Acounting terms

Question 1

Assets

Answer 1

What the business owns. The belongings of the business.

Question 2

Three types of fixed assets

Answer 2

Land and property, equipment and vehicles.

Question 3

Equipment

Answer 3

Computers, laptops, tablets, digital gadgets.

Question 4

Vehicles

Answer 4

Bakkie, car and delivery van.

Question 5

Fixed assets

Answer 5

Non-current assets. Business possessions that lasts more than 5 years.

Question 6

Current Assets

Answer 6

Business positions that can be converted to cash immediately or within one year.

Question 7

Two types of current assets

Answer 7

Bank and cash float.

Question 8

Bank

Answer 8

Cash and funds.

Question 9

Cash float

Answer 9

Change in the till.

Question 10

Owners equity

Answer 10

Owners equity is the value of the business to the owner. It is the owners net worth in the business.

Question 11

Two types of owners equity

Answer 11

Capital and drawings.

Question 12

Capital

Answer 12

Owner gives funds to the business.

Question 13

Drawings

Answer 13

Owner takes business funds for personal use.

Question 14

Three types of operating income

Answer 14

Current income, rent income and donation income.

Question 15

Current income

Answer 15

We render a service.

Question 16

Rent income

Answer 16

We have a tenant. (We are the landlord)

Question 17

Donation income

Answer 17

Receive as a gift. (Given to the business)

Question 18

Different types of operating expenses

Answer 18

Material cost, trading license, wages, stationary, telephone, water, rates, electricity, repairs, packing material, insurance, refreshments, postage, salaries, motor expenses, rent expenses, advertising, consumables and donation expenses.

Question 19

Material costs

Answer 19

Shampoo (hairdresser), washing powder (dry cleaners) and Oils/creams (health spa).

Question 20

Trading license

Answer 20

Our business exists and trades legally.

Question 21

Wages

Answer 21

Weekly employees, usually to laborer’s who are paid weekly in cash.

Question 22

Stationery

Answer 22

Invoice books, office pens and office printing paper.

Question 23

Telephone

Answer 23

Landline and phone calls (Also includes electronic communication mobiles).

Question 24

Water

Answer 24

Government service, a basic need provided by the municipality.

Question 25

Rates

Answer 25

Goverment charge on property (Payable to the city of Cape Town)

Question 26

Electricity

Answer 26

Eskom service. A power and electricity supply.

Question 27

Repairs

Answer 27

Fix broken windows, doors, shelves, etc.

Question 28

Packing material

Answer 28

Carier bags at Pick n Pay.

Question 29

Insurance

Answer 29

Saftey future precautions (On our property, vehicles, equipment, trading stock, etc.

Question 30

Refreshments

Answer 30

Cofee, tea, milk, etc. (For staff and geusts)

Question 31

Postage

Answer 31

Stamps, oarcels, etc. (Post office or Courier service)

Question 32

Salaries

Answer 32

Monthly paid employees. (Usually to proffessionals, paid monthly, via an EFT)

Question 33

Motor expenses

Answer 33

Energy, maintenace or repairs for our vehicles.

Question 34

Rent expences

Answer 34

We are the tenant. (We have a landlord)

Question 35

Advertising

Answer 35

When we promote our products or our business. (Flyers, billboards, pamphlets, on TV, newspaper, etc.

Question 36

Consumables

Answer 36

Cleaning materials. (Used in kitchen, office, factory. Hady andy etc.)

Question 37

Donation expenses

Answer 37

When we give away stock or cash. (To an organisation as charity)

Question 38

Current liabilities

Answer 38

Funds we owe to outsiders, short term debts.

Question 39

Non-current liabilities

Answer 39

Funds we owe to the bank in the form of a loan, long term.