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WorksheetsTHE ACCOUNTING EQUATION
Total questions: 15
Worksheet time: 10mins
UND: Identify what the accounting equation is.
Assets= Owners Equity - Liabilities
Liabilities= Owners Equity + Assets
Assets= Owners Equity + Liabilities
Owners Equity= Assets + Liabilities
REM: Define what an asset is
The debt of the business.
The profit accumulated in the business.
The income and expenditure within the business.
The possessions owned and used by the business.
CRE: Make a list fixed assets that is found in a business.
Land and buildings, Equipment, Vehicles
Capital, Drawings, Income
Trading inventory, Bank, Debtors
Loan Deposit, Interest
ANA: Classify the Owner's Equity accounts from below
Debtors control/ Petty cash
Land & Buildings/ Equipment
Interest on loan/ Trading stock
Capital/ drawings/ income/ expenses
EVA: Differentiate between Owners Equity and Liabilities
Owners Equity represents the possessions in a business and Liabilities represents income in the business.
Owners Equity represent the debts in a business and Liabilities represent the business's net worth.
Owners Equity represents the net worth of a business and Liabilities represent the debt in a business.
Owners Equity represent credit and Liabilities represent expenses.
APP: Solve the equation: OE= R989 000 L= R565 750 A= ?
Assets= R1 554 750
Assets= R423 250
Assets= R1 750 554
Assets= R1 455 057
REM: Describe the effect of the accounting equation on Assets.
Assets decrease on the debit side and increase on the credit side.
Assets increase on the debit side and decrease on the credit side.
Assets increase on the debit side as well as the credit side.
Assets decrease on the debit side and on the credit side.
REM: Define what a sole trader is
A business whose name ends in Pty [Ltd].
A business with more than 1 owner.
A business with one owner who takes full responsibility.
A business with a large number shareholders.
ANA: Differentiate between credit sales and credit purchases.
Credit sales= selling on credit & Credit purchases= buying on credit
Credit sales= buying on credit & Credit purchases = selling on credit
Credit sales= selling for cash & Credit purchases= buying with cash
All of the above
APP: Indicate what the two control accounts are:
Capital and Drawings
Debtors control and Bank
Sales and Creditors control
Debtors control and Creditors control
APP: Show the effect of the transaction- Sold goods worth R3000 on credit.
Dr Bank 3000 & Cr Trading stock 3000
Dr Debtors control 3000 & Cr Sales 3000
Dr Sales 3000 & Cr Trading Stock 3000
Dr Debtors control 3000 & Cr Trading stock 3000
EVA: Recommend ways to increase capital in a business
Provide more discounts and promotions
Increase the advertising budget and methods
Improve debtors control measure to avoid losses
All of the above
REM: Define the term Bad Debts
Money received from debtors
Profit accumulated from debtors control
Money that needs to be written off because debtors fail to settle their debts.
Debtors who are bad at repaying debts.
APP: Solve the transaction: Write off R1500 as bad debts.
Debit: Bad debts R1500 & Credit: Debtors control R1500
Debit: Trading stock R1500 & Credit: Debtors control R1500
Debit: Debtors control R1500 & Credit: Bad debts R1500
Debit: Expenses R1500 & Credit: Assets R1500
UND: Explain what measures could be implemented to minimize or prevent the theft of assets in a business.
Install cameras everywhere
Authorize 1-3 employees to manage assets in the business
Perform thorough criminal checks on employees
Keep and continuously update the business fixed asset register.
All of the above
