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MULTIPLE CHOICE QUESTIONS
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MULTIPLE CHOICE QUESTIONS

1. According to the FASB’s conceptual framework, which of the following is an
essential characteristic of an asset?
a. Assets are tangible
b. An asset is obtained at a cost
c. An asset generates future economic benefits
d. Liquid assets last in the firm beyond one accounting period.

2. Which of the following statements is incorrect?

a. The statement of financial position and income statement form part of the financial
statements of a business
b. The statement of financial position illustrates the accounting equation
c. The income statement illustrates the accounting equation
d. The statement of financial position and income statement illustrate the financial
position and performance of the business

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BOBBY JERRY ATSU DEVI EMMANUEL
OFFICE OF THE COORDINATOR DESIGN TEAM MEMBER
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3. Which of the following best explains what is meant by capital expenditure?
a. expenditure on non-current assets, including repairs and maintenance
b. expenditure on expensive assets
c. expenditure relating to the issue of share capital
d. expenditure relating to the acquisition or improvement of noncurrent assets

4. Which of the following statements is incorrect: According to the rules of double

entry:
A. a debit entry decreases or eliminates balances in Income and Liability accounts.
B. a credit entry increases the balance in Income, Liability, and Capital accounts.
C. a debit entry increases the balance in the Capital account.
D. a debit entry increases the balance in Assets and Expenses account

5. How would you define the net assets of a business?

A. Total assets - Owner's Capital
B. Total assets + liabilities
C. Owner's capital + Liabilities
D. Total assets - Liabilities

6. Provision for bad debt in 2016: 6,000 Provision for bad debt in 2017: 8,000
Determine excess
income or expense
A. 2000 income
B. 2000 expense
C. 8000 income
D.8000 expense
7. If, at year-end, the total assets of a business were Ghc 189,000 and business
liabilities were Ghc 126,000, what would be the owner's capital at that date?
A. Ghc 126,000
B. Ghc 63,000
C. Ghc 315,000
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BOBBY JERRY ATSU DEVI EMMANUEL
OFFICE OF THE COORDINATOR DESIGN TEAM MEMBER
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D. Ghc 189,000

8. An accounting concept according to which all assets are to be recognized based on

their
economic substance rather than legal form is:
A. Materiality concept
B.Accrual concept
C.Substance over form concept
D.Historical cost concept

9. A CEO recently bought a saloon car for his son out of company funds. The Chief
Accountant recorded this on a current account for the CEO. This resulted in an
intense argument. The CEO .................. threatened to dismiss the Chief Accountant
should he refuse to recognize the purchase of the saloon car as a transaction of the
company. Which of the following concept is the CEO attempting to breach?
A. Drawings concept
B. Continuity concept
C. Business Entity concept
D. Materiality Concept

10. A CEO expressed shock when the financial statements did not show a value for
the company’s efficient staff. He argued that the company’s beautiful and handsome
sales personnel are valuable assets used to attract customers and therefore insisted
that this “power of attraction” should be recognized in the books of accounts and
reflected on the face of the financial statement. Which of the following concept is the
CEO attempting to breach?
A. Materiality concept
B. Substance over form concept
C. Money measurement concept
D. Business Entity concept
11. Which of the following concepts state that in preparation of account, the
accountant is advised to use verifiable documents such as receipts, vouchers, pay
slips etc.?
A. Full disclosure concept
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BOBBY JERRY ATSU DEVI EMMANUEL
OFFICE OF THE COORDINATOR DESIGN TEAM MEMBER
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B. Dual aspect concept
C. Objectivity concept
D. Faithful representation

12. Which of the following concepts enables the accountant to counter the optimisms
of the owner?
A. Business Entity Concept
B. Conservatism Concept
C. Consistency Concept
D. Matching Concept

13. A company has had a poor accounting period and management believes that
financial performance could be better reported if the reducing balance method of
depreciation was adopted, instead of straight-line method which is stated in the
company’s policy. Which of the concepts is the management tempted to violate?
A. Accrual concept
B. Prudence Concept
C. Consistency concept
D. Going concern concept

14. Due to prevailing factors, including economic, management realizes that the long
run future prospects of the company are doubtful. Which of the concepts is the
management tempted to violate?
A. Accrual concept
B. Prudence Concept
C. Consistency concept
D. Going concern concept
15. State the effect of the transaction on accounting equation: Cash discount received
from suppliers
A. Increase in cash and Decrease in suppliers
B. Decrease in cash and Decrease in suppliers
C. Decrease in suppliers and Increase in Profit

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BOBBY JERRY ATSU DEVI EMMANUEL
OFFICE OF THE COORDINATOR DESIGN TEAM MEMBER
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D. Decrease in expense and Decrease in Capital

16. State the effect of the transaction on accounting equation: Paid salaries with cash
A. Increase in cash and Decrease in payables
B. Decrease in cash and Decrease in inventory
C. Decrease in cash and Decrease in Profit
D. Decrease in expense and Decrease in Cash

17. State the effect of the transaction on accounting equation: Felicia started business
with a bank loan of Ghc 10,000.
A. Increase in bank and Increase in capital, Ghc 10,000
B. Increase in bank and Decrease in capital, Ghc 10,000
C. Decrease in bank and Decrease in liabilities, Ghc 10,000
D. Increase in bank and Increase in liabilities, Ghc 10,000

18. What are the elements of income statement?

A. Profit and loss
B. Assets and Liabilities
C. Revenue and Expense
D. Revenue and Sales

19. Which of the following is incorrect?

A. Financial accounting reports on a section of the organization.
B. Cost accounting does not comply with GAAP
C. Management accounting’s records are not mandatory
D. Financial accounting reports to outsiders

20. Which of the following is correct?

A. Financial accounting is concerned with identifying, presenting and interpreting
information used for formulation of strategies, planning and controlling the activities,

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BOBBY JERRY ATSU DEVI EMMANUEL
OFFICE OF THE COORDINATOR DESIGN TEAM MEMBER
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decision making and optimization of resources usage by management in the firm
B. Classifying is concerned with ensuring that all business transactions that are
quantified in monetary terms are recoded in an orderly manner. Recordings are done
in Journal
C. Loss is an economic sacrifice for which the firm receives no offsetting financial
benefits.
D. Sales invoice is issued when goods are returned by customers.

21. Withdrawal of inventory by the owner for personal use appears in trading account
as a deduction from
a. sales
b. overdrafts
c. purchases
d. none of these

22. The revenue is not recognized until it is earned and realized or at least realizable.
To which accounting principle/concept this statement belongs?
a. Separate entity concept
b. Going concern concept
c. Prudence/Conservatism concept
d. Revenue recognition principle

23. What from the following is NOT a current asset?

a. Trade receivables
b. Patent rights
c. Cash
d. Inventory

24. What from the following is NOT a non-current asset?

a. Patent rights
b. Capital
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BOBBY JERRY ATSU DEVI EMMANUEL
OFFICE OF THE COORDINATOR DESIGN TEAM MEMBER
c. Property
d. Inventory

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25. A statement of financial position is intended to help investors and creditors
a. Computing rates of return.
b. Evaluate economic resources and obligations of a firm.
c. Evaluate changes in the ownership equity of a firm Evaluate economic
performance of a firm.
d. Assess the amount, timing, and uncertainty of prospective net cash inflows of a
firm

26. Which of the following states that a transaction is not recorded in the bo oks of
accounts unless it is measurable in terms of money?
a. Revenue recognition principle
b. Time period assumption
c. Money measurement concept
d. Matching principle

