ACCN1000: Accounting I Exam Notes (Wits BAccSc)

These exam notes are tailored for ACCN1000 Accounting I in the BAccSc programme at the University of the Witwatersrand (Wits). They consolidate core first‑year financial accounting concepts, link them to South African context (IFRS-based), and are structured to support exam preparation and past paper practice.

1. The Accounting Environment and Conceptual Framework

1.1 Purpose of Accounting and the ACCN1000 Context

Accounting in ACCN1000 (Wits) focuses on financial accounting: measuring, recording, and reporting financial information for decision‑making by external users. Key external users include:

Current and potential shareholders
Banks and other lenders
SARS and other regulators
Suppliers and major customers
Employees and trade unions

Within the Wits BAccSc degree, ACCN1000 lays the foundation for later courses (e.g., ACCN2000, ACCN3000 and ultimately professional CA(SA) training). Mastery of this course means:

Understanding double-entry bookkeeping
Preparing and interpreting basic financial statements
Applying the conceptual framework and basic IFRS principles
Building exam technique for common ACCN1000 question styles (journal entries, trial balance, statement preparation, and short theory)

1.2 The Accounting Equation and Elements

The fundamental accounting equation:

Assets = Equity + Liabilities

Rearrangements (often used in exam questions):

Equity = Assets − Liabilities
Liabilities = Assets − Equity

Definitions (aligned to IFRS Conceptual Framework)

Asset: A present economic resource controlled by the entity as a result of past events, from which future economic benefits are expected to flow.
Liability: A present obligation of the entity to transfer an economic resource as a result of past events.
Equity: The residual interest in the assets of the entity after deducting all liabilities.
Income: Increases in assets or decreases in liabilities that result in increases in equity, other than contributions from equity holders (owners).
Expenses: Decreases in assets or increases in liabilities that result in decreases in equity, other than distributions to equity holders.

Common ACCN1000 exam trick: classifying items correctly.

Example classification (small business in Johannesburg):

Item	Classification	Reason
Cash at bank	Asset	Present resource, controlled, future economic benefit
Loan from Standard Bank (5 years)	Non‑current liability	Present obligation to pay cash in future
Wages paid to employees	Expense	Decrease in economic resources (cash) without future benefit
Capital contributed by owner	Equity (contribution)	Increases resources but not from income
SARS – Income tax payable	Current liability	Present obligation to pay SARS in short term

1.3 Qualitative Characteristics of Financial Information

Exam questions often ask you to name and explain qualitative characteristics, or apply them to a scenario.

Fundamental Qualitative Characteristics

Relevance
- Information is relevant if it is capable of making a difference to decisions.
- Includes predictive and confirmatory value.
- Example: Disclosure of a large pending lawsuit for a Wits spin‑off tech start‑up is relevant because it may change investor decisions.
Faithful Representation
- Information should faithfully represent economic phenomena it claims to represent.
- Must be:
  - Complete (no material omissions),
  - Neutral (free from bias), and
  - Free from error (no errors in process, though estimates can still be uncertain).

Enhancing Qualitative Characteristics

Comparability: Users can compare information across periods and entities. For Wits ACCN1000 questions, think of consistent policies (e.g., same depreciation method from year to year).
Verifiability: Different knowledgeable, independent observers can reach consensus that information is faithfully represented (e.g., two auditors reaching similar conclusions).
Timeliness: Information is available in time to influence decisions (e.g., annual financial statements issued before investment decisions).
Understandability: Information is presented clearly and concisely, classifying and summarising properly so users with reasonable financial knowledge can comprehend it.

1.4 Underlying Assumptions and Constraints

Key Assumptions

Accrual Basis
- Transactions are recorded when they occur, not when cash is received or paid.
- Income: Recognised when earned, not when cash is received.
- Expenses: Recognised when incurred, not when cash is paid.
- Critical for exam journal entries such as:
  - Income received in advance
  - Accrued expenses and income
  - Prepayments
Going Concern
- Financial statements prepared on assumption that the entity will continue operating for the foreseeable future.
- Affects:
  - Measurement basis (historical cost vs liquidation values)
  - Classification into current vs non‑current items
- Exam twist: If going concern is in doubt, disclosure required, and measurement basis may change.

