O-Level Principles of Accounts

Question 1

Which of the following correctly states the accounting equation?

Accepted Answer

Assets = Liabilities + Capital

Answer

Assets = Liabilities - Capital

Answer

Assets + Capital = Liabilities

Answer

Liabilities = Assets + Capital

Question 2

When a business purchases goods on credit from a supplier, which double entry is recorded?

Accepted Answer

Debit Purchases, Credit Creditors

Answer

Debit Purchases, Credit Bank

Answer

Debit Creditors, Credit Purchases

Answer

Debit Bank, Credit Purchases

Question 3

Which source document is issued by a seller to a buyer for a credit sale?

Accepted Answer

Sales invoice

Answer

Purchase order

Answer

Goods received note

Answer

Debit note

Question 4

What does a trial balance verify?

Accepted Answer

That total debits equal total credits in the ledger

Answer

That all transactions have been recorded correctly

Answer

That assets equal liabilities plus capital

Answer

That the business has made a profit

Question 5

Which of the following accounts normally carries a credit balance?

Accepted Answer

Capital account

Answer

Asset account

Answer

Expense account

Answer

Drawings account

Question 6

Carriage inwards is included in which financial statement section?

Accepted Answer

Trading account

Answer

Profit and Loss account

Answer

Balance Sheet under current assets

Answer

Sales account

Question 7

A cash book serves as which type of accounting record?

Accepted Answer

Both a book of original entry and a ledger account

Answer

Only a ledger account

Answer

Only a book of original entry

Answer

Neither a ledger nor a book of original entry