Assests, Liablilities, Profit And Loss"

Question 1

What is capital?

Answer 1

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

Question 2

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

Answer 2

‘Loans’

Question 3

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

Answer 3

Liability

Question 4

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

Answer 4

Owners capital

Question 5

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

Answer 5

Profits

Question 6

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

Answer 6

Losses —— drawings

Question 7

Capital + profits

Capital -losses and/or drawings

Answer 7

Owners equity

Question 8

What is money the owner draws from the company callled?

Answer 8

Drawings

Question 9

Can paying personal expenses be a business expense?

What is this expense called?

Answer 9

No

Drawings

Question 10

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

Answer 10

Owner’s equity

Question 11

What are possessions that have a certain value called?

Answer 11

Assists

Question 12

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

Answer 12

Business ———– transaction

Question 13

Name the two types of assets

Answer 13

Fixed (tangible) assets

Currents assets

Question 14

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

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

Answer 14

Fixed assets

Running and maintaining

Question 15

Fixed assets have a ——- lifespan

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

Answer 15

Long

Sold

Question 16

Examples of Fixed assets

Answer 16

Plant and machinery
Motor vehicles
Land and buildings
Equipment

Question 17

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

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

They have a …….. lifespan

Answer 17

Current assets

Business’s cycle of business activities

Short

Question 18

Examples of current assets

Answer 18

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

Question 19

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

Answer 19

Reselling to make a profit

Question 20

Examples of trading stock to different businesses

Answer 20

Cars are trading stock to a car dealer but

A Fixed asset to a bakery that delivers bread to supermarkets

Question 21

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

Answer 21

Debtors

Credit

Question 22

Cash float is kept in the …….

Petty cash is kept in the ……..

Answer 22

Tills

Safe

Question 23

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

Answer 23

Liabilities

Question 24

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

Answer 24

In the bank to buy an expense item

Question 25

Name two types of liabilities

Answer 25

Current liabilities Non-current/ Long-term liabilities

Question 26

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

Answer 26

Non-current/ Long-term liabilities

Question 27

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

Answer 27

Current liabilities

Question 28

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

Answer 28

Income

Question 29

....... increases the ----------- in the business

Answer 29

Income......... owner's equity

Question 30

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

Answer 30

Expenses

Question 31

Expenses have a lasting value? Yes or No

Answer 31

No

Question 32

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

Answer 32

Owner's equity........ not assets

Question 33

Examples of expenses

Answer 33

Telephone bill Stationery Salaries

Question 34

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

Answer 34

Profit

Question 35

The aim of any business is to make a ...... | And this is called a

Answer 35

Profit Profit motive

Question 36

How is profit calculated

Answer 36

Profit = Income - Expenses

Question 37

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

Answer 37

Business owners and it increases owner's equity

Question 38

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

Answer 38

Losses

Question 39

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

Answer 39

Net loss

Question 40

Example of a net loss

Answer 40

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

Question 41

........ 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

Answer 41

Budget

Question 42

--------- are payable over a long period

Answer 42

Long term loans

Question 43

Goods that we own are called -------

Answer 43

Assets

Question 44

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

Answer 44

Owner's equity

Question 45

------ is the Money a business earns

Answer 45

Income

Question 46

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

Answer 46

Debt

Question 47

When money spent on e.g. wages it an -----

Answer 47

Expense

Question 48

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

Answer 48

Capital

Question 49

Vehicles and equipment are examples of ......

Answer 49

Assets

Question 50

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

Answer 50

Current assets Stock in shelves

Question 51

When can losses take place?

Answer 51

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

Question 52

What will decrease the owner's interest?

Answer 52

Any losses that take place.

Question 53

What is the budget for a country called?

Answer 53

A National Budget.

Question 54

What are savings?

Answer 54

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

Question 55

What is banking?

Answer 55

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.

Question 56

What do banks do for businesses and individuals?

Answer 56

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.

Question 57

Why can people borrow money?

Answer 57

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

Question 58

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

Answer 58

Economy

Question 59

What is accounting?

Answer 59

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.

Question 60

What are financial records?

Answer 60

Records of the business's financial transactions.

Question 61

What are financial transactions?

Answer 61

Events at which buyers and sellers exchange assets for money.

Question 62

Why businesses keep financial records?

Answer 62

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

Question 63

True or false | It is illegal to keep financial records of a business's earnings.

Answer 63

True

Question 64

What is SARS?

Answer 64

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

Question 65

What is owner's equity?

Answer 65

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

Question 66

What is a fixed/tangible asset?

Answer 66

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

Question 67

What are trading stocks?

Answer 67

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

Question 68

What are debtors?

Answer 68

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

Question 69

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.

Answer 69

Year | Longer

Question 70

What is a bank overdraft?

Answer 70

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.