SS2 First Term Book Keeping Past Questions And Answers

Here are 20 SS2 Bookkeeping questions with options and answers:

Question: What is the primary purpose of bookkeeping?

 

a) To generate profits

b) To record financial transactions

c) To market products

d) To manage human resources

 

Answer: b) To record financial transactions

 

Question: Which of the following is an example of a current liability?

 

a) Buildings

b) Accounts Payable

c) Land

d) Equipment

 

Answer: b) Accounts Payable

 

Question: What is the accounting equation?

 

a) Assets = Liabilities + Equity

b) Assets – Liabilities = Equity

c) Assets + Liabilities = Equity

d) Assets = Liabilities – Equity

 

Answer: a) Assets = Liabilities + Equity

 

Question: Which financial statement represents 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: In double-entry bookkeeping, if an asset account increases, which account must also increase?

 

a) Liability

b) Revenue

c) Equity

d) Another Asset

 

Answer: d) Another Asset

 

Question: What is the purpose of the trial balance?

 

a) To prepare financial statements

b) To ensure the equality of debits and credits

c) To analyze business transactions

d) To calculate tax liabilities

 

Answer: b) To ensure the equality of debits and credits

 

Question: Which of the following is a contra account?

 

a) Prepaid Rent

b) Accounts Receivable

c) Accumulated Depreciation

d) Common Stock

 

Answer: c) Accumulated Depreciation

 

Question: What is the normal balance of an expense account?

 

a) Debit

b) Credit

c) Either debit or credit, depending on the transaction

d) None of the above

 

Answer: a) Debit

 

Question: What is the purpose of the income statement?

 

a) To show the financial position of a company

b) To report revenues and expenses over a period

c) To list the assets and liabilities of a company

d) To calculate the return on investment

 

Answer: b) To report revenues and expenses over a period

 

Question: Which accounting principle states that expenses should be recorded in the same period as the revenues they help to generate?

 

a) Matching Principle

b) Revenue Recognition Principle

c) Consistency Principle

d) Materiality Principle

 

Answer: a) Matching Principle

 

Question: What does FIFO stand for in inventory valuation?

a) First In, Last Out

b) First In, First Out

c) Last In, First Out

d) Last In, Last Out

 

Answer: b) First In, First Out

 

Question: How are dividends treated in the accounting equation?

a) Increase assets

b) Decrease liabilities

c) Decrease equity

d) Increase revenues

 

Answer: c) Decrease equity

 

Question: Which financial statement reflects the company’s profitability over a specific period?

a) Balance Sheet

b) Income Statement

c) Cash Flow Statement

d) Statement of Retained Earnings

 

Answer: b) Income Statement

 

Question: What is the formula for calculating net income?

a) Revenue – Expenses

b) Assets – Liabilities

c) Equity / Time

d) Cash Flow + Investments

 

Answer: a) Revenue – Expenses

 

Question: In which section of the cash flow statement would the purchase of a new building be reported?

a) Operating Activities

b) Investing Activities

c) Financing Activities

d) Assets Activities

 

Answer: b) Investing Activities

 

Question: What is the purpose of the statement of cash flows?

a) To show the financial position of a company

b) To report changes in equity over a period

c) To analyze cash inflows and outflows

d) To calculate return on assets

 

Answer: c) To analyze cash inflows and outflows

 

Question: Which accounting principle requires that the financial statements of a company be prepared assuming that it will continue operating indefinitely?

a) Going Concern Principle

b) Matching Principle

c) Conservatism Principle

d) Revenue Recognition Principle

 

Answer: a) Going Concern Principle

 

Question: What is the purpose of the general ledger?

a) To record daily transactions

b) To prepare financial statements

c) To analyze business trends

d) To calculate tax liabilities

 

Answer: a) To record daily transactions

 

Question: What is the purpose of depreciation in accounting?

a) To increase the value of an asset

b) To allocate the cost of an asset over its useful life

c) To decrease the value of an asset

d) To record changes in equity

 

Answer: b) To allocate the cost of an asset over its useful life

 

Question: Which financial statement shows the changes in retained earnings over a specific pe

riod?

a) Income Statement

b) Balance Sheet

c) Cash Flow Statement

d) Statement of Retained Earnings

 

Answer: d) Statement of Retained Earnings