Indicate whether the following statements are TRUE or FALSE - NSC Accounting - Question 1 - 2019 - Paper 1
Question 1
Indicate whether the following statements are TRUE or FALSE. Write only 'true' or 'false' next to the question numbers (1.1.1 to 1.1.4) in the ANSWER BOOK.
1.1.1 Ou... show full transcript
Worked Solution & Example Answer:Indicate whether the following statements are TRUE or FALSE - NSC Accounting - Question 1 - 2019 - Paper 1
Step 1
1.1.1 Output VAT is collected by a business when goods are sold.
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Answer
True. Output VAT is indeed collected by businesses at the point of sale when goods are sold.
Step 2
1.1.2 The calculation of salaries does not take VAT into account.
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Answer
True. The calculation of salaries is independent of VAT considerations as salaries are not subject to VAT.
Step 3
1.1.3 A credit balance on the Bank Statement indicates an unfavourable balance.
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Answer
False. A credit balance on a bank statement usually indicates a favourable financial position as it signifies that more money is available than withdrawn.
Step 4
1.1.4 Recording bank charges separately from interest on an overdraft is an application of the materiality concept.
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Answer
True. This practice aligns with the materiality concept as it ensures that each financial item is accurately represented in accounting reports.
