Hartley Road Primary School

Economic and Management Sciences

Grade 7
Informal Test
Marks: 100 Examiner: Mrs ZN Khan
Duration: 60 Minutes

Instructions and information:

1. Please answer all questions.

2. Follow the numbering system used in this paper.

3. Please write neatly and legibly.

This paper consists of the following sections:

Section A Accounting Concepts 35
Section B Income and Expenses 35
Section C Budgets 30

Section A: Accounting Concepts

Question One: Match Column A with Column B (10x2=20)
Find the concept (from column B) that best suits the definition (from column A). Only write
the correct letter next to the question number, e.g., 1.6- G.
COLUMN A COLUMN B
1.1 Transactions must be recorded A Financial Records
daily.
1.2 Property owned by a business B Transactions
that can be converted into cash.
1.3 When expenses are more than C Savings
income.
1.4 Money the business owes other D Income
businesses.
1.5 When two parties take action. E Liabilities
The one buys and the other sells.
1.6 The costs that the business incur F Capital
to be able to run its business.
1.7 Money earned by the business G Expenses
e.g. for rendering a service.
1.8 Money or other property that the H Loss
owner invested in his business so
that the business can start.

1.9 Financial institutions that I Banking Sector

safeguard and lend out money to
businesses.
1.10 When the business sets aside J Assets
money for future use.
1
Question Two: Define the following concepts
2.1 Assets-
2.2 Income-
2.3 Liabilities-
2.4 Budget-
2.5 Savings-

(5 x 2 = 10)
Question Four: True or False
State whether the following statements are true or false.
4.1 Cash float is the money the owner took for personal use.
4.2 Trading stock are items bought with the purpose of selling them for profit.
4.3 Receipts that increase owner’s equity are called income.
4.4 Liabilities are payments that decrease owner’s equity.
4.5 Loss is the amount with which expenses exceed the receipts for services rendered.

(5)
Total: 35
Section B: Income and Expenses
Question Five: State whether the following concepts are income or expenses.

5.1 Sales-
5.2 Cost of Sales-
5.3 Telephone-
5.4 Fuel-
5.5 Salaries-
5.6 Interest on fixed deposit-
5.7 Insurance-
5.8 Packing Material-
5.9 Rent Expense-
5.10 Trading Licence- (10)

2
Question Six: Draw up a personal statement of Net Worth

6.1 You are appointed as the financial consultant of Susan Wilson. Use the following
information to answer her questions:

Susan owns a house worth R1 500 000. She also owns a vehicle worth R350 000.
She has a mortgage bond on her house to the value of R180 000 and still owes
ABSA bank R20 000 on her vehicle. Her furniture in the house is worth R230 000.
Her clothes and jewellery are worth R125 000. She has R89 000 in her current
bank account. She owes Edgars R12 000 for clothes. Her tablet is worth R8 000
and her cell phone is worth R6 000. She still owes VodacomR10 000 for the tablet
and cell phone.

6.1.1 Susan wants to know from you what her financial worth is. Draw up her Statement
of Net Worth to calculate this. (14)

Use the Source Material provided to you. Attach the source material to your
answer sheet.
6.1.2 Identify Susan’s biggest asset. (2)
6.1.3 Identify Susan’s biggest liability. (2)
6.1.4 Calculate how much Susan already paid off to date on her house. (3)
6.1.5 Susan wants to buy another house to the value of R600 000.
She will have to apply for another loan at FNB Bank. Predict if FNB Bank
will grant her the loan or not. Motivate why you feel that way. (4)

(25)

Total: 35
Section C: Budgets
Question Seven: Draw up a cash budget

7.1 Draw up your Cash Budget for the period 1 May 2017. Please answer on SOURCE
MATERIAL PROVIDED. (20)

You receive R50 pocket money from your parents each month. Every week end you
wash the cars in the neighbourhood. You make R80 every month doing this. You go
to the movies once a month and it costs R40 for the movie, cool drink and popcorn.
You spend R10 per week at the school’s tuck shop. You owe your sister R100 that you
will pay back over a 4 month period at R25 per month. You saw a beautiful pair of
sneakers in the shop. It costs R450. You decide to save for it. You only have R120 in
your bank account on 1 May 2017.

3
7.2 Calculate the amount of money in your bank account at the end of May 2017? (2)
7.3 Calculate the amount of money that you are short to buy the sneakers? (2)
7.4 Determine how many months it will still take if you proceed as always, before you
can afford the sneakers. Show your calculations. (4)

7.5 You don’t want to wait that long. Suggest what you could do to buy it faster. (2)

(30)

Total: 30
GRAND TOTAL: 1OO

4
 SOURCE MATERIAL

Question Six
6.1.1 Susan wants to know from you what her financial worth is. Draw up her Statement
of Net Worth to calculate this.

Susan owns a house worth R1 500 000. She also owns a vehicle worth R350 000.
She has a mortgage bond on her house to the value of R180 000 and still owes
ABSA bank R20 000 on her vehicle. Her furniture in the house is worth R230 000.
Her clothes and jewellery are worth R125 000. She has R89 000 in her current
bank account. She owes Edgars R12 000 for clothes. Her tablet is worth R8 000
and her cell phone is worth R6 000. She still owes Vodacom R10 000 for the tablet
and cell phone.

5
Question Seven: Draw up a cash Budget
7.1 Draw up your Cash Budget for the period 1 May 2017. (20)

You receive R50 pocket money from your parents each month. Every week end you
wash the cars in the neighbourhood. You make R80 every month doing this. You go
to the movies once a month and it costs R40 for the movie, cool drink and popcorn.
You spend R10 per week at the school’s tuck shop. You owe your sister R100 that you
will pay back over a 4 month period at R25 per month. You saw a beautiful pair of
sneakers in the shop. It costs R450. You decide to save for it. You only have R120 in
your bank account on 1 May 2017.