SS1 first term financial accounting past questions and answers

SS1 first term financial accounting past questions and answers

Here are 20 SS1 (Secondary School 1) financial account questions with options and answers:

Question: What is the purpose of a cash book?

A) To record credit sales

B) To record cash and bank transactions

C) To track fixed assets

D) To summarize expenses

Answer: B) To record cash and bank transactions

Question: In accounting, what does the term 'debit' represent?

A) Increase in assets

B) Decrease in liabilities

C) Increase in income

D) Decrease in expenses

Answer: A) Increase in assets

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) Trial balance

Answer: C) Balance sheet

Question: What is the formula for calculating net profit?

A) Revenue - Expenses

B) Assets - Liabilities

C) Income - Expenditure

D) Profit + Loss

Answer: A) Revenue - Expenses

Question: Depreciation is a process used to account for the:

A) Increase in value of assets

B) Decrease in value of assets over time

C) Total revenue generated

D) Shareholder dividends

Answer: B) Decrease in value of assets over time

Question: Which account is considered a liability?

A) Accounts receivable

B) Prepaid expenses

C) Bank loan

D) Equipment

Answer: C) Bank loan

Question: What is the purpose of a trial balance?

A) To prepare financial statements

B) To identify errors in accounting records

C) To calculate depreciation

D) To record daily transactions

Answer: B) To identify errors in accounting records

Question: What is the primary function of an income statement?

A) To show the financial position at a specific date

B) To report revenues and expenses over a period

C) To list assets and liabilities

D) To record cash transactions

Answer: B) To report revenues and expenses over a period

Question: Which of the following is a non-current asset?

A) Inventory

B) Accounts receivable

C) Land

D) Accounts payable

Answer: C) Land

Question: The accounting equation is:

A) Assets = Liabilities - Equity

B) Assets = Liabilities + Equity

C) Assets + Liabilities = Equity

D) Assets - Liabilities = Equity

Answer: B) Assets = Liabilities + Equity

Question: What is the purpose of the double-entry system in accounting?

A) To increase complexity

B) To ensure accuracy and maintain the accounting equation

C) To reduce the number of transactions recorded

D) To eliminate the need for financial statements

Answer: B) To ensure accuracy and maintain the accounting equation

Question: Which financial statement is also known as the statement of comprehensive income?

A) Income statement

B) Balance sheet

C) Cash flow statement

D) Statement of changes in equity

Answer: A) Income statement

Question: What does GAAP stand for in accounting?

A) Generally Accepted Accounting Principles

B) Generally Acknowledged Accounting Procedures

C) General Accounting and Auditing Practices

D) General Assessment of Accounting Procedures

Answer: A) Generally Accepted Accounting Principles

Question: Which type of account increases with a credit entry?

A) Asset

B) Liability

C) Revenue

D) Expense

Answer: B) Liability

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

A) To reconcile differences between the cash book and bank statement

B) To calculate total revenue

C) To prepare financial statements

D) To record daily transactions

Answer: A) To reconcile differences between the cash book and bank statement

Question: Which financial statement is used to analyze changes in equity accounts over a period?

A) Income statement

B) Balance sheet

C) Cash flow statement

D) Statement of changes in equity

Answer: D) Statement of changes in equity

Question: What is the purpose of an adjusting journal entry?

A) To record routine transactions

B) To correct errors

C) To close the books at the end of the year

D) To calculate depreciation

Answer: B) To correct errors

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

A) Assets = Liabilities - Equity

B) Assets = Liabilities + Equity

C) Assets + Liabilities = Equity

D) Assets - Liabilities = Equity

Answer: B) Assets = Liabilities + Equity

Question: What is the purpose of a petty cash book?

A) To record major transactions

B) To track fixed assets

C) To manage small, routine expenditures

D) To calculate depreciation

Answer: C) To manage small, routine expenditures

Question: Which financial statement is used to assess a company's ability to generate cash?

A) Income statement

B) Balance sheet

C) Cash flow statement

D) Trial balance

Answer: C) Cash flow statement