GAAP Principles is one of 9 topics in the Grade 10 Accounting CAPS syllabus, covered across 3 lessons on Study Vault. Below are real practice questions from this topic with full worked answers.
Sample practice questions
Easy
1. GAAP stands for:
Generally Accepted Accounting Practice
General Accounting and Auditing Principles
Government Approved Accounting Policy
Generally Applied Accounting Procedures
Answer: Generally Accepted Accounting Practice — GAAP stands for Generally Accepted Accounting Practice, the shared set of rules accountants follow so that financial records are prepared consistently and can be trusted and compared.
Easy
2. The historical cost principle requires an asset to be recorded at:
The actual price paid to acquire it
Its current estimated market value
Whatever value the owner believes it is worth
The price it is expected to sell for in future
Answer: The actual price paid to acquire it — Historical cost requires assets to be recorded at the original, actual purchase price, which is objective and provable with a source document, not an estimate of current worth.
Medium
3. A business bought equipment for R60 000 two years ago. Similar equipment now costs R75 000 to buy new. At what value should the equipment still appear in the accounting records (before any depreciation is considered), according to the historical cost principle?
Answer: R60000 — The historical cost principle requires the asset to remain recorded at its original purchase price of R60 000, not at the current higher replacement cost.
