Question Options Answer
SS 1 -2 FINANCIAL ACCOUNTING. A Bank Reconciliation Statement is prepared to A) calculate profit
B) reconcile the cash book balance with the bank statement balance
C) prepare the balance sheet
D) calculate depreciation
optionB
An unpresented cheque is a cheque that has A) been recorded by the bank
B) not yet been presented to the bank for payment
C) been dishonoured
D) been cancelled
optionB
A direct credit made by a customer into the bank account should be entered in the A) sales journal
B) cash book
C) purchases journal
D) ledger only
optionB
Bank charges appearing on the bank statement should be A) ignored
B) entered in the cash book
C) entered in the sales account
D) recorded in the purchase account
optionB
The Trading Account is prepared to determine A) net profit
B) gross profit
C) working capital
D) capital employed
optionB
Gross profit is calculated as A) Sales less Cost of Goods Sold
B) Sales less Expenses
C) Sales plus Purchases
D) Purchases less Returns
optionA
Which of the following appears in the Trading Account? A) Rent
B) Carriage inward
C) Salaries
D) Office expenses
optionB
The Profit and Loss Account is prepared to determine A) gross profit
B) net profit
C) capital
D) debtors
optionB
Which of the following is an operating expense? A) Carriage inward
B) Salaries
C) Purchases
D) Opening stock
optionB
Net profit is transferred to the A) Capital Account
B) Bank Account
C) Purchases Account
D) Cash Book
optionA
The Balance Sheet shows the financial position of a business on a A) daily basis
B) specific date
C) weekly basis
D) monthly basis
optionB
Which of the following is a current asset? A) Furniture
B) Building
C) Cash at bank
D) Motor vehicle
optionC
Which of the following is a current liability? A) Capital
B) Creditors
C) Land
D) Machinery
optionB
Capital is equal to A) Assets minus Liabilities
B) Assets plus Liabilities
C) Liabilities minus Assets
D) Assets plus Capital
optionA
A Cash Book is mainly used to record A) cash and bank transactions
B) purchases only
C) sales only
D) credit transactions only
optionA
The three-column Cash Book contains A) cash, bank and discount columns
B) cash, purchases and sales columns
C) bank, purchases and discount columns
D) cash, ledger and journal columns
optionA
An overdraft balance appears on the A) debit side of the cash book
B) credit side of the cash book
C) sales account
D) purchases account
optionB
Cash received from debtors is recorded on the A) debit side of the cash book
B) credit side of the cash book
C) trading account
D) balance sheet
optionA
Which of the following is a fixed asset? A) Debtors
B) Cash
C) Building
D) Stock
optionC
Closing stock appears in the A) Trading Account and Balance Sheet
B) Profit and Loss Account only
C) Cash Book only
D) Bank Reconciliation Statement only
optionA
A cheque issued but not yet presented to the bank is called A) dishonoured cheque
B) unpresented cheque
C) stale cheque
D) cancelled cheque
optionB
The balance shown by the cash book is compared with the A) trading account
B) bank statement
C) balance sheet
D) purchases account
optionB
Returns inward is deducted from A) purchases
B) sales
C) expenses
D) capital
optionB
Returns outward is deducted from A) purchases
B) sales
C) assets
D) liabilities
optionA
Cost of goods sold is calculated as A) Opening stock + Purchases − Closing stock
B) Sales − Expenses
C) Capital + Liabilities
D) Purchases − Sales
optionA
The excess of sales over cost of goods sold is A) net profit
B) gross profit
C) capital
D) turnover
optionB
Discount allowed is recorded in the A) cash book
B) trading account
C) balance sheet
D) purchases account
optionA
Discount received is treated as A) expense
B) income
C) liability
D) asset
optionB
Debtors are shown in the A) liabilities side of balance sheet
B) assets side of balance sheet
C) trading account
D) profit and loss account
optionB
Creditors are shown as A) current liabilities
B) fixed assets
C) expenses
D) income
optionA
The left side of a cash book is the A) credit side
B) debit side
C) balance side
D) adjustment side
optionB
The right side of a cash book is the A) debit side
B) credit side
C) asset side
D) expense side
optionB
Bank reconciliation helps to detect A) errors and differences in records
B) only profit
C) only sales
D) only purchases
optionA
An increase in expenses will normally A) increase profit
B) reduce profit
C) increase capital
D) increase sales
optionB
A balance sheet is also known as A) statement of financial position
B) trading statement
C) cash statement
D) income statement
optionA
The main aim of the Profit and Loss Account is to show A) financial position
B) net profit or net loss
C) cash balance
D) balance
optionB
Carriage outward is recorded in the A) Trading Account
B) Profit and Loss Account
C) Balance Sheet
D) Cash Book
optionB
Opening stock is found in the A) Trading Account
B) Balance Sheet
C) Cash Book
D) Bank Statement
optionA
Assets owned by a business are shown on the A) credit side of balance sheet
B) asset side of balance sheet
C) liability side only
D) profit side
optionB
The difference between total assets and total liabilities is A) sales
B) capital
C) expenses
D) revenue
optionB