ACCOUNTING

2nd TERM EXAMINATION SY 2025

GRADE 9
Name: __________________________ Date: ____________
(Write your complete name)
INSTRUCTIONS
• Answer all questions.
• Write your answer to each question in the space provided.
• Do not use an erasable pen or correction fluid.

Part Question/Portion Score

I MULTIPLE CHOICE /40

II STRUCTURED QUESTIONS /60

Total score: /100

Final mark:

Checked by: TR BRITO

Comments:
I. MULTIPLE-CHOICE QUESTIONS

1. What is the primary purpose of a cash book?

A. To record all credit transactions
B. To record cash and bank transactions
C. To summarize sales and purchases
D. To prepare the trial balance directly

2. A business receives $500 cash from a customer. How is this recorded in a two-
column cash book?
A. Debit cash column, credit bank column
B. Debit cash column, credit sales account
C. Credit cash column, debit sales account
D. Debit bank column, credit sales account

3. A contra entry in the cash book is made when:

A. Cash is paid to a supplier
B. Cash is withdrawn from the bank for business use
C. A cheque is received from a customer
D. A bank overdraft is recorded

4. A business pays $980 to a supplier after receiving a 2% cash discount. What is

the original invoice amount?
A. $1,000
B. $960
C. $980
D. $1,020

5. Which book of original entry is used to record cash discounts?

A. Sales journal
B. Purchases journal
C. Cash book
D. General journal

6. Which book of prime entry is used to record goods returned by credit customers?
A. Purchases journal
B. Sales journal
C. Sales returns journal
D. Purchases returns journal

7. What is the primary source document used to record transactions in the

purchases journal?
A. Credit note
B. Sales invoice
C. Purchase invoice
D. Receipt
8. A business sold goods for $5,000 and received a cheque. In which book of prime
entry should this transaction be recorded?
A. Cash book
B. Sales journal
C. General journal
D. Purchases journal

9. Why are books of prime entry used in accounting?

A. To prepare financial statements directly
B. To summarize transactions before posting to ledgers
C. To record transactions in the trial balance
D. To replace the need for ledger accounts

10. financial statement shows a business’s financial position at a specific date?

A. Income Statement
B. Statement of Financial Position
C. Cash Flow Statement
D. Trading Account

11. A business receives a credit note from a supplier for $200 due to defective goods
returned. In which book of prime entry is this recorded?
A. Sales returns journal
B. Purchases returns journal
C. Cash book
D. General journal
.
12. Which of the following transactions would be recorded in the general journal?
A. Cash sales of $1,000
B. Purchase of a machine on credit for $10,000
C. Credit sales of $3,000
D. Payment to a supplier by cheque

13. At the end of the month, the total of the sales journal is posted to:
A. The sales account in the general ledger
B. Individual customer accounts in the sales ledger
C. The purchases account in the general ledger
D. The cash book

14. A trader paid $500 in cash for office expenses. In which book of prime entry
should this be recorded?
A. Sales journal
B. Purchases journal
C. Cash book
D. General journal
15. If a payment of $500 for rent is recorded as a debit in the Rent Account and a
debit in the Cash Account, what error has been made?

A. Error of omission
B. Error of commission
C. Error of principle
D. Error of complete reversal

16. Which book of prime entry Which account is credited when a business repays a
bank loan?
A. Loan
B. Bank
C. Capital
D. Sales

17. Which of the following is shown in the statement of financial position?

A. Gross profit
B. Revenue
C. Trade payables
D. Cost of sales

18. What is the purpose of preparing an income statement?

A. To show the financial position of a business at a specific date
B. To calculate the profit or loss for a period
C. To list all non-current assets
D. To record cash transactions only

19. A business has revenue of $50,000, cost of sales of $30,000, and expenses of
$10,000. What is the profit for the period?
A. $10,000
B. $20,000
C. $30,000
D. $40,000

20. Which item is classified as a non-current asset in the statement of financial

position?
A. Inventory
B. Trade receivables
C. Machinery
D. Bank overdraft

21. How is closing inventory treated in the financial statements?

A. Deducted from revenue in the income statement
B. Added to cost of sales in the income statement
 C. Shown as a current asset in the statement of financial position
D. Recorded as an expense in the income statement

22. A business’s statement of financial position shows total assets of $100,000 and
total liabilities of $40,000. What is the capital?
A. $40,000
B. $60,000
C. $100,000
D. $140,000

23. Which of the following would increase the profit in the income statement?
A. Increase in rent expense
B. Decrease in revenue
C. Decrease in cost of sales
D. Increase in depreciation

24. Where is depreciation expense recorded in the financial statements?

A. As a liability in the statement of financial position
B. As an expense in the income statement
C. As an asset in the statement of financial position
D. As revenue in the income statement

25. How is the cost of sales calculated?

A. opening inventory + purchases – carriage inwards – purchases returns –
closing inventory
B. opening inventory + purchases – carriage inwards + purchases returns –
closing inventory

C. opening inventory + purchases + carriage inwards – purchases returns –

closing inventory

D. opening inventory + purchases + carriage inwards + purchases returns +

closing inventory.

