1. One of the following cannot be called Purchases, which?

1. Goods bought on credit
2. Office furniture purchased
3. Goods bought with cash
4. Goods purchased for resale

2. The following do not form part of personal accounts;

1. Premises,
2. Rent,
3. Debtors,
4. Creditors

1. ii and iv only
2. ii and iii only
3. i and ii only
4. iii and iv only

3. The term working capital means the

1. total of fixed assets minus long-term liabilities
2. excess of current assets over current liabilities
3. capital less drawings
4. amount of money invested in the business by its owner(s)

4. The following should be the correct entries if the proprietor takes goods for personal use:

1. Dr Stock Account, Cr Purchases Account
2. Dr Drawings Account, Cr Stock Account
3. Dr Drawings Account, Cr Purchases Account
4. Dr Purchases Account, Cr Drawings Account

5. If opening capital was GHC330,000, closing capital GHC227,000 and drawings GHC66,000 then loss or profit for the year is

1. GHC169,000 profit
2. GHC169,000 loss
3. GHC37,000 profit
4. GHC37,000 loss

6. If there is a debit balance of GHC18,500 in a cash book, it means that

1. GHC18,500 cash been overspent
2. There is GHC18,500 cash in hand
3. GHC18,500 is the total of cash paid out
4. Total cash received is equal to GHC18,500

7. The first place to enter details on sales invoice is in the

1. Sales journal
2. Cash book
3. Sales account
4. General Journal

8. Cash float of GHC5,000 are given. If GHC43,800 is spent during the period, how much will be reimbursed at the period?

1. GHC50,000
2. GHC6,200
3. GHC43,800
4. GHC56,200

9. The general journal is used for all of the following except

1. Correction of errors
2. Purchase of business
3. Recording of credit sales
4. Closing entries in the books of a firm

10. The cash book is used to record all of the following except

1. Trade discounts
2. Payments for goods bought
3. All cash received from suppliers
4. Expenses which arise in connection with the business

11. The imprest system is put in place in order to avoid

1. Payment of relatively small amount
2. Payment of small amount by cheque
3. Excessive expenses of maintaining records
4. None of the above

12. All of the following are true about double-column cash books except that

1. two separate totals are required to be arrived at for receipts
2. two balances are carried forward at the end of a trading period
3. the debit cash total must exceed or be equal to that of the credit
4. the book cannot show a debit bank balance and a credit bank balance at the same time.

13. All of the following appear on the adjusted cash book except

1. Unpresented cheques
2. Uncredited cheques
3. Balance as per cash book
4. Balance as per bank cheque

14. are the claims of persons other than the owners of the business.

1. Assets
2. Capital
3. Revenue
4. Liabilities

15. The economic resources of an entity are its

1. Assets
2. Capital
3. Income
4. Creditors

Which of the following equations are correct and which of them are incorrect?

(Please tick)

CorrectIncorrect

16. Assets + Liabilities = Owners equity
17. Assets + Owners Equity = Liabilities
18. Assets = Creditors=Owners Equity
19. Assets Owners Equity = Liabilities
20. Liabilities = Owners Equity = Assets

Read the statements below and determine whether they are true or false. Circle A or B accordingly.

21. Accounting is an aspect of bookkeeping.

1. True
2. False

22. Bookkeeping constitutes the recording and classifying aspects of Accounting.

1. True
2. False

23. Cash introduced into a business is better called assets.

1. True
2. False

24. Trade debtors are classified as assets and in some situations short term liabilities.

1. True
2. False

25. Bank overdraft falls due for settlement in a year and as a result may be classified as short term liability.

1. True
2. False

26. In accounting the owner and the business are separable.

1. True
2. False

27. An example of capital is a loan.

1. True
2. False

28. Profit belongs to the business.

1. True
2. False

29. In certain situations capital is equal to liabilities.

1. True
2. False

30. Purchases and sales are sometimes the same in accounting

1. True
2. False