27. The John Marketing Company provides advertising services to an investment

company in year A but receives advertising fee in year B. The John Marketing
Company recognizes this revenue in year A. This action of John Marketing Company
is justified by:
a. economic entity concept
b. revenue recognition principle
c. going concern concept
d. business entity concept

28. Sony, a multinational electronics corporation, rounds dollar amounts in its

financial statements to the nearest Ghc 1,000. Which accounting principle/concept
justifies this action?
a. historical concept
b. Economic entity concept

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BOBBY JERRY ATSU DEVI EMMANUEL
OFFICE OF THE COORDINATOR DESIGN TEAM MEMBER
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c. Materiality concept
d. Realization concept
29. Proceeds from goods that have been sold to the customers are treated as _____ in
the financial statements.
a. revenues
b. inventories
c. debt
d. expenses

30. Which of the following does not describe accounting?

a. Is an end rather than a mean to an end?
b. Language of business
c. Financial accounting and accounting systems
d. Useful for decision making

31. According to accrual concept of accounting, financial or business transaction is

recorded:
a. when profit is computed
b. when transaction occurs
c. when cash is received or paid
d. when balance sheet is prepared

32. Which financial statement displays the revenues and expenses of a company for a
period of time?
a. Cash flow statement
b. Statement of changes in equity
c. Income Statement
d. Statement of financial position

33. In certain situations, companies might recognize losses but not gains. This action
belongs to:

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BOBBY JERRY ATSU DEVI EMMANUEL
OFFICE OF THE COORDINATOR DESIGN TEAM MEMBER
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a. matching principle
b. monetary unit assumption
c. Prudence/conservatism principle
d. revenue recognition principle
34. The Modern Enterprises reported all assets in the balance sheet at current market
value. This action is a violation of:
a. materiality concept
b. conservatism concept
c. cost principle or historical cost concept
d. full disclosure concept

35. The auditor noticed that the financial statements of Meta Company were missing
some footnotes important for users for decision making. This action of the
management is a violation of:
a. going concern concept
b. full disclosure concept
c. economic entity concept
d. materiality concept

36. The goods that have not been sold to the customers till the end of the reporting
period are considered as
a. expenses
b. purchases
c. sales
d. inventories

37. What is the main purpose of financial accounting?

a. Keep track of companies’ expenses
b. Organize financial information
c. Minimize companies’ taxes
d. Provide useful financial information to outsiders

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BOBBY JERRY ATSU DEVI EMMANUEL
OFFICE OF THE COORDINATOR DESIGN TEAM MEMBER
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38. How many elements of financial statement do we have?
a. 2
b. 5
c. 3
d. 4
39. How many elements of income statement do we have?
a. 5
b. 3
c. 4
d. 2

40. Which one of the following states that the life of a business can be divided into
equal time periods?
a. Periodicity concept
b. Business entity concept
c. Accrual concept
d. Revenue recognition principle

41. Which accounting concept or principle states that the transactions of a business
must be recorded separately from those of its owners or other businesses?
a. matching principle of accounting
b. materiality concept of accounting
c. business entity concept of accounting
d. time period concept of accounting

42. Which financial statement uses the expanded accounting equation?

a. Income Statement
b. Cash flow statement
c. Balance sheet or statement of financial position
d. Statement of changes in equity
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BOBBY JERRY ATSU DEVI EMMANUEL
OFFICE OF THE COORDINATOR DESIGN TEAM MEMBER
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43. The correct form of accounting equation is
a. Assets + Receivable = Equity
b. Assets – Liabilities = Equity
c. Assets – Receivable = Equity
d. Assets + Liabilities = Equity

44. A company is a going concern if:

a. its income statement for the current year shows huge profit
b. it is a public limited company
c. its balance sheet shows a strong financial position
d. there is no evidence that it will or will have to cease o perations within foreseeable
future.

45. Prepaid Rent is what kind of account?

A. Dividends
B. Asset
C. Liability
D. Expense

46. If someone subscribes to a magazine, on the company books, which liability

account goes up?
A. expense prepaid
B. expense owing
C. revenue prepaid
D. revenue owing

47. When a customer pays the supplier in cash, the supplier will issue the customer a
document
called a _____
A. invoice
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BOBBY JERRY ATSU DEVI EMMANUEL
OFFICE OF THE COORDINATOR DESIGN TEAM MEMBER
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B. receipt
C. credit note
D. debit note

48. An activity carried out by a business to provide goods and services in exchange
for money is
known as _____
A. Transaction
B. Planning
C. Accounting
D. Purchasing

49. Gigi Supplies delivered cat food to Happy Pet Shop but did not receive payment
from Happy Pet Shop till the following month. This is known as a ______ transaction
A. Cash
B. Credit
C. Debit
D. Owing

50. When a supplier sells goods on credit, the supplier will issue the customer a
document called an ______
A. Debit note
B. Invoice
C. Receipt
D. Cheque

51. The business will receive from the bank a ______ which states the deposits and
withdrawals made to and from the business bank account
A. Cash book
B. Cheque book
C. Bank statement

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BOBBY JERRY ATSU DEVI EMMANUEL
OFFICE OF THE COORDINATOR DESIGN TEAM MEMBER
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D. Receipt

52. Loo's Sanitary sold Ghc 750 worth of taps to SAC Inc on credit. Identify the
Special Journal in which Loo's Sanitary would record the transaction in
A. Sales day book
B. Purchases ledger
C. Sales ledger
D. Purchases day book

53. Accounting transactions are processed regularly in a systematic order known as

the ________
A. Systematic order
B. Chronological order
C. Ledger order
D. Order from Board of directors and owners

54. Which of the following is not a Special Journal?

A. Purchases journal
B. General journal
C. Cash book
D. Sales journal

55. Lybrab Limited, a credit customer of Cute Dolls Makers, returned dolls that were
of the wrong model to Cute Dolls Makers. Which Special Journal should Cute Dolls
Makers record the transaction in?
A. Sales day book
B. Return inward book
C. Purchases day book
D. Purchases return book

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BOBBY JERRY ATSU DEVI EMMANUEL
OFFICE OF THE COORDINATOR DESIGN TEAM MEMBER
56. There is a debit balance of Ghc 100 in the cash in hand account. This means
that ............
A. Cash has been overspent by Ghc 100
B. Ghc 100 cash remains in the office of the business
C. Total cash paid out is Ghc 100
D. Total cash received is Ghc 100

57. When will a bank overdraft occur?

A. When a business buys goods on credit
B. When a business has insufficient funds in the bank account to settle a cheque
issued
C. When a business takes a short-term loan
D. When a business has sufficient funds in the bank account to settle a cheque issued

58. Which of the following is a reason for giving cash discounts?

A. To encourage customers to buy more goods
B. To encourage customers to buy goods on discount
C. To encourage customers to pay earlier, before the end of the credit period
D. To encourage customers to pay exactly on the last day of the credit period

59. Neequaye Convenience Store purchased inventory worth Ghc 4,570 from 'Accra
Is Bae' Drinks Supplies. A cheque was issued when the goods was delivered. State the
journal Neequaye Convenience Store would record the transaction in?
A. General journal
B. Cashbook
C. Purchases daybook
D. Sales daybook

60. Neequaye Convenience Store purchased goods worth Ghc 10,320 from Betty
Snack Enterprise on credit. State the journal Neequaye Convenience Store would
record the transaction in
A. purchases ledger
B. purchases daybook
C. general journal
D. cash book

