SS1 First Term Bookkeeping Past Questions And Answers

 

Here they are;

Question: What is the primary purpose of bookkeeping?

 

a) Profit maximization

b) Record keeping

c) Advertising

d) Production

 

Answer: b) Record keeping

 

Question: In the accounting equation (Assets = Liabilities + Equity), what does equity represent?

 

a) Money owed to creditors

b) Owner’s interest in the business

c) Current assets

d) Fixed assets

 

Answer: b) Owner’s interest in the business

 

Question: Which financial statement shows the financial position of a business at a specific point in time?

 

a) Income statement

b) Cash flow statement

c) Balance sheet

d) Statement of changes in equity

 

Answer: c) Balance sheet

 

Question: What is the purpose of the cash book in bookkeeping?

 

a) Record all transactions involving cash

b) Record only credit transactions

c) Track employee salaries

d) Calculate depreciation

 

Answer: a) Record all transactions involving cash

 

Question: A credit entry is made on the ___________ side of an account.

 

a) Left

b) Right

c) Top

d) Bottom

 

Answer: a) Left

 

Question: Which accounting principle states that revenue should be recognized when it is earned?

 

a) Matching principle

b) Revenue recognition principle

c) Going concern principle

d) Conservatism principle

 

Answer: b) Revenue recognition principle

 

Question: What does the term “double-entry” mean in bookkeeping?

 

a) Two sets of books are maintained

b) Every transaction has equal and opposite effects

c) Only one entry is recorded for each transaction

d) Entries are made only on odd dates

 

Answer: b) Every transaction has equal and opposite effects

 

Question: Which book of original entry is used to record all credit purchases?

 

a) Sales day book

b) Purchases day book

c) Cash book

d) General journal

 

Answer: b) Purchases day book

 

Question: The acronym “GAAP” stands for:

 

a) Generally Accepted Accounting Principles

b) Generally Acknowledged Auditing Procedures

c) Global Accounting and Auditing Principles

d) General Analysis of Accounting Procedures

 

Answer: a) Generally Accepted Accounting Principles

 

Question: What is the purpose of a trial balance?

 

a) To determine the financial position of a business

b) To check the arithmetic accuracy of accounts

c) To record daily transactions

d) To calculate taxes

 

Answer: b) To check the arithmetic accuracy of accounts

 

Question: The accounting equation must always balance. What does this signify?

 

a) Financial stability

b) Equal debits and credits

c) High profits

d) Constant business expansion

 

Answer: b) Equal debits and credits

 

Question: Which type of account is “Prepaid Rent”?

 

a) Asset

b) Liability

c) Equity

d) Expense

 

Answer: a) Asset

 

Question: What is the purpose of posting in the bookkeeping process?

 

a) To calculate profits

b) To record original entries

c) To transfer information from journals to ledgers

d) To prepare financial statements

 

Answer: c) To transfer information from journals to ledgers

 

Question: Depreciation is a process of allocating the cost of:

 

a) Current assets

b) Long-term liabilities

c) Fixed assets over their useful life

d) Owner’s equity

 

Answer: c) Fixed assets over their useful life

 

Question: Which financial statement reports the revenues and expenses over a specific period?

 

a) Balance sheet

b) Income statement

c) Statement of changes in equity

d) Cash flow statement

 

Answer: b) Income statement

 

Question: The accounting concept that assumes a business will continue operating indefinitely is known as:

 

a) Matching principle

b) Going concern principle

c) Consistency principle

d) Conservatism principle

 

Answer: b) Going concern principle

 

Question: What is the purpose of the general ledger?

 

a) To record daily transactions

b) To summarize transactions by category

c) To calculate profits

d) To issue invoices

 

Answer: b) To summarize transactions by category

 

Question: A contra account is used to:

 

a) Record expenses

b) Offset the balance of another account

c) Record revenues

d) Close the books at the end of the year

 

Answer: b) Offset the balance of another account

 

Question: Which accounting principle requires businesses to use the same accounting methods and procedures consistently?

 

a) Consistency principle

b) Materiality principle

c) Objectivity principle

d) Matching principle

 

Answer: a) Consistency principle

 

Question: What is the purpose of the “posting reference” column in a journal?

 

a) To identify the type of transaction

b) To record the date of the transaction

c) To cross-reference with ledger accounts

d) To calculate the total debits and credits

 

Answer: c) To cross-reference with ledger accounts.