SS2 First Term Bookkeeping Past Questions And Answers
Here they are;
Question: What is the primary purpose of bookkeeping?
A) Financial analysis
B) Record keeping
C) Marketing strategy
D) Human resources management
Answer: B) Record keeping
Question: In double-entry bookkeeping, what does the accounting equation represent?
A) Assets = Liabilities – Equity
B) Assets = Liabilities + Equity
C) Assets + Liabilities = Equity
D) Assets – Liabilities = Equity
Answer: B) Assets = Liabilities + Equity
Question: Which of the following is a liability account?
A) Cash
B) Accounts Receivable
C) Accounts Payable
D) Equipment
Answer: C) Accounts Payable
Question: What is the purpose of a trial balance in bookkeeping?
A) To prepare financial statements
B) To identify errors in the ledger
C) To calculate net income
D) To record daily transactions
Answer: B) To identify errors in the ledger
Question: Which financial statement reports the revenues and expenses for a specific period?
A) Balance Sheet
B) Income Statement
C) Statement of Cash Flows
D) Retained Earnings Statement
Answer: B) Income Statement
Question: Depreciation is a process that primarily affects which type of asset?
A) Current assets
B) Tangible assets
C) Intangible assets
D) Financial assets
Answer: B) Tangible assets
Question: What is the purpose of the cash flow statement?
A) To show the financial position at a specific date
B) To demonstrate changes in equity over time
C) To illustrate the inflows and outflows of cash
D) To record long-term investments
Answer: C) To illustrate the inflows and outflows of cash
Question: Which accounting principle requires expenses to be recorded when they are incurred, not when they are paid?
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 general ledger in bookkeeping?
A) To record daily transactions
B) To prepare financial statements
C) To track accounts payable
D) To organize accounts by category
Answer: D) To organize accounts by category
Question: Which type of account increases with a credit entry?
A) Assets
B) Liabilities
C) Equity
D) Expenses
Answer: C) Equity
Question: What is the accounting equation based on the double-entry system?
A) Assets = Liabilities – Equity
B) Assets = Liabilities + Equity
C) Assets + Liabilities = Equity
D) Assets – Liabilities = Equity
Answer: B) Assets = Liabilities + Equity
Question: Which financial statement is also known as the statement of financial position?
A) Balance Sheet
B) Income Statement
C) Statement of Cash Flows
D) Retained Earnings Statement
Answer: A) Balance Sheet
Question: What is the purpose of the trial balance?
A) To identify errors in the ledger
B) To prepare financial statements
C) To record daily transactions
D) To calculate net income
Answer: A) To identify errors in the ledger
Question: Which accounting principle states that revenue should be recognized when it is earned, not when cash is received?
A) Matching Principle
B) Revenue Recognition Principle
C) Historical Cost Principle
D) Conservatism Principle
Answer: B) Revenue Recognition Principle
Question: What does the term “contra account” refer to in bookkeeping?
A) An account with a normal credit balance
B) An account with a normal debit balance
C) An account that offsets another account
D) An account used for recording revenues
Answer: C) An account that offsets another account
Question: Which financial statement shows the profitability of a business over a specific period?
A) Balance Sheet
B) Income Statement
C) Statement of Cash Flows
D) Retained Earnings Statement
Answer: B) Income Statement
Question: What is the purpose of the statement of cash flows?
A) To show the financial position at a specific date
B) To demonstrate changes in equity over time
C) To illustrate the inflows and outflows of cash
D) To record long-term investments
Answer: C) To illustrate the inflows and outflows of cash
Question: Which accounting concept assumes that a business will continue to operate indefinitely?
A) Going Concern Concept
B) Consistency Concept
C) Materiality Concept
D) Conservatism Concept
Answer: A) Going Concern Concept
Question: What is the purpose of the income statement?
A) To show the financial position at a specific date
B) To demonstrate changes in equity over time
C) To illustrate the inflows and outflows of cash
D) To report the revenues and expenses for a specific period
Answer: D) To report the revenues and expenses for a specific period
Question: How does the accrual basis of accounting differ from the cash basis?
A) Accrual basis records transactions when cash is received
B) Cash basis records transactions when expenses are incurred
C) Accrual basis records transactions when they occur
D) Cash basis records transactions when revenue is recognized
Answer: C) Accrual basis records transactions when they occur.