61. Nyame na ay3 Bread Supplies sold goods worth Ghc1,438 to a Supermarket. A
cheque was received when the goods are delivered and banked in immediately. State
the journal Nyame na ay3 Bread supplies would record the transaction in
A. General journal
B. Cash book
C. Sales journal
D. Purchases journal

62. Start Supermarket returned goods worth Ghc 900 to Nyame na ay3 Bread
Supplies as they were of the wrong specifications. A cheque was refunded. State the
journal Nyame na ay3 Bread Supplies would record the transaction in
A. Return inward daybook
B. Cash book
C. Sales day book
D. Return outward book

63. The petty cash has an imprest amount of Ghc 250 and the expenses paid out from
the fund are cleaning Ghc 30, coffee and tea Ghc 20, postage Ghc 6 and stationary
Ghc 21. The reimbursement drawn by the chief cashier to the petty cashier for next
month will be ____
A. Ghc 250
B. Ghc 176
C. Ghc 174
D. Ghc 77

64. The balance left in the Petty Cash Book is Ghc 45 and a reimbursement of Ghc
155 is made. The imprest amount is ____
A. Ghc 110
B. Ghc 200
C. Ghc 155
D. Ghc 45
65. How is inventory classified on the financial statement?
A. asset
B. expense
C. revenue
D. liability

66. The dual effects concept can be best described as follows:

A. When one records a transaction in the accounting system, at least two effects on
the basic accounting equation will result
B. When an exchange takes place between two parties, both parties must record the
transaction
C. When a transaction is recorded, both the balance sheet and the income statement
must be impacted
D. When a transaction is recorded, one account will always increase and one account
will always decrease

67. The small amount of cash held on hand to pay minor expenses is known as:
A. cash at hand
B. petty cash
C. small cash fund
D. cash

68. If the ending balance in accounts payable decreases from one period to the next,
which of the following is true?
A. Cash receipts from customers exceeded cash payments to suppliers
B. Cash payments to suppliers exceeded current period purchases
C. Cash payments to suppliers were less than current period purchases
D. Cash receipts from customers exceeded current period purchases

69. The total amount of the Discount Column on the receipt side of the Cash Book is:
a. Credited to the Purchases Ledger Control account
b. Credited to the Sales Ledger Control account
c. Debited to the Purchases Ledger Control Account
d. Debited to the Sales Ledger Control account

70. Which of the following will not appear in the Purchase Ledger Control account?
a. Bills payable dishonored
b. Carriage outward
c. Return outward
d. Cheques paid to creditors

71. As at 1 January 2021 the Sales ledger control account had Ghc 216,400 debit
balance and Ghc 11,450 credit balance. Credit sales in January were Ghc 582,550:
and sales returns Ghc 31,600: Ghc 498,200 has been received from credit customers.
Identify the debit balance by the month end assuming that Discount allowed was

Ghc 14,400 and credit balances by month end were Ghc 19,700
a. Ghc 254,750
b. Ghc 263,000
c. Ghc 166,600
d. Ghc 263,050

72. As at 1 January 2021 the Sales ledger control account had Ghc 216,400 debit
balance and Ghc 11,450 credit balance. Credit sales in January were Ghc 582,550:
and sales returns Ghc 31,600: Ghc 498,200 has been received from credit customers.
Identify the debit balance by the month end assuming that Ghc 235,000 of the amount
received from trade receivables were net of 6% cash discount, and Ghc 14,800 of the
amount received from customers was in respect of a debt written off as bad in the
previous month. Credit balances in the Trade Receivables Ledger by the month end
was Ghc 9,200.
a. Ghc 281,540
b. Ghc 267,640
c. Ghc 266,740
d. Ghc 266,700

73. As at 1 January 2021 the Sales ledger control account had Ghc 216,000 debit
balance and Ghc 11,450 credit balance. Credit sales in January were Ghc 582,050:
and sales returns Ghc 31,600: Ghc 498,200 has been received from credit customers.
Identify the debit balance by the month end assuming that A trade debt of Ghc 9,500
was written off as bad in August and a cheque for Ghc 14,000 received from a
customer is returned dishonored by the bank. Upon receipt of this cheque the
customer had been allowed 6% cash discount. Discount allowed in the month was
Ghc 9,400 and credit balances in the Trade Receivables Ledger by the month end was
Ghc 7,200.
a. Ghc 260,000
b. Ghc 261,900
c. Ghc 270,400
d. Ghc 207,400

74. As at 1 January 2021 the Sales ledger control account had Ghc 216,400 debit
balance and Ghc 11,450 credit balance. Credit sales in January were Ghc 582,550:
and sales returns Ghc 31,600: Ghc 498,200 has been received from credit customers.
Identify the debit balance by the month end assuming that In January Ghc 11,500 was
offset by contra, Ghc 4,840 was allowed as cash discount and Ghc 2,100 was written
off as bad. Credit balances in the Trade Receivables Ledger by the month end was
Ghc 14,200.
a. Ghc 276,450
b. Ghc 253,460
c. Ghc 258,290
d. Ghc 258,460

75. During December 2019, purchases, purchases returns and cash paid to credit
suppliers were Ghc 728,450, Ghc 11,200 and Ghc 682,500 respectively. As at 1st
December, purchases ledger control account showed Ghc 149,550 credit balance and
Ghc 7,400 debit balance. Identify the total of credit balance in the Purchase’s ledger
control account, by the month end, assuming that payments to trade payables include
Ghc 280,250 paid taking advantage of 5% cash discount offered by the suppliers and
by the mo nth end the debit balances in the Purchases Ledger control account
amounted to Ghc 5,200.
a. Ghc 276,450
b. Ghc 253,460
c. Ghc 258,290
d. Ghc 258,460
76. During December 2019, purchases, purchases returns and cash paid to credit
suppliers were Ghc 728,450, Ghc 11,200 and Ghc 682,500 respectively. As at 1st
December, purchases ledger control account showed Ghc 149,450 credit balance and
Ghc 7,400 debit balance. Identify the total of credit balance in the Purchase’s ledger
control account, by the month end, assuming that during the month of Decemeber,
offset by contra amounted to Ghc 15,800; while by the month end the debit balances
in the Purchases Ledger amounted to Ghc 8,000
a. Ghc 169,800
b. Ghc 161,100
c. Ghc 258,290
d. Ghc 169,000

77. Which of the following would be valid reasons for writing up Total or Control
accounts

i) it becomes possible to enhance the preparation of trial balances

ii) It could be part of the company’s internal control system
iii) It is fashionable to write up control accounts
iv) It would become possible to localize any error to one of the subsidiary ledgers
a. i, ii and iv
b. ii, iii and iv
c. i, ii and iii
d. i, iii and iv

78. As at 31st March 2021 the Trade Receivables Control account balance was
reported as Ghc296,000 and this did not agree with the sum of the individual
customers’ balances. The following errors were discovered:
a. A dishonoured customer’s cheque for Ghc 4,500 has been posted to the credit of
the customer’s a/c
b. Return inwards day book was added as Ghc 17,600 instead of Ghc 27,600
c. A copy sales invoice of Ghc 42,800 has been recorded as Ghc24,800 in the Day
book.
d. Ghc 11,500 offset by contra is entered on the debit side of the Control account.

