ledger or 'T' accounts and
balance off all the leger accounts.
(20)
b) Prepare a trial balance as at 31 August 2022.
(5)
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QUESTION 4
(20 MARKS)
Malakia Shivute, a sole trader, has been in the business for some years. The following is the
trial balance of her wholesale clothing business as at 30June 2022.
Inventory (stock) as at 1 July 2021
Sales
Purchases
Carriage inwards
Carriage outwards
Returns inwards
Discount allowed
Discount received
Wages and salaries
Office expenses
Drawings
Bad debts
Equipment at cost
Depreciation at 1 July 2021 - Equipment
Vehicle at cost
Depreciation at 1July 2021- Vehicle
Capital
Bank
Accounts receivables
Accounts payables
Provision for bad and doubtful debts at 1st July 2021
Additional information:
Debit (N$)
Credit (N$)
40 000
700 000
480 000
10 000
4 000
2 000
1000
8 000
94000
54000
24 600
2 000
80000
24000
48 000
8 000
170 000
9 400
120 000
55 000
4000
969 000
969 000
1. Inventory (stock) held in the business at 30 June 2022 is valued at N$52 000.
2. At 30 June 2022 Ms Malaika owes N$3 000 for electricity used but not yet billed to her.
3. At 30 June 2022 Ms Malaika wishes t9 maintain the provision for doubtful debts equal to
5% of outstanding accounts receiv,ables balance.
If
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4. Salaries of N$4 000 included in Jhe wages ;h'd salari~s.of,~$9~_000 is prepaid salaries
I
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July 2022.
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5. Depreciations are to be charge_tjfor the year on the vehicle at rate of 20% on reduced
, · - ·i,1-.,,_ _
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balance and on the equipm~nt at rat~ ·o·fio %,on cost.
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You are required to: Prepare Mal~k·i~Shivu~~1s"sfat~-~-~~t'profit .or loss·account for the year
· • lf i ,,, _
· · r;: _, /
ended 30 June 2022.
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END OF EXAMINATION QUESTION PAPER
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