Book keeping

What is the primary purpose of bookkeeping?

• To prepare financial statements.

• To record and track financial transactions.

• C) To analyse business performance.

• D) To file tax returns.

2. Which of the following is an example of a financial transaction?

• A) Sending an email to a customer.

• B) Ordering office supplies.

• C) Receiving cash from a sale.

• D) Attending a team meeting.

3. What is the purpose of the general ledger in bookkeeping?

• A) To record sales and revenue.

• B) To track accounts payable and accounts receivable.

• C) To summarise all financial transactions.

• D) To calculate payroll expenses.

4. What is the difference between bookkeeping and accounting?

• A) Bookkeeping focuses on recording financial transactions, while accounting involves analysing and interpreting financial data.

• B) Bookkeeping is only required for small businesses, while accounting is necessary for large corporations.

• C) Bookkeeping is a manual process, while accounting is automated using software.

• D) Bookkeeping is optional, while accounting is mandatory for all businesses.

5. Which of the following is an example of an external user of financial information?

• A) Company managers.

• B) Employees.

• C) Investors.

• D) Vendors.

6. What is double-entry bookkeeping?

• A) Recording financial transactions twice to ensure accuracy.

• B) Keeping two sets of books for redundancy.

• C) Tracking both debit and credit entries for every transaction.

• D) Using two different accounting methods simultaneously.

7. What is the purpose of double-entry bookkeeping?

• A) To reduce the chances of errors in financial records.

• B) To simplify the recording of financial transactions.

• C) To increase the complexity of the accounting process.

• D) To eliminate the need for reconciliations.

8. Which accounts increase with a debit entry in double-entry bookkeeping?

• A) Assets and expenses.

• B) Liabilities and revenues.

• C) Assets and revenues.

• D) Liabilities and expenses.

Which accounts decrease with a credit entry in double-entry bookkeeping?

• A) Assets and expenses.

• B) Liabilities and revenues.

• C) Assets and revenues.

• D) Liabilities and expenses.

10.What is the key principle of double-entry bookkeeping?

• A) The matching principle.

• B) The revenue recognition principle.

• C) The conservatism principle.

• D) The duality principle.