 What would be the correct receivable balance as at 31stMarch, 2021

a. Ghc 281,000
b. Ghc 281,400
c. Ghc 292,900
d. Ghc 263,400

79. Reginald, a dealer in motor spares, buys his supplies from Easey. As at 1st April
Reginald owed Easey Ghc 29,450. He has received two invoices from Easey for
purchases during April for Ghc 54,550 and Ghc 48,500. Another invoice from Easey
for Ghc 23,300 and a remittance of Ghc 80,640 by Reginald are in transit as at 30th
April. When making the remittance Reginald took into account a cash discount of
4%. A monthly statement received from Easey shows the amount due from Reginald
as Ghc 155,800. Identify the amount Reginald owes Easey as at 30th April.
a. Ghc 23,300
b. Ghc 75,160
c. Ghc 155,800
d. Ghc 71,800

80. Identify which of the four alternatives is the correct analysis of the side in which
the items listed below will appear in a Sales Ledger Control account
i. Cash sales
ii. Reversal of discount allowed
iii. Set off
iv. Credit Sales
v. Receipt from credit customers
vi. Return inwards
vii. Discount allowed
viii. Provision for doubtful debt
ix. Return outwards
x. Carriage inward
xi. Bad debt recovered
xii. Bad debt written off
a. On the debit side: ii,v,viii; On the credit side: iii,iv,vi, vii, ix, xi; On neither side: i,
x, xii
b. On the debit side: ii,v; On the credit side: iii,vi,vii, ix, x; On neither side: i,iv, viii,
xi, xii
c. On the debit side: ii,v; On the credit side: iii, vi, ix, x, xii; On neither side: i, iv, vii,
viii, xi
d. On the debit side: i, ii, iv; On the credit side: iii,vi, viii, ix, x; On neither side: v,
vii, xi, xii

81. ............ is prepared to show in summarized from the individual items that have
been entered in the various subsidiary ledgers.
a. Trial Balance
b. Balancing off accounts
c. Total accounts
d. Control account

82. What is the double entry for contra setoff in control accounts?
a. Debit Setoff account: Credit Control account
b. Debit Purchases ledger control account: Debit Sales ledger control account
c. Credit Purchases ledger control account: Debit Sales ledger control account
d. Debit Purchases ledger control account: Credit Sales ledger control account

83. Which of the following about control accounts is incorrect?

a. They are included in the trial balance
b. They are included in the subsidiary ledger
c. The apply the normal rules for debit and credit
d. They provide a summarized data

84. Calculate credit purchases using the information given below:

Opening credit balance - Ghc 970
Cash paid to suppliers - Ghc 11,400
Discount received - Ghc 945
Bills Payable - Ghc 2,150
Discount received(withdrawn)- Ghc 145
Closing credit balance - Ghc 4,940
a. 18,320
b. 20,260
c. 18,610
d. 18,060

85. Calculate credit sales using the information given below:

Opening debit balance - Ghc 344,240
Set off - Ghc 3,000
Cash Sales - Ghc 10,000
Discount allowed - Ghc 240
Closing Debit balance - Ghc 350,000
a. Ghc 1,000
b. Ghc 1,480
c. Ghc 9,000
d. Ghc 3,000

86. Calculate Trade receivable balance using the information below:

Opening Debit balance: Ghc 30,700
Opening Credit balance: Ghc 240
Cash Sales: Ghc 150,000
Credit Sales: Ghc 162,200
Cash from debtors: Ghc 17,550
Cheque from debtors: Ghc 132,896
Discount allowed: Ghc 2,754
Closing credit Balance: Ghc 240
Carriage inward: Ghc 1,000
a. Ghc 39,460
b. Ghc 39,700
c. Ghc 189,700
d. Ghc 188,700

87. Calculate Trade payables balance using the information below:

Opening credit balance - Ghc 970
Credit Purchases - Ghc 20,260
Cash paid to suppliers - Ghc 11,400
Discount received - Ghc 945
Bills Payable - Ghc 2,150
Discount received(withdrawn)- Ghc 145
a. Ghc 4,940
b. Ghc 6,880
c. Ghc 4,490
d. Ghc 6,590

88. Calculate the value for credit sales balance using the information below:
Opening Debit balance: Ghc 30,700
Opening Credit balance: Ghc 240
Cash Sales: Ghc 150,000
Cash from debtors: Ghc 17,550
Cheque from debtors : Ghc 132,896
Discount allowed: Ghc 2,754
Closing credit Balance: Ghc 240
Carriage inward: Ghc 1,000
Closing debit balance: Ghc 39,000
a. Ghc 162,000
b. Ghc 162,200
c. Ghc 189,700
d. Ghc 162,900

89. The balance in a Bank Account appearing in a two column Cash Book:
A. Will always be on the credit side
B. Will always be on the debit side
C. Will always be either on the debit side or credit side
D. If it has a balance, it could be on either side

90. A cheque for Ghc 1,000 received from Rebecca Jones, a trade debtor, should be
accounted for as:
A. Debit Cash Account and credit Rebecca Jones’ Account
B. Debit Bank Account and credit Rebecca Jones’ Account.
C. Debit Rebecca Jones’ Account credit Cash Account.
D. Debit Cash Account and credit Sales Account
91. The bank statement reports a credit transfer of Ghc 400 from a customer on 29th
July. Accounting entries for this are:
A. A debit in the account of the debtor concerned and a credit in the Bank Account
B. A debit in the Bank Account and a credit in the Cash Account
C. A debit in the Bank Account and a credit in the account of the customer concerned
D. A debit in the Cash Account and a credit the account of the debtor concerned

92. The accounting entry required when the bank advises that a bank loan has been
approved:
A. Debit Bank Account credit Cash Account
B. Debit Cash Account credit Bank Account
C. Debit Cash Account credit Bank Loan Account
D. Debit Bank Account credit Bank Loan Account

93. The accounting entry to record bank charges deducted from the Bank Account of
the business:
A. Debit Bank Charges Account credit Bank Account
B. Debit Interest account credit Bank Account
C. Debit Bank Charges Account credit Cash Account
D. Debit Cash Account credit Bank Charges Account
94. A debit balance in Bank account in the Cash Book appears as a credit balance in
the bank statement
A. True
B. False

95. A Bank Reconciliation Statement is not part of the double entry system
A. True
B. False

96. An overdraft in the bank statement is included in the balance sheet as a current
asset
A. True
B. False

97. A cash payment as petty cash imprest would appear in the Bank statement
A. True
B. False

98. If the bank reconciliation statement started with a favorable balance as stated in
the bank statement, unpresented cheques would be added.
A. True
B. False

99. A reconciliation statement is prepared because the Bank Account in the Cash
Book is always
correct and the bank statement is not
A. True
B. False

100. An instruction to a bank to pay a specified amount at stated interval is a standing

order.
A. True
B. False
101. What would be the bank balance as at 11th May 2020 as reported in the bank
statement in each of the following circumstances:
a) As at this date the deposits awaiting clearance is Ghc 18,240 and cheques yet to be
presented for payment is Ghc 21,590; while the bank balance as recorded in the Cash
book was Ghc 9,480
A. Ghc 12,830
B. Ghc 6,130
C. Ghc 12,830 o/d
D. Ghc 71,800

102. b) As at this date the Cash Book reports a bank balance of Ghc 21,800; while
cheques yet to be presented amount to Ghc 21,560 and deposits yet to be credited by
the bank amount to Ghc 36,240.
A. Ghc 21,800
B. Ghc 36,480 o/d
C. Ghc 36,480
D. Ghc 7,120

