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The owner, Ben Joseph, realises that many people are now using electronic funds transfers (EFTs) instead of cheques - NSC Accounting - Question 2 - 2019 - Paper 1
Question 2
The owner, Ben Joseph, realises that many people are now using electronic funds transfers (EFTs) instead of cheques. 2.1 State THREE advantages of EFTs. 2.1.1 Jane... show full transcript
Worked Solution & Example Answer:The owner, Ben Joseph, realises that many people are now using electronic funds transfers (EFTs) instead of cheques - NSC Accounting - Question 2 - 2019 - Paper 1
Step 1
State THREE advantages of EFTs.
Answer
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Less Fraud: Electronic funds transfers reduce the risk of fraudulent activities associated with physical cheques, such as theft or forgery.
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Convenient or Easy to Use: EFTs allow users to conduct transactions at any time without the constraints of banking hours, making it easier for businesses to manage cash flow.
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Immediate Payment/Receipts: Transactions through EFTs are processed instantly, ensuring that accounts are updated immediately with no delays, thus improving bookkeeping accuracy.
Step 2
Explain TWO reasons why the internal auditor is concerned about this.
Answer
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Job Role Overlap: There could be too many related job functions assigned to Janet. Inadequate separation of duties increases the risk of errors or fraud due to a lack of independent oversight.
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Lack of Supervision: If Janet is absent, there may be no adequate supervision or checks in place for the processing of payments, which could result in unmonitored transactions or payments made erroneously.
Step 3
Step 4
Calculate the correct Bank Account balance on 30 June 2019.
Answer
To calculate the correct Bank Account balance:
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Start with the favourable balance at the end of May 2019: R9,200.
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Add the outstanding deposits: R9,675.
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Subtract the outstanding cheques total:
- Cheque 444: R4,670
- Cheque 522: R4,580
- Cheque 522: R1,250
- Total outstanding cheques: R10,500
Calculation:
egin{align*} ext{Correct Bank Balance} &= 9,200 + 9,675 - 10,500 \ &= R8,375 ext{Correct Bank Account balance on 30 June 2019 = R8,375} \end{align*}
Step 5
Prepare the Bank Reconciliation Statement on 30 June 2019.
Answer
Bank Reconciliation Statement on 30 June 2019
| Particulars | Debit (R) | Credit (R) |
|---|---|---|
| Balance per bank statement | 12,550 | |
| Outstanding deposit | 9,675 | |
| Incorrect entry | 1,125 | |
| Outstanding cheques / EFTs: | ||
| - Cheque 444 | 4,670 | |
| - Cheque 522 | 4,580 | |
| - Cheque 516 | 5,250 | |
| Total | 23,350 | 23,350 |
| Balance per bank account | 10,300 |