Essential Book Keeping - Qp11

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.

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.

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.

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.

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.

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.

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

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.