Essential Book Keeping - QP11

1. Match the following statements:

Many people may not fill in the folio at all.

Will often have to be signed by two individuals as a means of preventing fraud and theft.

Submit

2. Match the following statements:

Effectively it is the amount that your employer has to pay for your labour.

. It is your gross pay minus all the deductions that are made.

It is a general terms and refers to two separate types – statutory and voluntary.

Submit

3. Overtime is payment for working extra hours over and above the normal level.

True

False

Overtime refers to the additional payment that is given to employees for working extra hours beyond their regular working hours. It is a form of compensation for the additional time and effort put in by the employees. Therefore, the statement that overtime is payment for working extra hours over and above the normal level is true.

Explanation

Overtime refers to the additional payment that is given to employees for working extra hours beyond their regular working hours. It is a form of compensation for the additional time and effort put in by the employees. Therefore, the statement that overtime is payment for working extra hours over and above the normal level is true.

4. Every individual is entitled to earn an amount of money before paying any tax. This is known as your personal allowance.

True

False

Every individual is indeed entitled to earn an amount of money before paying any tax. This amount is referred to as personal allowance. This means that individuals can earn up to a certain threshold without being liable to pay any tax on that income. Therefore, the statement "Every individual is entitled to earn an amount of money before paying any tax. This is known as your personal allowance." is true.

Explanation

Every individual is indeed entitled to earn an amount of money before paying any tax. This amount is referred to as personal allowance. This means that individuals can earn up to a certain threshold without being liable to pay any tax on that income. Therefore, the statement "Every individual is entitled to earn an amount of money before paying any tax. This is known as your personal allowance." is true.

5. The Data Protection Act details some key principals that should help in formulating that policy which includes: (Select four)

All information held must be obtained and processed lawfully and fairly.

Personal data can be held only for lawful purposes that have been specified.

Data held for a purpose can only be used or disclosed for that purpose.

Data must be excessive or irrelevant for the purpose for which it is held.

Data must be accurate and up to date.

Data should be kept longer than is necessary.

The Data Protection Act outlines several key principles that should be considered when formulating a data protection policy. These principles include obtaining and processing information lawfully and fairly, holding personal data only for specified lawful purposes, using or disclosing data only for the purpose for which it was held, and ensuring that data is accurate and up to date. These principles help to ensure that individuals' personal information is handled in a responsible and ethical manner, protecting their privacy and maintaining the integrity of the data.

Explanation

The Data Protection Act outlines several key principles that should be considered when formulating a data protection policy. These principles include obtaining and processing information lawfully and fairly, holding personal data only for specified lawful purposes, using or disclosing data only for the purpose for which it was held, and ensuring that data is accurate and up to date. These principles help to ensure that individuals' personal information is handled in a responsible and ethical manner, protecting their privacy and maintaining the integrity of the data.

Submit

6. When companies deal with each other on a credit basis there is no need to issue a receipt, as a range of other documents are used to detail movements of goods and funds between the two trading companies.

True

False

When companies engage in credit-based transactions, they use various documents to keep track of the movement of goods and funds between them. These documents serve as evidence of the transaction and eliminate the need for a receipt. Therefore, the statement that there is no need to issue a receipt when companies deal with each other on a credit basis is true.

Explanation

When companies engage in credit-based transactions, they use various documents to keep track of the movement of goods and funds between them. These documents serve as evidence of the transaction and eliminate the need for a receipt. Therefore, the statement that there is no need to issue a receipt when companies deal with each other on a credit basis is true.

7. Writing cheques and recording information on the counterfoil is historically referred to as nominal items.

True

False

The statement is false. Writing cheques and recording information on the counterfoil is not historically referred to as nominal items. The term "nominal items" typically refers to small or insignificant expenses that are recorded in accounting systems. Writing cheques and recording information on the counterfoil is a process related to banking and financial transactions, but it is not specifically related to nominal items.

Explanation

The statement is false. Writing cheques and recording information on the counterfoil is not historically referred to as nominal items. The term "nominal items" typically refers to small or insignificant expenses that are recorded in accounting systems. Writing cheques and recording information on the counterfoil is a process related to banking and financial transactions, but it is not specifically related to nominal items.

8. In the case of a salaried individual, no calculations need to be carried out to determine pay as the amount paid is the same each month.

True

False

In the case of a salaried individual, the pay is fixed and does not vary from month to month. Therefore, there is no need for any calculations to determine the pay as it remains the same each month. This makes the statement "In the case of a salaried individual, no calculations need to be carried out to determine pay as the amount paid is the same each month" true.

Explanation

In the case of a salaried individual, the pay is fixed and does not vary from month to month. Therefore, there is no need for any calculations to determine the pay as it remains the same each month. This makes the statement "In the case of a salaried individual, no calculations need to be carried out to determine pay as the amount paid is the same each month" true.

9. Any individual who earns under the basic minimum level for national insurance in a week, has to pay a national insurance contribution.

True

False

Individuals who earn under the basic minimum level for national insurance in a week are not required to pay a national insurance contribution.

Explanation

Individuals who earn under the basic minimum level for national insurance in a week are not required to pay a national insurance contribution.

10. If an individual has an Annual salary of £26,000 Tax rate is 25% Tax Allowance is £8,000 the net pay is ______

1591.67

1691.67

1791.67

1891.67

The net pay is £1791.67 because the individual's annual salary of £26,000 is subject to a tax rate of 25%. The tax allowance of £8,000 is subtracted from the annual salary, leaving £18,000 as the taxable income. 25% of £18,000 is £4,500, which is then subtracted from the annual salary to get the net pay of £21,500. Finally, the net pay is divided by 12 to get the monthly net pay of £1791.67.

Explanation

The net pay is £1791.67 because the individual's annual salary of £26,000 is subject to a tax rate of 25%. The tax allowance of £8,000 is subtracted from the annual salary, leaving £18,000 as the taxable income. 25% of £18,000 is £4,500, which is then subtracted from the annual salary to get the net pay of £21,500. Finally, the net pay is divided by 12 to get the monthly net pay of £1791.67.

Essential Book Keeping - Qp11