ACBP5121 - Introduction to Accounting Assignment - The Independent Institute of Education

Assignment Task

Question 1

Users of financial information include investors, lenders, labour unions, management and others. Financial information is used for many different purposes. Answer the questions that follow relating to the users and uses of financial information:

i. In your own words, briefly explain what you understand by “financial information” and in what form/s could financial information be presented to users?

ii. Financial information is used by a variety of different stakeholders. List five different types of users of financial information and for each type of user you have listed, explain what financial information would be useful to them. You must only list 5 users. If more than 5 users are listed only the first 5 will be marked.

iii. Why has South Africa changed from the Accounting Standards known as GAAP (Generally Accepted Accounting Principles) to the IFRS (International Financial Reporting Standards)?

The purpose of accounting is to provide meaningful information to users.

• There are two main branches of accounting. One of the branches is financial accounting. What is the other branches.
• Provide three differences between the two branches.

Question 2

i. Indicate whether the transaction account listed in the left-hand column of the table below is increasing or decreasing given the transaction details provided. In addition, state whether the transaction account would be debited or credited AND state which accounting element is applicable to the transaction account i.e.: whether it is a current asset, non-current asset, current liability, etc.

ii. Businesses that keep stock, generally use either the perpetual or periodic inventory system for recording the value of their stock. You are required to answer the question below. Ignore VAT.

iii. Joshua Goniwe started a new welding business called World of Welding on 1 March 2023. He uses the perpetual inventory system. Joshua Goniwe has entered into the following transactions in March 2023:

Question 3

i. The following is an invoice issued by Joe Soap Industrial Cleaning Supplies:

ii . Complete the table below by providing the missing information. You are only required to write the number of the question together with the missing information:

iii. Complete the following tables by filling in the missing amounts corresponding to the letters A to J. You are only required to write the letter of the missing amount and the answer e.g. K = R100 or L = 20% Ignore VAT.

iv. Complete the following table by filling in the missing amounts corresponding to the letters A to J. You are only required to write the letter of the missing amount and the answer e.g. K = R100 or L = 20%

Question 4

Grid Unlock Traders import solar PV (photo voltaic) panels. The following relates to an order for 500 panels imported from Canada:

i. Calculate the cost price of each solar panel: Ignore VAT

ii. If Grid Unlock Traders marks up the solar panels at 25% on selling price, calculate the selling price of each panel.

iii. The following balances appear amongst others, in the trial balance of Grid Unlock Traders for the year ended 29 February 2024:

From the information supplied, which inventory system is being used by Grid Unlock Traders and provide a reason for your answer? 

In which type of business environment would it be most likely that the type of inventory system you have mentioned above, would be used?

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