Grade 8 Recap

What is the difference between an expense and an asset? Both cost the business money, but...

• one is expensive and the other is cheap.

• an asset belongs to the business, is used for a long period of time and can be sold for money after its use. While expenses are used up for the running of the business day to day.

• an asset is used up for the day to day running of the business and cannot be sold after, while an expense can be sold for cash after its use.

• one is more important than the other.

On which side does an asset increase?

• Debit

• Credit

On which side does an expense increase?

• Debit

• Credit

On which side does an income account increase?

• Debit

• Credit

On which side does a liability decrease?

• Debit

• Credit

Which two accounts would be affected by the following transaction?

Paid the owner's personal telephone account.

• Bank and Expenses

• Bank and Telephone

• Bank and Drawings

• Expenses and Telephone

Which two accounts would be affected by the following transaction?

Received money for rent

• Bank and Rent Expense

• Current Income and Bank

• Bank and Rent income

• Bank and Sundry accounts

How would the following transaction affect the accounting equation?

Bought a new computer for R12 000 cash

• Assets +12 000 and Owners Equity +12 000

• Assets +12 000 and Liabilities +12 000

• Assets +12 000 and Assets -12 000

• Assets -12 000 and Owner's Equity -12 000

How would the following transaction affect the accounting equation?

Took out a loan from FNB of R50 000

• Assets +50 000 and Liabilities +50 000

• Assets +50 000 and Liabilities -50 000

• Owner's Equity +50 000 and Liabilities -50 000

• Assets +50 000 and Owner's Equity +50 000

How would the following transaction affect the accounting equation?

Paid back R10 000 of the loan from FNB

• Owner's Equity +10 000 and Liabilities -10 000

• Assets +10 000 and Owner's Equity +10 000

• Owner's Equity -10 000 and Liabilities -10 000

• Assets -10 000 and Liabilities -10 000