ACC6212: Accounting 2B Exam Notes (MANCOSA, UNISA, CUT & South African BCom Accounting Modules)

ACC6212: Accounting 2B is a second‑year financial accounting module that builds on introductory accounting concepts and prepares students for more complex corporate reporting. These notes are aligned to South African Bachelor of Commerce in Accounting programmes (including MANCOSA BCom Accounting, UNISA FAC2601/FAC2602, and CUT ACCF261/ACCF262 equivalents). The focus is on exam‑relevant principles, IFRS‑aligned treatments, structured workings, and common pitfalls.

The guide emphasises topics that frequently appear in ACC6212, UNISA FAC2602 exam papers, CUT second‑year accounting tests, and similar modules such as MANCOSA ACC6210 Accounting 2A as a pre‑requisite. Use it alongside your official study guides, prescribed textbooks, and past exam papers from MANCOSA, UNISA and CUT.

1. Framework & Core Principles (Relevant to MANCOSA ACC6212, UNISA FAC2601, CUT ACCF261)

Second‑year accounting in South African universities typically assumes you know the basic accounting equation and double‑entry. However, many exam errors in ACC6212, UNISA FAC2601 and CUT ACCF261 still come from weak fundamentals. This section consolidates the key framework and principles as used under IFRS, which is the standard basis for South African universities.

1.1 The Accounting Equation & Elements

Core equation:

Assets = Equity + Liabilities

Rearranged:

• Equity = Assets − Liabilities
• Liabilities = Assets − Equity

These elements must be understood in IFRS terms:

• Assets: Present economic resources controlled by the entity as a result of past events, from which future economic benefits are expected (e.g. property, plant and equipment (PPE), inventories, trade receivables, cash).
• Liabilities: Present obligations of the entity arising from past events, the settlement of which is expected to result in an outflow of economic benefits (e.g. loans, trade payables, provisions).
• Equity: Residual interest in assets after deducting liabilities (e.g. share capital, retained earnings, reserves).

Exam Tip (MANCOSA ACC6212 / UNISA FAC2601):
Always link a transaction to how it affects the equation. For example, if a company issues shares for cash:

• Assets (Cash) increase
• Equity (Share Capital) increases
• The equation remains balanced.

A typical multiple‑choice question in UNISA FAC2601 or a short question in MANCOSA ACC6212 might test this without explicitly mentioning the equation.

1.2 Recognition Criteria (IFRS‑Aligned)

Under the IFRS Conceptual Framework (used across MANCOSA, UNISA, CUT):

• An asset is recognised when:

  • It is probable that future economic benefits will flow to the entity; and
  • The asset has a cost or value that can be measured reliably.

• A liability is recognised when:

  • It is probable that an outflow of resources will result from settling a present obligation; and
  • The amount can be measured reliably.

• Income is increases in assets or decreases in liabilities that result in increases in equity (other than contributions from holders of equity claims).

• Expenses are decreases in assets or increases in liabilities that result in decreases in equity (other than distributions to holders of equity claims).

Why this matters in ACC6212 and UNISA FAC2602:

• Impacts when to recognise revenue, provisions, assets like PPE and intangibles.
• A common exam question might ask: “Should a lawsuit be recognised as a liability or only disclosed as a contingent liability?” This directly refers to the recognition criteria.

1.3 Double‑Entry System Refresher

In ACC6212, UNISA FAC1502 (intro) and then reinforced in FAC2601/FAC2602, the debit/credit rules still apply:

• Assets: Debit to increase, credit to decrease.
• Expenses: Debit to increase, credit to decrease.
• Liabilities: Credit to increase, debit to decrease.
• Equity: Credit to increase, debit to decrease.
• Income (Revenue): Credit to increase, debit to decrease.

Example (common in tutorial letters and MANCOSA assignments):

A company buys machinery for R200 000 on credit from a supplier.

• Debit PPE (Machinery) R200 000
• Credit Trade Payables R200 000

Assets increase, liabilities increase.

Exam‑style twist:
Later, a payment of R50 000 is made to the supplier:

• Debit Trade Payables R50 000
• Credit Bank R50 000

Liabilities decrease, assets decrease (bank).

