SS3 first term book keeping past questions and answers

SS3 first term book keeping past questions and answers

Here are 20 SS3 (Senior Secondary School 3) Bookkeeping questions with options and answers:

Question: What is the purpose of a cash book?

A) Record sales transactions

B) Record cash and bank transactions

C) Track employee salaries

D) Monitor stock levels

Answer: B) Record cash and bank transactions

Question: In double-entry bookkeeping, every transaction affects at least how many accounts?

A) One

B) Two

C) Three

D) Four

Answer: B) Two

Question: What is the formula for calculating gross profit?

A) Sales - Expenses

B) Revenue - Cost of goods sold

C) Net profit / Total revenue

D) Gross margin * Sales

Answer: B) Revenue - Cost of goods sold

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) Statement of retained earnings

Answer: C) Balance sheet

Question: What is depreciation?

A) Increase in asset value

B) Decrease in liability

C) Allocation of cost over time

D) Cash received from customers

Answer: C) Allocation of cost over time

Question: What is the purpose of the journal in the accounting process?

A) Summarize financial transactions

B) Record transactions in a chronological order

C) Calculate total revenue

D) Prepare the balance sheet

Answer: B) Record transactions in a chronological order

Question: A credit entry is recorded on the __________ side of an account.

A) Left

B) Right

C) Top

D) Bottom

Answer: A) Left

Question: What does ROI stand for in financial terms?

A) Return on Investment

B) Rate of Inflation

C) Revenue of Income

D) Ratio of Income

Answer: A) Return on Investment

Question: Which accounting principle states that revenue should be recognized when it is earned and realizable?

A) Matching principle

B) Revenue recognition principle

C) Historical cost principle

D) Consistency principle

Answer: B) Revenue recognition principle

Question: What is the purpose of the trial balance?

A) Calculate net profit

B) Identify errors in the accounts

C) Prepare financial statements

D) Record daily transactions

Answer: B) Identify errors in the accounts

Question: The formula for calculating net profit is:

A) Revenue - Expenses

B) Gross profit - Expenses

C) Revenue - Cost of goods sold

D) Gross profit - Net profit

Answer: A) Revenue - Expenses

Question: What does the term "accounts payable" refer to?

A) Money owed by the company

B) Money owed to the company

C) Cash on hand

D) Revenue generated

Answer: B) Money owed to the company

Question: Which financial statement shows the profitability of a company over a specific period?

A) Balance sheet

B) Income statement

C) Cash flow statement

D) Statement of retained earnings

Answer: B) Income statement

Question: The accounting equation is represented as:

A) Assets = Liabilities + Equity

B) Revenue = Expenses + Profit

C) Income = Expenditure

D) Cash = Credit + Debit

Answer: A) Assets = Liabilities + Equity

Question: What is the purpose of a general ledger?

A) Record daily transactions

B) Prepare financial statements

C) Summarize financial transactions by account

D) Calculate total revenue

Answer: C) Summarize financial transactions by account

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

A) Long-term loan

B) Accounts payable

C) Building

D) Common stock

Answer: B) Accounts payable

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

A) Record small daily transactions

B) Track employee salaries

C) Calculate net profit

D) Prepare the balance sheet

Answer: A) Record small daily transactions

Question: The principle of conservatism in accounting suggests:

A) Recognizing revenue when received

B) Recognizing expenses when incurred

C) Delaying the recognition of both revenue and expenses

D) Ignoring the recognition of revenue and expenses

Answer: B) Recognizing expenses when incurred

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

A) Show the financial position at a point in time

B) Detail the cash inflows and outflows over a period

C) Summarize revenue and expenses

D) Record transactions in chronological order

Answer: B) Detail the cash inflows and outflows over a period

Question: What does the term "amortization" refer to in accounting?

A) Increase in asset value

B) Allocation of cost over time

C) Cash received from customers

D) Decrease in liability

Answer: B) Allocation of cost over time