JAMB ACCOUNTING

The term "accounting period" is used to refer to the

• • time span during which taxes are paid to the inland revenue board

• • budget period, usually one year, relied on by the accountant

• • time span, usually one year, covered by financial statement

• • period within which debtors are expected to settle accounts

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introduction to accounting

Accounting information is used by investors and creditors of a company to predict

• • future cash flows of the company

• • future tax payments of the company

• • potential merger candidates for the company

• • appropriate remunerations for the company's staff

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introduction to accounting

Which of the following is the primary objective of accounting?​

• • To maintain records of assets and liabilities

• • To ascertain the financial position of a business

• To determine the tax liability​

• • To provide information for decision-making

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introduction to accounting

Which of the following best describes the concept of double-entry accounting?

• • Every transaction affects two accounts

• • Only income and expenses are tracked

• • Transactions are recorded only at year-end

• • Only cash transactions are recorded

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introduction to accounting

In double-entry bookkeeping, which account is credited when cash is received from a debtor?​

• • Cash Account

• • Debtor's Account​

• • Sales Account​

• • Capital Account​

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double entry bookkeeping systems

What is the primary purpose of a balance sheet?

• • To provide a snapshot of the company's financial position at a specific point in time

• • To track the company's sales performance

• • To show the company's cash flow

• • To summarize the company's income and expenses over a period

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double entry bookkeeping systems

Which of the following is an example of a liability?

• • Cash

• • Accounts Payable

• • Inventory

• • Accounts Receivable

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double entry bookkeeping systems

What does the term "accrual basis" refer to in accounting?

• • Recording revenues when earned and expenses when incurred, regardless of cash flow

• • Tracking only cash transactions

• • Recording revenues and expenses when cash is exchanged

• • Only recording transactions at the end of the accounting period

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double entry bookkeeping systems

Which of the following items would cause a difference between the cash book balance and the bank statement balance?

• • Outstanding lodgments​

• • Depreciation charges​

• • Accrued expenses​

• • Prepaid income

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cash book balance

What is the main difference between cash basis and accrual basis accounting?

• • There is no difference; they are the same

• • Cash basis records transactions only when cash is exchanged, while accrual basis records when they are earned or incurred

• • Accrual basis is simpler than cash basis

• • Cash basis is used by all businesses, while accrual basis is only for large corporations

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cash book balance