1.4 Accrual Basis vs Cash Basis

In ACC6212, UNISA FAC2601 and CUT ACCF261, financial statements are prepared on the accrual basis:

• Accrual basis: Recognise income when earned and expenses when incurred, not when cash is received or paid.
• Cash basis: Recognise when cash flows occur (rarely used in corporate accounting; sometimes in small businesses or government‑related examples).

Example:

• On 28 February 2025, services worth R30 000 are provided on credit.
  • Revenue is recognised in February (accrual basis), even if cash is received in March.
• If the exam gives you a trial balance with an “Accrued Expenses” or “Income Received in Advance” line, you’re being tested on your ability to adjust for accruals/deferrals.

1.5 Qualitative Characteristics (Frequent Theory Question)

The IFRS Conceptual Framework identifies:

• Fundamental characteristics:

  • Relevance
  • Faithful representation (complete, neutral, free from error)

• Enhancing characteristics:

  • Comparability
  • Verifiability
  • Timeliness
  • Understandability

UNISA theory questions, MANCOSA ACC6212 written assignments, and CUT exam essays often ask you to:

• Name and briefly explain two qualitative characteristics; or
• Discuss why faithful representation is more than just accuracy; or
• Explain the trade‑off between relevance and faithful representation (e.g. fair values vs historical cost).

Key exam strategy:

• Define briefly.
• Explain why it matters to users (investors, creditors).
• Give one simple example (e.g. comparability between years or between companies).

2. Property, Plant & Equipment (PPE), Depreciation & Revaluation (MANCOSA ACC6212 Core; UNISA FAC2601/2602; CUT ACCF261)

PPE is a high‑value topic in ACC6212, UNISA FAC2602, and CUT ACCF261, frequently appearing in long‑form questions. You must know acquisition, subsequent expenditure, depreciation methods, revaluation model, disposals, and related note disclosures.

2.1 Initial Recognition of PPE (Cost Model)

Under IAS 16 – Property, Plant and Equipment:

• PPE is recognised at cost on initial recognition.
• Cost includes:
  • Purchase price, including import duties and non‑refundable taxes, less discounts/rebates.
  • Directly attributable costs:
    • Site preparation
    • Delivery and handling
    • Installation and assembly
    • Professional fees (e.g. architects, engineers)
    • Testing costs (less proceeds from sale of items produced during testing)
  • Initial estimate of dismantling and restoration costs (present value).

Example (MANCOSA‑style scenario):

On 1 March 2024, Siyanda Ltd (a company used across MANCOSA ACC modules) buys machinery:

• Invoice price: R500 000
• Trade discount: 10%
• Transport: R15 000
• Installation: R20 000
• Staff training: R8 000

Calculation of cost:

• Invoice price after discount: R500 000 × 90% = R450 000
• Add: Transport R15 000
• Add: Installation R20 000
• Training is NOT capitalised (it’s an expense).

Total cost of machinery = R450 000 + R15 000 + R20 000 = R485 000

Journal entry on acquisition:

• Dr PPE – Machinery R485 000
• Dr Training Expense R8 000
• Cr Bank / Trade Payables R493 000

Exam pitfall: Many ACC6212 and UNISA students incorrectly capitalise training, admin overheads, or start‑up losses. Learn the list of capitalisable vs non‑capitalisable items.

2.2 Subsequent Expenditure: Capital vs Expense

After initial recognition, decide whether later expenditure:

• Improves the future benefits (capacity, efficiency, life extension) → capitalise; or
• Merely maintains the asset’s condition → expense.

Capital expenditure examples:

• Replacing an engine with a more efficient one that extends useful life.
• Major inspection with significant cost recognised as part of the carrying amount.

Revenue (maintenance) expenditure examples:

• Routine servicing
• Repairs to keep the asset in working condition without enhancing performance.

Exam questions often list several expenses (e.g. repainting, overhauling, small repairs) and require classification.

2.3 Depreciation: Methods & Calculations

Depreciation represents the systematic allocation of the depreciable amount over the asset’s useful life.

• Depreciable amount = Cost (or revalued amount) − Residual value
• Common methods:
  • Straight‑line
  • Diminishing balance (reducing balance)
  • Units of production

2.3.1 Straight‑Line Depreciation

Formula:

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

Example:

Cost R485 000 (from Siyanda Ltd example), residual value R25 000, useful life 10 years.

