SS1 Second Term Book Keeping Past Questions and Answers

Question 6:

When recording revenue earned but not yet received in cash, which accounts are affected?

A) Debit Accounts Receivable, Credit Revenue

B) Debit Cash, Credit Revenue

C) Debit Revenue, Credit Accounts Payable

D) Debit Revenue, Credit Cash

Answer: A) Debit Accounts Receivable, Credit Revenue

Question 7:

What is the accounting equation?

A) Assets = Liabilities – Equity

B) Assets = Equity – Liabilities

C) Assets = Liabilities + Equity

D) Assets – Liabilities = Equity

Answer: C) Assets = Liabilities + Equity

Question 8:

If a business pays off a loan, how does this affect the accounting equation?

A) Assets increase, Liabilities decrease

B) Assets decrease, Liabilities increase

C) Assets and Liabilities both increase

D) Assets and Liabilities both decrease

Answer: A) Assets increase, Liabilities decrease

Question 9:

What type of account is “Accumulated Depreciation”?

A) Asset

B) Liability

C) Equity

D) Contra-Asset

Answer: D) Contra-Asset

Question 10:

If a business receives cash in advance for services to be provided later, how is this transaction recorded?

A) Debit Cash, Credit Revenue

B) Debit Unearned Revenue, Credit Cash

C) Debit Accounts Payable, Credit Cash

D) Debit Revenue, Credit Accounts Receivable

Answer: B) Debit Unearned Revenue, Credit Cash