NSC Accounting Basic concepts: 1.1 Choose the correct word from

Question

1.1 Choose the correct word from those given in brackets. Write only the word next to the question numbers (1.1.1 to 1.1.3) in the ANSWER BOOK.

1.1.1 The concept of (limited/unlimited) liability ensures that shareholders are not responsible for the debts of the business in the event of bankruptcy.

1.1.2 When preparing financial statements, creditors will be reflected as trade and other (receivables/payables/equity).

1.1.3 The separate disclosing of significant items, such as interest expenses, is an application of the (prudence/mater... materiality) GAAP principle.

1.2 ROCK-STONE LTD

REQUIRED:

Analyse the transactions below according to the headings on the table provided in the ANSWER BOOK.

- Indicate account debited and account credited in the General Ledger and the effect on the accounting equation. Indicate an increase as +, a decrease as - and no effect as 0. Refer to the example provided.
- Assume a favourable bank balance at all times.

Example: Bought stationery on credit, R3 200.

NO.
ACCOUNT DEBITED
ACCOUNT CREDITED
AMOUNT
O
L

1.2.1 Electronic funds transfers (EFT) totaling R136 000 were made to shareholders, being the amount owing to them at the end of the financial year.

1.2.2 The company received R450 000 for the issue of new shares.

1.2.3 The income tax assessment for the year was received. The income tax amount, R338 200, exceeded the provisional tax payments.

1.1 Choose the correct word from those given in brackets - NSC Accounting - Question 1 - 2021 - Paper 1

Worked Solution & Example Answer:1.1 Choose the correct word from those given in brackets - NSC Accounting - Question 1 - 2021 - Paper 1

1.1.1 The concept of (limited/unlimited) liability ensures that shareholders are not responsible for the debts of the business in the event of bankruptcy.

1.1.2 When preparing financial statements, creditors will be reflected as trade and other (receivables/payables/equity).

1.1.3 The separate disclosing of significant items, such as interest expenses, is an application of the (prudence/mater... materiality) GAAP principle.

1.2 Analyse the transactions below according to the headings on the table provided.

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