Term 3: Pre-Test
Before commencing any activities please complete the pre-test below. This will be compared with your performance in the post-test to determine your professional growth.
Time limit: 1 hour 2 mins
Grading method: Highest grade
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Question 1 of 20
1. Question
The director has to ensure that financial statements are prepared and presented at the annual general meeting.
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Question 2 of 20
2. Question
The difference between current assets and current liabilities is known as the non – current liabilities.
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CorrectIncorrect -
Question 3 of 20
3. Question
Consumable stores on hand are classified as non – current assets.
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Question 4 of 20
4. Question
To whom is the audit report addressed to?
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Question 5 of 20
5. Question
Refer to the information below to answer questions 5 & 6:
Extract from the Independent Auditor’s Report received by Frazeli Ltd
Fralezi Ltd received a/an ……………audit report.
Select one:CorrectIncorrect -
Question 6 of 20
6. Question
Refer to the information below to answer questions 5 & 6:
Extract from the Independent Auditor’s Report received by Frazeli Ltd
Explain why the independent auditors referred to pages 11–29 in the report.
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Question 7 of 20
7. Question
Questions 7 – 10 are based on the information below:
Net profit before tax of R2 493 600 was determined BEFORE taking into account the following information provided below:
- Indicate how the adjustments below will be treated in the calculation of the correct net profit after tax for the year ended 30 June 2019. Indicate a + for increase and a – for decrease
List of balances / totals on 30 June 2019:
Adjustments
- Trading stock on 30 June 2019 was valued at R191 900
- Provision for bad debts must be adjusted to R9 000
- An annual insurance premium of R6 000 was paid for the period 1 April 2019 to 31 March 2020
- The auditor discovered that the profit on disposal of a vehicle was incorrectly shown as a loss of R6 800
Indicate how adjustment 1 will be treated in the calculation of the correct net profit after tax.
Select one:CorrectIncorrect -
Question 8 of 20
8. Question
Questions 7- 10 are based on the information below:
Net profit before tax of R2 493 600 was determined BEFORE taking into account the following information provided below:
- Indicate how the adjustments below will be treated in the calculation of the correct net profit after tax for the year ended 30 June 2019. Indicate a + for increase and a – for decrease
List of balances / totals on 30 June 2019:
Adjustments
- Trading stock on 30 June 2019 was valued at R191 900
- Provision for bad debts must be adjusted to R9 000
- An annual insurance premium of R6 000 was paid for the period 1 April 2019 to 31 March 2020
- The auditor discovered that the profit on disposal of a vehicle was incorrectly shown as a loss of R6 800
Indicate how adjustment 2 will be treated in the calculation of the correct net profit after tax.
Select one:CorrectIncorrect -
Question 9 of 20
9. Question
Questions 9 – 13 are based on the information below:
Net profit before tax of R2 493 600 was determined BEFORE taking into account the following information provided below:
- Indicate how the adjustments below will be treated in the calculation of the correct net profit after tax for the year ended 30 June 2019. Indicate a + for increase and a – for decrease
List of balances / totals on 30 June 2019:
Adjustments
- Trading stock on 30 June 2019 was valued at R191 900
- Provision for bad debts must be adjusted to R9 000
- An annual insurance premium of R6 000 was paid for the period 1 April 2019 to 31 March 2020
- The auditor discovered that the profit on disposal of a vehicle was incorrectly shown as a loss of R6 800
Indicate how adjustment 3 will be treated in the calculation of the correct net profit after tax.
Select one:CorrectIncorrect -
Question 10 of 20
10. Question
Questions 7 – 10 are based on the information below:
Net profit before tax of R2 493 600 was determined BEFORE taking into account the following information provided below:
- Indicate how the adjustments below will be treated in the calculation of the correct net profit after tax for the year ended 30 June 2019. Indicate a + for increase and a – for decrease
List of balances / totals on 30 June 2019:
Adjustments
- Trading stock on 30 June 2019 was valued at R191 900
- Provision for bad debts must be adjusted to R9 000
- An annual insurance premium of R6 000 was paid for the period 1 April 2019 to 31 March 2020
- The auditor discovered that the profit on disposal of a vehicle was incorrectly shown as a loss of R6 800
Indicate how adjustment 4 will be treated in the calculation of the correct net profit after tax.