Constraints

Materiality
- Information is material if its omission or misstatement could influence decisions of users.
- In ACCN1000, materiality is often used to justify whether to separately disclose an item or aggregate it.
Cost vs Benefit
- The cost of providing information should not exceed the benefits gained from its use.

1.5 The Accounting Cycle Overview

The accounting cycle is a recurring sequence of steps:

Identifying and analysing transactions.
Recording in journals (general and subsidiary).
Posting to ledger accounts (T‑accounts / general ledger).
Preparing a trial balance.
Adjusting entries (accruals, prepayments, depreciation, allowances).
Preparing adjusted trial balance.
Preparing financial statements:
- Statement of profit or loss and other comprehensive income,
- Statement of financial position,
- (later modules: cash flow statement, changes in equity).
Closing entries (transferring income and expenses to equity/retained earnings).
Post‑closing trial balance for next period.

Many ACCN1000 exam questions take the form: Given transactions for the period, complete steps 2–7.

2. Double‑Entry System, Journals, and Ledgers

2.1 Double‑Entry Basics

Every transaction affects at least two accounts with equal debits and credits.

Debit/Credit Rules (Accounts Grouped)

Account Type	Debit (Dr) effect	Credit (Cr) effect
Assets	Increase	Decrease
Expenses	Increase	Decrease
Drawings/Dividends	Increase	Decrease
Equity (Capital)	Decrease	Increase
Income/Revenue	Decrease	Increase
Liabilities	Decrease	Increase

Mnemonic used by many first‑years at Wits:

DEAD CLIC
- Debit Expenses, Assets, Drawings
- Credit Liabilities, Income, Capital

2.2 Analysing Transactions: Steps

When ACCN1000 questions present a transaction:

Identify the accounts affected.
Classify each account (asset, liability, equity, income, expense).
Determine whether each account increases or decreases.
Apply DEAD CLIC to decide debit or credit.
Write the journal entry with narration.

Example: Starting a Business

On 1 March 2026, Thandi starts Thandi Traders with R100 000 cash capital contributed.

Accounts:
- Cash (asset) increases → Debit Cash R100 000
- Capital (equity) increases → Credit Capital R100 000

Journal entry:

Dr Cash R100 000
Cr Capital R100 000
(Owner introduced capital in cash to start business)

2.3 General Journal vs Special Journals

In more advanced practice, entities may use:

General journal: for non‑routine transactions and adjustments.
Special journals: e.g.:
- Cash receipts journal (CRJ)
- Cash payments journal (CPJ)
- Sales journal (SJ)
- Purchases journal (PJ)
- Returns journals

In ACCN1000 at Wits, the emphasis is typically on general journals and often a simple cash receipts/payments format, but understanding special journals helps conceptual clarity.

Cash Receipts and Cash Payments (Single Entry vs Double Entry)

CRJ summarises all cash inflows.
CPJ summarises all cash outflows.
At month‑end, totals are posted to ledger accounts.

Example CRJ snippet:

Date	Details	Bank (Dr)	Sales (Cr)	Capital (Cr)
01/03/2026	Capital	100 000	–	100 000
05/03/2026	Cash sale	15 000	15 000	–

2.4 Posting to T‑Accounts (General Ledger)

T‑Account layout:

Cash

Dr                            | Cr

01 Mar Capital   100 000      |
05 Mar Sales      15 000      |
                              | (other credits)

Balance c/f      115 000      |

Total            115 000      | 115 000

Posting rules:

Debits in journal → left side of T-account.
Credits in journal → right side of T-account.
Each ledger account will have:
- Date
- Details (contra account)
- Amount

Exam tip: Always label balances (e.g., “Balance c/f” at end of period, “Balance b/d” at start).

2.5 Trial Balance

After posting all entries, compile a trial balance.

Purpose:

Check arithmetical accuracy of ledger (total debits = total credits).
Serve as basis for financial statement preparation.

Format:

Account Name	Dr (R)	Cr (R)
Cash	115 000
Equipment	40 000
Capital		100 000
Sales		15 000
Rent expense	5 000
Totals	160 000	115 000

If totals do not balance, you have an error in:

Journal entries
Posting
Addition/subtraction
Omitting an account

Note: Balanced trial balance does not guarantee no errors – some errors do not affect equality of debits and credits.

