SS3 Third Term Bookkeeping Past Questions And Answers

SS3 Bookkeeping questions with options and answers:

 

Question 81:

What is the purpose of the “Statement of Cash Flows”?

 

a) Summarize financial transactions

b) Illustrate changes in equity over a specific period

c) Analyze cash inflows and outflows

d) Calculate net income

 

Answer:

c) Analyze cash inflows and outflows

 

Question 82:

Which financial statement shows the changes in a company’s retained earnings over a specific period?

 

a) Balance Sheet

b) Income Statement

c) Statement of Cash Flows

d) Statement of Retained Earnings

 

Answer:

d) Statement of Retained Earnings

 

Question 83:

What is the purpose of the “Adjusting Journal Entries”?

 

a) Record day-to-day transactions

b) Correct errors in the trial balance

c) Prepare financial statements

d) Summarize financial transactions

 

Answer:

b) Correct errors in the trial balance

 

Question 84:

Which term represents the amount by which total revenue exceeds total expenses?

 

a) Net Income

b) Gross Profit

c) Operating Income

d) EBITDA

 

Answer:

a) Net Income

 

Question 85:

What does the term “Debit Memo” refer to in bookkeeping?

 

a) A record of money owed by a business

b) An entry that increases liabilities

c) A note of debit transactions in the ledger

d) A document indicating a reduction in accounts receivable

 

Answer:

c) A note of debit transactions in the ledger

 

Question 86:

Which financial statement provides a summary of a company’s cash position at a specific point in time?

 

a) Income Statement

b) Balance Sheet

c) Statement of Cash Flows

d) Statement of Retained Earnings

 

Answer:

c) Statement of Cash Flows

 

Question 87:

What is the purpose of the “Conservatism Principle” in accounting?

 

a) Record transactions at their original cost

b) Report assets and revenues lower and liabilities and expenses higher

c) Recognize revenue when it is earned

d) Allocate the cost of an asset over its useful life

 

Answer:

b) Report assets and revenues lower and liabilities and expenses higher

 

Question 88:

In the context of bookkeeping, what is the role of the “General Ledger”?

 

a) Record day-to-day transactions

b) Prepare financial statements

c) Organize the Chart of Accounts

d) Verify the accuracy of the trial balance

 

Answer:

a) Record day-to-day transactions

 

Question 89:

What is the purpose of the “Accruals” in accounting?

 

a) Recognize revenue when it is earned

b) Record expenses when they are paid

c) Only record cash transactions

d) Calculate profit margins

 

Answer:

a) Recognize revenue when it is earned

 

Question 90:

Which financial statement provides information about a company’s cash and cash equivalents?

 

a) Balance Sheet

b) Income Statement

c) Statement of Cash Flows

d) Statement of Retained Earnings

 

Answer:

c) Statement of Cash Flows

 

Question 91:

What does the term “Fiscal Year” refer to in accounting?

 

a) A calendar year, starting in January and ending in December

b) A 52-week period

c) Any 12-month period used for financial reporting

d) A period of 365 days

 

Answer:

c) Any 12-month period used for financial reporting

 

Question 92:

Which financial statement reflects a company’s revenues and expenses over a specific period?

 

a) Balance Sheet

b) Income Statement

c) Cash Flow Statement

d) Statement of Retained Earnings

 

Answer:

b) Income Statement

 

Question 93:

What is the purpose of the “Petty Cash” account?

 

a) Record small, day-to-day transactions

b) Track major capital expenditures

c) Calculate depreciation

d) Prepare financial statements

 

Answer:

a) Record small, day-to-day transactions

 

Question 94:

Which term represents the total value of a company’s outstanding shares of stock?

 

a) Market Capitalization

b) Earnings Per Share (EPS)

c) Price-to-Earnings (P/E) Ratio

d) Dividend Yield

 

Answer:

a) Market Capitalization

 

Question 95:

What is the purpose of the “Going Concern Principle” in accounting?

 

a) Record transactions at their original cost

b) Report assets and revenues lower and liabilities and expenses higher

c) Assume the business will continue operating indefinitely

d) Recognize revenue when it is earned

 

Answer:

c) Assume the business will continue operating indefinitely

 

Question 96:

In double-entry bookkeeping, what happens when you debit a liability account?

 

a) Increase in Liability

b) Decrease in Liability

c) Increase in Asset

d) Decrease in Asset

 

Answer:

a) Increase in Liability

 

Question 97:

What does the term “Materiality Principle” suggest in accounting?

 

a) Record transactions at their original cost

b) Report assets and revenues lower and liabilities and expenses higher

c) Recognize significant information that could influence decisions

d) Allocate the cost of an asset over its useful life

 

Answer:

c) Recognize significant information that could influence decisions

 

Question 98:

Which term represents the amount by which total expenses exceed total revenue?

 

a) Gross Profit

b) Net Income

c) Operating Loss

d) EBITDA

 

Answer:

c) Operating Loss

 

Question 99:

What is the purpose of the “Accumulated Other Comprehensive Income” account?

 

a) Record realized gains and losses

b) Track changes in the fair value of certain assets

c) Record cash transactions

d) Prepare financial statements

 

Answer:

b) Track changes in the fair value of certain assets

 

Question 100:

In the context of inventory, what does “Obsolete Inventory” refer to?

 

a) Inventory that is slow-moving

b) Inventory that is no longer usable or saleable

c) Inventory with the highest market value

d) Inventory that is in high demand

 

Answer:

b) Inventory that is no longer usable or saleable