1.1 Indicate whether the following statements are TRUE or FALSE - NSC Accounting - Question 1 - 2017 - Paper 1
Question 1
1.1 Indicate whether the following statements are TRUE or FALSE. Choose the answer and write 'true' or 'false' next to the question number in the ANSWER BOOK.
1.1.1... show full transcript
Worked Solution & Example Answer:1.1 Indicate whether the following statements are TRUE or FALSE - NSC Accounting - Question 1 - 2017 - Paper 1
Step 1
TRUE or FALSE for statement 1.1.1
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Answer
TRUE. The balance in the Debtors' Control Account must match the total in the debtors' list, ensuring accounting accuracy.
Step 2
TRUE or FALSE for statement 1.1.2
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Answer
FALSE. Bad debts are typically recorded in the Bad Debts Expense account, rather than the Debtors' Allowances Journal.
Step 3
TRUE or FALSE for statement 1.1.3
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Answer
FALSE. A post-dated cheque is recorded in the Debtors' Control Account and not in the CRJ until the date it is cleared.
Step 4
Corrections for Debtors' Control Account and Debtors' List
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Final Balances:
Debtors' Control Account: R48 000
Debtors' List: R48 000
Step 5
Explain how a debtors' age analysis can assist with internal control over debtors.
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Answer
A debtors' age analysis helps identify overdue accounts that require further action, enabling the business to manage its cash flow effectively. It provides key insights into which debtors are consistently late and helps in prioritizing collection efforts.
Step 6
Calculate the percentage of total debts exceeding the credit terms.
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Answer
Total amount owing is R14 560 + R7 280 = R21 840. The amount exceeding credit terms is R8 840.
Percentage calculation:
rac{8840}{21840} imes 100 = 40 ext{%}
Step 7
Explain ONE problem (with figures) relating to D Pillay.
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Answer
D Pillay has exceeded the credit limit of R10 000 by R1 000, with a total owing of R11 000.
Step 8
Explain ONE problem (with figures) relating to W Patel.
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Answer
W Patel has exceeded credit terms of 30 days with a total balance of R11 192, which has been outstanding for over 60 days.
Step 9
Explain TWO problems (with figures) relating to debtor D Gouws.
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Answer
D Gouws has exceeded credit terms with an outstanding balance of R5 448, which is over 30 days.
The business extended more credit to D Gouws than they should have, allowing R7 100 in credit instead of remaining below R8 000.
