Grade 7 · CAPS

Grade 7 Financial Literacy

Economic and Management Sciences practice questions with answers

Grade 7 Financial Literacy is part of the CAPS Economic and Management Sciences curriculum, covering essential concepts such as income, expenses, and transactions. Learners will explore the differences between fixed and variable income, and understand how to calculate net worth using practical examples. Additionally, students will learn about the security features of South African banknotes, enhancing their financial awareness. The practice questions below are drawn from ReClass's own question bank, providing a comprehensive resource for mastering these skills.

Worked example

4.1 What do you notice about Mr. Smith’s Budget?

Answer & explanation

His expenses are more than his income.

You'll also practise

  • 4.2 Is this a balanced budget? Give a reason for your answer.
  • 4.3 What would you suggest he could do to manage his money better? Give two suitable answers by looking at his budget.
  • 4.4 Should he be saving any money? Give a reason for your answer.
  • 4.5 What can you do to ensure you save money?
  • 4.6 What is the difference between income and expenses?
  • 4.7 Why is it better to have a surplus than a deficit in a business?
  • 4.8 Explain the difference between Fixed Income and Variable Income.
  • 5.1 Calculate the Net Worth of Joe Soap using the information below.
  • 4.1 Answer the following questions: Explain the term personal expenses.
  • 4.2 In the column below, list six types of personal expenses.
  • 5. Draw up a Statement of Net Worth for Cynthia Harebottle.
  • 6.2 In a short paragraph, explain the importance of a budget.
  • 2.1 Complete the Statement of Net Worth for the Precious Family. (15) Their house is valued at R 95 000, but they still owe R45 000 on the house loan. Mom’s car is worth R12 000. The family still owes R5 000 on this car. Dad’s car is worth R10 000, which is paid in full. They have an investment of R15 000. They owe R 500 on their clothing account. They have R 1 200 in their Savings Account. The family owe R 2 000 on their credit cards. The value of their furniture is approximately R4 500, which is paid in full. The other household items are valued at R1 200, which is paid in full. Mrs. Precious has jewellery valued at R 900.
  • 3.1 What do you notice about Miss Amy Spark’s Budget? (1)
  • 3.2 Is this a balanced budget? Give a reason for your answer. (2)
  • 3.3 Should she be saving any money? Give a reason for your answer. (2)
  • 3.4 What can she give up to ensure she saves more money? (2)
  • 3.5 What is the difference between Income and Expenses? (2)
  • 3.6 Why is it better to have a Surplus than a Deficit in a business? (2)
  • 3.7 Name two groups of people or institutions that will be interested in the Financial Statements of a business. (2)
  • 2.2 List three security features on a South African banknote. (3)
  • 4.1 What is a budget? (1)
  • 4.2 Use the information below to draw up the Budget for Sarah Loch for the month of May 2022. (14) Item Amount Salary (after tax) R10890 Rent R2100 Electricity R310 Groceries R1780 Car repayments and petrol R4020 Stationery R560 Weekend job R500 Entertainment R600 Clothing R500 Domestic help R350 Morning coffee R500 Budget for _____________________________________ Income Amount Expenses Amount Total Total
  • 4.3 What is Sarah’s balance after she pays for all her expenses? (1)
  • 4.4 Is Sarah spending more or less than she earns? (1)
  • 4.5 List one way in which Sarah can manage her expenses. (1)
  • 4.6 How does Sarah earn extra income? (1)
  • 4.7 Why is it important for a person to have a budget? (1)
  • 6. Statement of Net Worth for Peter Pan. Read the following scenario and work out the Statement of Net Worth for Peter Pan. (15) Peter Pan is 45 years old and only has R12 500 in his bank account. Peter worked for 20 years as an attorney and wants to now work out his financial position. His friend Tinkerbell told him to make a list of all his possessions and money that he owes to other people and businesses.
  • 1.1 Match the term in Column A to the definition in Column B. Write the letter from Column B, in the spaces below.
  • 2.1 Why does a business draw up a Statement of Net Worth?
  • 2.2 The Bank has asked Cynthia Harebottle for a Statement of Net Worth to assess if she qualifies for a personal loan. Cynthia gives you the following information and asks you to prepare her Statement of Net Worth.
  • 3.1 What is an income statement?
  • 3.2 Mama Pia owns a hairdressing business. You are provided with a list of income and expense which you must use to prepare the Income statement for Mama Pia’s Business for October.
  • 3.3 Has Mama Pia’s business made a profit or loss for October? Give a reason for your answer.
  • 4.1 What is a transaction?
  • 4.2 List two types of transactions.
  • 4.3 Where does a business record their transactions?
  • 4.4 Why must financial transactions be recorded?
  • 4.5 Why must a company prepare financial statements?

Common mistakes

  • Confusing fixed and variable income definitions.
  • Misidentifying income as an expense in calculations.
  • Incorrectly listing security features of banknotes.
  • Misunderstanding the concept of a transaction.

Aligned to CAPS Grade 7 Economic and Management Sciences — Financial Literacy.

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