• Depreciable amount = R485 000 − R25 000 = R460 000
• Annual depreciation = R460 000 ÷ 10 = R46 000 per year

If Siyanda Ltd has a 28 February year‑end and bought the machine on 1 March 2024, full year 2025 depreciation = R46 000 (if policy is full‑year for assets held the whole year). If policy is pro‑rata, adjust by number of months.

2.3.2 Diminishing Balance Method

Formula:

Depreciation for year = Carrying amount at start of year × Rate

Example:

Cost R300 000, rate 20%, no residual value assumed.

• Year 1 dep. = 300 000 × 20% = 60 000
  Carrying amount end of year 1 = R240 000
• Year 2 dep. = 240 000 × 20% = 48 000
  Carrying amount end of year 2 = R192 000

This method is tested in UNISA FAC2601 and sometimes MANCOSA ACC6212 MCQs.

2.3.3 Units of Production

Used when asset usage drives depreciation.

Depreciation per unit = (Cost − Residual value) ÷ Total expected units

Annual depreciation = Depreciation per unit × Units produced in period

2.4 Changes in Estimates (IAS 8)

Useful life and residual value are estimates, not carved in stone. When updated, adjust prospectively.

Example (often seen in CUT ACCF261 exams):

• Machinery cost: R400 000, residual R40 000, life 8 years.
• Straight‑line method.
• After 3 full years, new total estimated life: 10 years (so 7 remaining from now), residual revised to R20 000.

Step‑by‑step:

1. Depreciation for first 3 years:
   Depreciable amount = 400 000 − 40 000 = 360 000
   Annual = 360 000 ÷ 8 = 45 000
   After 3 years: Accumulated dep. = 3 × 45 000 = 135 000
   Carrying amount = 400 000 − 135 000 = 265 000

2. New depreciable amount from beginning of year 4:
   265 000 − 20 000 = 245 000

3. New remaining life: 10 − 3 = 7 years

4. New annual depreciation from year 4 onwards:
   245 000 ÷ 7 = R35 000

No prior year restatement. Just adjust current and future dep. charges.

2.5 Revaluation Model & Revaluation Surplus (IAS 16)

Entities can choose:

• Cost model: Cost less accumulated depreciation and impairment.
• Revaluation model: Revalued amount (fair value) less subsequent depreciation.

If using revaluation model:

• Apply to entire class of assets (e.g. all land and buildings).
• Revaluation must be performed with sufficient regularity to keep carrying amount close to fair value.

Upward revaluation:

• Increase carrying amount to fair value.
• Recognise the increase in Other Comprehensive Income (OCI), credited to Revaluation Surplus (equity), unless reversing a prior downward revaluation previously recognised in profit or loss.

Downward revaluation:

• Decrease carrying amount to fair value.
• Recognise the decrease in profit or loss, unless it reverses a prior upward revaluation in OCI, in which case it reduces the revaluation surplus first.

2.5.1 Revaluation Example (Typical ACC6212 20‑mark Question)

Land and buildings at cost:

• Building cost: R1 000 000
• Accumulated depreciation: R200 000
• Carrying amount: R800 000
• Fair value at year‑end: R1 100 000

Steps:

1. Determine increase in carrying amount:
   1 100 000 − 800 000 = 300 000

2. Adjustment required: R300 000 upward revaluation.

Journal entry:

• Dr PPE – Buildings R300 000
• Cr Revaluation Surplus (OCI) R300 000

New carrying amount: R1 100 000.

Future depreciation is based on revalued amount less revised residual value over remaining useful life.

2.6 Disposals of PPE

On disposal:

1. Remove cost and accumulated depreciation from the books.
2. Recognise proceeds from disposal (cash or receivable).
3. Recognise profit or loss on disposal in profit or loss.

Example:

Machine cost: R200 000
Accumulated depreciation: R120 000
Carrying amount: R80 000

Sold for R90 000.

• Profit on disposal = 90 000 − 80 000 = 10 000

Journal:

• Dr Bank R90 000
• Dr Accumulated Depreciation R120 000
• Cr PPE – Machinery R200 000
• Cr Profit on Disposal R10 000

If proceeds were R70 000, there would be a loss of R10 000 instead.

