Bookkeeping JAMB Past Questions And Answers (Objectives and Theory)
10 multiple-choice questions along with 5 theory questions for bookkeeping:
Section A: Multiple Choice Questions
What is the primary purpose of bookkeeping?
a) Financial analysis
b) Tax planning
c) Record-keeping
d) Marketing
Answer: c) Record-keeping
Which of the following is NOT a type of account in bookkeeping?
a) Assets
b) Liabilities
c) Revenues
d) Expenses
Answer: d) Marketing
What is the purpose of the general ledger in bookkeeping?
a) To record daily transactions
b) To summarize financial transactions
c) To prepare financial statements
d) To communicate with stakeholders
Answer: b) To summarize financial transactions
Which of the following financial statements is NOT prepared from information in the general ledger?
a) Income statement
b) Balance sheet
c) Cash flow statement
d) Statement of retained earnings
Answer: c) Cash flow statement
What is the purpose of double-entry bookkeeping?
a) To reduce errors in recording transactions
b) To simplify record-keeping
c) To speed up the accounting process
d) To avoid paying taxes
Answer: a) To reduce errors in recording transactions
What does the term “accounts receivable” refer to in bookkeeping?
a) Money owed by customers
b) Money owed to suppliers
c) Money earned from sales
d) Money spent on rent
Answer: a) Money owed by customers
Which of the following transactions would increase both assets and liabilities?
a) Paying rent in cash
b) Borrowing money from a bank
c) Purchasing inventory on credit
d) Selling goods for cash
Answer: b) Borrowing money from a bank
What is the purpose of a trial balance in bookkeeping?
a) To identify errors in the general ledger
b) To prepare financial statements
c) To record daily transactions
d) To communicate financial information to stakeholders
Answer: a) To identify errors in the general ledger
What does the term “accounts payable” refer to in bookkeeping?
a) Money owed by customers
b) Money owed to suppliers
c) Money earned from sales
d) Money spent on rent
Answer: b) Money owed to suppliers
Which of the following is NOT a step in the bookkeeping process?
a) Posting transactions to the general ledger
b) Preparing financial statements
c) Recording transactions in a journal
d) Analyzing financial data
Answer: d) Analyzing financial data
Section B: Theory Questions
Define bookkeeping and explain its importance in business operations.
Answer: Bookkeeping is the process of recording, organizing, and storing financial transactions of a business in an accurate and systematic manner. It involves recording transactions in journals, posting them to the general ledger, and preparing financial statements. Bookkeeping provides a clear and comprehensive record of a company’s financial activities, enabling management to monitor performance, make informed decisions, comply with legal and regulatory requirements, and communicate financial information to stakeholders.
Describe the difference between single-entry and double-entry bookkeeping systems.
Answer: Single-entry bookkeeping is a simple and informal method of record-keeping that involves recording transactions in a single account, such as a cash book or a list of accounts receivable and accounts payable. It does not require the use of debits and credits or a formal system of accounts. Double-entry bookkeeping, on the other hand, is a more structured and systematic method that records each transaction in at least two accounts, with corresponding debits and credits. Double-entry bookkeeping provides greater accuracy and reliability in financial reporting and helps prevent errors and fraud.
Explain the purpose of the chart of accounts in bookkeeping and provide examples of common account classifications.
Answer: The chart of accounts is a list of all the accounts used by a business to record its financial transactions. It provides a systematic framework for organizing and classifying transactions, facilitating the recording and retrieval of financial data. Common account classifications include assets (e.g., cash, accounts receivable, inventory), liabilities (e.g., accounts payable, loans payable), equity (e.g., owner’s equity, retained earnings), revenues (e.g., sales revenue, interest income), and expenses (e.g., salaries expense, rent expense). The chart of accounts helps ensure consistency, accuracy, and efficiency in bookkeeping.
Discuss the importance of maintaining accurate and up-to-date financial records in bookkeeping.
*Answer: Maintaining accurate and up-to-date financial records is essential for effective bookkeeping and sound financial management. It provides a clear and comprehensive record of a company’s financial activities, enabling management to monitor performance, make informed decisions, and comply with legal and regulatory requirements. Accurate financial records also facilitate the preparation of financial statements, tax filings, and audits, as well as the analysis of financial trends and patterns. Additionally, it helps detect errors, fraud, and discrepancies in a timely manner, minimizing the risk of financial losses.
