Book keeping WAEC past questions and answers

Book keeping WAEC past questions and answers

Question: What is the purpose of the general journal?

a) Summarize financial statements

b) Record daily transactions

c) Calculate net income

d) Track specific accounts

Answer: b) Record daily transactions

Question: Which financial statement shows the cash inflows and outflows during a specific period?

a) Income statement

b) Balance sheet

c) Cash flow statement

d) Statement of retained earnings

Answer: c) Cash flow statement

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

a) Amortization

b) Depreciation

c) Appreciation

d) Accrual

Answer: b) Depreciation

Question: What does the term "contra account" mean in bookkeeping?

a) An account with a credit balance

b) An account with a debit balance

c) An account with zero balance

d) An account with irregular transactions

Answer: a) An account with a credit balance

Question: Which financial statement reports the changes in a company's equity accounts?

a) Income statement

b) Balance sheet

c) Cash flow statement

d) Statement of changes in equity

Answer: d) Statement of changes in equity

Question: In double-entry bookkeeping, what happens when a liability account is debited?

a) Increases the liability

b) Decreases the liability

c) No effect on the liability

d) Converts liability to equity

Answer: b) Decreases the liability

Question: What is the purpose of the income statement?

a) Show changes in equity

b) Summarize cash movements

c) Display profitability over time

d) Report changes in assets

Answer: c) Display profitability over time

Question: Which of the following is an example of an intangible asset?

a) Buildings

b) Land

c) Patents

d) Inventory

Answer: c) Patents

Question: What is the role of the petty cash book in bookkeeping?

a) Record daily transactions

b) Track specific accounts

c) Monitor changes in equity

d) Manage small, miscellaneous expenses

Answer: d) Manage small, miscellaneous expenses

Question: What is the formula for calculating the current ratio?

a) Current Assets / Current Liabilities

b) Total Assets / Total Liabilities

c) Net Income / Total Assets

d) Equity / Expenses

Answer: a) Current Assets / Current Liabilities

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

a) Matching principle

b) Revenue recognition principle

c) Historical cost principle

d) Conservatism principle

Answer: a) Matching principle

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

a) Report changes in assets and liabilities

b) Summarize revenue and expenses

c) Analyze changes in equity

d) Show cash inflows and outflows

Answer: d) Show cash inflows and outflows

Question: How does a debit entry affect an expense account?

a) Increases the expense

b) Decreases the expense

c) No effect on the expense

d) Converts expense to revenue

Answer: a) Increases the expense

Question: What is the significance of the trial balance in bookkeeping?

a) Finalize financial statements

b) Identify errors in the ledger

c) Record daily transactions

d) Calculate depreciation

Answer: b) Identify errors in the ledger

Question: What does the term "amortization" refer to in bookkeeping?

a) Allocation of cost over time for intangible assets

b) Depreciation of tangible assets

c) Recording daily transactions

d) Adjusting entries for errors

Answer: a) Allocation of cost over time for intangible assets

Question: In double-entry bookkeeping, which accounts are affected when recording a sale on credit?

a) Only revenue accounts

b) Only expense accounts

c) Both asset and liability accounts

d) Only equity accounts

Answer: c) Both asset and liability accounts

Question: What is the purpose of the post-closing trial balance?

a) Identify errors in financial statements

b) Record daily transactions

c) Finalize financial statements

d) Calculate depreciation

Answer: c) Finalize financial statements

Question: What is the accounting equation after a purchase of inventory on credit?

a) Assets = Liabilities - Equity

b) Assets = Liabilities + Equity

c) Assets + Expenses = Liabilities

d) Assets = Expenses - Liabilities

Answer: b) Assets = Liabilities + Equity

Question: How is net income calculated on the income statement?

a) Revenue - Liabilities

b) Expenses - Equity

c) Revenue - Expenses

d) Assets - Liabilities

Answer: c) Revenue - Expenses

Question: What is the purpose of the bank reconciliation statement?

a) Identify errors in the ledger

b) Adjust entries for depreciation

c) Reconcile differences between bank and book balances

d) Finalize financial statements

Answer: c) Reconcile differences between bank and book balances