Exam tip (UNISA FAC2602 and MANCOSA ACC6212):

• Prepare an asset disposal account as a working:
  • Debit with cost
  • Credit with accumulated depreciation
  • Credit with sale proceeds
  • Balance is profit (credit) or loss (debit), taken to profit or loss.

2.7 PPE Disclosures (Summarised)

Typical required disclosure in notes:

• Reconciliation of carrying amounts at beginning and end of period by class:
  • Cost / revalued amount
  • Additions
  • Disposals
  • Depreciation charges
  • Revaluation increases/decreases
• Depreciation methods and useful lives or depreciation rates.
• Existence of restrictions, pledged assets etc.

In ACC6212 or UNISA exam questions, you may be asked to prepare the PPE note with a given format. Practice laying out the table clearly.

3. Revenue Recognition, Inventory & Cost of Sales (UNISA FAC2601/FAC2602, CUT ACCF262, MANCOSA ACC6212)

Revenue and inventory form the backbone of income statement questions and statement of financial position adjustments. South African BCom Accounting modules align with IFRS 15 (Revenue from Contracts with Customers) and IAS 2 (Inventories).

3.1 IFRS 15 Five‑Step Model

Revenue is recognised when control of goods or services transfers to the customer. Steps:

1. Identify the contract with a customer.
2. Identify the performance obligations in the contract.
3. Determine the transaction price.
4. Allocate the transaction price to performance obligations.
5. Recognise revenue when (or as) performance obligations are satisfied.

3.1.1 Simple Sale of Goods (Common in ACC6212 MCQs)

A retailer sells inventory for cash:

• Contract: At point of sale.
• Performance obligation: Deliver goods.
• Transaction price: Invoice amount (e.g. R5 000).
• Allocation: One obligation only.
• Revenue recognised when customer obtains control (usually delivery).

Journal:

• Dr Bank R5 000
• Cr Revenue R5 000

Simultaneously:

• Dr Cost of Sales (COGS)
• Cr Inventory

3.2 IAS 2 Inventories – Measurement

Inventories include:

• Goods held for sale (finished goods).
• Work in progress.
• Raw materials for production.

Measurement: Lower of cost and net realisable value (NRV).

• Cost includes purchase costs, conversion costs (direct labour, production overheads) and other costs to bring inventory to its present condition and location.
• NRV = Estimated selling price − Costs to complete − Costs to sell.

3.2.1 Cost Formulas: FIFO & Weighted Average

Under IAS 2, allowed cost formulas:

• FIFO (First‑In, First‑Out):

  • Earliest purchases assumed sold first.
  • Ending inventory comprised of most recent purchases.

• Weighted Average:

  • Cost per unit = Total cost ÷ Total units available.
  • Applied for both cost of sales and closing inventory.

South African examiners often require:

• Show inventory movement tables.
• Calculate cost of sales and closing inventory under both methods.
• Discuss impact on gross profit.

Example (appears in CUT ACCF262 and occasionally in UNISA FAC2601):

Inventory transactions for March:

• 1 Mar: Opening inventory: 100 units @ R10 = R1 000
• 5 Mar: Purchase: 200 units @ R12 = R2 400
• 18 Mar: Purchase: 150 units @ R11 = R1 650
• 25 Mar: Sales: 300 units

Using FIFO:

• Units available: 100 + 200 + 150 = 450
• Units sold: 300
• Units left: 150

COGS calculation:

• 100 units from opening @ R10 = R1 000
• 200 units from 5 Mar @ R12 = R2 400
• Total COGS = R3 400

Closing inventory:

• Remaining 150 units from 18 Mar purchase @ R11 = 150 × 11 = R1 650

Using Weighted Average (perpetual or periodic): Calculation differs by system, but exam will clarify. For periodic:

• Total cost: 1 000 + 2 400 + 1 650 = R5 050
• Total units: 450
• Average cost per unit: 5 050 ÷ 450 ≈ R11.22

COGS:

• 300 × 11.22 ≈ R3 366
  Closing inventory:

• 150 × 11.22 ≈ R1 683

Examiners may ask: Which method results in higher gross profit? In rising prices, FIFO usually gives lower COGS and higher profit than weighted average.

3.3 Inventory Write‑Downs to NRV

When NRV < cost, inventory must be written down.

