Question Paper

For the Position: Audit & Accounts Officer

Time: ………………………………………

Candidates Name:
Existing/ Previous (Mark it √ ) Job Experience Details:

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Questions from 01 to 20:

1. What are the effects on the balance sheet when a company borrows a two-year bank loan of
1,000?
a. 1,000 credit in current liabilities; 1,000 debit in current assets
b. 1,000 credit in current liabilities; 1,000 debit in non-current assets
c. 1,000 credit in non-current liabilities; 1,000 debit in current assets
d. 1,000 credit in non-current liabilities; 1,000 debit in non-current assets
2. What happens to the balance sheet when a company makes provision for salaries of 5,000?
a. 5,000 credit in cash; 5,000 debit in salaries payable
b. 5,000 credit in cash; 5,000 debit in retained earnings
c. 5,000 credit in cash; 5,000 debit in salary expense
d. 5,000 debit in salary expense; 5,000 credit in salaries payable
3. Company B purchased an equipment for 600. The equipment has a useful life of 4 years and a
scrap value of 50 at the end of year 4. What is the depreciation expense for year 1 (using
straight line method)?
a. 137.5
b. 150.0
c. 50.0
d. 122.5

4. Using the same example from previous question, what is the closing balance of property, plant
& equipment (PP&E) in year 3?
a. 150.0
b. 325.0
c. 187.5
d. 50.0
5. Which of the following is not an example of financing cash flow?
a. Issuing 10M worth of shares
b. Repaying 50,000 of long-term debt
c. Paying 200,000 of dividends to shareholders
d. Investing 60,000 in equipment
6. Which of the following is true about the accrual concept?
a. It requires companies to recognize revenues and costs as the business receives or pays
the actual cash for them
b. It requires companies to recognize revenues and costs as the business incurs them
c. The cash flow statement records transactions when the business incurs them
d. Profits on the income statement equals the closing cash flow on the cash flow statement

7. Given the following information, calculate the operating cash flows.

 o 9
o 21
o 73
o 13
8. The ending net book value of Property, Plant & Equipment (PP&E) in year 1 and year 2 are
500,000 and 430,000 respectively on Company A's balance sheet. The company's depreciation
expense in year 2 is 90,000. What is Company A's net capital expenditure for year 2?
a. 160,000
b. 90,000
c. 20,000
d. 340,000
9. If any amount is directly deposited into the bank then?
a. Cash book will show less balance & bank book will show more
b. Cash book will show more balance & bank book will show less
c. Cash book will show double balance
d. Bank book will show double balance
10. When dealing with Bank reconciliation statement while using missing method the credit side of
cash book corresponds to?
a. Debit side of cash book
b. Credit side of Bank statement
c. Debit side of Bank statement
d. None of them
11.How many types of business transactions are there in accounting?
12.Explain real and nominal accounts with examples.
13.What is The Difference between the Cash Basis and the Accrual Basis of Accounting?
14. Explain Capital Expenditure & Revenue Expenditure with examples.
15. Write down the name of different accounting concepts.
16. Write down the components of Financial Statements.
17.What is Cost of Goods Sold? Write down the formula to calculate Cost of Goods Sold.
18.Write down the formulas for following steps to calculate Cost Sheet:
i. Prime Cost
ii. Work Cost
iii. Cost of Production
iv. Total Cost