26. What is the primary purpose of preparing a trial balance?

A. To calculate the net profit of a business
B. To ensure the accuracy of the double-entry system
C. To record all cash transactions
D. To prepare the final accounts directly

27. Which of the following errors would NOT affect the agreement of a trial balance?
A. An error of omission
B. An error of commission
C. A compensating error
D. An error of principle
28. Which account would appear in the trial balance with a debit balance?
A. Capital
B. Sales
C. Accounts receivable
D. Bank loan

29. A trial balance is prepared on 31 December, and the total debits equal the total
credits. What does this confirm?
A. All transactions are free from errors
B. The ledger accounts are arithmetically correct
C. The business has no liabilities
D. The financial statements are complete

30. An invoice of $1,000 for purchases was recorded as $100 in both the purchases
and creditor accounts. What type of error is this?
A. Error of commission
B. Error of original entry
C. Error of principle
D. Error of complete reversal

31. A business buys inventory for $2,000 on credit from a supplier. How is this
transaction recorded?
A. Debit Inventory, Credit Cash
B. Debit Inventory, Credit Accounts Payable
C. Debit Accounts Payable, Credit Inventory
D. Debit Cash, Credit Inventory

32. A sole trader pays $300 for electricity using the business bank account. Which
accounts are affected?
A. Debit Bank, Credit Electricity
B. Debit Electricity, Credit Bank
C. Debit Electricity, Credit Capital
D. Debit Bank, Credit Capital
Answer: B. Debit Electricity, Credit Bank

33. A customer pays $1,500 to settle an outstanding invoice. How is this recorded in
the double-entry system?
A. Debit Cash, Credit Accounts Receivable
B. Debit Accounts Receivable, Credit Cash
C. Debit Cash, Credit Sales
D. Debit Sales, Credit Cash

34. A business sells goods for $4,000 in cash. How is this transaction recorded?
A. Debit Sales, Credit Cash
B. Debit Cash, Credit Sales
C. Debit Cash, Credit Inventory
 D. Debit Sales, Credit Inventory
Answer: B. Debit Cash, Credit Sales

35. The owner of a business withdraws $500 in cash for personal use. How is this
recorded?
A. Debit Cash, Credit Drawings
B. Debit Drawings, Credit Cash
C. Debit Capital, Credit Cash
D. Debit Drawings, Credit Capital

36. A business pays $1,200 to settle a supplier’s invoice. Which accounts are
affected?
A. Debit Accounts Payable, Credit Cash
B. Debit Cash, Credit Accounts Payable
C. Debit Accounts Payable, Credit Capital
D. Debit Cash, Credit Capital

37. A business purchases a vehicle for $10,000 using a cheque. How is this
recorded?
A. Debit Vehicle, Credit Cash
B. Debit Vehicle, Credit Bank
C. Debit Bank, Credit Vehicle
D. Debit Cash, Credit Vehicle

38. Which of the following is recorded as a credit entry in double-entry bookkeeping?

A. An increase in expenses
B. A decrease in liabilities
C. An increase in income
D. An increase in assets

39. Which of the following is an example of a liability?

A. Motor vehicles
B. Bank loan
C. Capital
D. Drawings

40. A business returns faulty goods worth $600 to Benny, a supplier, originally
purchased on credit. How is this recorded?
A. Debit Benny, Credit Inventory
B. Debit Inventory, Credit Benny
C. Debit Benny, Credit Cash
D. Debit Cash, Credit Inventory
II. STRUCTURED QUESTIONS

1. Zara is a trader. She extracted the following balances from her books of account
on 31 December 2023.

Account $
Equipment 22,000
Bank overdraft 9,000
Sales 85,500
Sales returns 4,200
Purchases 41,300
Purchases returns 1,850
Drawings 6,000
Machinery 3,500
Inventory 15,600
Rent paid 3,200
Wages 25,400
Discount allowed 1,150
Other operating expenses 12,300
Nora (a credit customer) 850
Ahmed (a credit customer) 1,200
Bella (a credit supplier) 5 100
Capital 35 250

Prepare Zara’s trial balance at 31 December 2015.

Zara
Trial Balance at 31 December 2015
DEBIT CREDIT
$ $
 [20]

2. Complete the following sentences, using these phrases:

assets and liabilities
at a particular date
for a period of time
incomes and expenses
An income statement shows ........................................................ and is
prepared ........................................................
A statement of financial position shows ........................................................ and
is prepared ........................................................ [4]

3. The income statement has two sections namely.

1………………………………………………………………………………………….
2…………………………………………………………………………………….… [2]

4. State the simple formula for calculating gross profit.

………………………………………………………………………………………… [3]

5. Identify any three items that would appear below gross profit as other income.
1………………………………………………………………..
2………………………………………………………………..
3…………………………………………………………….…. [3]

6. What is the difference between a service business and a trading business?

………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………….. [4]

7. List any three items that are only found in the income statement of a trading
business, not of a service business.
 1………………………………………………………………..
2………………………………………………………………..
3…………………………………………………………….…. [3]

8. Complete the following sentences using the words and phrases ‘credit’, ‘debit’,
‘income statement’ and ‘statement of financial position’.
An expense account usually has a .............................................. balance and is
shown in the ……………………………………..
The asset account has a ......................................balance and the asset the
account balance is included in the ............................................................. [4]

9. At the end of his first year of trading, Rashid provided the following information.
$
Revenue 72 500
Purchases 49 700
Closing inventory 4 800
Carriage inwards 1 150
Carriage outwards 2 950

What was Rashid’s gross profit? Show your working.

………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………… [4]

10. Leo is a wholesaler. He has little knowledge of accounting. He prepared the

following
income statement which contains some errors.
Prepare a corrected income statement for Leo for the year ended 30 April 20–1.
[20]