The Accounting Equation 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. Which of these is an example of a liability?
A loan from a bank
Inventory (stock)
Cash in the bank
Equipment
Answer: A loan from a bank — A liability is an amount owed to an outside party; a bank loan is a classic example, while inventory, bank/cash and equipment are all assets.
Easy
2. For a sole trader, owner's equity is called:
Capital
Share capital
Retained earnings
Reserves
Answer: Capital — A sole trader's owner's equity is simply called Capital; share capital and retained earnings are company (not sole trader) terms used in Grade 12.
Medium
3. Every asset a business owns must have been financed by:
Either the owner (owner's equity) or an outside party (a liability)
Only the owner, never an outside party
Only outside parties, never the owner
Neither the owner nor any outside party
Answer: Either the owner (owner's equity) or an outside party (a liability) — There are only two possible sources of finance for any asset a business holds: the owner's own contribution (owner's equity) or money owed to outside parties (liabilities).
