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1 Which of the following is part of the double entry system in Accounting?

A Cash book B General journal C Sales journal D Trial balance

✅ Correct Answer: 1

2 In which of the following book returns inwards are recorded?

A Sales returns book B Purchase returns book C Cash receipts book D Cash payment book

✅ Correct Answer: 1

3 What is the net amount of cash paid to the supplier if: Credit purchases $12,000 out of which $2,000 were rejected and subsequently returned to the supplier. Supplier allowed a discount of 1% on settlement of amount.

A $10,000 B $12,000 C $9,900 D $11,880

✅ Correct Answer: 3

4 The main source(s) of Generally Accepted Accounting Principles (GAAP) is/are:

A Company Law B Accounting standards C Both A and B D None of these

✅ Correct Answer: 3

5 What standards are used to prepare financial statements by most of the countries and companies

A International Financial Reporting Standards B International Financial Accounting Standards C International Accounting & Auditing Standards D International Risk Reporting Standards

✅ Correct Answer: 1

6 The correct form of Accounting equation is

A Assets + Liabilities = Equity B Assets - Liabilities = Equity C Assets - Receivable = Equity D Assets + Receivable = Equity

✅ Correct Answer: 2

7 A company sold goods worth $5,000 on 5 June and $10,000 on 28 June. The company received the first payment on 25 June and second on 7 July. The company prepared the financial statement on 30 June. What would be the total sale on the financial statement?

A $0 B $5,000 C $10,000 D $15,000

✅ Correct Answer: 4

8 Advance payments are recognized as

A receivable B payable C bad debt D none of these

✅ Correct Answer: 1

9 What from the following is NOT a current asset?

A Patent rights B Inventory C Cash D Trade receivables

✅ Correct Answer: 1

10 What from the following is NOT a non-current asset?

A Capital B Property C Patent rights D Inventory

✅ Correct Answer: 4

11 A machine price was $1,000 and was carried through a truck. The trucks fares were $500. The engineers charged $500 for the installation. The cost of the machine is?

A $1,000 B $1,500 C $2,000 D $2,500

✅ Correct Answer: 3

12 Depreciable amount =

A Cost of an asset + Residual value B Cost of an asset - Residual value C Residual value - Cost of an asset D None of these

✅ Correct Answer: 2

13 The accounting process of allocation cost of intangible assets is called

A Amortization B Depletion C Going Concern D Residual Value

✅ Correct Answer: 1

14 The process of recording consumption of natural resources (or wasting assets) is called

A Amortization B Depletion C Going Concern D Residual Value

✅ Correct Answer: 2

15 The concept that the enterprise will continue in a foreseeable future is known as

A Amortization B Depletion C Going Concern D Residual Value

✅ Correct Answer: 3

16 What from the following is NOT a capital expense?

A Purchase of property B Purchase of office equipment C Replacement of a vehicle, D Repair of a vehicle

✅ Correct Answer: 4

17 An item of equipment cost $300,000 and has a residual value of $50,000 at the end of its expected useful life of four years. What is the depreciable amount?

A $50,000 B $250,000 C $300,000 D $350,000

✅ Correct Answer: 2

18 The expected disposal value of the asset (after deducting disposal costs) at the end of its expected useful life is called

A residual value B net book value C depreciation D substance over form

✅ Correct Answer: 1

19 The figure that appears in the statement of financial position, after the depreciation, is known as

A depreciation B substance over form C residual value D net book value

✅ Correct Answer: 4

20 Depreciation is normally charged as

A payable B receivable C expenses D advances

✅ Correct Answer: 3

21 A company purchases a non-current asset in Year 1 for $90,000. The depreciation charge is $15,000. What net book value would be recorded in financial position statement (or balance sheet) at the end of Year-2?

A $75,000 B $60,000 C $30,000 D $15,000

✅ Correct Answer: 2

22 Raw materials that are remaining at the end of the reporting period are treated as

A liabilities B expenses C fixed assets D current assets

✅ Correct Answer: 4

23 The goods that have been sold to the customers are treated as _____ in the financial statements.

A inventories B expenses C income D debt

✅ Correct Answer: 2

24 The goods that have not been sold to the customers till the end of the reporting period are considered as

A inventories B expenses C sales D purchases

✅ Correct Answer: 1

25 The selling price of some goods is $1500 and cost to sell the goods is $200. What is the Net Realizable Value (NRV)?

A $1000 B $1200 C $1300 D $1500

✅ Correct Answer: 3

26 The selling price of some under-process goods is $1500, cost to finally produce the goods is $300, and cost to sell the goods is $200. What is the Net Realizable Value (NRV)?