2.6 Common Error Types (Exam Favourites)

Error of Omission
- Transaction completely omitted.
- Trial balance still balances.
- Example: Cash sale of R5 000 not recorded anywhere.
Error of Commission
- Correct amount in wrong account of same type.
- E.g., Debiting Equipment instead of Furniture.
- Trial balance balances.
Error of Principle
- Correct amount, wrong type of account (e.g., expense instead of asset).
- Example: Treating purchase of a delivery vehicle as Repairs Expense.
- Violates accounting principles.
Compensating Errors
- Two or more errors cancel each other’s effect.
- Trial balance still balances.
Transposition Error
- Digits reversed (e.g., writing R4 560 instead of R5 460).
- Often causes trial balance difference divisible by 9.
Single‑sided Error
- Entry made only on one side (only debit or only credit).
- Trial balance does NOT balance.

In a typical ACCN1000 exam, you might be asked:

To identify error types from descriptions, or
To pass correcting journal entries.

3. Adjustments and the Accrual Basis

Adjustments are central to ACCN1000, especially in preparing an adjusted trial balance and financial statements. The exam almost always includes adjustments like: depreciation, accruals, prepayments, inventory, bad debts, and income/expenses received/paid in advance.

3.1 Accruals and Prepayments

Accrued Expenses (Outstanding Expenses)

Expense incurred but not yet paid by year‑end.
Example: Electricity for March R3 000 consumed but bill not received at 31 March 2026.

Year‑end adjustment:

Dr Electricity expense R3 000
Cr Accrued expenses (liability) R3 000

Impact:

Increases current period expenses (profit decreases).
Recognises liability in statement of financial position.

Accrued Income (Income Receivable)

Income earned but not yet received.
Example: Interest on fixed deposit R1 200 earned in March, payable in April.

Adjustment:

Dr Accrued income (asset) R1 200
Cr Interest income R1 200

Impact:

Increases income (profit increases).
Recognises asset (amount owed by bank).

Prepaid Expenses

Cash paid in advance for expense relating partly/wholly to future period.
Example: Insurance R12 000 paid on 1 Jan 2026 for 12 months; year‑end is 31 March 2026. Only 3 months (Jan–Mar) is current period expense.

Calculation:

Monthly = R12 000 ÷ 12 = R1 000 p.m.
Expense for Jan–Mar = R1 000 × 3 = R3 000
Prepaid for Apr–Dec = R12 000 − R3 000 = R9 000

If entire R12 000 recorded initially as Insurance Expense:

Adjustment at year‑end:

Dr Prepaid insurance (asset) R9 000
Cr Insurance expense R9 000

Income Received in Advance (Unearned Income)

Cash received before income is earned.
Example: Rental R24 000 received on 1 March 2026 for 6 months (March–August). Year‑end is 31 March 2026.

Calculation:

Monthly rent = R24 000 ÷ 6 = R4 000
Income earned to 31 March (1 month) = R4 000
Income received in advance at 31 March = R24 000 − R4 000 = R20 000

If entire R24 000 recorded as Rent Income:

Adjustment:

Dr Rent income R20 000
Cr Income received in advance (liability) R20 000

3.2 Inventory and Cost of Sales (Periodic System)

In ACCN1000, the periodic inventory system is commonly tested.

Key Terms

Opening inventory: Inventory at start of period.
Purchases: Inventory acquired during period.
Closing inventory: Inventory at end of period.
Cost of sales = Opening inventory + Purchases − Closing inventory.

Example scenario:

Opening inventory: R30 000
Purchases: R120 000
Closing inventory (per physical count at 31 Dec): R25 000

Cost of sales = 30 000 + 120 000 − 25 000 = R125 000

In trial balance:

Purchases (Dr)
Opening inventory (Dr)
Closing inventory may be given outside trial balance (adjustment).

Adjustment for Closing Inventory

Two methods in exam answers (conceptually equivalent):

Method 1: Separate closing inventory account

Dr Inventory (asset) R25 000
Cr Cost of sales R25 000

Method 2: Split effect across trading account
Handled within trading section when preparing statement of profit or loss.

Common exam pitfalls:

Forgetting to include opening inventory.
Using sales instead of purchases in cost of sales formula.
Not adjusting purchases for returns and carriage inwards.

Additional Inventory Adjustments

Goods on approval (sent to customer, not yet accepted): Remain in seller’s inventory.
Goods in transit:
- FOB shipping point → buyer’s inventory once shipped.
- FOB destination → seller’s inventory until delivered.
- ACCN1000 may keep these simple but be aware conceptually.