103. c) The Cash Book reports a bank balance of Ghc 4,250, without recording a
credit transfer from a customer of Ghc 7,200 and a standing order payment of Ghc
4,500. Deposits awaiting clearance were Ghc 22,400 and the value of cheques yet to
be presented on this date was Ghc 9,480.
A. Ghc 19870
B. Ghc 11,370 o/d
C. Ghc 5,970 o/d
D. Ghc 5,180
104. d) As at this date the Cash Book reports a bank balance of Ghc 11,450, without
recording bank charges of Ghc 35. Deposits awaiting clearance and cheques yet to be
presented amount to Ghc 49,240 and Ghc 29,780 respectively.
A. Ghc 8,045 o/d
B. Ghc 30,875
C. Ghc 8,010 o/d
D. Ghc 8,010
105. As at this date the Cash Book reports a bank overdraft of Ghc 9,850. Cheques
yet to be presented and deposits awaiting clearance on this date amount to Ghc
15,250 and Ghc 21,820 respectively.
A. Ghc 3,280 o/d
B. Ghc 16,420 o/d
C. Ghc 15,250
D. Ghc 15,205

106. The balance at bank as at 17th July 2020 is stated on the bank statement as Ghc
18,450. Cheques yet to be presented to the bank on this date amount to Ghc 19,720.
Assuming that the balance in the Bank Account written up in the Cash Book differs
only because of circumstances stated in each of the following, what is the bank
balance to be reported in the Statement of financial position as at 17th July 2020:a)
The deposits awaiting clearance on that date amount to Ghc 32,475.
A. Ghc 18,450
B. Ghc 31,205
C. Ghc 5,695
D. Ghc 5,695 o/d

107. The bank statement reports an overdraft of Ghc 17,455 as at 27th May 2012. As
at that date cheques to the value of Ghc 14,280 have not been presented for payment
and deposits amounting to Ghc 39,450 await clearance. If other circumstances are as
described in each of the following situations, ascertain the bank balance that would
be reported in the Cash Book, prior to correcting what has been stated below:
a) A cheque for Ghc 12,480 written in favor of Guy Soloman, a trade creditor, has
been entered in the Cash Book as Ghc 12,840, and an automated credit from Niel
Tudor, a customer, for Ghc 3,500 is yet to be recorded in the Cash Book.
A. Ghc 11,655 o/d
B. Ghc 4,650
C. Ghc 4,655
D. Ghc 3,855

108. b) Cash Book fails to record the dishonour of a cheque for Ghc 22,500 from Dan
Moss, a customer, Ghc 18 charged as bank commission and Ghc 17,500 collected by
the bank on a dividend mandate.
A. Ghc 37,607 o/d
B. Ghc 2,707 o/d
C. Ghc 2,707
D. Ghc 12,733

109. c) Bank balance stated in the Cash Book is Ghc 17,240. Trade Association
subscription of Ghc 450 paid by direct debit, a dividend of Ghc 3,000 collected on a
mandate are yet to be recorded in the Cash Book. Any difference is deposit awaiting
clearance.
A. Ghc 20,690
B. Ghc 17,240 o/d
C. Ghc 19,790
D. Ghc 17,240

110. d) A cheque for Ghc 6,500 drawn in favour of Maria Sayes, a trade creditor, was
lost and replaced by another. Apart from entering both cheques as credits in the Cash
Book no other entry has been made.
A. Ghc 1,215
B. Ghc 14,215
C. Ghc 29,625 o/d
D. Ghc 29,625

111. Which of the following accounts will have a credit balance?

A. Salaries account
B. Motor vehicle account
C. Cash account
D. Sales account

112.Which of the following accounts will have a debit balance?

A. Commission earned account
B. Sales account
C. Furniture account
D. Capital account
113.Which pair of accounts stated below will have balances on opposite sides?
A. Stationery account and Salaries account
B. Capital account and Purchases account
C. Furniture account and Cash account
D. Furniture account and Bank account

114. Birdland paid cash to purchase of bird cages for re-sale. Which of the following
statements is correct?
A. Total assets of the business would increase.
B. Total assets of the business will decrease.
C. There will be no effect on the total assets of the business.
D. Owner's Capital will decrease.

115.The owner of Birdland also paid in additional capital amounting to Ghc 50,000 in
cash. As a result of this:
A. the assets and capital will increase.
B. the assets and capital will decrease.
C. the assets will increase and liabilities will decrease.
D. the liabilities and capital will increase.

116. If the effect of a transaction is that it reduced both the assets and the liabilities of
a business by Ghc 100,000, which of the following is that transaction likely to be?
A. Disposal of an asset
B. Sale of goods
C. Introduction of additional capital by the owner
D. Discharge of a loan

117. Which of the following transactions would cause Ghc 50,000 increase in both
total assets and
total liabilities of a business?
A. Acquisition of a computer for office use for Ghc 50,000 on delayed payment terms
B. Payment of Ghc 50,000 in part settlement of a loan obtained by the business
C. Collection in full of a debt of Ghc 50,000 due to the business
D. Payment of staff salary of Ghc 50,000

118. The owner of a business transferred her private car into the business for use by
her staff. What would the effect of this transaction be?
A. Decrease Owner's capital and increase assets
B. Increase Owner's capital and increase assets
C. Increase assets and increase liabilities
D. Decrease assets and decrease liabilities

119. State whether the Total assets would increase, decrease, or remain unchanged by
each of the following transactions:
a) Additional cash introduced as capital by the owner
A. Increase
B. Decrease
C. No change
120. State whether the Total assets would increase, decrease, or remain unchanged by
each of the
following transactions:
b) Salary paid to staff
A. Increase
B. Decrease
C. No change
121.State whether the Total assets would increase, decrease, or remain unchanged by
each of the following transactions:
c) Loan received from a friend
A. Increase
B. Decrease
C. No change

122. State whether the Total assets would increase, decrease, or remain unchanged by
each of the following transactions:
d) Payment of cash to acquire a vehicle for business use
A. Increase
B. Decrease
C. No change

123. State whether the Total assets would increase, decrease, or remain unchanged by
each of the following transactions:
e) Cash removed by the owner for personal use
A. Increase
B. Decrease
C. No change
124. State whether the Total assets would increase, decrease, or remain unchanged by
each of the
following transactions:
f) Part of the loan repaid to the friend
A. Increase
B. Decrease
C. No change

125. State whether the Total assets would increase, decrease, or remain unchanged by
each of the following transactions:
g) Interest paid to the lender
A. Increase
B. Decrease
C. No change

126. Which of the following is known as the accounting equation?

A. Assets = Liabilities - Owner's Capital
B. Liabilities = Assets + Owner's Capital
C. Assets - Liabilities = Owner's Capital
D. Owner's Capital = Assets + Liabilities

127. How would you define the net assets of a business?

A. Total assets - Owner's Capital
B. Total assets + liabilities
C. Owner's capital + Liabilities
D. Total assets – Liabilities

128. If, at year-end, the total assets of a business were Ghc 189,000 and business
liabilities were Ghc 126,000, what would be the owner's capital at that date?
A. Ghc 126,000
B. Ghc 63,000
C. Ghc 315,000
D. Ghc 189,000
129. If the net assets of a business totalled Ghc 540,000 and its liabilities totalled Ghc
316,800, its
total assets on that date would amount to:
A. Ghc 856,800.
B. Ghc 633,600.
C. Ghc 223,200.
D. Ghc 540,000.

