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ACCOUNTING REVISION QUESTIONS WITH ANSWERS

 

🔹 Section A: Trial Balance (6 Questions)

  1. Michael started a business on Jan 1 with a capital of TSh 1,000,000. During January, he bought goods for cash worth TSh 600,000 and sold goods for TSh 850,000. Prepare a trial balance.

  2. From the following, prepare a trial balance:

    • Cash: TSh 400,000

    • Capital: TSh 1,000,000

    • Purchases: TSh 300,000

    • Sales: TSh 600,000

    • Rent paid: TSh 50,000

  3. Identify and correct errors in this trial balance:
    Dr side = TSh 1,200,000, Cr side = TSh 1,350,000

  4. What is the purpose of a trial balance in financial accounting?

  5. True or False: A trial balance ensures that there are no errors in the accounts.

  6. List any 4 errors that do not affect the trial balance agreement.

🔹 Section B: Cash Account (5 Questions)

  1. Enter the following in a cash account:

    • Jan 1: Started business with TSh 1,500,000

    • Jan 2: Bought goods TSh 500,000

    • Jan 3: Sold goods TSh 700,000

    • Jan 5: Paid wages TSh 100,000

  2. What is the closing balance in the cash account after these transactions:

    • Opening: TSh 200,000

    • Received: TSh 300,000

    • Paid: TSh 150,000

  3. What is a contra entry in a cash book?

  4. Differentiate between a cash account and a bank account.

  5. From the following data, prepare a one-column cash book:

  • Jan 1: Cash in hand TSh 50,000

  • Jan 3: Received from John TSh 20,000

  • Jan 5: Paid for stationery TSh 10,000

🔹 Section C: Trading Account (5 Questions)

  1. Given:

  • Opening Stock: TSh 300,000

  • Purchases: TSh 500,000

  • Sales: TSh 1,200,000

  • Closing Stock: TSh 200,000
    Prepare a Trading Account.

  1. What is the purpose of a trading account?

  2. Is gross profit shown on the debit or credit side of the trading account?

  3. True or False: Direct expenses are shown in the trading account.

  4. State two differences between the trading account and profit and loss account.

🔹 Section D: Profit & Loss Account (5 Questions)

  1. From the following, prepare a Profit and Loss Account:

  • Gross Profit: TSh 300,000

  • Salaries: TSh 50,000

  • Rent: TSh 20,000

  • Commission Received: TSh 10,000

  1. Define net profit and explain how it is calculated.

  2. Identify which of the following are operating expenses:
    (a) Salaries (b) Electricity (c) Sales Revenue (d) Capital

  3. True or False: Depreciation is included in the profit and loss account.

  4. What is the difference between gross profit and net profit?

🔹 Section E: Balance Sheet (4 Questions)

  1. State the accounting equation and explain how it relates to the balance sheet.

  2. Prepare a simple balance sheet using the following:

  • Capital: TSh 800,000

  • Loan: TSh 200,000

  • Assets: Furniture TSh 300,000, Cash TSh 700,000

  1. Classify the following items as assets or liabilities:

  • Bank Loan, Building, Creditors, Debtors, Cash, Capital

  1. What is the difference between a balance sheet and a trial balance?

🔹 Section F: Accounting Equation & Calculations (5 Questions)

  1. If assets = TSh 1,000,000 and liabilities = TSh 300,000, what is the owner’s equity?

  2. Given:

  • Assets = TSh 900,000

  • Liabilities = TSh 400,000
    Find capital.

  1. What is the effect on the accounting equation when cash is used to buy equipment?

  2. A business had the following:

  • Opening Capital: TSh 700,000

  • Additional Capital: TSh 100,000

  • Drawings: TSh 50,000

  • Closing Capital: TSh 900,000
    Find profit or loss.

  1. Explain the three components of the accounting equation and provide an example.

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