Question 1

What is the primary purpose of accounting?

Accepted Answer

To record and classify business transactions.

Answer

To calculate tax liabilities.

Answer

To manage employee payroll.

Answer

To prepare financial statements for banks.

Question 2

In double-entry bookkeeping, what does the acronym DEAD CLIC stand for?

Accepted Answer

Debits increase Expenses, Assets, Drawings; Credits increase Liabilities, Income, Capital.

Answer

Debits decrease Excess, Assets, Drawings; Credits decrease Liabilities, Income, Capital.

Answer

Debits equal Assets, Earnings, Dividends; Credits equal Liabilities, Income, Capital.

Answer

Debits equal Expenses, Assets, Dividends; Credits equal Liabilities, Income, Cash.

Question 3

What is the role of a trial balance?

Accepted Answer

To ensure that total debits equal total credits.

Answer

To prepare financial statements.

Answer

To record daily transactions.

Answer

To calculate profits and losses.

Question 4

Which document is used to authorize a purchase transaction?

Accepted Answer

Purchase order.

Answer

Credit note

Answer

Sales invoice

Answer

Delivery note

Question 5

What is the purpose of a remittance advice?

Accepted Answer

To indicate what invoices are being paid.

Answer

To acknowledge receipt of payment.

Answer

To confirm delivery of goods.

Answer

To request payment from a customer.

Question 6

In bookkeeping, what is meant by the term 'imprest system'?

Accepted Answer

A system where a fixed amount of petty cash is maintained and replenished based on the amount spent.

Answer

A method for recording all transactions digitally.

Answer

A method of preparing financial statements monthly.

Answer

A system that tracks all cash sales in real time.

Question 7

What document is usually generated to show the total sales and any outstanding balances for a customer?

Accepted Answer

Statement of account.

Answer

Purchase order

Answer

Sales invoice

Answer

Delivery note

Question 8

What happens to a customer's balance when a prompt payment discount is applied?

Accepted Answer

The balance decreases.

Answer

A new invoice is issued.

Answer

The balance remains the same.

Answer

The balance increases.

Question 9

What does VAT stand for?

Accepted Answer

Value Added Tax.

Answer

Voluntary Allocation Tax

Answer

Variable Assessment Tax

Answer

Value Assessment Tax

Question 10

What is a cash book?

Accepted Answer

A record of cash receipts and payments.

Answer

A summary of all bank accounts.

Answer

A document for recording employee hours.

Answer

A ledger for tracking inventory.

Question 11

Which accounts are impacted when a customer makes a payment?

Accepted Answer

Bank account and receivable account.

Answer

Cash account and payable account

Answer

Expense account and equity account

Answer

Sales account and inventory account

Question 12

What does a petty cash book record?

Accepted Answer

Small cash transactions for minor expenditures.

Answer

Only payments to suppliers

Answer

Large capital expenditures

Answer

All cash receipts and payments

Question 13

What is a recurring entry?

Accepted Answer

A journal entry that is recorded periodically.

Answer

A customer's payment record

Answer

An annual summary

Answer

One-time transactions

Question 14

How are discounts recorded when a customer pays early?

Accepted Answer

As a reduction in the receivable account and an expense in the discounts allowed account.

Answer

As additional income

Answer

As a liability

Answer

As inventory loss

Question 15

Which of the following is a type of discount that encourages early payment?

Accepted Answer

Prompt payment discount.

Answer

Trade discount

Answer

Seasonal discount

Answer

Bulk discount

Question 16

Which financial statement shows a company's assets and liabilities at a specific point in time?

Accepted Answer

Statement of financial position.

Answer

Trial balance

Answer

Cash flow statement

Answer

Income statement

Question 17

What types of accounts are maintained in a subsidiary ledger?

Accepted Answer

Individual receivable and payable accounts.

Answer

Only income and expense accounts

Answer

Only inventory accounts

Answer

Only cash accounts

Question 18

Which document is generated by a business to confirm a customer's order?

Accepted Answer

A sales order.

Answer

A purchase order.

Answer

A delivery note.

Answer

An invoice.

Question 19

Which type of account is used to track individual customer debts?

Accepted Answer

Receivables ledger.

Answer

General ledger.

Answer

Cash book.

Answer

Payables ledger.

Question 20

What is the significance of a trial balance in accounting?

Accepted Answer

It ensures that debits equal credits in the ledger accounts.

Answer

It lists all bank transactions.

Answer

It tracks asset depreciation.

Answer

It calculates net income.

Question 21

What is a petty cash system primarily used for?

Accepted Answer

To handle small, everyday expenses.

Answer

To manage large business transactions

Answer

To process sales invoices

Answer

To control bank accounts

Question 22

What is a subsidiary ledger?

Accepted Answer

A set of accounts that provide details behind the total in the general ledger.

Answer

An external financial report

Answer

A tax report

Answer

A summary of financial transactions

Question 23

What is the accounting equation in its simplest form?

Accepted Answer

Assets = Liabilities + Equity.

Answer

Revenue = Expenses + Assets

Answer

Income = Expenses + Profit

Answer

Assets - Liabilities = Equity

Question 24

In double-entry bookkeeping, a credit entry represents an increase to which type of account?

Accepted Answer

Liabilities

Answer

Equity

Answer

Assets

Answer

Expenses

Question 25

What does a statement of account provide to customers?

Accepted Answer

Details of all invoices, credit notes, and outstanding payments.

Answer

An overview of market trends

Answer

A list of supplier contacts

Answer

A summary of business expenses

Question 26

In a sales day book, what does the total net amount represent?

Accepted Answer

The total sales figure excluding VAT.

Answer

The total amount due including VAT

Answer

The amount owed by customers

Answer

The profit made on sales

Question 27

What is the first step in preparing a trial balance?

Accepted Answer

Total all the debits and credits from the ledger accounts.

Answer

Analyze expenses.

Answer

Record sales and purchase invoices.

Answer

Reconcile bank statements.

Question 28

What are control accounts?

Accepted Answer

Accounts that summarize the totals of individual subsidiary accounts.

Answer

Accounts without any balances.

Answer

Accounts that only track cash.

Answer

Accounts that track all transactions.

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