Example:

• Inventory cost: R50 000
• NRV: R45 000

Write‑down: R5 000

Journal:

• Dr Inventory Write‑down Expense R5 000
• Cr Inventory R5 000

If NRV recovers later, a reversal is allowed up to original cost.

ACC6212 and UNISA FAC2602 often embed this as an adjustment in a trial balance question.

3.4 Revenue & Cost of Sales in Financial Statements

Income Statement (Profit or Loss):

• Revenue (Sales)
• Less: Cost of sales
• Equals: Gross profit

Gross profit margin = Gross profit ÷ Revenue.

Example for exam practice:

• Revenue: R800 000
• Cost of sales: R520 000
• Gross profit: R280 000
• Gross margin: 280 000 ÷ 800 000 = 35%

3.5 Period‑End Adjustments (Cut‑off Errors, Returns, Allowances)

ACC6212 and UNISA exam papers frequently test:

• Sales returns: Reduce revenue and cost of sales.
• Sales allowances/discounts: Adjust revenue.
• Goods in transit: Determine whether they belong to company at year‑end (FOB shipping point vs destination; often simplified to whether risks pass on dispatch or delivery).

Example:

At 28 February 2025, the following exist:

• Inventory per count: R150 000
• Goods sold on 27 Feb, delivered on 3 Mar: cost R20 000, sale price R30 000
• Company’s policy: risks transfer on delivery.

Then at 28 Feb:

• The sale has not yet taken place (no revenue).
• These goods should still be in closing inventory.

Adjust:

• Add R20 000 back to inventory if excluded.

3.6 Revenue Recognition for Services (Over Time vs Point in Time)

IFRS 15: For services (e.g. consulting), revenue may be recognised over time if:

• Customer simultaneously receives and consumes the benefits; or
• Company’s performance creates/ enhances an asset controlled by customer; or
• Entity has an enforceable right to payment for performance completed to date.

Construction contracts, long‑term services and maintenance contracts are common case studies. Exams may ask to compute revenue using percentage of completion based on costs incurred relative to total expected costs.

4. Partnerships, Companies & Equity (MANCOSA ACC6212, UNISA FAC2602, CUT ACCF262)

While ACC6210 (Accounting 2A) often introduces sole traders, ACC6212 and equivalent modules at UNISA (FAC2602) and CUT (ACCF262) put more emphasis on partnerships, companies, and equity accounting.

4.1 Partnership Accounting Basics

Partnerships are common exam topics in South African second‑year accounting:

• No separate legal personality (in many jurisdictions), but treated as separate accounting entity.
• Partners share:
  • Profits and losses
  • Capital
  • Drawings
• Partnership agreement governs:
  • Capital contributions
  • Profit‑sharing ratios
  • Interest on capital
  • Salaries to partners
  • Interest on drawings

4.1.1 Appropriation of Profit

Example:

• Partnership of Thabo and Lerato.
• Capital balances:
  • Thabo: R200 000
  • Lerato: R150 000
• Agreement:
  • Salaries: Thabo R60 000, Lerato R40 000
  • Interest on capital: 10% per annum
  • Remainder of profit: Thabo 3/5, Lerato 2/5

Net profit for year: R250 000.

Appropriation:

1. Net profit: R250 000
2. Less salaries:
   • Thabo: R60 000
   • Lerato: R40 000
     Subtotal: R150 000
3. Less interest on capital:
   • Thabo: 200 000 × 10% = R20 000
   • Lerato: 150 000 × 10% = R15 000
     Subtotal: R35 000

Total appropriations so far: 150 000 + 35 000 = R185 000

Balance of profit: 250 000 − 185 000 = R65 000

Allocate balance:

• Thabo: 3/5 × 65 000 = R39 000
• Lerato: 2/5 × 65 000 = R26 000

Total share of profit:

• Thabo: 60 000 + 20 000 + 39 000 = R119 000
• Lerato: 40 000 + 15 000 + 26 000 = R81 000

Check: 119 000 + 81 000 = R200 000 total appropriated, plus 50 000? Wait—note: 250 000 total net profit. Sum of all appropriations:

• Salaries: 100 000
• Interest: 35 000
• Balance: 65 000
  Total: 200 000? That appears inconsistent with net profit of R250 000.

