Give 3 examples of expenses
Answers will vary
What is the term for when the owner takes money out of the business?
Drawings
Give 1 example of a fixed asset.
Answers will vary
What is the simple formula to calculate Profit or Loss?
Income - Expenses = Profit/Loss
What effect does the following transaction have on the accounting equation: The owner invests R50.000 in the business.
Assets (Bank) increase by R50.000 and Owner's Equity increases by R50.000
Clients who owe the business money are an example of a) Income b) Asset c) Liability
b) Asset
What effect does the following transaction have on the accounting equation: Take a loan from the bank to buy a delivery vehicle, R100.000
Assets (Vehicles) increase by R100.000 and Liabilities (Bank loan) increase by R100.000
Give 1 example of an income.
Answers will vary.
What type of business are we dealing with when only one person owns it?
Sole trader
Give one example of a current asset.
Answers will vary.
What effect does the following transaction have on the Accounting Equation: Bought coffee and tea for the staff, R200
Assets decrease (Bank) R200 and Owner's Equity decreases R200
What am I referring to when I speak about the revenue of the business?
Income
What is the term used to refer to the debt of a business?
Liability
What effect does the following transaction have on the accounting equation: Bought equipment for car, R20.000
Assets (Equipment) increase by R20.000 and Assets decrease by R20.000 (Bank)
Capital - Drawings + Profit - Loss = ?
Owner's Equity
Salaries (from a business perspective) is an example of a) Liability b) Income c) Expense
C) Expense
What is the accounting equation?
A = L + OE
What effect does the following transaction have on the accounting equation: Received money for work done, R5.000
Assets (Bank) increase by R5.000 and Owner's Equity increases by R5.000
Is this form of the accounting equation correct? A + L = OE
No (A = L + OE therefore we can say A - L = OE)
What is money in the bank classified as? a)Income b) Liability c) Asset
c) Asset