Accounting Basics Quiz

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Questions and Answers

What does SP represent in the context of pricing?

  • Selling Price (correct)
  • Service Price
  • Standard Price
  • Starting Price

Which formula correctly represents the concept of Mark-up (MU)?

  • MU = Selling Price - Cost Price (correct)
  • MU = Cost Price - Selling Price
  • MU = Selling Price ÷ Cost Price
  • MU = Cost Price ÷ Selling Price

If a business generates revenue from selling physical items, what is the correct term to describe this type of business?

  • Franchise business
  • Investment business
  • Service business
  • Merchandising business (correct)

What does a profit signify in a business context?

<p>Total revenue exceeds total expenses (D)</p> Signup and view all the answers

In financial terms, what does the term 'loss' refer to?

<p>Excess expenses over income (C)</p> Signup and view all the answers

What does R1008 represent in the given content?

<p>A numerical value (D)</p> Signup and view all the answers

What is the result of the expression R330 x 100 + 33?

<p>R33,033 (D)</p> Signup and view all the answers

How is R15 represented in the context of the operations?

<p>R1,500 (C)</p> Signup and view all the answers

If 50% of R15,000 is calculated, what is the resultant value?

<p>R7,500 (D)</p> Signup and view all the answers

What does the expression R3500 * 45000 equal?

<p>R1,575,000 (A)</p> Signup and view all the answers

What is an asset in a business context?

<p>A long-lasting item utilized for business operations (A)</p> Signup and view all the answers

Which statement best describes a long-lasting item for business?

<p>It provides ongoing utility in business activities. (D)</p> Signup and view all the answers

What is NOT considered an asset?

<p>A business loan that is to be repaid (B)</p> Signup and view all the answers

Which of the following is an example of a tangible asset?

<p>Office machinery (B)</p> Signup and view all the answers

What characteristic primarily defines a long-lasting asset?

<p>Continuous usefulness over time (A)</p> Signup and view all the answers

Which of the following items typically depreciates in value?

<p>Vehicle used for deliveries (B)</p> Signup and view all the answers

Which accounting principle involves the long-term value of assets?

<p>Going concern assumption (C)</p> Signup and view all the answers

In a balance sheet, how are assets categorized?

<p>As current and non-current assets (B)</p> Signup and view all the answers

What effect does an income increase have on the debit and credit sides?

<p>Increases equity on the credit side and decreases on the debit side. (B)</p> Signup and view all the answers

In the context of bank transactions, what is the role of a rent receipt in transactions?

<p>It is a record of income received. (A)</p> Signup and view all the answers

When a cash sale is made, what is the expected impact on the bank?

<p>Cash sales increase the bank balance. (C)</p> Signup and view all the answers

What is typically recorded when a bank deposit occurs?

<p>An increase in capital. (B)</p> Signup and view all the answers

In a bank transaction, how is a duplicate receipt important?

<p>It acts as evidence of a transaction for record-keeping. (C)</p> Signup and view all the answers

What describes a transaction?

<p>Receiving payment or money between two people. (A)</p> Signup and view all the answers

Which of the following represents a current liability?

<p>Accounts payable due within 30 days. (A)</p> Signup and view all the answers

Which equation correctly represents the relationship between assets and owner's equity?

<p>Assets = Owner’s Equity + Liabilities (C)</p> Signup and view all the answers

What is an example of a non-current asset?

<p>Vehicles owned for business use. (B)</p> Signup and view all the answers

What happens to assets during a debit entry?

<p>Assets increase on the debit side. (A)</p> Signup and view all the answers

What is typically kept in a cash float?

<p>Cash in small denominations to give change. (C)</p> Signup and view all the answers

Which condition describes when a loss exceeds profit?

<p>Negative cash flow (B)</p> Signup and view all the answers

How is owner's equity calculated?

<p>Owner's Equity = Assets - Liabilities (B)</p> Signup and view all the answers

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Study Notes

Profit and Loss

  • Profit is when a business earns more money than it spends
  • Loss occurs when a business spends more money than it earns
  • Tax is paid based on profit

Business Types

  • A business that provides a service in exchange for money is a sole trader
  • A business that sells a physical item in exchange for money is also a sole trader

Accounting Terms

  • Asset : A long-lasting item used for a business
  • Transaction : An exchange of money between two people, involving either receiving or paying
  • Current Liabilities: Debts due within 12 months
  • Non-current Liabilities: Debts due after 12 months

Assets

  • An asset is anything of value that a business owns. Examples include:
    • Current Asset: A bank account
    • Non-current Asset: Vehicles

Accounting Equations

  • Assets = Owner's Equity + Liabilities
  • Owner's Equity = Assets - Liabilities

Other Accounting Concepts

  • Cash float: Money kept in the cash register to give change to customers
  • Credit: The right side of the accounting equation
  • Debit: The left side of the accounting equation
  • Income: Money earned by a business
  • Equity: Represents the owner's investment in the business
  • Expense: Money spent by a business
  • Journal Entries: Records of financial transactions

Example Journal Entries

  • Journal entry 1:
    • Debit: Bank account
    • Credit: Capital account
    • Amount: R20,000
  • Journal entry 2:
    • Debit: Bank account
    • Credit: Rent income
    • Amount: R2,500
  • Journal entry 3:
    • Debit: Bank Account
    • Credit: Cash sales
    • Amount: R3,000

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