1.     . ………..cheques and amounts paid in, not yet credited are used to prepare the bank reconciliation statement.

blank

dishonored

drawn

unpresented

2.     A ………… cheque is one which the bank refuses to pay for various reasons.

blank

dishonored

drawn

unpresented

3.     A bad debt recovered account is used to record the recovery of bad debts ………the financial year in which they were written off.

after

before

during

on

4.     A bank account with overdraft has a debit balance.

False

True

5.     A bank reconciliation statement is prepared to ………. between the cash book and bank statement balances.

explain

identify

reconcile

update

6.     A debit balance on the insurance account means that insurance premiums have been paid in advance.

False

True

7.     A journal entry always includes a debit and a credit entry.

False

True

8.     A journal entry states which account is to be debited and which account is to be credited, along with a ……….. to explain the reason for the entry.

– (Đ)✅:  narrative

cause

sentence

word

9.     A petty cash book voucher has to be completed and ……… before payment is made.

– (Đ)✅:  authorized

made

obtained

written

10.  A prepaid expense is added to the expense item from the trial balance.

False

True

11.  A prepaid expense is shown as a current asset in the balance sheet.

False

True

12.  A prepaid expense requires no year-end adjustment.

False

True

13.  A prepaid income is an income received in…………of the accounting period that it relates to.

– (Đ)✅:  advance

ahead

front

terms

14.  A provision for doubtful debt is set at a ………….of debtors.

number

percentage

rank

rate

15.  A stale cheque might be a dishonored one.

False

True

16.  A………..of a debt may be written off as a bad debt if the debtor is not able to pay all of what is owed.

little

lot

part

whole

17.  Accrual of income means that income due …………. the financial year has not been received by the end of the year.

for

of

to

with

18.  Alternative names for the Journal are the ……….. Journal or Journal Proper.

– (Đ)✅:  general

generalize

generous

popular

19.  Amounts due from debtors, which are individually written off should be debited to bad debts account.

False

True

20.  Amounts paid in but not yet included in the bank statement are called unpresented cheques.

False

True

21.  An accrual of expense remains ………at the end of that period.

due

owed

paid

unpaid

22.  An accrued expense is shown amongst the liabilities in the balance sheet.

False

True

23.  An accrued expense is shown as an amount due within 1 year in the balance sheet.

False

True

24.  An accrued expense represents an expense paid in advance.

False

True

25.  An error in addition is one not affecting the trial balance agreement.

– (Đ)✅:  False

True

26.  An error overstating an expense item would also overstate the net profit.

– (Đ)✅:  False

True

27.  An error understating an income item would also understate capital.

– (Đ)✅:  True

False

28.  An error understating the purchases amount would overstate gross profit.

– (Đ)✅:  True

False

29.  An expense accrual appears in the balance sheet as a………..

current asset

current liability

fixed asset

long-term liability

30.  An expense prepayment appears in the balance sheet as a……………..

current asset

current liability

fixed asset

long-term liability

31.  An income accrual appears in the balance sheet as a…………..

current asset

current liability

fixed asset

long-term liability

32.  An income prepayment appears in the balance sheet as a……………

current asset

current liability

fixed asset

long-term liability

33.  Any debt written off must be charged against the profit by means of a ……….entry in the profit and loss account.

credit

debit

right

wrong

34.  Any debts written off are a/an …………of the business.

benefit

expense

gain

loss

35.  Any decrease in the provision for doubtful debt will be seen as an expense to the firm.

False

True

36.  Any decrease in the provision for doubtful debts is a ……….. to the firm.

benefit

growth

loss

reduction

37.  Any increase in a depreciation provision is credited to the Profit and Loss account.

False

True

38.  Any increase in the provision for doubtful debt will be debited to the P/L account.

False

True

39.  Any………..in depreciation provision is charged against profit.

going up

growing

increase

increasing

40.  Bad debts are debts that the business is unable to………..

buy

collect

give

pay

41.  Bad debts written off are not shown in the balance sheet.

False

True

42.  Bank charges are the income of the business.

False

True

43.  Capital expenditure decreases the figure of assets in the balance sheet.

False

True