A $1000 B $1200 C $1300 D $1500

✅ Correct Answer: 1

27 A bank overdraft is shown as a/an _____ balance in the bank statement.

A debit B credit C credit - debit D none of these

✅ Correct Answer: 1

28 Which from the following is included in the cost of purchases?

A Abnormal loss B Freight in C Rent of store D Administrative Salaries

✅ Correct Answer: 2

29 Cheques issued but not presented, cause the bank statement balance to be ________ the cash book balance.

A greater than B less than C equal to D the two statements are irrelevant

✅ Correct Answer: 1

30 The capital of a business is $100,000 and the liabilities are $40,000. What are the total assets?

A $40,000 B $60,000 C $100,000 D $140,000

✅ Correct Answer: 4

31 Any transaction which cannot be recorded in any book of prime entry is recorded in

A Cash book B Petty cash book C General journal D Day books

✅ Correct Answer: 3

32 The withdrawal of inventory by the owner for personal use should appear in the trading account as a deduction from

A sales B purchases C overdrafts D none of these

✅ Correct Answer: 2

33 A company had opening inventory of $200,000. Sales and purchases during the period were of $400,000 and $80,000 respectively. What is the gross profit for the period if the closing inventory was worth $100,000?

A $20,000 B $120,000 C $220,000 D $320,000

✅ Correct Answer: 3

34 Which from the following costs are included in conversion costs?

A Carriage in B Carriage outwards C Commission of selling staff D Supervisors wages

✅ Correct Answer: 4

35 Goods which originally cost $800 were sold for $1,000. In the accounting equation Net Assets will?

A Rise by $1,000 B Rise by $200 C Fall by $1,000 D Fall by $200

✅ Correct Answer: 2

36 A debit entry usually represents

A Assets and Expenses B Assets and Income C Liabilities and Income D Liabilities and Expenses

✅ Correct Answer: 1

37 The capital of a business would change as a result of:

A Raw material being purchased on credit B Non-current assets being purchased on credit C A supplier being paid by cheque D Wages being paid in cash

✅ Correct Answer: 4

38 Which of the following is an indirect cost?

A carriage inwards B production wages C production materials D factory rent

✅ Correct Answer: 4

39 There is a debit balance on the office expenses at the end of the financial year. In which section of the balance sheet this will be recorded?

A capital B current assets C current liabilities D fixed assets

✅ Correct Answer: 2

40 Which of the following is not a business transaction?

A Purchasing office supplies B Hiring a new employee C Paying interest on a business loan D Receiving fees for services

✅ Correct Answer: 2

41 A company is owned by its

A directors B employees C shareholders D managers

✅ Correct Answer: 3

42 The goods which are purchased for the purpose of resale are known as

A inventory B merchandise C purchases D traded goods

✅ Correct Answer: 1

43 Cash invested in the business is known as

A current asset B fixed asset C liabilities D capital

✅ Correct Answer: 4

44 Expenditures which provide benefit in the future period are known as

A Revenue expenditure B Outstanding expenditure C Current expenditure D Capital expenditure

✅ Correct Answer: 4

45 Which of the following is a capital transaction?

A Purchase of goods B Payment of wages C Sale of goods D Purchase of machinery

✅ Correct Answer: 4

46 Financial statements are mainly prepared for

A Directors B Shareholders C Employees D Managers

✅ Correct Answer: 2

47 Interim audit is performed before the end of the accounting period, normally by the

A junior staff B senior staff C whole audit team D board of directors

✅ Correct Answer: 2

48 Fundamentally, the auditor report gives an opinion on whether the financial statements

A are in accordance with the national standards B are in accordance with the international standards C have errors, mistakes, or fraud D present fairly the position and results of an entity

✅ Correct Answer: 4

49 The _____ certify or guarantee that the financial statements are correct.

A management B board of governors C auditor D auditor does not

✅ Correct Answer: 4

50 IFAC is an abbreviation for

A International Federation of Accountants B International Federation of Auditors C International Framework for Accounting Concepts D International Framework for Auditing Concepts

✅ Correct Answer: 1

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