Select one:CorrectIncorrect -
Question 11 of 20
11. Question
Use the following information to answer questions 11 and 12. The financial year ends on 30 June 2019:
Information
A) Share capital and dividends
- 900 000 shares were in issue on 1 July 2018
- 75 000 ordinary shares were re-purchased from the estate of a deceased shareholder at R10.70 per share on 1 October 2018
- The company issued 125 000 ordinary shares at R10.80 per share on 1 April 2019
- The cash flow statement reflected dividends paids of R434 250
Calculate the ordinary share capital balance for the year ended 30 June 2019.
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Question 12 of 20
12. Question
Use the following information to answer questions 11 and 12. The financial year ends on 30 June 2019:
Information
A) Share capital and dividends
- 900 000 shares were in issue on 1 July 2018
- 75 000 ordinary shares were re-purchased from the estate of a deceased shareholder at R10.70 per share on 1 October 2018
- The company issued 125 000 ordinary shares at R10.80 per share on 1 April 2019
- The cash flow statement reflected dividends paids of R434 250
Calculate the balance of the retained income for the year ended 30 June 2019.
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Question 13 of 20
13. Question
The information provided below is extracted from the records of Africa Ltd for February 2019:
- Depreciation for the year ended 28 February 2019 is R215 100
- Additional property was purchased for R2 100 000. No other fixed assets were purchased
- Equipment was sold at carrying value.
Calculate the proceeds from disposal of fixed assets to appear in the cash flow statement.
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Question 14 of 20
14. Question
The information provided below is extracted from the records of Egoli Ltd for February 2019:
Balance sheet extract
Income statement extract
Calculate the income tax amount to appear in the cash flow statement.
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Question 15 of 20
15. Question
Use the information below to calculate the debt : equity ratio for the year ended 30 June 2019:Extract of the balance sheet
The correct debt : equity ratio is:Select one:CorrectIncorrect -
Question 16 of 20
16. Question
Provide a calculation to show the change in the dividend pay- out policy:
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Question 17 of 20
17. Question
Use the following information to answer questions 17 -18.
Mary is the CEO of Ziggy Ltd. Her shareholding is as follows:
- the company has 1 000 000 authorised ordinary shares
- 900 000 ordinary shares were in issue on 1 March 2018 (the beginning of the financial period)
- 75 000 ordinary shares were re-purchased on 25 September 2019 and were properly recorded.
Calculate Mary’s % shareholding on 1 October 2019 after the repurchase of shares.
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Question 18 of 20
18. Question
Use the following information to answer questions 17 -18.
Mary is the CEO of Ziggy Ltd. Her shareholding is as follows:
- the company has 1 000 000 authorised ordinary shares
- 900 000 ordinary shares were in issue on 1 March 2018 (the beginning of the financial period)
- 75 000 ordinary shares were re-purchased on 25 September 2019 and were properly recorded.
The independent auditor discovered that Mary had made the decision to re-purchase the shares without informing the board of directors. Which of the following statements is FALSE?
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Question 19 of 20
19. Question
The information provided below is extracted from the financial records of Mayibuye Ltd:
List of balances / totals on 30 June 2019:
The mortgage loan from Custom Bank was obtained on 1 April 2018. This will be repaid over 6 years. A fixed loan repayment (excluding interest) is made at the end of each month. The first monthly loan repayment was made on 30 April 2018. All other loan repayments have been made, interest is not capitalized.
Use the information above to calculate the short term loan that will be recorded in the balance sheet.
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Question 20 of 20
20. Question
The bookkeeper completed the following page in the Fixed Assets Register, using the incorrect method of depreciation:
Instruction
Corrections must be made in respect of a computer that was stolen on 31 March 2019.
Note: The depreciation on this asset should have been calculated at 20% p.a on the diminishing balance method.
Choose the correct combination of calculations for the following accounts for the year ended 30 June 2019:
- Depreciation
- Loss of computer due to theft
Select one:CorrectIncorrect