Correct calculation:

Re‑evaluate:

Net profit: R250 000

• Salaries: 100 000 → remaining 150 000
• Interest: 35 000 → remaining 115 000

Remainder of profit = 115 000

Allocate remainder:

• Thabo: 3/5 × 115 000 = 69 000
• Lerato: 2/5 × 115 000 = 46 000

Total share:

• Thabo: 60 000 + 20 000 + 69 000 = R149 000
• Lerato: 40 000 + 15 000 + 46 000 = R101 000

Check total: 149 000 + 101 000 = 250 000 (agrees with net profit).

Exam Tip: Always reconcile to net profit to ensure no arithmetic error.

4.2 Admission of a New Partner

When a new partner is admitted:

• Adjust capital accounts for goodwill (if any).
• Revalue assets and liabilities if agreement specifies.
• Old partners may be compensated for sacrifice in profit‑sharing ratio.

Basic illustration:

• Old partners: A & B share profits 3:2.
• New partner C is admitted with 1/5 share.
• New ratio could be: A 2/5, B 2/5, C 1/5.

Sacrifice / gain of each partner is tested, but BCom Accounting 2B modules often simplify to adjusting capitals in proportion to new ratio.

4.3 Company Equity: Ordinary Share Capital, Share Premium, Reserves

MANCOSA ACC6212, UNISA FAC2602, and CUT ACCF262 all devote large questions to company financial statements, focusing on:

• Ordinary share capital
• Preference share capital
• Share premium (or "share capital – premium")
• Retained earnings
• Reserves (revaluation reserve, general reserve, etc.)

4.3.1 Issue of Shares

Example:

ABC Ltd issues 100 000 ordinary shares at R5 each, par value R1:

• Cash received: 100 000 × 5 = R500 000
• Share capital (par): 100 000 × 1 = R100 000
• Share premium: R400 000

Journal:

• Dr Bank R500 000
• Cr Share Capital – Ordinary R100 000
• Cr Share Premium – Ordinary R400 000

If there is no par value, all proceeds go to share capital or a single “stated capital” account.

4.3.2 Rights Issues & Bonus Issues

Rights issue:

• Existing shareholders offered the right to buy additional shares, usually at a discount.

Bonus (capitalisation) issue:

• Free shares issued to existing shareholders, funded by reserves (e.g. share premium, retained earnings).
• No change to total equity; just reclassification.

Example:

• ABC Ltd has 200 000 shares in issue.
• Announces a 1‑for‑4 bonus issue (1 new share for every 4 held).
• New shares issued: 200 000 × (1/4) = 50 000
• If each share has par value R1:
  • Debit retained earnings or share premium: R50 000
  • Credit share capital: R50 000

Total ordinary share capital increases, while reserves decrease, leaving total equity unchanged.

4.4 Dividends (Interim & Final)

• Interim dividends: Declared and paid during the year.
• Final dividends: Declared after year‑end but relating to current year’s profits; often disclosed as a note.

Accounting:

• On declaration date:

  • Dr Retained Earnings
  • Cr Dividends Payable (liability)

• On payment:

  • Dr Dividends Payable
  • Cr Bank

Exams frequently ask you to reconcile retained earnings:

• Opening balance
• Add profit after tax
• Less dividends (interim + final)
• Closing balance

4.5 Statement of Changes in Equity (SoCE)

Common exam requirement in ACC6212, UNISA FAC2602 and CUT ACCF262:

SoCE typically shows:

• Opening balances of:
  • Share capital
  • Share premium
  • Revaluation reserve
  • Retained earnings
  • Non‑controlling interest (if group accounts)
• Movements during the year:
  • New share issues
  • Revaluation surplus changes
  • Profit for the year
  • Dividends
• Closing balances.

Exam strategy:

• Use clear columnar format.
• Reconcile each component separately.
• Ensure closing total equity matches statement of financial position.

5. Preparation of Financial Statements & Advanced Adjustments (ACC6212, UNISA FAC2602, CUT ACCF262)

The ultimate test in ACC6212 and equivalent modules is the preparation of complete financial statements from a trial balance plus additional information:

• Statement of Profit or Loss and Other Comprehensive Income
• Statement of Financial Position
• Statement of Changes in Equity
• Selected notes.

