Financial Accounting 1

Question 1

What are the sectors where business activity happen? (2)

Answer 1

• Public
• Private

Question 2

Define, state the goal, and type of regulations of an NPO (3)

Answer 2

• Non-profit organisation
• Further a certain public benefit (not profit)
• NPO Act

Question 3

Define, state the goal, and type of regulations of an NPC (3)

Answer 3

• Non-profit company
• further a certain public benefit (not profit)
• Companies Act

Question 4

Define, identify, and state the benefits of a PBO (3)

Answer 4

• Public Benefit Organisation
• must be an NPC
• if given PBO status could offer tax-reductibility RE donations

Question 5

Define, state the type of regulations, and given examples of an SOC (3)

Answer 5

• State-owned company
• Companies Act
• Transnet, Eskom

Question 6

What are the 5 types of legal form? (5)

Answer 6

• Sole Trader
• Partnership
• Close Corporation (CC) [no new can be registered]
• Private Company (Pty. Ltd)
• Public Company (Ltd)

Question 7

What is the business entity concept? (1)

Answer 7

• a business to be accounted for
• and treated as a separate entity from its owners

Question 8

What are the 2 types of ownership? (2)

Answer 8

• Unincorperated
• Incorpporated

Question 9

Give examples of unincorperated (2) and incorperated (3) ownership

Answer 9

• Sole Trader
• Parternship
• Close Corporation
• Private Company
• Public Company

Question 10

Define unincorporated ownership (4)

Answer 10

• unlimited liability
• not a legal person
• limited registration requirements
• not covered by Companies Act (2008)

Question 11

Define incorporated ownership (4)

Answer 11

• Limited liability
• entity is legal person
• more registration requirements
• covered by Companies Act (2008)