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: Trade and other receivables are amounts owed to the company by customers and are expected to be turned into cash within a year.
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 expenses: Adjustments to bad debts reflect expenses incurred when collecting receivables and should be classified accordingly.
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: Fixed deposits maturing after more than one year are classified as non-current due to their longer-term nature.
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 in inventory value and is recorded as an expense in the financial statements.