5.1 Typical Year‑End Adjustments

Common adjustments in South African BCom Accounting 2B exam papers:

• Accruals and prepayments
• Provision for doubtful debts / loss allowance
• Depreciation and impairment
• Inventory adjustments
• Income received in advance / income accrued
• Provision for leave pay / bonuses
• Taxation and deferred tax (lighter in some syllabi, but present in UNISA FAC2602)

Exam technique:

1. Read additional information twice.
2. Underline:
   • Date of transaction
   • Which accounts are involved
   • Whether amounts are already included in trial balance.
3. Perform a working for each adjustment.
4. Post to:
   • Adjusted trial balance
   • Statement of profit or loss
   • Statement of financial position
   • Notes (if required).

5.2 Example: Adjusted Trial Balance to Financial Statements (Stylised)

Consider an abbreviated trial balance (at 28 February 2025) for Zanele Ltd (similar to MANCOSA and UNISA examples):

Account	Debit (R)	Credit (R)
Revenue		1 200 000
Cost of sales	700 000
Salaries and wages	150 000
Rent expense	60 000
Trade receivables	200 000
Allowance for credit losses		8 000
Trade payables		130 000
PPE – at cost	900 000
Accumulated dep. – PPE		180 000
Bank	50 000
Ordinary share capital		500 000
Retained earnings (1 March 2024)		200 000
Income tax expense	90 000
Income tax payable		90 000
Totals	2 150 000	2 150 000

Additional information:

1. Closing inventory at 28 Feb 2025: R240 000.
2. Depreciation on PPE: 10% on cost.
3. Increase allowance for credit losses to 5% of trade receivables.
4. Accrued salaries at year‑end: R10 000.
5. Prepaid rent: The R60 000 rent covers 12 months ending 31 May 2025.

5.2.1 Inventory Adjustment

• Trial balance cost of sales = 700 000 (likely already after adjustment, but check). Many exam questions give opening inventory and purchases instead; here assume cost of sales includes opening minus closing etc.
• If they give purchases rather than cost of sales, we would:

Cost of sales = Opening inventory + Purchases − Closing inventory

Here, assume cost of sales remains 700 000 and closing inventory of 240 000 appears in statement of financial position and as deduction from cost of sales if not already factored.

For exam purposes, you must clearly show:

• Dr Inventory (closing) R240 000
• Cr Cost of Sales R240 000

if cost of sales in trial balance is purchases only.

5.2.2 Depreciation

Depreciation = 10% on cost:

• 10% × 900 000 = R90 000

Journal:

• Dr Depreciation Expense R90 000
• Cr Accumulated Depreciation – PPE R90 000

Accumulated depreciation closing balance = 180 000 + 90 000 = 270 000.

5.2.3 Allowance for Credit Losses (Impairment of Receivables)

Trade receivables = R200 000.

Required allowance = 5% × 200 000 = R10 000.

Current allowance (credit) = R8 000.

Increase needed = 10 000 − 8 000 = R2 000.

Journal:

• Dr Credit Loss Expense R2 000
• Cr Allowance for Credit Losses R2 000

New allowance balance: R10 000.

5.2.4 Accrued Salaries

Accrued salaries = R10 000:

• Dr Salaries and Wages Expense R10 000
• Cr Accrued Expenses (Salaries Payable) R10 000

Total salaries expense in profit or loss: 150 000 + 10 000 = 160 000.

Statement of financial position:

• Current liability: Accrued expenses R10 000.

5.2.5 Prepaid Rent

Rent expense R60 000 covers 12 months ending 31 May 2025 (from 1 June 2024 to 31 May 2025).

Year‑end: 28 February 2025.

Months benefited in current year: 9 months (June to Feb).

Rent per month = 60 000 ÷ 12 = 5 000.

Rent expense for 9 months = 9 × 5 000 = 45 000.

Prepaid portion (asset) for 3 months (Mar–May 2025) = 3 × 5 000 = 15 000.

Adjust:

• Dr Prepaid Rent (Current asset) R15 000
• Cr Rent Expense R15 000

Final rent expense in profit or loss: 60 000 − 15 000 = 45 000.

