SS2 Third Term Bookkeeping Past Questions And Answers
Here are 20 Senior Secondary School 2 (SS2) Third Term Bookkeeping Questions with options and answers:
Question: What is the purpose of the ledger in bookkeeping?
A) To record daily transactions
B) To organize accounts by category
C) To prepare financial statements
D) To track accounts payable
Answer: A) To record daily transactions
Question: In double-entry bookkeeping, what does a debit entry represent?
A) Increase in assets
B) Increase in liabilities
C) Decrease in equity
D) Decrease in expenses
Answer: A) Increase in assets
Question: What is the main function of the accounts payable ledger?
A) Record customer transactions
B) Track amounts owed to suppliers
C) Manage cash flow
D) Record long-term investments
Answer: B) Track amounts owed to suppliers
Question: How does the cash basis of accounting differ from the accrual basis?
A) Cash basis records transactions when they occur
B) Accrual basis records transactions when cash is received
C) Cash basis records transactions when expenses are incurred
D) Accrual basis records transactions when revenue is recognized
Answer: C) Cash basis records transactions when expenses are incurred
Question: What is the purpose of the contra account in bookkeeping?
A) To offset another account
B) To record revenue
C) To track long-term investments
D) To prepare financial statements
Answer: A) To offset another account
Question: Which financial statement shows the changes in equity over different periods?
A) Balance Sheet
B) Income Statement
C) Statement of Cash Flows
D) Retained Earnings Statement
Answer: D) Retained Earnings Statement
Question: What is the role of the trial balance in the accounting process?
A) To identify errors in the ledger
B) To record daily transactions
C) To prepare financial statements
D) To close temporary accounts
Answer: A) To identify errors in the ledger
Question: Which financial statement provides information on a company’s cash activities?
A) Balance Sheet
B) Income Statement
C) Statement of Cash Flows
D) Retained Earnings Statement
Answer: C) Statement of Cash Flows
Question: What is the purpose of the cash receipts journal?
A) To record customer transactions
B) To track accounts payable
C) To manage petty cash
D) To record cash inflows
Answer: D) To record cash inflows
Question: How does a debit entry affect a liability account?
A) Increases the liability
B) Decreases the liability
C) Has no effect on the liability
D) Converts the liability into equity
Answer: A) Increases the liability
Question: What does the term “book value” refer to in accounting?
A) The original cost of an asset
B) The market value of an asset
C) The accumulated depreciation of an asset
D) The net income of a business
Answer: A) The original cost of an asset
Question: What is the purpose of the adjusted trial balance in the accounting cycle?
A) To identify errors in the ledger
B) To record daily transactions
C) To close temporary accounts
D) To prepare financial statements
Answer: D) To prepare financial statements
Question: How does the concept of materiality impact accounting decisions?
A) It encourages recording every financial transaction
B) It suggests recording only significant transactions
C) It focuses on historical cost
D) It emphasizes conservatism
Answer: B) It suggests recording only significant transactions
Question: What is the purpose of the perpetual inventory system?
A) To track the cost of goods sold
B) To record customer transactions
C) To prepare financial statements
D) To manage petty cash
Answer: A) To track the cost of goods sold
Question: Which accounting principle states that expenses should be recognized in the same period as the revenues they help to generate?
A) Matching Principle
B) Revenue Recognition Principle
C) Historical Cost Principle
D) Conservatism Principle
Answer: A) Matching Principle
Question: What is the purpose of the financial ratios in financial analysis?
A) To record daily transactions
B) To identify errors in the ledger
C) To evaluate a company’s financial performance
D) To prepare financial statements
Answer: C) To evaluate a company’s financial performance
Question: Which financial statement is also known as the statement of changes in equity?
A) Balance Sheet
B) Income Statement
C) Statement of Cash Flows
D) Statement of Changes in Equity
Answer: D) Statement of Changes in Equity
Question: How does the concept of consistency impact financial reporting?
A) It encourages changing accounting methods frequently
B) It emphasizes using the same accounting methods consistently
C) It focuses on recording all transactions accurately
D) It suggests adjusting entries regularly
Answer: B) It emphasizes using the same accounting methods consistently
Question: What is the purpose of the chart of accounts in bookkeeping?
A) To record daily transactions
B) To organize accounts by category
C) To prepare financial statements
D) To close temporary accounts
Answer: B) To organize accounts by category
Question: How does the realization principle impact revenue recognition?
A) It emphasizes recognizing revenue when earned, not when cash is received
B) It suggests recognizing revenue only when cash is received
C) It focuses on historical cost
D) It encourages recognizing revenue at the end of the accounting period
Answer: A) It emphasizes recognizing revenue when earned, not when cash is received.
