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EMS Exam > Assests, Liablilities, Profit And Loss" > Flashcards

Assests, Liablilities, Profit And Loss" Flashcards

1
Q

What is capital?

A

The amount of money the owner uses to start up the business.

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2
Q

The owner basically ‘______’ money to the business. But the Capital remains the property of the owner.

A

‘Loans’

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3
Q

The capital is always treated as a ——— to the business because it remains the property of the owner not for the business

A

Liability

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4
Q

The ——— contribution remains part of the business as long as the business exists

A

Owners capital

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5
Q

Any —— earned during the year are added to the original capital amount

A

Profits

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6
Q

The ——- incurred and the —— made by the owner are deducted from the capital amount

A

Losses —— drawings

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7
Q

Capital + profits

Capital -losses and/or drawings

A

Owners equity

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8
Q

What is money the owner draws from the company callled?

A

Drawings

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9
Q

Can paying personal expenses be a business expense?

What is this expense called?

A

No

Drawings

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10
Q

What does paying for a business expenses such as a salary decrease?

A

Owner’s equity

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11
Q

What are possessions that have a certain value called?

A

Assists

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12
Q

These possessions are owned by the ——– and are purchased by means of a ———–

A

Business ———– transaction

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13
Q

Name the two types of assets

A

Fixed (tangible) assets

Currents assets

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14
Q

———- are assets that have a long life expectancy.

They are bought for the purpose of ——- and ——– the business

A

Fixed assets

Running and maintaining

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15
Q

Fixed assets have a ——- lifespan

These assets are not bought so to be —— for profit

A

Long

Sold

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16
Q

Examples of Fixed assets

A

Plant and machinery
Motor vehicles
Land and buildings
Equipment

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17
Q

……… are assets that can be converted into cash easily.

These assets are usually used within the ………….. of ……

They have a …….. lifespan

A

Current assets

Business’s cycle of business activities

Short

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18
Q

Examples of current assets

A

Cash in bank
Debtors (clients who owe the business money)
Trading stock ( goods in the shop which are to be sold to customers)

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19
Q

Trading stock is goods bought with the purpose of ——-

A

Reselling to make a profit

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20
Q

Examples of trading stock to different businesses

A

Cars are trading stock to a car dealer but

A Fixed asset to a bakery that delivers bread to supermarkets

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21
Q

……. are Clients who have bought goods/stock from a business but have not paid for it and this means that have bought them on ……..

A

Debtors

Credit

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22
Q

Cash float is kept in the …….

Petty cash is kept in the ……..

A

Tills

Safe

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23
Q

Any Money borrowed by the business is called a …………

A

Liabilities

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24
Q

Businesses borrow money when they do not have the cash ———

A

In the bank to buy an expense item

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25
Q

Name two types of liabilities

A

Current liabilities

Non-current/ Long-term liabilities

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26
Q

….. are debts that are repayable over a period of more than one year

A

Non-current/ Long-term liabilities

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27
Q

…… are debts that are payable within a few months i.e. Less than a year

A

Current liabilities

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28
Q

Business sells goods or services and they expect to be paid money in return. What is this type of money called ?

A

Income

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29
Q

……. increases the ———– in the business

A

Income……… owner’s equity

30
Q

…….. is payment for services and consumable goods that a business buys to run its business

A

Expenses

31
Q

Expenses have a lasting value? Yes or No

A

No

32
Q

Expenses decrease the …….. in the business and they are not

A

Owner’s equity…….. not assets

33
Q

Examples of expenses

A

Telephone bill
Stationery
Salaries

34
Q

…….. money a Business makes after taking all the income and deducting expenses

A

Profit

35
Q

The aim of any business is to make a ……

And this is called a

A

Profit

Profit motive

36
Q

How is profit calculated

A

Profit = Income - Expenses

37
Q

Profit gained goes to the ………. and it ……..

A

Business owners and it increases owner’s equity

38
Q

……. is the loss of money or decrease in financial value.

A

Losses

39
Q

……… is when the expenses were more the income earned.

A

Net loss

40
Q

Example of a net loss

A

Is when a business sells its assets at less than their original value

Bought car for R2000 but sellers it for R900

Net loss = R1100

41
Q

…….. is a list showing the money you expect to earn and the expenses you expect to have in a certain period e.g. A year

A

Budget

42
Q

——— are payable over a long period

A

Long term loans

43
Q

Goods that we own are called ——-

A

Assets

44
Q

Share or interest that an owner has in his business is called

A

Owner’s equity

45
Q

—— is the Money a business earns

A

Income

46
Q

Money that is owed to another party is ——- for the business

A

Debt

47
Q

When money spent on e.g. wages it an —–

A

Expense

48
Q

Money an owner uses to start a business is called……

A

Capital

49
Q

Vehicles and equipment are examples of ……

A

Assets

50
Q

……..?are on.y temporary in nature and can be converted into cash easily within a short period of time.

Give examples

A

Current assets

Stock in shelves

51
Q

When can losses take place?

A

When a business sells an asset for less than it is worth in the books at the time.

52
Q

What will decrease the owner’s interest?

A

Any losses that take place.

53
Q

What is the budget for a country called?

A

A National Budget.

54
Q

What are savings?

A

The money that you put away when you have covered your expenses.

55
Q

What is banking?

A

The act of using the services that a bank provides, with a bank being a financial institution that works with your money on your behalf.

56
Q

What do banks do for businesses and individuals?

A

Give them the opportunity to save money with them and borrow money from money from them. You can also earn interest on money they save on money they borrow.

57
Q

Why can people borrow money?

A

To increase capital value by buying vehicles, equipment or land.

58
Q

When the money from a bank is borrowed to make capital investments, it is usually a boost to the ______ of any country.

A

Economy

59
Q

What is accounting?

A

The process of keeping a business’s financial records so that other people in the business, as well as shareholders, know how the business is using its money.

60
Q

What are financial records?

A

Records of the business’s financial transactions.

61
Q

What are financial transactions?

A

Events at which buyers and sellers exchange assets for money.

62
Q

Why businesses keep financial records?

A

To prevent fraud and to provide documentation to the South African Revenue Service (SARS) that the earnings they have declared are correct.

63
Q

True or false

It is illegal to keep financial records of a business’s earnings.

A

True

64
Q

What is SARS?

A

The government body responsible for collecting all of the country’s taxes.

65
Q

What is owner’s equity?

A

Something that gives the owner an interest in the business (for example, money).

66
Q

What is a fixed/tangible asset?

A

It has a lifespan of more than one year and is more y easily sold for cash.

67
Q

What are trading stocks?

A

Goods bought for the purpose of reselling them to make a profit.

68
Q

What are debtors?

A

Clients who have bought goods from a business but have not payed for them yet.

69
Q

Current liabilities have to be paid back within a ____ or less. Long term liabilities have to be paid back over a period ___ than a year.

A

Year

Longer

70
Q

What is a bank overdraft?

A

Where the bank allows the business to spend more money than there is in their bank account, and then this money is owed to the bank.

EMS Exam (5 decks)

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