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1 Which statement about a computerised accounting system is correct?

A The general ledger does not include non-current asset accounts.

B The income statement always shows a profit.
C The statement of financial position does not include non-current asset accounts.
D The trial balance always balances.

2 Which is a liability of a business?

A amount owing by credit customers

B amount owing to credit suppliers
C long term loan to employee
D property tax paid in advance

3 A business bought a computer for office use and paid by cheque.

How will the business record the transaction?

Account to be debited Account to be credited

A bank office equipment
B office equipment bank
C bank purchases
D purchases bank

4 A trader divides his ledger into sales, purchases and general ledgers.
Which statement is not correct?

A It is easier to locate and refer to ledger accounts.

B Maintaining the ledger can be divided between several people.
C The same type of accounts can be kept together.
D There are fewer entries in the sales and purchases accounts.

5 Which of the following statement is incorrect?

A Assets – Capital = Liabilities

B Liabilities + Capital = Assets
C Liabilities + Assets = Capital
D Assets – Liabilities = Capital

6 Goods for re-sale are bought for cash.

What are the entries in the books of the purchaser?

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 Account debited Account credited
A cash purchases
B cash supplier
C purchases cash
D supplier cash

7 X keeps a full set of books of account.

Where will the Sales account appear?

A general journal B general ledger C sales journal D sales ledger

8 A firm has received the following business documents from X, a supplier.

$
October 5 invoice 650
October 10 invoice 120
October 12 credit note 150
October 22 invoice 230
November 4 invoice 790

What was the total purchase at 31 October?

A $1000 B $1150 C $1640 D $1940

9 X buys goods on credit from Y. The goods are unsuitable and X returns them to Y.

Which document should Y issue to X on receipt of the returned goods?

A credit note B debit note C purchase invoice D receipt

10 A business purchases goods on credit for $800, less 25% trade discount.
How much will the business record in Purchase Journal?

A $560 B $570 C $600 D $760

11 Which of the following is not an asset?

A Buildings B Cash Balance C Accounts receivable D Loan from K. Harris

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12 Which of the following is a liability?

A Machinery B Accounts payable for goods C Motor Vehicles D Cash at bank

13 Which of the following is incorrect?

Assets Liabilities Capital

$ $ $
A 7,850 1,250 6,600
B 8,200 2,800 5,400
C 9,550 1,350 8,200
D 6,450 1,120 5,420

14 Which of the following statement is correct?

Effect upon
Assets Liabilities
A We paid a creditor by cheque –Bank –Accounts payable
B A debtor paid us $90 in cash +Cash +Accounts receivable
C J. Hall lends us $500 by cheque +Bank –Loan from Hall
D Bought goods on credit +Inventory +Capital

15 Which of the following best describes the meaning of ‘Purchases’?

A Items bought
B Goods bought on credit
C Goods bought for resale
D Goods paid for

16 A retailer bought 20 items from a manufacturer at list price of $20 each, subject to 20%
trade discount. The retailer later returned 10 of the items. How much is entered in the Sales
Returns Journal of the manufacturer?

A $160 B $200 C $240 D $320

17 Winston sold goods sold on credit.

Which general journal entry records this?

Account debited Account credited

A Trade receivable Sales
B Sales Cash
C Sales Bad debts
D None of the above
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18 Which of the following should not be called ‘Sales’?

A Office fixtures sold

B Goods sold on credit
C Goods sold for cash
D Sale of item previously included in ‘Purchases’

19 Given the following, what is the amount of Capital?

Assets: Premises $20,000; Inventory $8,500; Cash $100.

Liabilities: Accounts payable $3,000; Loan from A. Adams $4,000

A $21,100 B $21,600 C $32,400 D $21,400

20 What is the balance on the following account on 31 May 2024?

C. De Freitas

2024 $ 2024 $

May 1 Sales 205 May 17 Cash 300

14 Sales 360 28 Returns 50

30 Sales 180

A A credit balance of $395

B A debit balance of $380
C A debit balance of $395
D There is a nil balance on the account

21 Which of the following possible double-entries is correct?

Account to debit Account to Credit

A Bank Bank
B Machinery Bank
C Both of the above
D None of the above

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22 A firm’s trial balance . . .

A shows its financial position.
B establishes whether its accounting records are correct.
C lists all of the entries in its double-entries accounting records.
D is a list of all of the balance brought down in the double-entry accounting records.

23 Which statement is correct?

A Accounting involves measuring profits and losses.

B Accounting is the recording of financial transactions.
C Book-keeping involves communicating financial data.
D Book-keeping requires the use of ratio analysis.

24 $
Loan from XY Finance 10 000
Wages due 620
Rent prepaid 240
Trade receivables 3 300
Trade payables 4 650
Motor vehicles 8 000

What was the total of the liabilities?