44.  Capital expenditure is aimed at providing long-term benefits.

False

True

45.  Capital expenditure is the money spent on the ………… of fixed assets or on improvements to fixed assets.

disposal

purchase

sale

scrap

46.  Closing stock appears ………in the final accounts.

– (Đ)✅:  twice

four times

once

three times

47.  Closing stock appears both in the trading account and in the balance sheet.

– (Đ)✅:  True

False

48.  Closing stock is included in the trial balance.

– (Đ)✅:  False

True

49.  Costs of business belong to capital expenditure.

False

True

50.  Debts may be written off at……………times throughout the year.

different

few

same

several

51.  Depreciation is the estimate of the …………in value of fixed assets over a period of time.

– (Đ)✅:  fall

falling

growth

increase

52.  Depreciation provision account has a credit balance.

False

True

53.  Differences in the cash book and bank statement balances could be due to time………..

causes

changes

differences

shifts

54.  Drawings can be in the form of business facilities.

– (Đ)✅:  True

False

55.  Drawings can only be in the form of bank or cash.

– (Đ)✅:  False

True

56.  Drawings cannot be in the form of goods that the business deal.

– (Đ)✅:  False

True

57.  Drawings is …………from capital in the balance sheet.

– (Đ)✅:  deducted

added

different

less

58.  Drawings is added to capital in the balance sheet.

– (Đ)✅:  False

True

59.  Drawings might also take the …….of goods for private use

– (Đ)✅:  form

effect

format

layout

60.  Drawings might also take the form of using business………for private purposes.

– (Đ)✅:  facilities

expenditure

expenses

facilitate

61.  During the period, the petty cashier can make payments up to the value of the ………….

account

budget

float

fund

62.  Errors are …………… using journal entries.

– (Đ)✅:  corrected

caused

created

made

63.  Errors in figures in the trading and profit and loss account will affect the ………………. of profits.

– (Đ)✅:  calculation

cause

leading

resulting

64.  Errors in figures in the trading and profit and loss account will affect the calculation of profits.

– (Đ)✅:  True

False

65.  Errors of commission occur when a transaction is entered in the wrong class of account.

False

True

66.  Errors of duplication occur when a transaction is entered twice in the book.

False

True

67.  Errors of original entry happen when the entries have been made with the amount being entered wrongly in one account.

– (Đ)✅:  False

True

68.  Expenditure incorrectly treated as capital expenditure will overstate the …………… on the balance sheet.

assets

capital

debtors

liabilities

69.  Expenditure incorrectly treated as capital expenditure will overstate the assets on the balance sheet.

False

True

70.  Expenditure incorrectly treated as revenue expenditure will overstate expenses and ………….. profits.

increase

raise

reduce

rise

71.  Expenditure incorrectly treated as revenue expenditure will understate expenses and increase profits.

False

True

72.  Expenses and incomes need to be…………..to the correct accounting period.

listen

listening

match

matched

73.  If drawings is in the form of cash, ……..account is credited.

– (Đ)✅:  cash

bank

capital

drawings

74.  If drawings is in the form of goods, it is necessary to show a……….from purchases in the trading caccount.

– (Đ)✅:  deduction

decrease

deduct

reduce

75.  If trading and profit and loss accounts are presented in a two sided form, it is called the …….form.

– (Đ)✅:  horizontal

long

short

vertical

76.  If you take no account year-by-year of the fall in value of fixed assets, the annual profit figures are………

overstated

undercast

underestimated

understated

77.  If you take no account year-by-year of the fall in value of fixed assets, the value of assets in the balance sheet is ………

overstated

undercast

underestimated

understated

78.  In allowing for depreciation of fixed assets, you estimate the amount to be received on………..

disposal

disposing

sale

selling

79.  In straight line method to calculate depreciation, the eventual disposal…………..is estimated.

cost

estimate

price

value

80.  In the account of provision for depreciation, it is only necessary to ……….down the balance once two entries have been made.

bring

carry

get

put

81.  In the balance sheet, each fixed asset is shown at………..less total depreciation to date.

cost

once

price

time

82.  In the balance sheet, the net profit is added to capital.

False

True

83.  In the balance sheet, the net profit is added to………….

– (Đ)✅:  capital

debtors

drawings

stock

84.  In the petty cash book, any payment item has to be entered twice, once in the total column and once in the appropriate analysis column.

