1. When goods are sold on credit, what is the correct double entry?

A. Debit Sales account, Credit Receivable account B. Debit Receivable account, Credit Sales account C. Debit Cash account, Credit Sales account D. Debit Sales account, Credit Cash account

2. Which of these is NOT a step in preparing a trial balance?

A. Ascertain ledger balances B. Enter balances into debit and credit columns C. Confirm that debit equals credit totals D. Prepare invoices for debtors

3. When recording a transaction, which should be debited?

A. The account giving value B. The account receiving value C. An income account D. A liability account only

4. How does a payment of office rent in cash affect accounts?

A. Debit Rent account, Credit Bank account B. Debit Rent account, Credit Cash account C. Debit Cash account, Credit Rent account D. Credit Rent account, Debit Cash account

5. What does the trial balance confirm when debit balances equal credit balances?

A. That income has been maximized B. The arithmetic accuracy of postings in the accounts C. That there are no errors in financial statements D. That all expenses are recorded

6. When stationery is purchased for cash, which of the following is correct?

A. Debit Cash, Credit Stationery B. Debit Stationery, Credit Cash C. Debit Purchases, Credit Cash D. Debit Cash, Credit Purchases

7. What does the accounting equation express?

A. The total amount of cash and expenses B. The relationship among assets, liabilities, and equity C. How much income was generated in a period D. The debit balance of all accounts

8. What must be true for the accounting equation to balance?

A. Assets must equal liabilities only B. Owners equity must equal liabilities C. Assets = Liabilities + Owner’s equity D. Liabilities = Assets + Equity

9. Which of these is a real account?

A. Rent Expense B. Cash C. Salaries D. Capital

10. According to the double entry principle, what must happen when a company purchases an office machine on credit?

A. Debit Payables account and Credit Office Machine account B. Debit Office Machine account and Credit Payables account C. Debit Cash account and Credit Payables account D. Debit Payables account and Credit Cash account

11. What type of account would “Jide lent us #500 by cheque” be recorded in?

A. Asset account to debit and liability to credit B. Credit account for the loan and debit for cash/bank C. Expense account only D. Income account only

12. If assets increase by N100,000 and liabilities decrease by N30,000, how does owners’ equity change?

A. Remains unchanged B. Increases by N130,000 C. Decreases by N70,000 D. Increases by N70,000

13. Which account type deals with gains and losses such as rent and salaries?

A. Real Account B. Personal Account C. Nominal Account D. Capital Account

14. What is the accounting equation for a sole proprietorship?

A. Assets = Owner’s Equity - Liabilities B. Liabilities = Owner’s Equity + Assets C. Assets = Liabilities + Owner’s Equity D. Owner’s Equity = Liabilities – Assets

15. What are the two equal and corresponding sides in the double-entry bookkeeping system?

A. Debits and credits B. Assets and liabilities C. Expenses and revenues D. Income and capital

16. What is the nature of a trial balance?

A. An account showing profit or loss B. A summary list of all ledger account balances C. A detailed inventory list D. A record of all cash receipts

17. Which of the following would be classified under a nominal account?

A. Cash B. Rent expense C. Machinery D. Customer’s account

18. When an expense increases, according to the APED-LISC rule, which account is debited?

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

19. What is the effect on liabilities when a debit entry is made?

A. Increase liabilities B. Decrease liabilities C. No effect on liabilities D. Doubles liabilities

20. According to the APED-LISC rule, which of the following is credited?

A. Assets increase B. Expenses increase C. Liabilities increase D. Drawings increase

21. Which account is credited when office machines are purchased on credit?

A. Office Machines account B. Payables account C. Cash account D. Sales account

22. If a business pays off part of a loan, what effect does this have?

A. Decreases liabilities and decreases cash/assets B. Increases liabilities and increases cash C. Increases income and decreases expense D. No effect on accounts

23. Which type of ledger is usually restricted to senior management?

A. Sales Ledger B. Purchases Ledger C. Private Ledger D. General Ledger

24. Which of the following is NOT one of the three main types of accounts?

A. Real Account B. Nominal Account C. Transaction Account D. Personal Account

25. What is the primary purpose of extracting a trial balance in accounting?

A. To prepare financial statements directly B. To record transactions in the ledger C. To confirm the arithmetic accuracy of postings at the bookkeeping stage D. To classify accounts into real, nominal, and personal types

