SS2 first term book keeping past questions and answers

SS2 first term book keeping past questions and answers

Here are 20 SS2 Bookkeeping questions with options and answers:

Question: What is the purpose of a cash book?

A) Record credit transactions

B) Record cash and bank transactions

C) Record only expenses

D) Record only income

Answer: B) Record cash and bank transactions

Question: What is the accounting equation?

A) Assets = Liabilities - Owner's Equity

B) Assets = Liabilities + Owner's Equity

C) Assets = Liabilities / Owner's Equity

D) Assets = Liabilities x Owner's Equity

Answer: B) Assets = Liabilities + Owner's Equity

Question: In the trial balance, where should you place closing stock?

A) Debit side

B) Credit side

C) Trading account

D) Profit and loss account

Answer: D) Profit and loss account

Question: What type of account is a bank account?

A) Personal account

B) Real account

C) Nominal account

D) Revenue account

Answer: A) Personal account

Question: What is the purpose of a journal in bookkeeping?

A) Summarize financial transactions

B) Record day-to-day transactions

C) Calculate profit

D) Prepare financial statements

Answer: B) Record day-to-day transactions

Question: Depreciation is a process of:

A) Increasing asset value

B) Decreasing asset value

C) Excluding assets from the books

D) Ignoring asset value

Answer: B) Decreasing asset value

Question: Which financial statement shows a company's financial position at a specific point in time?

A) Income statement

B) Cash flow statement

C) Balance sheet

D) Trial balance

Answer: C) Balance sheet

Question: What is the purpose of a petty cash book?

A) Record major expenses

B) Record small, routine expenditures

C) Record only cash sales

D) Record only credit sales

Answer: B) Record small, routine expenditures

Question: If a business has more liabilities than assets, it is in a:

A) Profitable position

B) Solvent position

C) Liquid position

D) Insolvent position

Answer: D) Insolvent position

Question: What does ROI stand for in accounting?

A) Return on Investment

B) Rate of Interest

C) Revenue on Income

D) Record of Inventory

Answer: A) Return on Investment

Question: What is the formula for calculating net profit?

A) Net Profit = Revenue - Expenses

B) Net Profit = Revenue + Expenses

C) Net Profit = Revenue x Expenses

D) Net Profit = Revenue / Expenses

Answer: A) Net Profit = Revenue - Expenses

Question: What is the dual aspect concept in accounting?

A) Every debit has a corresponding credit

B) Only credits are recorded

C) Only debits are recorded

D) Debits and credits are unrelated

Answer: A) Every debit has a corresponding credit

Question: What is the purpose of a ledger in accounting?

A) Record daily transactions

B) Summarize financial position

C) Classify and store transactions by accounts

D) Prepare financial statements

Answer: C) Classify and store transactions by accounts

Question: In the context of financial statements, what does COGS stand for?

A) Cost of Goods Sold

B) Cash on Goods Sold

C) Credit on Goods Sold

D) Cost on Goods Sold

Answer: A) Cost of Goods Sold

Question: What is the purpose of a trial balance?

A) Prepare financial statements

B) Verify the arithmetical accuracy of accounts

C) Record daily transactions

D) Calculate profit

Answer: B) Verify the arithmetical accuracy of accounts

Question: Which account represents the owner's investment in a business?

A) Revenue account

B) Liability account

C) Capital account

D) Expense account

Answer: C) Capital account

Question: What is the accounting equation when a business makes a sale on credit?

A) Assets = Liabilities - Owner's Equity

B) Assets = Liabilities + Owner's Equity + Accounts Receivable

C) Assets = Liabilities + Owner's Equity - Accounts Payable

D) Assets = Liabilities + Owner's Equity - Revenue

Answer: B) Assets = Liabilities + Owner's Equity + Accounts Receivable

Question: Which financial statement represents a company's profitability over a specific period?

A) Balance sheet

B) Income statement

C) Cash flow statement

D) Trial balance

Answer: B) Income statement

Question: What is the accounting treatment for an increase in liabilities?

A) Debit

B) Credit

C) No effect

D) Depends on the transaction

Answer: B) Credit

Question: What is the purpose of a cash flow statement?

A) Record cash and bank transactions

B) Summarize financial position

C) Analyze cash inflows and outflows

D) Prepare income statement

Answer: C) Analyze cash inflows and outflows