3.1 CONCEPTS
Choose the correct term to complete each of the following statements - NSC Accounting - Question 3 - 2016 - Paper 1
Question 3
3.1 CONCEPTS
Choose the correct term to complete each of the following statements. Write only the term next to the question number (3.1.1–3.1.4) in the ANSWER BOOK.
... show full transcript
Worked Solution & Example Answer:3.1 CONCEPTS
Choose the correct term to complete each of the following statements - NSC Accounting - Question 3 - 2016 - Paper 1
Step 1
3.1.1 Interest on a bank overdraft is a/an …
96%
114 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
Interest on a bank overdraft is considered an expense because it represents the cost incurred for borrowing funds.
Step 2
3.1.2 Consumable stores on hand are a/an …
99%
104 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
Consumable stores on hand are classified as a current asset as they are expected to be utilized within the normal operating cycle.
Step 3
3.1.3 The portion of a loan to be paid during the next financial year is regarded as a/an … in the Balance Sheet.
96%
101 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
The portion of a loan due within the next financial year is recognized as a current liability since it represents an obligation that is expected to be settled in the near term.
Step 4
3.1.4 The difference between current assets and current liabilities is known as …
98%
120 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
The difference between current assets and current liabilities is referred to as net working capital, which indicates the company's short-term financial health.
Step 5
3.2.1 To whom is the audit report addressed?
97%
117 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
The audit report is addressed to the shareholders, as they are the owners of the company and interested parties in the financial performance.
Step 6
3.2.2 Who has to ensure that the financial statements are prepared and presented at the annual general meeting?
97%
121 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
The responsibility for ensuring that the financial statements are prepared and presented at the annual general meeting lies with the directors/management/CEO/CFO, as they oversee the financial operations of the company.
Step 7
3.2.3 Choose the correct word from those in brackets. Write the answer next to the question number (3.2.3) and explain your choice.
96%
114 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
Fralezi Ltd received a/an unqualified audit report. This indicates that the auditors found no significant issues or discrepancies and that the financial statements present a true and fair view of the company's position.
Step 8
3.2.4 Explain why the independent auditors referred to pages 11–29 in the report.
99%
104 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
The independent auditors referred to pages 11–29 because they contain the detailed financial statements that were subjected to examination. The auditors are responsible for ensuring accuracy and compliance with applicable standards, hence their emphasis on these pages.
