Book keeping NECO exam past questions and answers

Book keeping NECO exam past questions and answers

Here they are;

Question: What is the primary purpose of bookkeeping?

a) Marketing

b) Record-keeping

c) Customer service

d) Product development

Answer: b) Record-keeping

Question: Which financial statement summarizes a company's revenues and expenses over a specific period?

a) Balance Sheet

b) Income Statement

c) Cash Flow Statement

d) Statement of Retained Earnings

Answer: b) Income Statement

Question: In double-entry bookkeeping, for every debit entry, there must be a corresponding:

a) Credit entry

b) Asset entry

c) Liability entry

d) Equity entry

Answer: a) Credit entry

Question: What type of account is "Accounts Receivable"?

a) Asset

b) Liability

c) Expense

d) Revenue

Answer: a) Asset

Question: What is the accounting equation?

a) Assets = Liabilities - Equity

b) Assets = Liabilities + Equity

c) Assets = Equity - Liabilities

d) Liabilities = Assets + Equity

Answer: b) Assets = Liabilities + Equity

Question: Depreciation is typically associated with which type of asset?

a) Current Asset

b) Tangible Asset

c) Intangible Asset

d) Financial Asset

Answer: b) Tangible Asset

Question: What does the term "accrual" mean in accounting?

a) Payment made in advance

b) Recognition of revenue or expense before cash is exchanged

c) Adjustment of errors in financial statements

d) Record of non-operating income

Answer: b) Recognition of revenue or expense before cash is exchanged

Question: Which financial statement provides a snapshot of a company's financial position at a specific point in time?

a) Income Statement

b) Cash Flow Statement

c) Balance Sheet

d) Statement of Cash Flows

Answer: c) Balance Sheet

Question: What is the purpose of the general ledger in bookkeeping?

a) To record daily transactions

b) To summarize financial transactions by account

c) To calculate profit and loss

d) To manage payroll

Answer: b) To summarize financial transactions by account

Question: What is the accounting term for a decrease in owner's equity resulting from the operation of a business?

a) Revenue

b) Expense

c) Liability

d) Asset

Answer: b) Expense

Question: What is the purpose of a trial balance?

a) To prepare financial statements

b) To identify errors in the accounting records

c) To calculate net income

d) To reconcile bank statements

Answer: b) To identify errors in the accounting records

Question: Which accounting principle states that expenses should be recorded in the same period as the revenues they help to generate?

a) Matching Principle

b) Revenue Recognition Principle

c) Consistency Principle

d) Materiality Principle

Answer: a) Matching Principle

Question: What is the term for the process of allocating the cost of an asset over its useful life?

a) Amortization

b) Depreciation

c) Accrual

d) Prepayment

Answer: b) Depreciation

Question: Which financial statement is often referred to as the statement of changes in equity?

a) Income Statement

b) Balance Sheet

c) Cash Flow Statement

d) Statement of Retained Earnings

Answer: d) Statement of Retained Earnings

Question: What is the purpose of the cash flow statement?

a) To show the company's financial position at a specific date

b) To report the company's revenues and expenses

c) To analyze the flow of cash in and out of the business

d) To provide details on the company's equity transactions

Answer: c) To analyze the flow of cash in and out of the business

Question: Which accounting principle emphasizes that financial information should be verifiable and faithfully represented?

a) Conservatism Principle

b) Objectivity Principle

c) Materiality Principle

d) Reliability Principle

Answer: b) Objectivity Principle

Question: What is the purpose of the chart of accounts in bookkeeping?

a) To record daily transactions

b) To provide a list of all financial transactions

c) To summarize financial transactions by account

d) To calculate profit and loss

Answer: c) To summarize financial transactions by account

Question: What is the formula for calculating net income?

a) Net Income = Revenue - Expenses

b) Net Income = Revenue + Expenses

c) Net Income = Assets - Liabilities

d) Net Income = Equity - Liabilities

Answer: a) Net Income = Revenue - Expenses

Question: Which financial statement shows the movement of cash in and out of a business?

a) Income Statement

b) Balance Sheet

c) Cash Flow Statement

d) Statement of Changes in Equity

Answer: c) Cash Flow Statement

Question: How does a credit entry affect liabilities?

a) Increases liabilities

b) Decreases liabilities

c) No effect on liabilities

d) Converts liabilities into assets

Answer: a) Increases liabilities