5.3 Extracting the Statement of Profit or Loss

Using the adjustments, approximate statement (ignoring tax subtleties):

Zanele Ltd – Statement of Profit or Loss for the year ended 28 Feb 2025

Description	R
Revenue	1 200 000
Cost of sales (working)	(700 000)
Gross profit	500 000
Other income	–
Salaries and wages	(160 000)
Rent expense	(45 000)
Depreciation – PPE	(90 000)
Credit loss expense	(2 000)
Profit before tax	203 000
Income tax expense	(90 000)
Profit for the year	113 000

Figures are illustrative for exam structure; in a real question, ensure full reconciliation.

5.4 Statement of Financial Position Structure

ACC6212 and UNISA FAC2602 expect correct classification:

• Non‑current assets:
  • PPE (cost less accum. dep)
  • Intangibles
• Current assets:
  • Inventory
  • Trade receivables (less allowance)
  • Prepayments
  • Bank/cash
• Equity:
  • Share capital
  • Share premium
  • Retained earnings
• Non‑current liabilities:
  • Long‑term loans
  • Deferred tax
• Current liabilities:
  • Trade payables
  • Income tax payable
  • Accrued expenses
  • Bank overdraft
  • Current portion of long‑term borrowings

From Zanele Ltd’s example, you’d present:

• PPE at cost 900 000 − accum. dep 270 000 = 630 000 (non‑current asset).
• Inventory 240 000.
• Trade receivables 200 000 − allowance 10 000 = 190 000.
• Prepaid rent 15 000.
• Bank 50 000.

Equity:

• Share capital 500 000.
• Retained earnings:
  Opening 200 000 + Profit for year 113 000 − Dividends (if any) = closing.

Current liabilities:

• Trade payables R130 000
• Income tax payable R90 000
• Accrued salaries R10 000

5.5 Use of Past Papers & South African‑Specific Modules

For South African students in MANCOSA: Bachelor of Commerce in Accounting, UNISA BCompt/FAC, and CUT BTech/BCom Accounting, the style of questions is consistent:

• MANCOSA ACC6212 often integrates company accounts with PPE, inventory, and equity.
• UNISA FAC2602 emphasises company financial statements and IFRS‑compliant treatment.
• CUT ACCF262 leans heavily on clear working notes and reconciliation.

Recommended practice:

• For MANCOSA: Download ACC6212 Accounting 2B past papers and ACC6210 Accounting 2A notes for foundation review.
• For UNISA: Use FAC2601 and FAC2602 past exam papers, tutorial letters, and solutions.
• For CUT: Refer to ACCF261/ACCF262 test papers, internal exam exemplars, and departmental study guides.

When you practice:

1. Time yourself for a 60‑ to 90‑minute full financial statement preparation question.
2. Start by planning:
   • Quick scan of trial balance.
   • Number each adjustment in the additional info and create dedicated workings.
3. Cross‑check:
   • Statement of profit or loss totals to post‑tax profit that feeds the SoCE.
   • Total equity and liabilities equals total assets.

5.6 Common Exam Pitfalls & How to Avoid Them

• Not adjusting for accruals/prepayments:
  Always check expenses and income to see whether they include a full 12 months.
• Mixing up inventory adjustments:
  Verify whether cost of sales given is before or after adjustment.
• Forgetting to update accumulated depreciation after revaluation or disposals.
• Misclassifying items: e.g. including long‑term loans under current liabilities or including bank overdraft under current assets.
• Not presenting proper formats:
  Many marks are for layout, headings, subtotals and correct grouping.

Final Exam Strategy Across ACC6212, UNISA FAC2602 & CUT ACCF262

• Master the core topics:

  • PPE and depreciation (including revaluations).
  • Revenue recognition and inventory.
  • Partnership accounts and company equity.
  • Full financial statement preparation with adjustments.

• Target university‑specific keywords and materials:

  • MANCOSA ACC6212 Accounting 2B exam notes
  • UNISA FAC2601/FAC2602 study notes
  • CUT ACCF261/ACCF262 past papers

• Use a structured approach:

  • Step‑by‑step workings.
  • Clear journal entries for adjustments.
  • Consistent labelling and correct IFRS terminology.

A disciplined practice routine with these ACC6212‑level concepts will significantly improve your performance in MANCOSA: Bachelor of Commerce in Accounting and related modules at UNISA and CUT, aligning your exam technique with South African university standards and expectations.