Business structures
The accounting equation
The balance sheet
The profit and loss
Random
Ratios
100
A person who runs a business on their own.
Sole Trader
100
State the accounting equation.
A = L + OE
100
How is the accounting equation arranged for the narrative form of the balance sheet?
A - L = OE
100
What is turnover?
Turnover is business income.
100
True or false: Assets are things a business owes
False
100
What is the formula for a Gross Profit Margin?
Gross profit / net sales as a percentage
200
What is the maximum number of partners that a partnership can have?
20
200
What is owners' equity?
The amount the business owes back to the owner.
200
True or false: A balance sheet is also called the Statement of Financial Position.
True
200
Which of the following is/are an expense?
cash, motor vehicle, stationery, rent
stationery and rent
200
True or false: A private company has shares that are listed.
False, this is only for public companies.
200
What is wrong with this ratio?
Net profit Margin = Net profit/total sales
Should be net sales and as a percentage
300
Give two features of a company
Separate legal entity, limited liability
300
Is this correct?
A - L = OE
Yes
300
Is the following correct?
Statement of Financial Position for A Newman for the period ending 30 June 2021
No - a balance sheet is "as at" not "for the periond ending".
300
Who does the profit a business makes belong to?
The business owner/s.
300
True or false: Creditors and accounts payable are the same thing
True
300
How do you calculate average owners equity?
(Opening OE + Closing OE)/2
400
What does the term limited liability mean?
That the debts of the company cannot be transferred to the shareholders.
400
Define an asset.
Something a business owns.
400
What form of the balance sheet is this?
Account form
400
What is wrong with this title?
Statement of Profit or Loss for the month ending 30 June
The date is incomplete.
400
Give two examples of an asset.
Examples can include motor vehicles, cash, accounts receivable etc.
400
What is the formula to calculate Return on Equity?
ROE = net profit/average owners equity %
500
List 4 types of business structures.
Any 4 of the following: Sole trader, partnership, private company, public company and trust
500
How do you calculate liabilities using the accounting equation?
L = A - OE
500
What is wrong with this balance sheet heading?
Statement of Financial Performance for R Peeters as at 31 December 2021
It should be statement of financial position.
500
What is the profit for this business?
Its a loss of $1,700!!
500
Who owns a private limited company?
The shareholders.
500
True or False: You can calculate the gross profit margin, net profit margin and return on equity for all companies.
False - GPM is only for a trading company.
600
What is a public company?
One that is listed on the Australian stock exchange.
600
If assets equal $50,000 and liabilities are $26,000 what is the value of owners' equity?
$24,000
600
What is the difference between the account format and the narrative format of the statement of financial position?
The narritive format uses A - L = OE whereas the account form uses A = L + OE.
600
Calculate net sales using the figures below:
Sales - $70,000, Sales returns - $5,000, interest revenue - $3,000
$65,000
600
Classify the following items:
motor vehicle
creditors
wages
motor vehicle - asset
creditors - liability
wages - expense
600
What is a benchmark?
Something that is used as a comparison for a business or industry sector.