130. If net assets of a business totalled Ghc 200,000 and its total assets on that date
amounted to Ghc 325,000, its liabilities would amount to:
A. Ghc 125,000.
B. Ghc 525,000.
C. Ghc 200,000.
D. There is insufficient information to calculate.

131.Rahim started a mobile car wash service: The Visit and Shine. As capital he
introduced Ghc
2,000. The effect of bringing that amount on the Accounting Equation would be:
A. liabilities and assets are both decreased.
B. assets are increased and the owner’s equity decreased.
C. the owner’s equity is increased and liabilities are decreased.
D. the owner’s equity and assets are both increased.
132. Rahim received Ghc 40 when he carried out his first car wash job. The effect of
this transaction on the Accounting Equation is:
A. equity and the assets are both decreased by Ghc 40.
B. liabilities and assets are both increased by Ghc 40.
C. equity and the assets are both increased by Ghc 40.
D. liabilities and assets are both decreased by Ghc 40.

133. Which of the following would be an appropriate description of Ghc 40 received

by Easey for his first car wash job?
A. Capital expenditure of Ghc 40
B. A revenue receipt of Ghc 40
C. A capital receipt of Ghc 40
D. Revenue expenditure of Ghc 40

134. Which of the following would be an appropriate description of Ghc 9 Rahim

paid to advertise his services?
A. Capital expenditure of Ghc 9
B. Revenue expenditure of Ghc 9
C. A revenue receipt of Ghc 9
D. A capital receipt of Ghc 9

135. What is the effect of a credit entry on the balance in a Ledger account?
A. Increase the balance in Capital, Income, and Liability accounts and decrease the
balance in an asset account
B. Increase the balance in the relevant account
C. Increase the balance in the asset and expenditure and decrease the balance in
others
D. Decrease the balance in the relevant account

136. Which of the following statements is incorrect: According to the rules of double
entry:
A. a debit entry decreases or eliminates balances in Income and Liability accounts.
B. a credit entry increases the balance in Income, Liability, and Capital accounts.
C. a debit entry increases the balance in the Capital account.
D. a debit entry increases the balance in Assets and Expenses accounts.

137. Which of the following would you say is the essential quality of an asset?
A. It should be possible to see, feel, and use it.
B. The business should own it.
C. It should bring economic benefit to the business even after the current accounting
period.
D. It should be possible to sell it.
138. Which of the following is an asset?
A. Salaries
B. Sales
C. Cash
D. Capital

139. Which of the following accounts reports an asset?

A. Capital account
B. Bank account
C. Bank Loan account
D. Sales account

140. Which of the following statements describes a liability?

A. Amounts owed
B. Amounts payable within one year after the end of the accounting period
C. Amounts which have to be repaid within the accounting period
D. Amount by which expenses exceed income of a business

141. Which of the following is a liability?

A. Sales
B. Stationery
C. Land and building
D. Bank loan

142. If the Petty Cash Book is treated as merely a subsidiary book of accounts, Ghc
78 paid by the Cashier to restore the petty cash balance to the level of the imprest
should be accounted for as:
A. Debit Petty Cash Account and credit Cash Account
B. Debit Petty Cash Account and credit Bank Account
C. Debit Cash Account and credit Petty Cash Account
D. Debit Petty Cash Book and credit Sales Account
143. The owner of a shop draws a cheque on his personal bank account to pay for
shop rent. This should be accounted for as:
A. Credit Capital account and debit Rent account
B. Credit Bank account in the Cash Book and debit Rent Account
C. Credit Bank account in the cash Book and debit Drawings account
D. Debit Bank account and credit Capital Account

144. A contra entry in the Cash Book means that:

A. Debit and credit entries are in any folio but in the Cash Book
B. Debit must be in the Cash Account and the credit in the Bank Account
C. Debit must be in the Bank Account and the credit in the Cash Account
D. Debit and credit entries are on the same folio of the Cash Book

145. Which kind of account is loan recorded in?

a. Personal
b. Real
c. Nominal
d. Impersonal

146. Cash sales is recorded in.....

a. Sales account
b. Sales day book
c. Sales ledger
d. Sales invoice account

147. The debit balance on the bank statement indicates that

A. the customer has a positive balance
B. the customer is a receivable to the bank
C. the customer is the owner of the bank
D. the customer is an employee to the bank

148. Which of the following is not an asset?

A. Machinery
B. Accounts payable for goods
C. Motor vehicle
D. Cash at bank

149. Which of the following describes a trial balance

A. shows the financial position of a business
B. its a special account
C. shows all the entries in the books
D. its a list of the balances in the books

150. Which of the following best describes non-current asset.

A. Items to be used in the business
B. Items which will not wear out quickly
C. Expensive items bought for the business
D. Items having a long life and not bought specifically for resale

151.Which of the following describes the financial position of a business?

A. An account proving books balance
B. A record of closing entries
C. A statement of assets, liabilities and shareholder's equity
152. A provision for doubtful debt is created
A. When receivable becomes bankrupt
B. When receivable cease to be in business
C. To provide for possible bad debt
D. to write off bad debt

153. Which of the following should be entered in the general journal?

i. Payment of credit purchases
ii. Fixtures bought on credit
iii. Credit sale of goods
iv. Sale of old machinery
A. (I) and (IV)
B. (II) and (III)
C. (III) and (IV)
D. (II) and (IV)

154. In a sales ledger control account the bad debts written off should be shown in
account
A. as a debit
B. as a balance carried down
C. both as a debit and a credit
D. as a credit

155. The going concern assumption

A. Is the most widely used method of measuring monetary account
B. recognizes revenue and cost as they are earned
C. Is that the entity will continue in operations for foreseeable future
D. Is an alternative to the accrual concept

156. Which of the following reflects the effects on the accounting equation of a
payment to a
supplier?
A. Assets decrease and capital decreases
B. Assets decrease and capital increases
C. Assets increase and liabilities decrease
D. Assets decrease and liabilities decrease

157. Which of the following is a liability?

A. Rent accrued
B. Wages and salaries prepaid
C. Bills receivable
D. Cash balance

158. All the following are components of typical financial statement except?
A. Cash flow statement
B. Statement of comprehensive income
C. Notes of accounts
D. Prospectus

159. All the following are activities undertaking in the business environment except?
A. Wholesale
B. Retailing
C. Partnership
D. Manufacturing

160. All the following are characteristics of a partnership business except

A. Pooling of skills and resources
B. Severally and jointly liable
C. Sharing of profits and losses
D. Limited Liability

161. The total of the sales day book is posted to the

A. Debit side of the receivable's account
B. Credit side of sales account
C. Debit side of the sales account
D. Debit side of the individual sales account

162. Which of the following is an advantage of extracting a trial balance?

A. To post items to the purchases day book
B. To check validity of entries
C. To check the arithmetical accuracy of ledger postings
D. To post items to the sale day book

163. Which of the following items will be shown on debit side of receivables account
A. Discount received
B. Return inwards
C. Discount allowed
D. Credit sales
164. Which of this statement is correct?
A. An asset is always a credit entry
B. An expense is always a credit entry
C. A revenue is a credit entry
D. A liability is always a debit entry

165. In income measurement and recognition of assets and liability which of

following concepts
goes together?
A. Periodicity, Accrual, matching
B. Cost, accrual, matching
C. Going concern, cost, realization
D. Going concern, periodicity, reliability

166. Human resources will not appear in the statement of financial position because
of .............
A. Accrual concept
B. Going concern
C. Money measurement concept
D. None

