Which of the following statements is incorrect?

1. Assets — Capital = Liabilities 
2.  Liabilities +CapitaI = Assets
3.  Liabilities + Assets = Capital 
4.  Assets - Liabilities = Capital

Which of the following is a liability?

1.  Machinery
2. Accounts payable for goods
3.  Motor vehicles 
4.  Cash at bank

(iii)     Which of the following best describes the meaning of sales?

1.  Goods bought for cash
2.    Goods bought on credit
3.  Goods bought for resale
4. Goods paid for cash and credit

(iv)     What is meant by book keeping?

1.  An art of recording business transactions.
2. An art of recording cash transactions. 
3.  An art of recording bank transactions.
4. An art of recording cash and credit transactions.

(v)       Which of the following is correct?

1.  Profit does not change capital. 
2.  Profit reduces capital
3.  Capital can only come from profit.
4.  Profit increases capital.

(vi)     In government accounting the term family includes an officers:

1. wife and children
2. father, wife and children
3. and all relatives
4.  mother, father, wife and children

(vii)    Net profit is calculated in the:

1.  trading account
2.  trial balance
3.  balance sheet
4. profit and loss account

(viii)  The gross profit can be described as:

1. excess of sales over cost of goods sold
2. sales less purchases
3.  cost of goods sold plus opening stock 
4.  net profit less expenses of the period

(ix)     The sales day book can be described as:

1.    part of the double entry system
2. a list of credit sales
3. a list of supplier accounts 
4.  part of real accounts

(x)       A debit balance of Sh. 25,000 in a cash account shows that:

1.  there was Sh. 25,000 cash in hand
2. cash has been overspent by Sh. 25,000
3.  Sh. 25, 000 was the total of cash paid out
4. the total of cash received was less than 25, 000

2014 - BOOK-KEEPING

SECTION A

1.       For each of the items (i) - (x), choose the correct answer.

(i)Which of the following statements is incorrect?

A.Assets — Capital = Liabilities 

B. Liabilities +Capital = Assets

C. Liabilities + Assets = Capital D. Assets — Liabilities = Capital

(ii)Which of the following is a liability?

A.Machinery

B.Accounts payable for goods

C.Motor vehicles 

D. Cash at bank

(iii)Which of the following best describes the meaning of sales?

A.Goods bought for cash

B.Goods bought on credit

C.Goods bought for resale

D.Goods paid for cash and credit

(iv)What is meant by book keeping?

A.An art of recording business transactions.

B.An art of recording cash transactions. 

C. An art of recording bank transactions.

D. An art of recording cash and credit transactions.

(v)Which of the following is correct?

A.Profit does not change capital.

B.Profit reduces capital

C.Capital can only come from profit.

D.Profit increases capital.

(vi)In governmentaccountingthe term family includes an officers:

A.wife and children

B.father, wife and children

C.and all relatives

D.mother, father, wife and children

(vii)Net profit is calculated in the:

A.trading account

B.trial balance

C.balance sheet

D.profit and loss account

(viii)The gross profit can be described as:

A.excess of sales over cost of goods sold

B.sales less purchases

C.cost of goods sold plus opening stock 

D. net profit less expenses of the period

(ix)The sales day book can be described as:

A.part of the double entry system

B.a list of credit sales

C.a list of supplier accounts 

D. part of real accounts

(x)A debit balance of Sh. 25,000 in a cash account shows that:

A.there was Sh. 25,000 cash in hand

B.cash has been overspent by Sh. 25,000

C.Sh. 25, 000 was the total of cash paid out

D.the total of cash received was less than 25, 000