SS3 First Term Bookkeeping Past Questions And Answers

20 Strategic Stage 3 (SS3) Bookkeeping questions to challenge and strengthen your understanding of this crucial discipline. Each question is accompanied by multiple-choice options and detailed explanations to help you grasp the intricacies of bookkeeping.

 

Question 1:

What is the primary purpose of bookkeeping?

 

a) Financial Analysis

b) Inventory Management

c) Tax Preparation

d) Employee Training

 

Answer:

a) Financial Analysis

 

Question 2:

Which account type does “Accounts Receivable” belong to?

 

a) Asset

b) Liability

c) Equity

d) Expense

 

Answer:

a) Asset

 

Question 3:

What is the accounting equation?

 

a) Assets = Liabilities + Equity

b) Revenue = Expenses

c) Income – Costs = Profit

d) Cash Inflows – Cash Outflows = Balance

 

Answer:

a) Assets = Liabilities + Equity

 

Question 4:

Which financial statement reflects a company’s financial position at a specific point in time?

 

a) Income Statement

b) Cash Flow Statement

c) Balance Sheet

d) Statement of Retained Earnings

 

Answer:

c) Balance Sheet

 

Question 5:

What is the purpose of double-entry bookkeeping?

 

a) Minimize Errors

b) Simplify Record-Keeping

c) Reduce Tax Liability

d) Expedite Financial Reporting

 

Answer:

a) Minimize Errors

 

Question 6:

Which accounting principle states that revenue should be recognized when it is earned?

 

a) Matching Principle

b) Revenue Recognition Principle

c) Historical Cost Principle

d) Conservatism Principle

 

Answer:

b) Revenue Recognition Principle

 

Question 7:

What is the purpose of a trial balance?

 

a) Summarize Financial Transactions

b) Identify Errors and Discrepancies

c) Calculate Net Income

d) Distribute Dividends

 

Answer:

b) Identify Errors and Discrepancies

 

Question 8:

Which type of account increases with a credit entry?

 

a) Asset

b) Liability

c) Revenue

d) Expense

 

Answer:

c) Revenue

 

Question 9:

What does the term “Accrual Basis” mean in accounting?

 

a) Recording transactions when they occur

b) Recording transactions when cash is received or paid

c) Only recording cash transactions

d) Ignoring non-cash transactions

 

Answer:

a) Recording transactions when they occur

 

Question 10:

Which financial statement represents the company’s profitability over a specific period?

 

a) Balance Sheet

b) Income Statement

c) Statement of Cash Flows

d) Statement of Retained Earnings

 

Answer:

b) Income Statement