167. The policy to anticipate no profit and provide or all possible losses arise due to
the concept of
A. Consistency
B. Disclosure
C. Prudence /Conservatism
D. Matching

168. A cheque for Ghc 200 was received from Master Easey (a receivable) and was
presented to the bank but the bank has dishonoured it. Identify the correct treatment
of this cheque in a receivable control account?
A. Debit sales ledger control account with Ghc 200
B. Credit sales ledger control account with Ghc 200
C. Debit sales ledger control account with Ghc 400
D. No treatment in sales ledger control accounts

169. A purchasing agent wants to know the total inventory purchased on account
during the year from a particular supplier. Where is the easiest place to find this
information?
A. Inventory subsidiary ledger
B. Accounts payable controlling account
C. Inventory controlling account
D. Accounts ledger

170. Which of the following would be accounted for as an expense?

A. Repayment of bank loan
B. Dividend to stockholders
C. The purchase of land
D. Payment of the current period's rent
171. Which of the following is not included as a separate item in the basic accounting
equation?
A. Assets
B. Revenue
C. Liabilities
D. Stockholder's equity

172. What are the effects on the statement of financial position when a company
borrows a two- year bank loan of Ghc 50,000?
A. Ghc 50,000 credit in current liabilities: Ghc 50,000 debit in cuurent asset
B. Ghc 50,000 credit in current liabilities: Ghc 50,000 debit in non-current asset
C. Ghc 50,000 credit in non-current liabilities: Ghc 50,000 debit in current asset
D. Ghc 50,000 credit in non-current liabilities: Ghc 50,000 debit in non-current asset

173. identify the correct double entry for "bill receivable dishonoured"
A. Debit receivable and credit bill dishonoured
B. Debit bill dishonoured and credit receivable
C. Debit payable and credit bill dishonoured
D. Debit cash and credit receivable

174. The closing balance of petty cash book is considered as

A. Liability
B. Asset
C. Expense
D. Income

175. Which of the following error results in adjustment to cash book balance?
A. Outstanding cheque
B. Unpresented cheque
C. Deposit in transit
D. Omission of bank charges
176. Balance as per cash book (adjusted) = Ghc 1,000, Unpresented cheques = Ghc
2,000, uncredited cheques = Ghc 500, Deposit in transit = Ghc 500. Compute the
balance as per bank statement
A. 2000
B. 0
C. 3000
D. 2500

177. A discount of Ghc 2000 was given to a customer for prompt repayment of debt
but the cashier entered the gross amount in the cash book. How will this be corrected
in the cash book?
A. Ghc 2,000 will be debited in cash book
B. Ghc 2,000 will be credited in cash book
C. Ghc 4000 will be debited in cash book
D. Ghc 4000 will be credited in the cash book.

178. A contra entry of Ghc 1,000 between sales ledger and purchases ledger was
omitted from payables control. Which of the following is the correct adjustment in
the payable control account?
A. Ghc 1000 should be credited
B. Ghc 1,000 should be debited
C. No adjustment
D. Ghc 2000 should be debited

179. At the end of the period, the petty cashier had Ghc 20,000. If the imprest amount
is Ghc 60,000, how much should reimbursed to him?
A. 30,000
B. 40,000
C. 50,000
D. 60,000

180. Master Easey, a businessman took Ghc 500 cash for personal use. To record this
transaction, debit
A. drawings a/c Ghc 500: Master Easey's a/c Ghc 500
B. cash a/c Ghc 500 : Credit Master Easey's a/c Ghc 500
C. Drawings a/c Ghc 500 : Credit Cash a/c Ghc 500

181. Sales: 90,000 Trade discount; 18000, Cash discount: 3000, a customer was
unable to make payment within the possible time, how much is he liable to pay?
A. 72,000
B. 69,000
C. 75,000
D. 80,000

182. Which of the following item is not included in the Cash Book?
A. Credit sales of Ghc 40,000
B. Cash of Ghc 3000 from a debtor
C. Cash payment of Ghc 700

183. The expenditure incurred in the acquisition of a non current asset or adding
value or improving the asset is termed as?
A. Capital expenditure
B. Capital income
C. Capital account
D. Revenue expenditure

184. Debit what comes in and credit what goes out is for which account
A. Nominal account
B. Real account
C. Capital account
D. Sale account

185. Rent received prepaid is a current asset

A. True
B. False
186. Which of the following is not a source document?
A. Receipt
B. Invoice
C. Pay in slip
D. Checklist

187. Which feature states that financial statement should be reliable?

A. Relevance
B. Reliability
C. Understandability
D. Accuracy

188. Financial statement is prepared at the end of the:

A. Month
B. Year
C. Period
D. Week
189. Which concept statement says that the firm should use the same accounting
method over periods
A. Duality
B. Going concern
C. Money measurement
D. Consistency

190. The acting of posting from ledger to trial balance is:

A. summarizing
B. reporting
C. analyzing
D. collecting

191. Cost of asset : Ghc 80,000

Scrap value: Ghc 16,000
Useful life: 4 years
Calculate depreciation per year
A. 10,000
B. 20,000
C. 16,000
D. 12,000

192. Which of the following is not correct?

A. Asset a/c is a real account
B. Rent a/c is a personal account
C. Debtor's a/c is personal account
D. Expense a/c is a nominal account

193. Which of the following serves a dual purpose?

A. Sales daybook
B. Purchases daybook
C. Return inward daybook
D. Cash book

194. Which of the following is the mathematical equivalence inn accounting

A. Going concern concept
B. Money measurement
C. Duality
D. Substance over form

195. Sales journal is used to record

A. Sales on credit
B. Purchases on credit
C. Cash sales
D. Cash purchases
196. Sales: 100,000
Opening inventory: 20,000
Purchases: 90,000
Closing inventory: 30,000
Discount allowed: 5000
Calculate Cost of goods sold
A. 110,000
B. 80,000
C. 70,000
D. 120,000

197. Sales: 100,000

Opening inventory: 20,000
Purchases: 90,000
Closing inventory: 30,000
Discount allowed: 5000
Calculate Cost of goods available for sale:
A. 110,000
B. 80,000
C. 70,000
D. 100,000

198. Sales: 100,000

Opening inventory: 20,000
Purchases: 90,000
Closing inventory: 30,000
Discount allowed: 5000
Calculate the margin on trading
A. 20%
B. 80%
C. 5%
D. 30%

199. Cash from owner: Ghc 5000

Electricity paid: Ghc 500
Payment to suppliers: Ghc 1000
Cash from customers: Ghc 700
Calculate total cash received
A. 5,700
B. 5000
C. 6000
D. 700

200. Cash from owner: Ghc 5000

Electricity paid: Ghc 500
Payment to suppliers: Ghc 1000
Cash from customers: Ghc 700
Calculate total cash payment
A. 5,100
B. 1,500
C. 500
D. 2,200

201. Cash from owner: Ghc 5000

Electricity paid: Ghc 500
Payment to suppliers: Ghc 1000
Cash from customers: Ghc 700
Calculate the cash balance
A. 5,500
B. 3,200
C. 4,200
D. 700
202. What is the source document of cash deposit and withdrawal?
A. Receipt
B. Bank statement
C. Invoice
D. Bank reconciliation statement

