Chapter 2 Flashcards
Numeracy Skills (18 cards)
What are numeracy skills essential for in daily activities?
Buying textbooks, shopping, paying tuition fees, calculating semester marks
Numeracy skills are crucial for managing financial aspects in various contexts, including legal practice.
List three reasons why numeracy skills are important for attorneys.
- Manage client’s money
- Responsible for own expenses and income
- Calculate total assets and liabilities as an executor
What can poor accounting lead to for an attorney?
Loss of practice and personal liability for client losses
Attorneys may be held accountable for negligent financial management.
What basic skills should one understand related to numeracy?
- Addition
- Subtraction
- Division
- Multiplication
- Order of calculations
- Rounding off
- Averages
- Fractions
- Percentages
- Proportional allocation
- Apportionment of damages
- Calculation of interest
- Calculation of VAT
What is the total assets calculation for A and B if A has R10,000 and B has R30,000?
R40,000
Total assets = A’s assets + B’s assets.
How do you calculate remaining assets when one partner leaves?
Total assets - C’s assets
Example: If total assets are R50,000 and C’s assets are R30,000, remaining assets = R20,000.
What is the profit share for a partner in a law firm if the total profit is R43,872 and there are five partners?
R8,774.40
Profit per partner = Total profit ÷ Number of partners.
What is the order of calculations in arithmetic?
- Brackets
- Exponents
- Multiplication and division
- Addition and subtraction
What does rounding off help achieve in calculations?
Reduce the number of decimal places shown
Rounding off is useful for simplifying large numbers.
Define a fraction.
A part of a whole, represented with a numerator and a denominator
Example: In ¾, 3 is the numerator and 4 is the denominator.
What is required to add or subtract fractions?
The denominators must be the same
Finding the lowest common denominator (LCD) is the first step.
How do you convert a fraction to a decimal?
Divide the numerator by the denominator
Example: ¾ = 0.75.
What is a percentage?
A fraction with a denominator of 100
‘Per cent’ means ‘per hundred’.
Explain proportional allocation.
Division of a total amount based on designated shares
Example: In a 2:3:5 ratio, profits are divided accordingly.
What is interest in financial terms?
Money earned on investments or paid on loans, expressed as a percentage
Interest calculations are based on the principal amount.
How is an average calculated?
Total value divided by the number of items
Example: Average donation = Total donations ÷ Number of donors.
How do you calculate VAT charged on services?
Multiply the service amount by the VAT rate
Example: For R8,000 at 7%, VAT = R560.
What is the formula to calculate the VAT exclusive amount?
100 / (100 + VAT rate) x VAT inclusive amount
This formula helps in calculating the pre-VAT amount from a total that includes VAT.
