Indicate where EACH of the following items would be placed in the financial statements by choosing a term from the list below - NSC Accounting - Question 3 - 2018 - Paper 1
Question 3
Indicate where EACH of the following items would be placed in the financial statements by choosing a term from the list below. Write only the answer next to the ques... show full transcript
Worked Solution & Example Answer:Indicate where EACH of the following items would be placed in the financial statements by choosing a term from the list below - NSC Accounting - Question 3 - 2018 - Paper 1
Step 1
3.1.1 Trade and other receivables
96%
114 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
Current assets - This item represents amounts owed to the company by its customers for goods or services that have been delivered but not yet paid for.
Step 2
3.1.2 Adjustments of provision for bad debts (decrease)
99%
104 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
Operating income - A decrease in the provision for bad debts indicates an increase in expected collectibility of receivables, thus impacting the income positively.
Step 3
3.1.3 Fixed deposit maturing in three years' time
96%
101 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
Non-current assets - Since it will not be converted into cash or resources within the next year, this fixed deposit is classified as a non-current asset.
Step 4
3.1.4 Trading stock deficit
98%
120 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
Operating expenses - A trading stock deficit indicates a loss that affects the operational expenses of the business.
