SS3 Second Term Bookkeeping Past Questions And Answers
20 Senior Secondary School 3 Second Term Bookkeeping questions with options and answers:
Question: How does the Straight-line method calculate depreciation?
A) Based on the asset’s market value
B) Allocates an equal amount of depreciation each year
C) Front-loads depreciation in the early years
D) Calculates depreciation based on usage
Answer: B) Allocates an equal amount of depreciation each year
Question: What does the term “Accounts Receivable” represent in the ledger?
A) Money owed by the business to suppliers
B) Money owed to the business by customers
C) Cash on hand
D) Money invested by the owner
Answer: B) Money owed to the business by customers
Question: How is the cost of goods sold calculated?
A) Opening stock + Purchases – Closing stock
B) Opening stock – Purchases + Closing stock
C) Opening stock x Purchases – Closing stock
D) Opening stock / Purchases + Closing stock
Answer: A) Opening stock + Purchases – Closing stock
Question: What is the purpose of the “Return Inwards” account?
A) Records goods returned by customers
B) Records goods returned to suppliers
C) Tracks sales revenue
D) Manages petty cash
Answer: A) Records goods returned by customers
Question: What does the term “Double-entry” mean in accounting?
A) Recording transactions twice
B) Using two different types of accounts
C) Entering transactions on two separate days
D) Recording the dual effect of each transaction
Answer: D) Recording the dual effect of each transaction
Question: How does the Accumulated Depreciation account appear in the balance sheet?
A) As an asset
B) As a liability
C) As a contra-asset
D) As an expense
Answer: C) As a contra-asset
Question: What is the purpose of the “Prepaid Income” account?
A) Records income received in advance
B) Records income earned but not yet received
C) Records expenses paid in advance
D) Records expenses incurred but not yet paid
Answer: A) Records income received in advance
Question: When is the Weighted Average method used in valuing inventory?
A) When there are frequent price changes
B) When inventory levels remain constant
C) When using perpetual inventory system
D) When there are seasonal fluctuations
Answer: A) When there are frequent price changes
Question: What does the term “Trial Balance” help to identify?
A) Net Profit
B) Errors in the ledger
C) Cost of Goods Sold
D) Accumulated Depreciation
Answer: B) Errors in the ledger
Question: How does the Income Summary account contribute to the closing process?
A) Records all income transactions
B) Serves as a temporary account to close revenue and expense accounts
C) Calculates net profit
D) Tracks long-term liabilities
Answer: B) Serves as a temporary account to close revenue and expense accounts
Question: What is the purpose of the “Imprest System” in Petty Cash management?
A) Allows unlimited spending
B) Requires periodic reimbursement to maintain a constant balance
C) Tracks all business transactions
D) Eliminates the need for petty cash
Answer: B) Requires periodic reimbursement to maintain a constant balance
Question: How does the Diminishing Balance method calculate depreciation?
A) Allocates an equal amount of depreciation each year
B) Front-loads depreciation in the early years
C) Reduces the asset’s book value by a fixed percentage each year
D) Calculates depreciation based on usage
Answer: C) Reduces the asset’s book value by a fixed percentage each year
Question: What is the purpose of the “Opening Entry” in the accounting cycle?
A) Records the opening balance of all accounts
B) Opens a new ledger account
C) Adjusts the closing stock
D) Closes all revenue accounts
Answer: A) Records the opening balance of all accounts
Question: How does the perpetual inventory system differ from the periodic inventory system?
A) Perpetual system requires physical counts
B) Periodic system updates inventory after each transaction
C) Perpetual system provides real-time inventory information
D) Periodic system eliminates the need for an inventory ledger
Answer: C) Perpetual system provides real-time inventory information
Question: What is the purpose of the “Discount Allowed” account?
A) Records discounts received from suppliers
B) Records discounts offered to customers
C) Tracks sales revenue
D) Manages bad debts
Answer: B) Records discounts offered to customers
Question: How is the “Interest Received” entry recorded in the Cash Book?
A) Debit side
B) Credit side
C) In the Bank Reconciliation Statement
D) In the Journal
Answer: A) Debit side
Question: What is the significance of the “Conservatism Principle” in accounting?
A) Recognizes revenue only when it is earned
B) Emphasizes recording transactions at their original cost
C) Prefers understating assets and income to avoid overstatement
D) Requires presenting financial statements in a consistent manner
Answer: C) Prefers understating assets and income to avoid overstatement
Question: How does the “Matching Principle” guide the recognition of expenses in accounting?
A) Recognizes expenses only when cash is paid
B) Matches expenses with the revenue they generate
C) Records expenses in the period they are incurred
D) Delays recognition of expenses until the end of the fiscal year
Answer: B) Matches expenses with the revenue they generate
Question: What is the purpose of the “Drawing Account” in the ledger?
A) Records owner’s withdrawals from the business
B) Records investments made by the owner
C) Tracks sales revenue
D) Manages bad debts
Answer: A) Records owner’s withdrawals from the business.