False

True

85.  In the petty cash book, the total of the analysis column totals and the total of payments are not necessarily equal.

False

True

86.  Omission is an error affecting the trial balance agreement.

– (Đ)✅:  False

True

87.  Once the provision for doubtful debts has been created, it remains in the books until………..

amended

changed

left

moved

88.  One of the reasons for a dishonored cheque is that the drawer has not……..……funds in his bank account.

many

much

several

sufficient

89.  One of the reasons for a dishonored cheque is that there may be something………in the way the cheque has been written.

correct

different

incorrect

strange

90.  Opening stock appears ………in the final accounts.

– (Đ)✅:  once

four times

three times

twice

91.  Petty cash book is set up to deal with…………payments.

– (Đ)✅:  enormous

big

large

small

92.  Petty cash operates on the imprest………….

– (Đ)✅:  system

measure

method

way

93.  Provision for depreciation has a…………..balance.

correct

credit

debit

false

94.  Reimbursement of the petty cash float may be done on the last day of the period or on the first day of the ………. period.

– (Đ)✅:  next

accounting

annual

financial

95.  Revenue expenditure is chargeable to the trading and profit and loss account while capital expenditure results in ………… figures for the balance sheet.

decreased

fallen

increased

reduced

96.  Revenue expenditure is chargeable to the trading and profit and loss account.

False

True

97.  Revenue expenditure is the day-to-day …………. costs of a business.

going

jogging

running

walking

98.  Stock included in the balance sheet is the opening stock.

– (Đ)✅:  False

True

99.  Straight line method is also termed the fixed …………..method.

asset

division

installment

period

100.                   The ………… column is used to record the receipt of money into petty cash.

– (Đ)✅:  receipts

analysis

date

details

101.                   The accrual amount is ……………to the figure shown in the trial balance when including the item in the profit and loss account.

– (Đ)✅:  added

less

paid

plus

102.                   The amount paid out is then ……….. to the petty cashier at the end of the period.

– (Đ)✅:  reimbursed

drawn

given

lent

103.                   The asset account balance is not reduced by the …………..provision for depreciation.

annual

daily

hourly

monthly

104.                   The asset account balance is reduced when the asset is sold or……….

bought

given

kept

scrapped

105.                   The asset account has a………….balance.

correct

credit

debit

false

106.                   The asset account is reduced by the annual provision for depreciation.

False

True

107.                   The bad debts account serves as a ………….point for debts written off over the year.

arrival

collection

coming

final

108.                   The balance sheet will show the total of debtor after the provision for doubtful debts being deducted.

False

True

109.                   The balance sheet will show the total of debtor before writing off bad debts.

– (Đ)✅:  False

True

110.                   The balance used in preparing the bank reconciliation statement is that of the unupdated cash book.

False

True

111.                   The cash book is …………. with items revealed by the bank statement, e.g. bank charges, credit transfer, direct debit, etc.

drawn up

prepared

set up

updated

112.                   The first step in updating the cash book is to tick the items both appear in the cash book and bank statement.

False

True

113.                   The first step in updating the cash book is to tick the items that………….in both cash book and bank statement.

appear

come

display

show

114.                   The float cannot be amended, it is set as a fixed amount.

– (Đ)✅:  False

True

115.                   The items picked up from the bank statement are entered into the cash book as at the last date of the period.

