SS3 Third Term Bookkeeping Past Questions And Answers
Senior Secondary School 3 Third Term Bookkeeping questions with options and answers:
Question: What is the purpose of the “contra-asset” account?
A) Records owner’s withdrawals
B) Offsets the balance of a related asset account
C) Records customer payments
D) Manages bad debts
Answer: B) Offsets the balance of a related asset account
Question: How is the “Interest Paid” 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: When using the perpetual inventory system, how are sales transactions recorded?
A) Directly in the Sales account
B) In the Purchases account
C) In the Sales Returns account
D) In the Sales and Cost of Goods Sold accounts
Answer: D) In the Sales and Cost of Goods Sold accounts
Question: What is the purpose of the “Accumulated Amortization” account?
A) Records the cost of intangible assets
B) Accumulates the depreciation of intangible assets
C) Records sales revenue
D) Manages petty cash
Answer: B) Accumulates the depreciation of intangible assets
Question: How does the “Consistency Principle” contribute to financial reporting?
A) Requires presenting financial statements in a consistent manner
B) Recognizes revenue only when it is earned
C) Delays recognition of expenses until the end of the fiscal year
D) Matches expenses with the revenue they generate
Answer: A) Requires presenting financial statements in a consistent manner
Question: What does the term “Stock Turnover” measure in accounting?
A) The rate at which inventory is sold
B) The level of opening stock
C) The value of closing stock
D) The total assets of a business
Answer: A) The rate at which inventory is sold
Question: How does the “Conservatism Principle” guide the valuation of inventory?
A) Values inventory at market price
B) Prefers understating inventory to avoid overstatement
C) Records inventory at historical cost
D) Ignores the valuation of inventory
Answer: B) Prefers understating inventory to avoid overstatement
Question: What is the purpose of the “Capital Expenditure” account?
A) Records day-to-day expenses
B) Records long-term investments in assets
C) Tracks sales revenue
D) Manages bad debts
Answer: B) Records long-term investments in assets
Question: How is the “Return Outwards” entry recorded in the Purchases Day Book?
A) Debit side
B) Credit side
C) In the Journal
D) In the General Ledger
Answer: B) Credit side
Question: What is the purpose of the “Adjusting Entry” in the accounting cycle?
A) Records the opening balance of all accounts
B) Adjusts the ledger accounts for unrecorded transactions
C) Opens a new ledger account
D) Closes all revenue accounts
Answer: B) Adjusts the ledger accounts for unrecorded transactions
Question: When using the perpetual inventory system, how are purchases recorded?
A) In the Purchases account only
B) Directly in the Cost of Goods Sold account
C) In the Purchases Day Book
D) In the Sales Returns account
Answer: C) In the Purchases Day Book
Question: What is the purpose of the “Capital Reserve” account?
A) Records owner’s withdrawals
B) Accumulates profits for future use
C) Tracks sales revenue
D) Manages bad debts
Answer: B) Accumulates profits for future use
Question: How is the “Allowance for Doubtful Debts” account used?
A) Records actual bad debts written off
B) Accumulates the estimated amount of doubtful debts
C) Records customer payments
D) Manages petty cash
Answer: B) Accumulates the estimated amount of doubtful debts
Question: What is the purpose of the “Revenue Expenditure” account?
A) Records day-to-day expenses
B) Records long-term investments in assets
C) Tracks sales revenue
D) Manages bad debts
Answer: A) Records day-to-day expenses
Question: How does the “Subsidiary Ledger” differ from the General Ledger?
A) Subsidiary Ledger contains detailed information for specific accounts
B) General Ledger records only revenue transactions
C) Subsidiary Ledger tracks owner’s equity
D) General Ledger is used for day-to-day transactions
Answer: A) Subsidiary Ledger contains detailed information for specific accounts
Question: What is the purpose of the “Depreciation Fund” account?
A) Records actual depreciation expenses
B) Accumulates funds for future asset purchases
C) Records sales revenue
D) Manages bad debts
Answer: B) Accumulates funds for future asset purchases
Question: How does the “Materiality Principle” influence financial reporting?
A) Requires presenting financial statements in a consistent manner
B) Emphasizes recording transactions at their original cost
C) Prefers understating assets and income to avoid overstatement
D) Focuses on reporting information that is significant to users
Answer: D) Focuses on reporting information that is significant to users
Question: What does the term “Amortization” refer to in accounting?
A) Process of allocating the cost of intangible assets over time
B) Process of valuing inventory
C) Process of recording bad debts
D) Process of adjusting ledger balances
Answer: A) Process of allocating the cost of intangible assets over time
Question: How does the “Materiality Principle” guide the treatment of small financial transactions?
A) Requires presenting financial statements in a consistent manner
B) Emphasizes recording transactions at their original cost
C) Prefers understating assets and income to avoid overstatement
D) Allows for flexibility in handling immaterial amounts
Answer: D) Allows for flexibility in handling immaterial amounts.
