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RECONCILIATIONS 1.1 Choose the correct answer from the words provided within brackets - NSC Accounting - Question 1 - 2017 - Paper 1
Question 1
RECONCILIATIONS 1.1 Choose the correct answer from the words provided within brackets. Write only the answer, next to each number (1.1.1-1.1.4) in the ANSWER BOOK. ... show full transcript
Worked Solution & Example Answer:RECONCILIATIONS 1.1 Choose the correct answer from the words provided within brackets - NSC Accounting - Question 1 - 2017 - Paper 1
Step 1
Calculate the correct Debtors Control balance on 30 June 2017.
Answer
To determine the correct Debtors Control balance, we need to adjust for errors identified.
Starting balance: R74 600
Adjustments:
- Debtors Journal overcast by R3 500: Subtract R3 500
- Goods sold on credit posted incorrectly: Add R6 300 to the general ledger (this should be included in the Debtors balance)
New Calculation:
Final adjustment due to the returned cheque from Pillai:
- Since the amount was not recorded, we do not need to adjust the total at this point (it will affect how we calculate totals later).
Therefore, the final Debtors Control balance is R75 600.
Step 2
Calculate the correct balances for the debtors listed in the ANSWER BOOK.
Answer
Using the errors noted:
-
N. Pillai:
- Original: R70 000
- Error: Overcast by R3 500 → New balance: R70 000 - R3 500 = R66 500
-
Y. Bosman:
- Original: R21 600
- No adjustments noted → New balance: R21 600
-
C. Tele:
- Original: R12 400
- Adjustment for cheque received → New balance: R12 400 - R2 500 = R9 900
-
A. Botha:
- Original: R24 900
- No adjustments noted → New balance: R24 900
Resulting Balances:
- Pillai: R66 500
- Bosman: R21 600
- Tele: R9 900
- Botha: R24 900
Step 3
Calculate the percentage of debtors that are not complying with the 30 days credit terms.
Answer
To calculate the percentage of debtors that are not complying with the 30 days credit terms:
Total debtors: 70 000 Debtors not complying:
- Pillai: 36 440
- Tele: 28 000
- Botha: 4 800
Total non-compliance:
Percentage of debtors not complying: rac{69 240}{70 000} imes 100 = 99.2 ext{%}
Step 4
Explain TWO internal control measures that JT Traders can use to ensure that only reliable clients are granted credit.
Answer
To ensure that only reliable clients are granted credit, JT Traders can implement the following internal control measures:
-
Perform credit checks: Conduct thorough credit checks that include references, credit history, and financial backgrounds of clients before extending credit.
-
Verification of information: Regularly verify employment history and salary information to ensure that clients have the capacity to repay. In addition, maintain contact details to reach clients when necessary.