3.3 Depreciation of Non‑Current Assets

Depreciation allocates the cost of a tangible non‑current asset over its useful life.

Common methods in ACCN1000:

Straight‑line method
Diminishing balance (reducing balance) method

Straight‑Line Depreciation

Formula:

Annual depreciation = (Cost − Residual value) ÷ Useful life

Example:

Delivery vehicle cost R120 000
Residual value R20 000
Useful life 5 years

Annual depreciation = (120 000 − 20 000) ÷ 5 = R20 000

Journal entry (year‑end):

Dr Depreciation expense – Vehicles R20 000
Cr Accumulated depreciation – Vehicles R20 000

Diminishing Balance Method

Depreciation is a fixed percentage of carrying amount at beginning of period.

Example:

Equipment cost R100 000
Depreciation rate 20% p.a. on reducing balance
Year 1 depreciation: 20% of 100 000 = R20 000
Carrying amount end of Y1 = 100 000 − 20 000 = R80 000
Year 2 depreciation: 20% of 80 000 = R16 000

Handling Partial Years

If asset purchased during year, pro‑rate depreciation by months.

Example:

Vehicle purchased 1 July 2026 cost R150 000
Depreciation 10% p.a., straight‑line, negligible residual value
Year‑end 31 Dec 2026 (6 months)

Annual depreciation = 10% × 150 000 = R15 000
For 6 months: 15 000 × 6/12 = R7 500

Disposals of Assets

Key steps when asset sold:

Remove cost of asset.
Remove accumulated depreciation up to disposal date.
Record proceeds from sale (cash or receivable).
Recognise profit or loss on disposal.

Example:

Equipment cost: R80 000
Accumulated depreciation at sale date: R50 000
Carrying amount: 80 000 − 50 000 = R30 000
Sold for R25 000 cash → Loss on disposal = 30 000 − 25 000 = R5 000

Journal entries:

Remove asset and accumulated depreciation:

Dr Accumulated depreciation – Equipment R50 000
Dr Loss on disposal of equipment R5 000
Cr Equipment R80 000
Cr Bank R25 000

(Or separate entry for cash)

Exam emphasis:

Correct calculation of depreciation before disposal.
Correct classification of profit or loss on disposal in statement of profit or loss.

3.4 Bad Debts and Allowance for Credit Losses

Bad Debts (Irrecoverable Debts)

A bad debt is an amount from a debtor that is deemed uncollectible.

Example:

Debtor: Sipho Ltd owes R4 000.
Entity becomes aware Sipho Ltd has been liquidated; debt is irrecoverable.

Journal entry:

Dr Bad debts expense R4 000
Cr Trade receivables R4 000

Bad debts expense appears in statement of profit or loss.

Allowance for Credit Losses (Provision for Doubtful Debts)

Instead of waiting for debts to go bad, entity estimates expected credit losses (allowance).

Suppose:

Total trade receivables at year‑end: R100 000
Estimated 5% will be doubtful → Required allowance = R5 000
Assume existing allowance in trial balance = R3 000 (credit balance)

Adjustment needed: Increase allowance by R2 000 (5 000 − 3 000)

Journal entry:

Dr Credit losses expense (or Impairment loss) R2 000
Cr Allowance for credit losses R2 000

If required allowance < existing allowance, reverse difference.

Example when required allowance = R2 500 and existing = R3 000:

Dr Allowance for credit losses R500
Cr Credit losses expense R500

Exam pattern:

Often given: “Create an allowance for credit losses of 5% of trade receivables.”
You must:
1. Calculate the new required allowance.
2. Compare to existing allowance.
3. Adjust by difference.

3.5 Income Tax, Salaries, and Other Common Adjustments

Income Tax

At ACCN1000 level, treatment is simplified:

Income tax expense for year is given.
Income tax payable (liability) may be calculated based on payments made.

Example:

Income tax expense for 2026: R30 000
Income tax paid during year: R20 000

Adjustment at year‑end:

Dr Income tax expense R30 000
Cr Income tax payable R10 000
Cr Bank R20 000

In practice, many exam questions simply show:

Income tax expense in statement of profit or loss.
Income tax payable in statement of financial position.

