Grade 8 Accounting

What are the Accounting Equation Steps?

Steps: 1-Decide which two items/accounts are affected. (Bank and rent income.) 2-Decide what type of Account bank is and what type of account Rent is. 3-Decide if the Owner's Equity has increased/decreased and if the asset has increased. 4-Record it and give a reason for the increase. 5-Check if the equation balances.

Name 5 expenses.

-Cost of sales -Rent expense -Wages -Telephone -Stationary -Bank charges -Interest on loan/mortgage bond -Trading licence -Water and electricity -Repairs -Motor expenses.

What 4 things make up the owner's equity?

-Income -Expenses -Drawings -Capital

Name some fixed assets.

-Land and buildings -Equipment -Vehicles

What are the 8 groups of assets?

-Land and buildings -Vehicles -Equipment -Trading inventory (anything bought to sell) -Bank -Debtors -Petty cash -Cash float

What does a business generate?

A business generates wealth by its main function i.e to sell or provide a service, and this money that is received increases the assets (bank).

What is a cash register roll?

A cash register roll is cash received from a customer for goods sold through the cash register.

What is a cheque?

A cheque is a written instruction to the bank to pay someone a specified amount of money (we keep a cheque counterfoil) (which means a copy).

What is a transaction?

A financial happening between two or more parties.

What is a receipt?

A receipt is a record of cash recorded that does not go through the cash register.

What is accounting?

Accounting keeps a record of what a business owns, owes and the value or interest that the owner has in the business.

What is an invoice?

An invoice is a document to record goods bought or sold/services on credit (the business keeps the copy).

What is the formula for the accounting equation?

Assets = Owner's equity/owners wealth

What are assets?

Assets are a valuable possession of the business.

What is a cash receipt journal?

Cash receipt journals tell the story of the cash received and what that cash is received for. They show a record of how much money has gone into bank and why the money has gone to the bank. Bank is always affected

What does a bookkeeper do in accounting?

In accounting, the bookkeeper keeps a record of transactions.

What are Journals?

Journals tell the story of a transaction-remember two parts are still affected (Assets/Assets;Assets/Owners Equity;Assets/ Liability etc.)

What stories do journals tell?

Journals tell the story of a transaction.

Name the two long term liabilities.

Loan Mortgage Bond

What stories do cash receipt journals tell?

They tell the of the amount of cash that is received and what that cash is received for.

What does it mean to sell on credit?

When you sell on credit it means that you have not received the money yet.