1. Which of the statements is incorrect

A. Assets - Capital = Liabilities

B. Liabilities + Capital = Assets

C. Liabilities + Assets = Capital

D. Assets - Liabilities = Capital

2. Which of the following is not an asset?

A. Buildings

B. Cash balance

C. Accounts receivable

D. Loan from Ahmad

3. Which of the following is a liability?

A. machinery

B. accounts payable from goods

C. motor vehicles

D. cash at bank

4. Which of the following best describe a trial balance?

A. It shows the financial position of a business

B. It is a special account

C. It shows all the entries in the books

D. It is a list of balances on the books

5. If an expense has been incurred but not yet paid, which of the following statements is correct?

A. Expenses account needs to be credited.

B. Expenses account needs to be debited.

C. The expenses accured account need to be debited.

D. The expenses in advance account needs to be debited.

6. Which of the following are correct?

Accounts

To record

Entry in the account

I. Assets

an increase

a decrease

Debt

Credit

II.Capital

an increase

a decrease

Debit

Credit

III.Liabilities

an increase

a decrease

Credit

Debit

A. I and II only.

B. II and III only.

C. I and III only.

D. I, II and III only.

7. Which of the best describes a balance sheet?

A. An account proving the book balance

B. A record of closing entries

C. A listing of balances

D. A statement of assets

8. 'Posting' the transactions in the bookkeeping means

A. Making the first entry of a double entry trasaction

B. Entering items in a cash book

C. Making the second entry of a double entry transaction

D. Something other than the above

9. Discounts received are

A. Deducted when we receive cash

B. Given by us when we sell goods on credit

C. Deducted by us when we pay our accounts

D. None of these

10. What is the effect of accrued revenues on the statement of financial position?

A. Increase in current asset

B. Increase in current liability

C. Decrease in current asset

D. Decrease in current liability

11. When the financial statements are prepared, the Bad Debts Account is closed by a transfer to the

A. Balance Sheet

B. Profit and Loss Account

C. Trading Account

D. Allowance for Doubtful Debts is created

12. The journal is

A. Part of the double entry system

B. A supplement to the Cash Book

C. Not part of the double entry system

D. Used when other journals have been mislaid

13. Errors are corrected via the journal because

A. It saves the bookkeeper's time

B. It saves entering them in the ledger

C. It is much easier to do

D. It provides a good record explaining the double entry records.

14. If the two total of trial balance do not agree, the differences must be entered in

A. The Income Statement

B. A Suspense Account

C. A Nominal Account

D. The Capital Account

15. Transactions are initially recorded in the

A. General Ledger.

B. Balance Sheet

C. General Journal

D. Trial Balance

16. Is it true that the trial balance totals should agree?

A. No, there are sometimes good reasons whey they differ

B. Yes, except where the trial balance is extracted at the year end

C. Yes, always

D. No, because it is not a balance sheet