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Grade 12 Accounting Exam Questions with Complete Answers
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Grade 12 Accounting Exam Questions with Complete Answers
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Grade 12 Accounting Exam Questionswith Complete Answers
Accounting - Answer-the process of identifying, recording, and communicating the
economic events of an organization (pg.6)
Accounting equation - Answer-Assets= Liabilities+ Owners Equity (p. 11)
Annual report - Answer-Info that a company gives each year to its shareholders and
other interested parties about its operations and financial position. It includes the
financial statements and auditors' report, in addition to info and reports by management.
(p. 24)
Assets - Answer-Resources owned by a business. (p. 11)
Assumptions - Answer-Basic assumptions (going concern, monetary unit, and economic
entity) that the financial accounting structure is based on. (p. 8)
Balance sheet - Answer-A financial statement that reports the assets, liabilities, and
owner's equity at a specific date. (p. 21)
Cash flow statement - Answer-A financial statement that provides info about the cash
inflows (receipts) and cash outflows (payments) for a specific period of time. (p. 21)
Corporation - Answer-A business organized as a separate legal entity under corporation
law, with ownership divided into transferable shares. (p. 10)
Cost principle - Answer-An accounting principle which states that assets should be
recorded at their historical (original) cost. (p. 8)
Drawings - Answer-Withdrawals of cash or other assets from an unincorporated
business for the personal use of the owner. Drawings reduce owner's equity. (p. 12)
Economic entity assumption - Answer-An assumption that requires the activities of the
entity to be kept separate and distinct from the activities of its owner, and all other
economic entities. (p. 9)
Ethics - Answer-The standards of conduct by which one's actions are judged as right or
wrong, honest or dishonest, fair or unfair. (p. 3)
Expenses - Answer-The cost of assets consumed or services used in the process of
earning revenue. Expenses reduce owner's equity. (p. 13)
, Generally accepted accounting principles (GAAP) - Answer-An accepted set of
standards that indicates how to report economic events. (p. 7)
Going concern assumption - Answer-An assumption which states that the entity will
continue operations for enough time to use its assets for their intended purpose and to
complete its obligations. (p. 8)
Income statement - Answer-A financial statement that presents the revenues and
expenses and resulting net income (or net loss) for a specific period of time. (p. 21)
Income trust - Answer-A special or limited purpose corporation, set up specifically to
invest in income-producing assets, and with its ownership divided into transferable
units. (p. 10)
Investments by the owner - Answer-The increase in owner's equity that results from
assets put into the business by the owner. (p. 12)
Liabilities - Answer-Claims of creditors on total assets. (p. 12)
Monetary unit assumption - Answer-An assumption which states that only transaction
data can be expressed as an amount of money may be included in the accounting
records. It is also assumed that the monetary unit is stable. (p. 9)
Net income - Answer-The amount by which revenues are greater than expenses. (p. 12)
Net loss - Answer-The amount by which expenses are greater than revenues. (p. 12)
Owners equity's - Answer-The ownership claim on total assets. (p. 12)
Partnership - Answer-An association of 2 or more persons to carry on as co-owners of a
business for profit. (p. 10)
Proprietorship - Answer-A small business owned by one person. (p. 9)
Revenues - Answer-The increase in owner's equity that results from business activities
that are done to earn income. (p. 13)
Statement of owner's equity - Answer-A financial statement that summarizes the
changes in owner's equity for a specific period of time. (p. 21)
Transactions - Answer-The economic events of a business that are recorded by
accountants. (p. 15)
Account - Answer-A record of increases and decreases in a specific asset, liability, or
owner's equity item. (p. 52)
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