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FAC511S-FINANCIAL ACCOUNTING 101-1ST OPP-JUNE 2025 |
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nAmlBIA UnlVERSITY
OF SCIEnCE Ano TECHnOLOGY
FACULTY OF COMMERCE, HUMAN SCIENCESAND EDUCATION
DEPARTMENT OF ECONOMICS, ACCOUNTING AND FINANCE
QUALIFICATION: BACHELOROF ACCOUNTING AND BACHELOROF LOGISTICSAND SUPPLY
CHAIN MANAGEMENT
QUALIFICATION CODE: 07BGAC AND
07BLSC
LEVEL: 5
COURSE: FINANCIAL ACCOUNTING 101
COURSE CODE: FAC511S
SESSION: JUNE 2025
DURATION: 3 Hours
PAPER: THEORY & CALCULATIONS
MARKS: 100
FIRST OPPORTUNITY EXAMINATION QUESTION PAPER
EXAMINERS:
MODERATOR:
Ms H Kangala, Mr H Namwandi, Mr H Hainghumbi, Ms Y Odio, Ms
NJ Akwenye
Mr C Mahindi
INSTRUCTIONS TO CANDIDATES
1. Answer all questions in blue or black ink.
2. Round off all amounts to the nearest Namibian Dollar, where applicable.
3. A non-programmable calculator is permissible.
4. Show all your workings (where applicable).
This Question paper is made up of 5 Pages (Excluding the front page)
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Question 1
41 Marks
The following is a list of the accounts that relate to the business of Cloudy cc for the
financial year ended 28 February 2025.
Sales
Purchases
Carriage inwards
Telephone expenses
Repairs and maintenance
Rent paid
Rates and taxes
Salaries and wages
Water and Electricity
Insurance
Stationery
Capital
Land and Buildings
Equipment
Accumulated depreciation: Equipment (01/03/2024)
Accumulated depreciation: Land and Buildings (01/03/2024)
Cash on hand
Bank (overdraft)
Long-term Investments
Inventory (01/03/2024)
Accounts Receivables
Allowance for credit losses
Accounts Payables
Accrued expenses
Additional information:
680,000
450,000
2,500
1,844
23,300
9,940
230
15,400
2,200
315
3,330
825,625
880,000
158,600
25,800
10,560
2,100
21,000
23,226
6,800
48,350
1,000
64,000
150
3,256,270
1. The owner took trading inventory with a sales value of N$2, 115 for own use on 15
December 2024. The enterprise sells goods at cost price plus 12.5%
2. The accountant incorrectly included equipment that was acquired on 1
November 2024 for N$18, 700 under repairs and maintenance.
3. The organisation uses a periodic inventory system. The following balances relate
to inventories at the end of the year:
- Trading inventories
- N$8,600
- Stationery
-N$150
4. An accounts receivable whose account of N$3,500 was written off in the previous
year was recovered in the current year. The accountant included this amount in
sales.
5. An accounts receivable with an account of N$2,750, included in the accounts
receivable should be written off.
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6. The allowance for credit losses should be adjusted to 2.5% of outstanding
accounts receivables.
7. Insurance relates to a cover with BD Insurers at N$45 per month. According to the
contract, Cloudy cc has been covered for the full financial year.
8. Rent expense relates to the rental of the inventory warehouse at a cost of N$710
per month.
9. The Land and Buildings asset class is 80% Land and 20% Buildings. Cloudy cc
depreciates Buildings at a 2% rate using the Straight-line method. Land is not
depreciable.
10. Cloudy cc uses the Reducing Balance method at 15% to apply depreciation on
Equipment and other non-current assets.
11. The listed Accrued Expenses relate to a balance that has been brought down from
last year's telephone expenses. This account was settled in the current year and
the movement in the Bank account has already been correctly accounted for.
Required:
a) Prepare the adjusted Trial Balance for Cloudy cc as at 28 February 2025,
considering the information provided.
24 Marks
b) Prepare the statement of profit or loss for the year ended 28 February 2025
10 Marks
c) Prepare the closing general journal entries to the Trading Account and to the
Capital Account. Ignore narrations
7 Marks
Question 2
12 Marks
Fresh-take CC supplies wedding decor services as well as decor items to its client base.
On 31 May 2024, the trial balance of Fresh-take CC failed to agree. Several errors have
been detected by the accounting officer of the close corporation. A credit balance of
N$420.00 brought down from April 2024.
