High School

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1. Choose the correct formula of the accounting equation:
E. $L = OE + A$
F. $OE = A + L$
G. $A = OE + L$
H. $A = OE - L$

2. The selling price of stock is R5 200 and the mark-up is 25%. Calculate the cost of sales:
A. 4 500
B. 4 200
C. 4 900
D. 4 160

Answer :


  1. Choose the correct formula of the accounting equation:

    The accounting equation is a fundamental principle in accounting that shows the relationship between a company's assets, liabilities, and owner's equity. The correct formula is:

    [tex]A = OE + L[/tex]

    where:


    • [tex]A[/tex] stands for Assets

    • [tex]OE[/tex] stands for Owner's Equity

    • [tex]L[/tex] stands for Liabilities


    Therefore, the correct choice is G. [tex]A = OE + L[/tex].


  2. Calculate the cost of sales:

    To find the cost of sales when you have the selling price and a given mark-up percentage, you use the following steps:


    • The selling price is given as R5,200, and the mark-up is 25%.

    • If the selling price is a result of a 25% mark-up on the cost, it means the selling price is 125% of the cost.

    • We can use the equation to find the cost:
      [tex]\text{Selling Price} = \text{Cost} + \text{Mark-Up} = \text{Cost} \times 1.25[/tex]


    Rearrange the equation to solve for the Cost:

    [tex]\text{Cost} = \frac{\text{Selling Price}}{1.25}[/tex]


    • Substitute the given selling price:

      [tex]\text{Cost} = \frac{5200}{1.25} = 4160[/tex]



    Therefore, the correct answer is D. 4,160.


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