Grade 8 EMS (TVM)

What is the purpose of the accounting equation?

• To calculate wages

• To ensure the books balance

• To record capital only

• To calculate tax

The accounting equation is:

• Assets + Liabilities = Owner's Equity

• Assets = Liabilities + Owner’s Equity

• Assets = Owner’s Equity – Liabilities

• Liabilities = Assets + Owner’s Equity

A receipt is issued when:

• A business pays money

• Goods are returned

• Money is received

• Credit is granted

The source document for a cash sale is a:

• Invoice

• Cheque counterfoil

• Receipt

• Bank statement

Which of the following is an asset?

• Loan from bank

• Equipment

• Capital

• Wages

Capital increases when:

• The owner withdraws money

• The business pays rent

• The owner invests more

• Liabilities increase

A debit entry means:

• A decrease in assets

• An increase in liabilities

• A decrease in capital

• An increase in assets

Which one is NOT a source document?

• Cash register roll

• Invoice

• Bank deposit slip

• Asset

What is the main function of accounting?

• Marketing products

• Managing people

• Recording financial information

• Packing goods

An example of a liability is:

• Rent received

• Drawings

• Loan from ABC Bank

• Capital