SS1 Third Term Bookkeeping Past Questions And Answers
Here are 20 Bookkeeping questions for Senior Secondary School 1 (SS1) Third Term:
Question: What is the purpose of the bank reconciliation statement?
a) To record daily transactions
b) To reconcile discrepancies between the bank statement and the company’s records
c) To calculate net income
d) To prepare financial statements
Answer: b) To reconcile discrepancies between the bank statement and the company’s records
Question: Which financial statement provides a detailed breakdown of a company’s cash inflows and outflows?
a) Balance sheet
b) Income statement
c) Statement of changes in equity
d) Cash flow statement
Answer: d) Cash flow statement
Question: The accounting concept that requires information to be accurate and reliable is known as:
a) Objectivity principle
b) Consistency principle
c) Materiality principle
d) Historical cost principle
Answer: a) Objectivity principle
Question: What is the purpose of the petty cash fund?
a) To pay salaries
b) To make small, miscellaneous purchases
c) To record long-term liabilities
d) To calculate depreciation
Answer: b) To make small, miscellaneous purchases
Question: What is the purpose of the statement of cash flows?
a) To show the changes in equity over a period
b) To summarize revenue and expenses
c) To report the cash transactions of a business
d) To record daily transactions
Answer: c) To report the cash transactions of a business
Question: What is the difference between cash accounting and accrual accounting?
a) Accrual accounting records transactions when cash is exchanged
b) Cash accounting recognizes revenue and expenses when incurred, regardless of cash flow
c) Both methods are identical
d) Cash accounting is only applicable to large corporations
Answer: b) Cash accounting recognizes revenue and expenses when incurred, regardless of cash flow
Question: The term “bad debt expense” is associated with which accounting principle?
a) Matching principle
b) Conservatism principle
c) Materiality principle
d) Going concern principle
Answer: a) Matching principle
Question: What is the purpose of the general journal in the bookkeeping process?
a) To record only credit transactions
b) To record all types of transactions
c) To track employee salaries
d) To calculate net income
Answer: b) To record all types of transactions
Question: Which account represents the owner’s drawings from the business?
a) Retained earnings
b) Common stock
c) Dividends
d) Revenue
Answer: c) Dividends
Question: The accounting equation must always remain in balance because:
a) It is required by law
b) It ensures financial stability
c) Assets must always equal liabilities plus equity
d) It simplifies financial reporting
Answer: c) Assets must always equal liabilities plus equity
Question: What is the purpose of the statement of changes in equity?
a) To report the cash transactions of a business
b) To summarize revenue and expenses
c) To show the changes in equity over a period
d) To reconcile discrepancies in the bank statement
Answer: c) To show the changes in equity over a period
Question: The accounting concept that requires a business to use the same accounting methods from year to year is known as:
a) Consistency principle
b) Materiality principle
c) Objectivity principle
d) Conservatism principle
Answer: a) Consistency principle
Question: What is the purpose of the contra revenue account?
a) To offset the balance of another revenue account
b) To record expenses
c) To track the owner’s investments
d) To calculate net income
Answer: a) To offset the balance of another revenue account
Question: How does an increase in liabilities affect the accounting equation?
a) It decreases equity
b) It increases assets
c) It has no effect on the equation
d) It decreases assets
Answer: b) It increases assets
Question: What is the purpose of the aging of accounts receivable?
a) To calculate depreciation
b) To estimate the uncollectible portion of accounts receivable
c) To reconcile discrepancies in the bank statement
d) To track employee salaries
Answer: b) To estimate the uncollectible portion of accounts receivable
Question: The term “amortization” is associated with the gradual reduction of:
a) Liabilities
b) Expenses
c) Assets over their useful life
d) Owner’s equity
Answer: c) Assets over their useful life
Question: What is the purpose of the statement of retained earnings?
a) To report the cash transactions of a business
b) To reconcile discrepancies in the bank statement
c) To summarize revenue and expenses
d) To show changes in retained earnings over a period
Answer: d) To show changes in retained earnings over a period
Question: What is the purpose of the “contra expense” account?
a) To offset the balance of another expense account
b) To record revenues
c) To track the owner’s investments
d) To calculate net income
Answer: a) To offset the balance of another expense account
Question: In the accounting equation (Assets = Liabilities + Equity), what does equity represent?
a) Owner’s interest in the business
b) Money owed to creditors
c) Current assets
d) Fixed assets
Answer: a) Owner’s interest in the business
Question: How is the net cash provided or used by operating activities calculated in the cash flow statement?
a) By adding cash inflows and cash outflows from investing activities
b) By adjusting net income for non-cash items and changes in working capital
c) By subtracting cash inflows and cash outflows from financing activities
d) By simply recording the net income
Answer: b) By adjusting net income for non-cash items and changes in working capital.
