NSC Accounting Debtors’ age analysis: 1.1 Choose the correct answer fr

Question

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.

1.1.1 A stale cheque, one that is more than 6 months old, must be cancelled in the (Cash Receipts Journal/Cash Payments Journal).

1.1.2 A (debit/credit) balance on the bank statement indicates an overdraft.

1.1.3 A (debit note/credit note) is issued when accounts are settled by a debtor.

1.1.4 A (cash discount/trade discount) is offered when accounts are settled within a certain time.

1.2 DEBTORS RECONCILIATION AND AGE ANALYSIS
The information below relates to JT Traders for June 2017.

REQUIRED:
1.2.1 Calculate the correct Debtors Control balance on 30 June 2017.
1.2.2 Calculate the correct balances for the debtors listed in the ANSWER BOOK.
1.2.3 Refer to the Age Analysis (Information C):
- Calculate the percentage of debtors that are not complying with the 30 days credit terms.
- Explain TWO internal control measures that JT Traders can use to ensure that only reliable clients are granted credit.

INFORMATION:
A. Balances on 30 June 2017 (before errors and omissions):

Debtors Control balance R74 600
Debtors list
N. Pillai 70 000
Y. Bosman 21 600
C. Tele 12 400
A. Botha 24 900

B. Errors and omissions discovered:
(i) The Debtors Journal was overcast by R3 500.
(ii) An allowance of R800 granted to Pillai for damaged goods shipped was entered in the wrong side of the journal.
(iii) Goods sold on credit to Botha for R6 300 was posted incorrectly to Pillai’s account as R3 600. This posting to the General Ledger was correct.
(iv) A cheque for R2 500 received from Tele was recorded in the Debtors Journal of Bosman.
(v) A cheque for R230 received from Pillai was returned by the bank marked “R/D – insufficient funds”. A deduction was granted when this cheque was received. This has not yet been recorded.

1.3 CREDITORS RECONCILIATION
Marge Traders buys goods on credit from Simpson Suppliers. The information presented is for July 2017.

REQUIRED:
Reconcile the Creditors Ledger account of Simpson Suppliers in the books of Marge Traders with the statement received.

Commence with the opening balances as provided in the ANSWER BOOK.

1.1 Choose the correct answer from the words provided within brackets - NSC Accounting - Question 1 - 2017 - Paper 1

Worked Solution & Example Answer:1.1 Choose the correct answer from the words provided within brackets - NSC Accounting - Question 1 - 2017 - Paper 1

1.1.1 A stale cheque, one that is more than 6 months old, must be cancelled in the (Cash Receipts Journal/Cash Payments Journal).

1.1.2 A (debit/credit) balance on the bank statement indicates an overdraft.

1.1.3 A (debit note/credit note) is issued when accounts are settled by a debtor.

1.1.4 A (cash discount/trade discount) is offered when accounts are settled within a certain time.

1.2.1 Calculate the correct Debtors Control balance on 30 June 2017.

1.2.2 Calculate the correct balances for the debtors listed in the ANSWER BOOK.

1.2.3 - Calculate the percentage of debtors that are not complying with the 30 days credit terms.

1.2.3 - Explain TWO internal control measures that JT Traders can use to ensure that only reliable clients are granted credit.

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