SS1 First Book Keeping Past Questions and Answers

Question 1:

What is the purpose of a ledger in bookkeeping?

A) To record daily transactions

B) To prepare financial statements

C) Both A and B

D) None of the above

Answer: C) Both A and B

Question 2:

In double-entry bookkeeping, what happens when a liability increases?

A) Debit

B) Credit

C) No effect

D) Depends on the account

Answer: B) Credit

Question 3:

Which financial statement shows the financial position of a business at a specific point in time?

A) Income statement

B) Balance sheet

C) Cash flow statement

D) Statement of changes in equity

Answer: B) Balance sheet

Question 4:

What is the purpose of the trial balance?

A) To check the accuracy of accounts

B) To prepare financial statements

C) To record daily transactions

D) None of the above

Answer: A) To check the accuracy of accounts

Question 5:

If a business purchases office supplies on credit, how would this transaction be recorded?

A) Debit Office Supplies, Credit Accounts Payable

B) Debit Accounts Payable, Credit Office Supplies

C) Debit Cash, Credit Accounts Receivable

D) Debit Accounts Receivable, Credit Cash

Answer: A) Debit Office Supplies, Credit Accounts Payable