Grade 7
EMS
Term two
Support Material
What is Accounting?
It is the systematic recording of financial transactions of a business in books of accounts.
Transaction:
A transaction is a financial action between two persons usually with money being involved. (Role
play: learners play two characters, one customer, buying with money and the other owner of a
business, selling goods or rendering a service)
Careers to follow with Accounting:
If learners have Accounting and Mathematics as subjects at school, they could consider a career
in the business world and become one of the following:
1. Financial Manager
2. Chartered Accountant
3. Bookkeepers
4. Financial Advisor or consultant
5. Commercial and Industrial Managers
6. Bankers
7. Insurance agent or manager
8. Actuarial Sciences
9. Stock brokers on JSE or independent
10. Local and Central Government
11. Business administrator
12. Sales and purchasing
13. Procurement
14. Auditor
Starting a business:
The following is needed to start a business and maintain it successfully?
- Research (An entrepreneur needs to know what type of business he/she wants to operate
successfully before starting the business)
- Business Plan
- Capital to start business/ funding/ finance/ cash flow
- Registration of business to make it formal
- License
- VAT registration no. / Tax certificate
- Premises
- Equipment
- Stock/ inventory to sell
- Staffing/ workers
- Water and Electricity account
- Telephone, cell phone and internet for communication and marketing purposes
- Business banking account (cheque account/ current account)
- Customers/ clients
- Record keeping – bookkeeping through use of accounting software or manually
1. Assets:
The possessions of the business (e.g. Land and Buildings, Vehicles, Equipment, Bank,
etc.).
2. Liabilities:
Money which the business owes to other businesses or persons. (Debt owed to other
parties).
3. Capital/ Owners Equity:
Funds/ finance/ money or other assets contributed by the owner to start the business.
4. Income:
Money received for sale of goods or service rendered. (E.g. Sales, Rent Income, etc.)
5. Expenses:
Payments made for the running of the business. (E.g. Water and electricity, Rent Expense,
Trade License, Material Cost, Wages, Salaries, Stationery, etc.)
Activity 6:
Instruction: Fill in the missing words:
1. Accounting is the systematic _____________ of financial _________ of a business in
_________ of _____________.
2. To start a business, the business owner needs ____________.
3. Name three careers to follow with Accounting as a subject:
__________________, _________________ and _____________________.
ACTIVITY 7
Use the Word Bank to answer the following questions:
WORD BANK:
Assets
Cash float
Mortgage bond
Capital
Bank overdraft
Vehicle
Debtor
1.
2.
3.
4.
5.
6.
7.
8.
Creditor
Possessions of the business.
Money that the owner needs to start a business.
People that buys on credit from the business, are called......
_______ is an enterprise to whom the business owes money
Example of a fixed asset.
Example of a long-term liability.
A type of loan from the bank where the bank allows you to draw more money than you have
in the bank.
Small amounts of money that the business keeps in the cash register to give change to
customers.
ACTIVITY 8
Learners need to complete the following activity in class.
1.
Copy the table below into your exercise book. Calculate profit or loss in the third column.
State in the fourth column
whether the difference is a profit or loss.
Nr
E.g.
1
2
3
4
5
2.
Income
R300
R10 200
R5 200
R124 200
R23 400
R46 200
Expenses
R100
R6 400
R7 800
R100 300
R30 000
R18 200
Difference
R200
Profit or loss
Profit
Speedy Electricians do electrical work in the community. Their services for the year
brought an income of R98 400.
The business paid out R67 500 for material costs, R5 200 for telephone and R10 200
for other expenses.
Calculate if the business made a profit or loss.
ACTIVITY 9:
1. Instruction: Use the information below to complete the table to show the total assets,
liabilities, equity, income and expenses. Use only amounts.
Owner, T. Limekhaya, started a small photographic business in a shack at the back of his
house. He deposited R25 000 in the current account of the business. He bought
photographic equipment and paid by cheque, R10 000. He also borrowed R10 000 from
ABSA bank to renovate the shack. He rented out an extra room in the shack to a friend and
at the end of the month he received the rent for the room R500 and he received R2 500 for
photos he developed for customers. His monthly expenses included Water and electricity
R300, Telephone R250, Stationery R150, Processing of photos R600 and Transport R300.
Assets
Liabilities
Equity
Income
Expenses
Total:
2. Instruction: Using the information in no. 1 above, determine the following:
Profit or loss he made at the end of the month.
ACTIVITY 10
1.
1.1
1, 2
Explain in your own words the following concepts:
Budget
Savings
2.
Read through the following scenario and answer the questions that follow:
Scenario:
Peter pan wants to buy a CD worth R200 but do not have enough money. He
earns R200 pocket money per month and his expenses is R150 per month.
2.1
2.2
2.3
2.4
What is the first thing Peter Pan needs to do?
Calculate the money that he has left over every month?
What do we call this money?
How many months will it take him to buy his CD?
Activity 11
Question 1
Match column A with column B
COLUMN A
COLUMN B
1. A loan from the bank where the bank allows you to
draw money that you have in your account
A.
Cash float
2. Someone who owes money to a business
B.
Capital
3. Money that have been contributed to start a
business
C.
Debtor
4. Money that is in a cash register to give change to
customers
D.
Transaction
5. Agreement between two parties
E.
Overdraft
Question 2
Complete the word puzzle
Down:
1. Money owed to other businesses
2. Systematic recording of transactions
3. income made after expenses has been paid
4. Documented evidence
5. Person who checks if the books of a company are compliant to accounting rules.
Across:
1. Money to start a business
2. monthly financial planning
3. money received for sale of goods or service rendered
4. Income not spent
5. Financial action between two persons.
1
2
1
2
3
4
5
3
4
5
Question 3:
WORD SEARCH
Complete the following word search. Note answers can only be circled, diagonally,
vertically and horizontally. Use the questions below to complete the word search
L
I
A
B
I
L
I
T
I
E
S
A
N
I
J
B
A
N
K
S
B
T
T
C
D
O
U
B
T
S
U
R
R
I
O
B
S
L
I
A
J
A
A
P
P
M
M
U
S
L
S
N
O
Z
K
A
E
X
P
E
N
S
E
S
E
D
C
A
N
U
N
A
E
P
A
I
J
O
B
G
N
C
D
T
I
V
O
T
S
D
A
T
E
J
S
K
I
P
N
T
E
I
G
Z
T
O
T
N
J
B
I
O
Q
I
B
B
W
A
G
E
S
N
N
C
T
R
I
O
O
S
N
G
G
A
D
S
K
G
A
S
R
E
H
B
C
E
N
A
D
F
O
N
T
A
D
U
N
O
B
K
Z
R
E
T
H
E
I
S
L
U
G
B
N
I
Y
C
1.
2.
3.
4
5
6
7
8
9
10
The start-up money for a business is called? ______________
A _______________is any action (buying and selling) where money is involved.
The money you spend to buy goods and services provided by someone else.
______________
The payment you receive for selling goods and services, providing services or investing
your money._______________
A person’s financial value at any given point. _____________
Money that is left over after all the expenses have been paid. _______________
Everything that belongs to a business is called ___________.
Personal income is an individual’s total annual earnings from all sources such
as_____________.
The debts that a person or business has to pay. ___________
___________provide essential services to individuals and businesses.