New Concepts Gr 8

Question 1

Define the term transaction

Answer 1

Action is taking place between two parties

A transaction changes your financial status

Question 2

Source document

Answer 2

A document that proof that the transaction took place

Contains all necessary info in order to complete the books of the business

Question 3

Give four examples of a source document

Answer 3

Receipt
Cash register roll
Deposit slip
Proof of payment for debit card

Question 4

Define stock

Answer 4

All goods on hand which are available for sale to customers

Question 5

Give to types of stock and explain

Answer 5

Initial stock- the stock the business has on and at the beginning of the financial year

Final stock- the value of the goods that the business has on hand at the end of the financial year

Question 6

Define Income earned

Answer 6

Income is the money the business receives during the day to day operation

Question 7

Provide four examples of income

Answer 7

Sales
Rent Income
Commission received
Interest received

Question 8

Define expenses

Answer 8

Expenses are the payments made for the day to day running cost of the business

Money that is spend on something and it’s not possible to get the money back

Question 9

Provide eight examples of expenses

Answer 9

Purchases. Insurance
Telephone. Repairs
Rent paid
Salaries
Wages
Water & electricity

Question 10

Define profit

Answer 10

When the income received is more than the expenses paid

Main reason for having a business is to make a profit

Question 11

Define a loss

Answer 11

When the expenses paid is more than the income received

Question 12

Define the term liabilities and give two examples

Answer 12

Money owned by the business to outside parties

Creditors
Loans

Question 13

Define the term capital

Answer 13

The money put into the business by the owner

Question 14

Define the term owner’s equity

And give two accounts

Answer 14

The capital that the owner puts into the business gives him a monetary interest in the business and is called owner’s equity

Capital
Drawings

Question 15

Name and define the two types of business activities

Answer 15

Service business- renders a service to customers and gets paid for the service

Trading business- Buy goods with the intention of selling it to customers at a higher price

Question 16

Define cash purchases

Answer 16

When the business buys goods for resale and pays immediately

Question 17

Define cash sales

Answer 17

When the business receives money by cash or debit card for the sale of goods- immediately