False

True

116.                   The items picked up from the bank statement should not appear in the …………statement.

prepared

reconciliation

sale

updated

117.                   The journal is a kind of book of prime entry.

– (Đ)✅:  True

False

118.                   The Journal is not a part of the double entry system; it is just a form of ………… supporting the double entry.

– (Đ)✅:  diary

book

note

notebook

119.                   The journal is used to record transactions that are not entered in the other books of ………… entry.

– (Đ)✅:  original

credit

debit

double

120.                   The main difference between the two types of expenditure is the ………… of time the expenditure is of benefit to the business.

depth

height

length

weight

121.                   The main………….of depreciation are physical deterioration, economic factors and time factors.

– (Đ)✅:  causes

cause

ideas

items

122.                   The petty cash book has …………. columns for each category of expenditure.

– (Đ)✅:  analysis

detailed

different

many

123.                   The petty cash book is a book of ………. entry as well as a ledger account.

– (Đ)✅:  original

credit

debit

double

124.                   The prepaid amount is …………..from the figure shown in the trial balance when including the item in the profit and loss account.

added

less

plus

subtracted

125.                   The provision for depreciation …………up the amount of depreciation year by year.

build

grow

keep

make

126.                   The provision for doubtful debt has a credit balance.

False

True

127.                   The provision for doubtful debt is never adjusted.

False

True

128.                   The provisional profits may change as a result of error …………….

commission

compensation

correction

duplication

129.                   The purchase and sale of fixed assets is always made diary notes on in the journal.

– (Đ)✅:  False

True

130.                   The reconciliation process has two………….

measures

methods

stages

ways

131.                   The reconciliation statement will start with the balance as…………..the bank statement.

for

of

per

with

132.                   The reduced balance is the cost of the asset less depreciation to …………

date

day

hour

minute

133.                   The reducing balance method is also termed the………….balance method.

decreasing

diminishing

falling

going down

134.                   The reimbursement can only take place on the last day of the period (e.g. the month).

False

True

135.                   The third step in updating the cash book is that the cash book is ……………to obtain the up-to-date balance.

calculated

drawn up

prepared

re-balanced

136.                   The trading and profit and loss account only has one form to be display.

– (Đ)✅:  False

True

137.                   The use of the Journal reduces the chances of ……….. a transaction and makes fraud by book-keepers more difficult.

– (Đ)✅:  omitting

leaving

recording

remembering

138.                   The use of the petty cash book saves the cash book and ledger accounts from being ………… with a lot of minor details.

– (Đ)✅:  overcrowded

heavy

many

much

139.                   The value closing stock has got an ……..on the profit for the period.

– (Đ)✅:  effect

affect

affection

effective

140.                   The value closing stock has got an effect on the profit for the period.

– (Đ)✅:  True

False

141.                   The voucher numbers are entered in …………

case

sequence

time

turn

142.                   The word ‘estimate’ in allowing for depreciation of fixed assets means that you are estimating the working……….of the asset.

hours

life

period

time

143.                   There are two ways in preparing the bank reconciliation statement.

False

True

144.                   There is likely to be either a ……….or a profit arising out of the sale of a fixed asset.

decrease

fall

loss

reduce

145.                   To correct the error of reversal of entries, we need to double the original amount in the entries made.

False

True

146.                   Totals from the analysis columns are posted to the ………. accounts at the end of the month.

– (Đ)✅:  ledger

appropriate

relevant

suitable

147.                   When a fixed asset is sold, there are ………… elements to take account of.

2

3

4

5

148.                   Where business ………… (e.g. telephone) are used for the owner’s personal use, this is also regarded as drawings, and adjustments must be made at the end of the year to reflect this.

equipments

expenses

facilities

services

149.                   With the straight line method of depreciation, the estimated disposal value should not be allowed for in calculating the annual depreciation provision.

False

True

150.                   Year-end ……………… are necessary to give a true and fair picture, as far as possible, of the performance of the business over the period.

– (Đ)✅:  adjustments

accounts

calculations

performance