SS3 First Term Bookkeeping Past Questions And Answers
20 Senior Secondary School 3 First Term Bookkeeping questions with options and answers:
Question: What is the primary purpose of a Trial Balance?
A) Prepare financial statements
B) Record daily transactions
C) Calculate profit
D) Close accounts
Answer: A) Prepare financial statements
Question: In double-entry bookkeeping, what does the accounting equation represent?
A) Assets = Liabilities
B) Assets – Liabilities = Equity
C) Liabilities = Equity
D) Assets + Liabilities = Equity
Answer: D) Assets + Liabilities = Equity
Question: What is the function of a Cash Book in accounting?
A) Record sales transactions
B) Record cash and bank transactions
C) Calculate depreciation
D) Prepare income statements
Answer: B) Record cash and bank transactions
Question: How is the closing stock treated in the Trading Account?
A) Deducted from purchases
B) Added to purchases
C) Deducted from sales
D) Ignored in the Trading Account
Answer: A) Deducted from purchases
Question: What type of account is “Sales” in the ledger?
A) Nominal
B) Real
C) Personal
D) Impersonal
Answer: A) Nominal
Question: When is a Petty Cash Book used?
A) To record all business transactions
B) To track large expenses
C) To manage small, routine expenses
D) To record long-term liabilities
Answer: C) To manage small, routine expenses
Question: What is the purpose of a Bank Reconciliation Statement?
A) Record all bank transactions
B) Compare cash and bank balances
C) Calculate depreciation
D) Prepare income statements
Answer: B) Compare cash and bank balances
Question: What does the term “Debit Note” represent?
A) A credit purchase
B) A debit purchase
C) A document issued for goods returned
D) A document issued for goods sold
Answer: C) A document issued for goods returned
Question: What is the formula for calculating Net Profit?
A) Gross Profit – Expenses
B) Sales – Cost of Goods Sold
C) Total Revenue – Total Expenses
D) Net Sales – Operating Expenses
Answer: C) Total Revenue – Total Expenses
Question: How is the Capital Account affected when the owner invests additional cash in the business?
A) Decreases
B) Increases
C) Remains unchanged
D) Converts to a liability
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**Answer:** B) Increases
Question: What does the term “Accrual” mean in accounting?
A) Cash payment
B) Payment in advance
C) Recognition of revenue or expenses before the cash is received or paid
D) Recognition of revenue or expenses only when the cash is received or paid
Answer: C) Recognition of revenue or expenses before the cash is received or paid
Question: What is the purpose of a Journal in the accounting process?
A) To post transactions directly
B) To record financial transactions in chronological order
C) To prepare financial statements
D) To calculate depreciation
Answer: B) To record financial transactions in chronological order
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 “contra entry” in accounting?
A) To correct errors in the ledger
B) To record transactions with no effect on the accounting equation
C) To cancel out a previous entry
D) To adjust depreciation
Answer: C) To cancel out a previous entry
Question: What is the role of the Profit and Loss Account?
A) To show the financial position of a business
B) To calculate the net profit or loss
C) To record all sales transactions
D) To manage daily expenses
Answer: B) To calculate the net profit or loss
Question: What is the purpose of the “Bad Debts” account?
A) To record debts that will never be collected
B) To track all customer transactions
C) To calculate the gross profit
D) To record credit purchases
Answer: A) To record debts that will never be collected
Question: How does the accounting equation change when a company pays off a loan?
A) Assets decrease, Liabilities decrease
B) Assets increase, Liabilities decrease
C) Assets decrease, Liabilities increase
D) Assets increase, Liabilities increase
Answer: A) Assets decrease, Liabilities decrease
Question: What is the purpose of the Cash Flow Statement?
A) To show the financial position of a business
B) To calculate net profit
C) To report cash inflows and outflows
D) To record daily transactions
Answer: C) To report cash inflows and outflows
Question: How are prepaid expenses treated in the financial statements?
A) Deducted from revenue
B) Added to expenses
C) Deducted from assets
D) Added to liabilities
Answer: B) Added to expenses
Question: What is the significance of the “Going Concern” concept in accounting?
A) Assumes the business will operate indefinitely
B) Assumes the business will close soon
C) Records transactions only when cash is received or paid
D) Ignores future business prospects
Answer: A) Assumes the business will operate indefinitely.