26. What type of ledger holds details of capital accounts and drawings accounts?

A. General Ledger B. Sales Ledger C. Private Ledger D. Purchases Ledger

27. Which of the following transactions follows the double-entry rule correctly?

A. Buying goods on credit: Debit Creditors, Credit Purchase B. Selling goods for cash: Debit Cash, Credit Sales C. Borrowing money: Debit Capital, Credit Bank D. Payment of expense by cheque: Debit Bank, Credit Rent Expense

28. What does the term “nominal accounts” refer to?

A. Accounts relating to specific assets B. Accounts for gains, losses, expenses, and incomes C. Accounts for customers and suppliers D. Capital accounts only

29. What happens to the balance brought down (bal b/d) in accounting?

A. It is the closing balance for the current period B. It is the amount to balance both debit and credit sides at the end of the period C. It becomes the opening balance at the start of the next period D. It represents the total of debit transactions during the period

30. Why is the double-entry system considered to create better accountability?

A. Because it records transactions on only debit side B. Because it provides a balanced check between debit and credit C. Because it ignores cash transactions D. Because it only records expenses

31. Which ledger contains all the personal accounts of customers?

A. General Ledger B. Purchases Ledger C. Sales Ledger D. Private Ledger

32. What is the primary feature distinguishing personal accounts?

A. They relate to transactions with persons or corporate bodies B. They involve only cash transactions C. They record only expenses and incomes D. They track tangible assets only

33. Which of these is a characteristic of a real account?

A. Deals with tangible assets such as cash and goods B. Records transactions involving persons only C. Deals only with revenues and expenses D. Does not follow double entry rules

34. What is the fundamental principle behind double-entry bookkeeping?

A. Every transaction affects only one account B. Every debit entry must be matched with a corresponding credit entry C. Only cash transactions need to be recorded D. Debits and credits can be unequal as long as totals match

35. Which account is debited when goods are purchased on credit?

A. Purchase Account B. Payable Account C. Cash Account D. Sales Account

36. Which ledger would typically have restricted access to prevent office staff from viewing sensitive information?

A. Sales Ledger B. General Ledger C. Private Ledger D. Purchases Ledger

37. In double entry bookkeeping, what does a debit entry in an asset account represent?

A. Decrease in asset value B. Increase in asset value C. Credit given to a customer D. Payment of liabilities

38. Which of the following would NOT be included in the General Ledger?

A. Land and buildings accounts B. Customer personal accounts C. Rent expense accounts D. Plant and machinery

39. Which ledger contains the personal accounts of suppliers of goods and services?

A. Sales Ledger B. Purchases Ledger C. General Ledger D. Private Ledger

40. What does the term "posting" refer to in accounting?

A. Recording transactions in the journal B. Transferring information from the journal to the ledger accounts C. Preparing the financial statement D. Verifying accuracy of accounts

41. Why is the trial balance said to provide only prima facie evidence of accuracy?

A. Because it is prepared before recording transactions B. Some errors do not affect the debit and credit balancing C. It includes only cash accounts D. It only records profits and losses

42. Why is a trial balance not considered a financial statement?

A. Because it only lists account balances without adjustments B. Because it contains errors and omissions C. Because it includes only nominal accounts D. Because it reports on cash flow only

43. What does the Purchases Ledger primarily contain?

A. Accounts of customers B. Accounts of suppliers C. Capital accounts D. Expense accounts

44. Which of the following represents an increase in income according to double entry?

A. Debit Income account B. Credit Income account C. Debit Expense account D. Credit Asset account

45. Which of the following transactions will increase both assets and liabilities?

A. Payment of a debt in cash B. Purchasing goods by cash C. Borrowing money from a friend D. Selling goods on credit

46. What is meant by “balance carried down” (bal c/d) in ledger accounts?

A. The opening balance of the account for the new period B. The final closing balance of the account for the period C. The total debit entries in the ledger account D. The total credit entries in the ledger account

47. Why can the trial balance not detect all errors in accounting records?

A. Because it only summarizes cash transactions B. Because it does not check the accuracy of debits or credits individually C. Certain classes of errors do not affect debit and credit totals equally D. It only lists nominal accounts

48. What is a balancing figure in ledger accounts used for?

A. To bring total debits in line with total credits in the account B. To record income earned C. To summarize expenses for the period D. To calculate net profit

49. If the total debit balances equal the total credit balances in a trial balance, what does this imply?

A. No errors exist in the ledger accounts B. Only the arithmetic accuracy of postings is confirmed C. All financial statements are accurate D. The books need to be adjusted further

50. What is the main purpose of preparing a trial balance?

A. To calculate the company’s profit B. To check arithmetic accuracy and ease preparation of final accounts C. To record transactions made in credit D. To list only expenses and incomes