A $13 920 B $14 890 C $15 270 D $17 270

25 On 2 April Nina received a cheque from Zaffar, a credit customer.

On 12 April the cheque was returned unpaid by the bank.

What entry would Nina make on 12 April?

Account to be debited Account to be credited

A irrecoverable debts bank
B irrecoverable debts Zaffar
C provision for doubtful debts Zaffar
D Zaffar bank

26 What is recorded in the sales journal?

A all money received from sales C all sales transactions

B cash sales transactions D credit sales transactions
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27 Which of the following is a ‘Book of Original Entry’?

A The sales (debtors) ledger.
B The purchases journal (daybook).
C The general (nominal) ledger.
D The purchases (creditors) ledger.

28 Which of the following is a personal account?

A Buildings B Wages. C Trade receivable D None of the above.

29 ‘Posting’ means . . .

A making the first record of transactions.

B recording transactions in a book of original entry
C transferring the total(s) of a book of original entry to the nominal (general) ledger 1
D None of the above.

30 Credit notes issued by a firm should initially be record in . . .

A the sales account in its nominal (general) ledger.

B the returns inwards account in its nominal (general) ledger.
C the returns inwards journal.
D the returns outwards journal.

31 Which statements about trade discount are correct?

1 It is debited to the supplier’s account.

2 It is only given if the invoice is paid within the period allowed by the supplier.
3 It is shown as a deduction from the price of the goods on an invoice.
4 It is used to encourage bulk buying.

A 1 and 2 B 1 and 3 C 2 and 4 D 3 and 4

32 Why is a trial balance prepared?

A to analyse the financial information

B to assist preparation of financial statements
C to control the costs of the business
D list of the balance on a certain date

33 When a firm pays one of its trade payables by cheque, the effect on its assets and
liabilities is:
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Effect upon Assets Effect upon Liabilities

A Reduce bank Reduce trade payable
B Increase bank Increases trade payable
C Reduce bank Increase creditors
D Nope of the above

34 Which of the following statement is correct?

A To record an increase in any given asset account that account must be debited.
B To record a decrease in capital, the capital account must be credited.
C To record an increase in any given liability account that account must be debited.
D To record a decrease in any given liability account that account must be credited.

35 ‘Credit sales’ the journal entry is-

A Trade receivable Dr. Sales Cr. C Cash Dr. Sales Cr.

B Both of the above D None of the above

36 Which of following is the item of ‘Sales return Journal’?

A Credit sales B Cash sales C Goods return from customer D Goods return to
supplier

37 Rakib account
Date Details $ Date Details $

May 1 Sales 750 May 5 Bank 700

May 15 Sales 1500 Discount allowed 50

May 25 Sales 1200 May 28 Cash 2000

May 31 Balance c/d ?

---------- ---------

3450 3450

---------- ---------

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How much is the balance on 31 May?

A $700 Dr. B $750 Dr. C $3450 Dr. D $3450 Cr.

38 Which of the following are entered in the Purchases Journal (otherwise known as the
Purchases Daybook)?

A Payments to suppliers. B Invoice receive from suppliers.

C The general (nominal ledger). D The purchases (creditors’ ledger).

39 Which of the following is a personal account?

A Buildings. B Wages. C Salary D None of the above.

40 The total of the purchases invoices recorded in the Purchases Journal is posted to . . .

A the credit side of the purchases account in the general ledger.

B the debit side of the purchases daybook.
C the credit side of the purchases daybook.
D the debit side of the purchases account in the general ledger.

41 Which is a liability of a business?

A amount owing by credit customers B amount owing to credit suppliers

C long term loan to employee D property tax paid in advance

42 Which of the following possible double-entries is correct?

Account to debit Account to Credit

A Bank Bank
B Cash Cash
C Both of the above
D None of the above

43 In accounting, the term ‘purchases’ means...

A all items bought B only goods bought on credit.

C only those goods bought for resale D only goods bought and paid for.

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44 In the case of a sole trader...

A earnings profit does not affect capital. B earning profit reduces capital.
C capital can arise only by earning profit D earning profit increases capital.

45 Which of the following is not a ‘Book of Original Entry’?

A Sales Ledger. B The purchases journal (daybook).

C The sales journal D The purchases return journal

46 Which of the following is an asset?

A Loan B Trade payable C Bank overdraft D Premises

47 Which of the following is an expense?

A Machinery B Cash C Salary D Trade payable

48 Accounting means:

(a) preparation of final accounts.

(b) an art of recording.
(c) recording business transaction.
(d) none of the above.

49 Book keeping is mainly concerned with:

(a) recording of transactions in the books of accounts.

(b) designing the accounting system.
(c) interpreting the data for internal and external users.
(d) None of the above.

50 The owner of a business withdraws cash for own use. It should be recorded as:
Debit Credit
(a) Purchases Drawings
(b) Bank Stock
(c) Drawing Cash
(d) Stock Drawings