Accounting Cycle and Equation (Grade 8)

The first step in the accounting cycle is...

• documents

• journals

• transactions

• financial statements

The second step in the accounting cycle is journals. Which two journals do we work with this year.

• Creditors Journal

• The Cash Receipts Journal

• Bank Journal

• The Cash Payments Journal

The cash receipts journal deals with different types of cash coming into a business. Identify which item will NOT be classified as a cash receipt.

• Drawings

• Capital Contribution

• Rent Income

• Current Income

What is the difference between a salary and a wage? Choose the most correct option.

• Salaries are paid in cash.

• Salaries are paid monthly by direct deposit.

• Wages are paid in lump sums.

• Salaries are paid once a week.

Choose the correct accounting equation.

• A = OE - L

• A = OE + L

• A= OE

• A= OE + L + A

True or false. Assets increase on the debit side and decrease on the credit side.

• TRUE

• FALSE

Received R50 000 from the owner as a capital contribution. What would the effect on the accounting equation be?

• Asset increases by R50 000. OE decreases by R50 000.

• Asset increases by R50 000.

• Asset Increases by R50 000. Owner's Equity Increases by R50 000.

• Owner's Equity increases by R50 000.

Paid Advertising per EFT, R1000.

What account will be decreasing on the credit side.

• Advertising

• Bank

Withdrew cash for the owner's personal use, R3000. Which two accounts will be affected in this transaction.

• Bank

• Cash Float

• Drawings

• Capital

For every ____, there is an equal and opposite ______.

• Debit, effect.

• Debit, Credit.

• Increase, decrease.