Salaries and Wages

Common adjustments:

Accrued salaries (outstanding at year‑end).
Prepaid salaries (if salaries paid in advance).
PAYE, UIF, and other statutory deductions are more bookkeeping‑intensive; ACCN1000 usually focuses just on accruals and prepayments.

Example Integrated Adjustment Question

Question (ACCN1000 style):

At 31 Dec 2026, the following information relates to Ray Traders:

Trial balance shows Rent expense R24 000 (for year).

On 1 Oct 2026, Ray paid R9 600 for 6 months’ rent in advance (Oct–Mar).

Required: Pass the year‑end adjustment for rent.

Analysis:

Total cash payments: Unknown; but we know R9 600 covers Oct–Mar.
Period covered for Oct–Dec 2026 (current year) = 3 months.
Monthly rent = 9 600 ÷ 6 = 1 600.
Rent expense for Oct–Dec 2026 = 1 600 × 3 = 4 800.
Rent for Jan–Sep (if included in R24 000) must be considered, but exam typically expects:
- Total rent expense for year = existing R24 000 + current year portion of the new payment (4 800),
- Prepayment = remaining 3 months (4 800).

However, if R24 000 already includes the entire R9 600, the adjustment is:

Prepaid rent amount at 31 Dec = 1 600 × 3 = R4 800

Adjustment:

Dr Prepaid rent (asset) R4 800
Cr Rent expense R4 800

Check the wording carefully in exam; whether R24 000 includes or excludes the R9 600 matters.

4. Financial Statements for Sole Traders (ACCN1000 Core)

ACCN1000 focuses heavily on preparing:

Statement of Profit or Loss (Income Statement)
Statement of Financial Position (Balance Sheet)

under a sole trader or simple entity structure.

4.1 Statement of Profit or Loss

Purpose: To show the entity’s performance (profit or loss) over a period.

Typical layout (for a small Johannesburg retailer):

Ray Traders
Statement of Profit or Loss
for the year ended 31 December 2026

Description	R
Revenue (Sales)	500 000
Less: Cost of sales	(320 000)
Gross profit	180 000
Other income	10 000
Total income	190 000
Expenses:
– Rent expense	(36 000)
– Salaries and wages	(80 000)
– Depreciation	(12 000)
– Bad debts	(3 000)
– Other operating expenses	(24 000)
Total expenses	(155 000)
Profit for the year	35 000

Exam skills:

Knowing which items go under cost of sales, other income, and expenses.
Correctly accounting for adjustments before drawing up this statement.

4.2 Statement of Financial Position (SFP)

Purpose: Shows the entity’s financial position at a specific date (what it owns and owes, and owners’ equity).

Ray Traders
Statement of Financial Position
as at 31 December 2026

ASSETS

Non‑current assets
Property, plant and equipment (at carrying amount):

Asset	Cost	Acc. depn	Carrying amount
Equipment	80 000	(20 000)	60 000
Vehicles	120 000	(30 000)	90 000
Total PPE			150 000

Current assets

Inventory R50 000
Trade receivables R40 000
Less: Allowance for credit losses (2 000)
Net trade receivables R38 000
Prepaid expenses R4 800
Cash and cash equivalents R15 000
Total current assets R107 800

Total assets R257 800

EQUITY AND LIABILITIES

Equity

Capital (opening) R150 000
Add: Profit for the year 35 000
Less: Drawings (20 000)
Closing capital R165 000

Non‑current liabilities

Loan from Standard Bank (5 years) R50 000

Current liabilities

Trade payables R30 000
Accrued expenses R12 800
Income received in advance R0
Income tax payable R0
Total current liabilities R42 800

Total equity and liabilities R257 800

Exam tips:

Assets and liabilities are usually split into current and non‑current.
Ensure Assets = Equity + Liabilities.
Show net trade receivables (after allowance) clearly.

4.3 Equity Section for Sole Trader

For sole trader (ACCN1000), equity section is generally:

Opening capital

Additional capital introduced

Profit for the year
− Drawings
= Closing capital

Exam question may ask:

“Calculate closing capital and show equity movement.”

Example:

Opening capital R100 000
Profit for year R30 000
Drawings R15 000
Additional capital R5 000

Closing capital = 100 000 + 30 000 + 5 000 − 15 000 = R120 000

4.4 Typical ACCN1000 Exam Question Structure (Financial Statements)

Scenario:

You are given:
- Trial balance of a small sole trader as at year‑end.
- A list of additional information/adjustments (inventory, depreciation, accruals, bad debts, etc.).

