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4.1 Choose a term in COLUMN B that matches an explanation in COLUMN A - NSC Accounting - Question 4 - 2019 - Paper 1
Question 4
4.1 Choose a term in COLUMN B that matches an explanation in COLUMN A. Write only the letters (A-E) next to the question numbers (4.1.1 to 4.1.4) in the ANSWER BOOK.... show full transcript
Worked Solution & Example Answer:4.1 Choose a term in COLUMN B that matches an explanation in COLUMN A - NSC Accounting - Question 4 - 2019 - Paper 1
Step 1
4.1.1 Reflects the financial position of the business on a specific date
Answer
The term that matches this explanation is C: Balance Sheet. The Balance Sheet provides a snapshot of a company's assets, liabilities, and equity at a specific point in time, illustrating the financial position.
Step 2
Step 3
4.1.3 Provides details about the movement of money with regard to operating, investing and financing activities
Answer
This is best described by B: Cash Flow Statement. The Cash Flow Statement tracks the flow of cash in and out of the business, detailing cash movements in operating, investing, and financing activities.
Step 4
Step 5
4.2.1 Give ONE reason why the Companies Act requires public companies to be audited by an independent auditor.
Answer
The Companies Act necessitates independent audits to ensure that unbiased, reliable financial information is presented to the stakeholders. This helps in maintaining transparency and trust in the financial reporting.
Step 6
4.2.2 Give ONE reason for unqualified/disclaimed or disqualified opinion.
Answer
A reason for unqualified opinion may be that the financial statements present a fair view of the company's financial status without any significant errors. A qualified opinion may arise if the auditor encounters limitations in data or significant uncertainties.
Step 7
4.2.3 Explain how this may influence shareholders of Everest Ltd. State TWO points.
Answer
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Lack of Trust: Shareholders may lose confidence in the company’s ability to provide accurate financial information due to the findings against Kego and Murray Associates.
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Impact on Share Price: Concern over potential misstatements may lead to a decrease in share value as investors reevaluate their trust in the company's reported earnings.
Step 8
4.3.1 Complete the Statement of Comprehensive Income (Income Statement) for the year ended 31 March 2019.
Answer
The Income Statement for MVVS Ltd needs to include revenues and expenses such as:
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- Gross profit calculated as revenue minus cost of sales.
- Operating profit after subtracting operating expenses.
- Net profit before and after tax.
Detailed calculations based on the provided figures are required here.
Step 9
4.3.2 Complete the following notes to the Balance Sheet: Fixed/Tangible Asset Note
Answer
The Fixed Asset Note must include:
- Carrying value at the beginning of the year confirms the amounts for Land, Buildings, and Equipment based on the trial balance.
- Additions and disposals should reflect any acquisition or sale of assets.
- Depreciation calculated based on the assets’ costs and methods.
- Carrying value at the end of the financial year should also be noted.
Step 10
4.3.2 Complete the following notes to the Balance Sheet: Ordinary share capital
Answer
Ordinary share capital section requires previous levels of authorized and issued shares to be detailed. This includes:
- Authorised: Outstanding share numbers before adjustments.
- Issued: Current share numbers (including transactions) reflecting updates based on the additional shares issued during the reporting period.