Terminology

Question 1

What is an asset?

Answer 1

Possessions of a business which has value, could be converted into cash

Question 2

What is a non-current asset?

Answer 2

Intention is not to be converted. These are possessions purchased by the business with the aim of using them for longer than a year.

Question 3

List the non-current assets

Answer 3

• Land and buildings
• Vehicles
• Equipment
• Fixed deposits
• Notice deposits

Question 4

What are land and buildings?

Answer 4

non-current asset
property, factory
buildings, office buildings

Question 5

What are vehicles?

Answer 5

non-current asset
cars, trucks,
motor cycles, tractors,
bakkies, etc

Question 6

What is equipment?

Answer 6

Non-current asset
computers,
printers, tools, cash
register / till, desks, chairs,
shelves, etc.

Question 7

What are fixed deposits?

Answer 7

non-current asset

Money invested for a given period of time. Earns interest

Question 8

What are notice deposits?

Answer 8

money invested for a certain
period, which needs a
notice of 30/60/90 days
before it will be paid back

Question 9

What is a non-current asset also known as?

Answer 9

Fixed assets

Question 10

What are current assets?

Answer 10

Assets that can be converted into cash in the short term, less than a year.

Question 11

List the current assets

Answer 11

• Trading stocks
• Debtors control
• Bank
• Cash float
• Petty cash

Question 12

What is trading stock?

Answer 12

Current assets

Goods purchased for resale

Question 13

What is debtors control?

Answer 13

Current assets

those who owe money to the business

Question 14

What is debtors control also known as?

Answer 14

Accounts receivable

Question 15

What is the bank?

Answer 15

Current assets

money in the current bank account

Question 16

What is a cash float?

Answer 16

Current assets

cash in the cash register/ till to give change to customers

Question 17

What is a petty cash?

Answer 17

Current assets

money used to buy low-cost items, usually less than RI0O per item

Question 18

When is trading stock expected to be sold by?

Answer 18

Within one year

Question 19

What are non-current liabilities?

Answer 19

Long-term borrowings that will be paid back over a period longer than a year.

Question 20

What are non-current liabilities also known as?

Answer 20

Long-term liabilities

Question 21

List the non-current liabilities

Answer 21

• Loan

* Mortgage bond

Question 22

What is a loan?

Answer 22

Non-current liabilities

money borrowed to finance business operations. Interest is charged.

Question 23

What is a mortgage bond?

Answer 23

money borrowed to buy a house, office

Question 24

List the current liabilities?

Answer 24

• Creditors control

* Bank overdraft

Question 25

What is creditors control?

Answer 25

money owed to other businesses should WE (our | business) need to buy something on credit

Question 26

What is creditors control also known as?

Answer 26

Accounts payable

Question 27

What is a bank overdraft?

Answer 27

a facility offered by the bank where you can use more money than you have in your account

Question 28

What does owner's equity consist of?

Answer 28

* Capital * Drawings * Income * Expenses

Question 29

Define capital

Answer 29

OE The money or assets the owner gives to start up a business

Question 30

Define drawings

Answer 30

OE | The money the owner takes out of the business for personal use

Question 31

What does the Nominal Accounts Section consist of?

Answer 31

Part of OE * Income * Expenses

Question 32

Define income

Answer 32

OE | Earnings of the business. Income increases OE

Question 33

Define expense

Answer 33

OE | Costs of running a business. Expenses decrease OE

Question 34

List examples of income

Answer 34

``` Sales Current income Commission income (every product you sell) Rent income Interest income ```

Question 35

List examples of expenses

Answer 35

``` Cost of sales Salaries/Wages Telephone Rent expense Water/electricity advertising stationery packing materials insurance cleaning materials repairs/maintenance fuel rates/taxes ```