203. Which of the following is not adjusted in the cash book?

A. Standing order
B. Unpresented checks
C. Bank charges
D. Dishonoured cheques

204. Kofi is a receivable (debtor), Kofi's account is a

A. Nominal account
B. Real account
C. Personal account

205. The concept that assumes that we should report only expensive relevant items is:
A. Money measurement concept
B. Materiality concept
C. Accrual concept
D. Substance over form concept

206. Which of the following is correct: Where accounting records are maintained on
accrual basis:
A. Income should be accounted for only when received
B. Income should be accounted on accruals basis and expenditure on payments basis
C. Income and expenditure relating to the accounting period should be fully
accounted for even if income is still to be received and expenditure is yet to be paid
for.
D. Expenditure should be accounted for only to the extent they have been paid for
207. An accrued expense amounting to Ghc 18,000 was overlooked when
ascertaining the profit for the year. The effect of this error is that:
A. Net profit as well as liability are overstated
B. Net profit as well as liability are understated
C. Net profit is not affected but liability is understated
D. Net profit is overstated and liability understated

208. Expenses relevant to the accounting period which remain unpaid by period end
should be:
A. ignored until they are paid for in the next period
B. included with expenses paid and shown as an asset at the period end
C. included in with expenses paid and shown as a liability at the period end
D. deducted from amount already paid and shown as a liability at the period end

209. Staff salary remaining unpaid as at the year-end should be accounted for as:
A. Debit Pre-paid Salary account and credit Staff salary account
B. Debit Staff salary account and credit Cash account
C. Debit Salary accrued account and credit Staff salary account
D. Debit Staff salary account and credit Salary accrued account

210. Rent prepaid as at the commencement of the year was Ghc 8,000. Having agreed
to pay rent at Ghc 4,000 per month, the business was able to pay during the year only
Ghc 28,000. What is the position at the year-end?
A. Rent pre-paid is Ghc 12,000.
B. Rent accrued is Ghc 12,000.
C. Rent prepaid is Ghc 4,000.
D. Rent accrued is Ghc 20,000.

211.Rent paid for eight months up to 28th February 2010 amounts to Ghc 32,000.
Since then rent has been increased by 20%. The rent written off as an expense in the
Income statement for the year ended 30th June 2010 and stated as accrued on the
Statement of financial position as at that date would be:
A. Expense: Ghc 57,600; Accrued: Ghc 25,600.
B. Expense: Ghc 38,400; Accrued: Ghc 6,400.
C. Expense: Ghc 51,200; Accrued: Ghc 19,200.
D. Expense: Ghc 48,000; Accrued: Ghc 16,000.

212. Having agreed on a monthly rent of Ghc 4,000 for business premises, three
months rent was in arrears as at 1st January 2010, though Ghc 44,000 was paid as
rent during the year to 31st December 2010. What will appear as rent accrued on the
Statement of financial position as at 31 December 2010.
A. Ghc 24,000
B. Ghc 16,000
C. Ghc 8,000
D. Ghc 8,000

213. Master Easey pays rent regularly quarterly in arrears on 31st March, 30th June,
30th September and 31st December. Annual rent, agreed at Ghc 240,000, was
increased to Ghc 300,000 from 1st July 2010. The amount to be expensed in the year
to 31st August 2011 and reported as accrued as at that date would be:
A. Expense: Ghc 300,000; Accrued: Ghc 50,000.
B. Expense: Ghc 290,000; Accrued: Ghc 60,000.
C. Expense: Ghc 240,000; Accrued: Ghc 50,000
D. Expense: Ghc 200,000; Accrued: Ghc 60,000.

214. The year-end trial balance as at 31st March 2011 reports a debit balance of Ghc
9,800 in the Insurance account. This figure includes Ghc 6,000 paid on 1st January
2011 as insurance for the year ended 31st December 2011. Ascertain the amount to be
charged in the Income Statement as insurance for the year ended 31st March 2011.
A. Ghc 15,800
B. Ghc 5,300
C. Ghc 9,800
D. Ghc 6,000

15. If an expense accrual as at year-end of Ghc 1,500 was treated as a prepayment,

the net profit for the year would be:
A. understated by Ghc 1,500.
B. overstated by Ghc 3,000
C. understated by Ghc 3,000.
D. overstated by Ghc 1,500.

216. A loan of Ghc 30,000 at 6% interest per year, was given to a member of staff, in
the previous year. No interest has been received during the year. The accounting
entries for accruing interest income are:
A. Debit Cash account and credit Interest earning account
B. Debit Staff Loan account and credit Interest earnings account
C. Debit Interest receivable account and credit Interest earnings account
D. Debit Interest receivable account and credit Staff loan account

217. Awurama Owusu-Ansah, a retailer paid Ghc 75,000 as rent and treated the whole
amount as expenditure for the year, overlooking the fact that the amount was for a
five year period commencing from the beginning of that year. The effect of this error
would be:
A. Net profit and current liabilities will be understated by Ghc 75,000.
B. Net profit and current assets are understated by Ghc 75,000.
C. Net profit and current assets are understated by Ghc 60,000.
D. Net profit and current assets are overstated by Ghc 60,000.

218. Which of the following describes the balance in the Accumulated depreciation
account?
A. a liability account
B. The cumulative sum of all depreciation expenses from the date of asset's
acquisition to the present date.
C. Depreciation expense written off in an accounting period
D. D. None of the above

219. The most compelling reason for accounting for depreciation is:
A. to write down the non-current assets to what it is worth by the end of the period
B. to build up resources for the purpose of replacing the non-current assets
C. to match a portion of the depreciable cost of the asset against the income generated
by it
D. because that is a requirement of company law

220. Accumulated depreciation should be shown on the Statement of financial

position:
A. as a current liability.
B. as part of owner's equity.
C. as a deduction from the cost of corresponding noncurrent assets.
D. as a deduction from current assets.

221. What do you understand when one refers to as “net book value” of a non-current
asset?
A. The cost of the asset
B. The cost of the asset less amount expensed as depreciation in the current period
C. The cost less accumulated depreciation up to the date of reporting
D. The current worth of the asset

222. Joe Kissi, a shoe maker, reports his profit without accounting for depreciation of
machinery. As a result:
A. Gross profit as well as net profit are overstated.
B. Gross profit is not affected but net profit is understated.
C. Gross profit is not affected but net profit is overstated.
D. Gross profit as well as net profit are understated.
223. A trader depreciates his vehicles at 20% per annum using the straight-line
method with time proportionate depreciation in the year of acquisition. In addition to
the fleet acquired in previous years for Ghc 180,000, he acquired a vehicle on 1 May
2011 for Ghc 60,000. Calculate depreciation for the year ended 31 December 2011.
A. Ghc 44,000
B. Ghc 12,000
C. Ghc 36,000
D. Ghc 48,000
224. A trade debt as at 30th June 2011 amounted to Ghc 418,400. Allowance for
doubtful debts brought forward as at 1st July 2010 was Ghc 18,800. The proprietor
wishes that a debt of Ghc 3,400 should be written off and the Allowance adjusted to
cover 5% of debts receivables as at 30th June 2011. Calculate the expense for the
year.
A. Ghc 3,400
B. Ghc 1,450
C. Ghc 5,350
D. Ghc 20,920

225. A trade debt of Ghc 12,400 is to be written off as bad and the Allowance for
doubtful debts increased from Ghc 38,200 to Ghc 41,900. The amount to be written
off against the profit for the year as bad and doubtful debts would be:
A. Ghc 54,300
B. Ghc 16,100.
C. Ghc 12,400.
D. Ghc 8,700