Required:

Process adjusting journal entries and/or
Prepare statement of profit or loss and statement of financial position.

Step‑by‑step approach:

Read trial balance carefully – identify:
- Which items are income, expense, asset, liability, capital.
Read all adjustments and decide:
- Which accounts they affect.
- Whether they increase or decrease profit.
Process each adjustment:
- In working papers/T‑accounts.
- Aim to arrive at adjusted balances.
Prepare statement of profit or loss:
- Start with revenue.
- Compute cost of sales.
- Add other income.
- Deduct all expenses (including depreciation, bad debts, and any adjustment‑related expenses).
Prepare equity calculation:
- Opening capital, plus profit, less drawings.
Prepare statement of financial position:
- Show adjusted balances for all assets and liabilities.
- Make sure the accounting equation balances.

Common exam pitfalls:

Missing an adjustment.
Applying adjustment in wrong direction (e.g., increasing instead of decreasing an expense).
Forgetting to deduct drawings from capital.
Forgetting to adjust cost of sales for closing inventory and any returns.

5. Special Topics and Exam Technique for ACCN1000 at Wits

5.1 Cash and Bank Reconciliation

Although detailed bank reconciliation may feature more heavily in later courses, ACCN1000 often includes a basic bank reconciliation concept.

Reasons for Bank Reconciliation

Identify differences between cash book balance and bank statement balance.
Detect:
- Errors (by bank or by entity).
- Unrecorded transactions (e.g., bank charges, interest).
- Fraud or unauthorised withdrawals.

Common Reconciling Items

Outstanding deposits: Deposits recorded in cash book, not yet reflected on bank statement.
Unpresented cheques: Cheques issued (payments) recorded in cash book, not yet presented to bank.
Bank charges: Recorded by bank, not yet in entity’s cash book.
Direct debits/credits: e.g., debit orders, EFTs recorded only on bank statement.
Dishonoured (bounced) cheques: Previously recorded deposits which failed; must reverse.

Exam technique:

Update cash book for bank statement items not yet recorded.
Determine updated cash book balance.
Prepare bank reconciliation statement to reconcile updated cash book balance with bank statement balance.

5.2 Control Accounts and Subsidiary Ledgers (Overview)

Control accounts summarise transactions in subsidiary ledgers.

Trade receivables control account:
- Total of individual debtors’ accounts.
Trade payables control account:
- Total of individual creditors’ accounts.

Purpose:

Provide a check between the control account and total of subsidiary ledgers.
Easier to prepare trial balance (use control accounts rather than listing each debtor/creditor individually).

Exam focus (if tested):

Posting entries affecting all debtors or all creditors to control accounts.
Reconciliation of control account balance with the sum of individual accounts.

5.3 Ethics and Professional Behaviour in Accounting

Even at first‑year level, exams may ask short theory questions on ethics.

Key principles (aligned broadly with SAICA Code of Professional Conduct):

Integrity: Being straightforward and honest in all professional relationships.
Objectivity: Not allowing bias, conflict of interest or undue influence to override professional judgment.
Professional competence and due care: Maintaining professional knowledge and acting diligently.
Confidentiality: Respecting information confidentiality.
Professional behaviour: Complying with relevant laws and avoiding actions that discredit the profession.

Example exam‑style application:

A junior accountant at a Johannesburg firm discovers that revenue is being overstated at year‑end to secure a bank loan. Discuss the ethical issues.

Discussion points:

Overstating revenue breaches integrity (dishonesty).
Misleads users (e.g., banks) → contravenes duty to provide faithful representation.
Accountant must report/resolve internally, potentially escalate or resign if unresolved.

5.4 ACCN1000 Exam Strategy and Common Question Types

5.4.1 Layout and Marks

Typical ACCN1000 final exam (varies by year, but common patterns):

Section A: Short questions (theory and small calculations)
- Accounting concepts, definitions, multiple choice, or brief journal entries.
Section B: Long questions
- Preparation of full financial statements from trial balance and adjustments.
- Ledger and trial balance from list of transactions.
- Adjustments and error correction.