Below are further details on the errors detected.
1. The owner's daughter worked for the business during the school holidays. Her
salary of N$1,500 was recorded as drawings. It was correctly treated in the bank
account.
2. An amount of N$800 paid for advertisements, was not posted to the ledger
account, but correctly posted to the bank account.
3. Credit losses of R120 written off against a receivable's account were recorded as
a credit, to credit losses account. The amount was correctly recorded treated as
a credit to accounts receivables.
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4. Purchases of R600 were posted twice to the purchases account.
5. Total cash receipts of N$81,360 according to the cash receipts journal was
recorded as N$81,630 on the debit side of the bank account.
6. The accounts payable journal was overstated by R500.
7. Goods sold on credit for N$340 were recorded as N$430 on the debit side of the
accounts payable journal.
8. The business paid N$1,000 for water and electricity. The only entry made of the
transaction was a debit to the bank with N$1,000.
REQUIRED
Prepare the suspense account general ledger account to correct the errors and clear the
difference.
12 Marks
Question 3
19 Marks
BC Music is a wholesaler of music equipment, selling to various music stores while using a
periodic inventory system. The company is a registered VATVendor and generally deals with
other registered VAT vendors. The following are a summary of transactions for the month of
March 2025.
VATis charged at 15%. Assume all amounts are VATexclusive, unless otherwise stated.
1. Purchased inventory from the manufacturer, Mshasho equipment for N$710,000 (incl) on
credit.
2. Cash sales of music equipment amounted to N$1,600,000, all paid via bank transfer or
with point of sale (swiping). This amount includes sales of N$160,000 that was made to
customers who are not registered for VAT.
3. Received interest on fixed deposit of N$10,000 from Bic Bank
4. DD Jamz, a small business cash customer of BC Music returned the goods sold to them
at N$25,000.
5. The monthly lease payment of the company's premises amounting to N$28,500 (incl) was
paid by cheque.
6. Sales of music equipment to Kandu Cultural Group N$500,000 (incl) on credit
7. Paid the monthly salary of Mark Hue, the company's general manager at N$20,000.
8. The company purchased a computer system for N$51,300 (incl) for G Computers, paid by
cheque.
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9. Purchased a seven-seater vehicle for staff transportation N$100,000 (incl) on credit from
Autohut.
Required:
a) Provide the journal entries to record the above transactions in the accounting
records of BC Music. Journal narrations are not required.
19 Marks
Question 4
12 Marks
The following information was obtained from the financial records of Zinadi Traders on 31
March 2025.
N$
Balances on 01 March 2025
Total debit balances in receivables ledger
24,000
Total of debit balances in payables ledger
1,000
Transactions for the month ended 31 March 2025
Total of cash sales returns from appropriate journal
300
Total of credit sales column in receivables journal
130,000
Total of cash sales column in cashbook receipts journal
32,000
Total of credit sales returns from appropriate journal
600
Total from receivables column in the cashbook receipt journal
136,000
Total of credit purchases returns from appropriate journal
900
Total discount received on credit transactions
1,300
Payments received from credit customers returned by the bank
1,000
Interest charged on long outstanding receivables balances
200
Total discount allowed on credit transactions
1,500
Credit losses written off in March 2025 per the expenses account
3,600
Accounts receivable mistakenly recorded as a debit to payables ledger
900
Balances on 31 March 2025
Total credit balances in receivables ledger
3,200
Total of credit balances in payables ledger
4,000
Required: Prepare the accounts receivables control account for Zinadi Traders for the
month of March 2025.
12 Marks
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Question 5
Required:
16 Marks
a) Using the definitions of the appropriate elements, discuss why income received in
advance should be recognized as a liability and not an asset.
4 marks
b) On the 8th of March 2025, the owner of Brown Trading purchased inventory of
N$5,000 for the business and paid for it on the same day using his personal funds.
The accountant thinks this transaction should be recognized as a Debit to assets and
a Credit to Income, because it should be regarded as a gift from the owner, Mr.
Brown.
Use the definitions of the elements of financial statements to explain why you agree
or disagree with the accountant's treatment of the transaction and provide
alternative treatment, if there is any.
5 Marks
c) Discuss the meaning of capital expenditure and give one example
4Marks
d) Define depreciation and name two methods of depreciation.
3 Marks
End of Paper
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