5.4.2 Managing Time

Quick scan entire paper (2–3 minutes).
Start with questions where you feel most confident (often financial statements).
Allocate time proportional to marks.
- Example: For a 100‑mark paper over 3 hours:
  - Each mark ≈ 1.8 minutes.
  - 40‑mark question → 72 minutes maximum.

5.4.3 Showing Workings

Markers award method marks, especially in Wits ACCN1000. Always:

Show clear and labelled workings:
- Inventory calculations.
- Depreciation schedules.
- Allowance for credit losses movements.
Use sub‑totals (e.g., total expenses) to help marker follow logic.

Even if final answer is wrong, you can gain significant marks from good intermediate steps.

5.4.4 Common Mistakes and How to Avoid Them

Omitting Adjustments
- Strategy: Tick off each adjustment in question once incorporated into answer.
Confusing Debit and Credit
- Always refer back to DEAD CLIC.
- Practise standard transactions until intuitive (e.g., sales on credit, payment to creditor, owner drawings, bank loan received).
Mismatched Dates
- Depreciation and accruals must be calculated for correct portion of the year.
- Always count months precisely between purchase and year‑end.
Not Balancing Financial Position
- If assets ≠ equity + liabilities, something is missing or misallocated.
- Check:
  - Drawings.
  - Closing inventory.
  - Accruals and prepayments.
Calculator Errors
- Double‑check key computations.
- Use step‑by‑step arithmetic instead of one long calculation where possible.

5.5 Linking ACCN1000 to Later Courses (and Other Universities’ Equivalents)

Although this guide focuses on Wits ACCN1000, many South African universities and UNISA modules cover equivalent material under different codes, which is useful for cross‑referencing and finding extra practice resources:

UNISA:
- FAC1501 – Introductory Financial Accounting
- FAC1601 – Financial Accounting Principles
Central University of Technology (CUT):
- ACC10AB – Accounting I
Other Wits courses in later years:
- ACCN2000, ACCN3000 expanding on company accounts, IFRS, and consolidations.

Students frequently search for combinations like:

“ACCN1000 Wits past exam papers”
“FAC1501 UNISA study notes PDF”
“ACC10AB CUT exam tips”

Using these equivalent modules’ publicly available questions can help reinforce ACCN1000 skills, as the core topics overlap heavily:

Double‑entry and journals
Trial balances
Adjustments and accrual accounting
Preparation of financial statements for sole traders and simple entities

5.6 Consolidated Example: Mini‑Exam Simulation

Bringing together many concepts from ACCN1000:

Scenario (Condensed)

You are given the unadjusted trial balance of Kabelo Traders as at 30 June 2026 (R):

Account	Dr	Cr
Capital		150 000
Drawings	20 000
Land and buildings	200 000
Equipment	80 000
Accumulated depn – Equipment		20 000
Inventory (1 Jul 2025)	30 000
Trade receivables	40 000
Allowance for credit losses		1 600
Trade payables		35 000
Bank	25 000
Sales		300 000
Purchases	180 000
Salaries and wages	60 000
Rent expense	24 000
Insurance expense	12 000
Bad debts	2 000
General expenses	16 000
Totals	669 000	506 600

Additional information:

Inventory on 30 June 2026: R35 000.
Depreciate equipment at 10% p.a. on cost.
Insurance expense includes R3 000 for the period 1 July to 30 September 2026.
Create allowance for credit losses at 5% of trade receivables.
Rent expense for June 2026 of R2 000 is outstanding.
Income tax expense for the year is R18 000 (unpaid).

Required (as in exam):

a) Pass the adjusting journal entries.
b) Prepare the statement of profit or loss for year ended 30 June 2026.
c) Prepare the statement of financial position as at 30 June 2026.

This integrated question covers:

Inventory adjustment (1)
Depreciation (2)
Prepaid insurance (3)
Allowance for credit losses (4)
Accrued expense (rent) (5)
Income tax expense & payable (6)
Equity movement (capital and drawings)

Working through such full‑length example questions from past ACCN1000/Wits exam papers and similar UNISA CUT modules is one of the most effective ways to prepare for your own exam.

These ACCN1000 Accounting I exam notes for Wits BAccSc consolidate the foundational financial accounting concepts expected at first‑year level in South Africa. Combine them with past exam practice, tutorial questions, and lecturer guidance to build strong competence in double‑entry, adjustments, and financial statement preparation.