IGCSE Accounting: Multiple Choice Questions (Cambridge CIE)
IGCSE Accounting: Multiple Choice Questions
Level: IGCSE Cambridge (CIE)
Instructions: Choose the most appropriate answer for each question.
Which accounting concept assumes that a business will continue to operate for an indefinite period?
- A. Going Concern
- B. Business Entity
- C. Money Measurement
- D. Accruals
The accounting equation is:
- A. Assets = Capital - Liabilities
- B. Capital = Assets + Liabilities
- C. Liabilities = Assets + Capital
- D. Assets = Capital + Liabilities
What is the source document for a credit sale?
- A. Cheque counterfoil
- B. Purchase invoice
- C. Sales invoice
- D. Receipt
Which book of prime entry records all credit purchases of goods for resale?
- A. Sales Day Book
- B. Purchases Day Book
- C. Cash Book
- D. Journal
When a business buys a machine on credit, which accounts are affected?
- A. Debit Machine account, Credit Bank account
- B. Debit Machine account, Credit Creditor account
- C. Debit Creditor account, Credit Machine account
- D. Debit Bank account, Credit Machine account
If rent is paid by cheque, what is the double entry?
- A. Debit Rent account, Credit Cash account
- B. Debit Bank account, Credit Rent account
- C. Debit Rent account, Credit Bank account
- D. Debit Cash account, Credit Rent account
Which of these is NOT found in the Trading Section of an Income Statement?
- A. Sales revenue
- B. Cost of sales
- C. Gross profit
- D. Rent expense
Which item is classified as a current liability?
- A. Bank loan (long-term)
- B. Trade receivables
- C. Inventory
- D. Trade payables
A machine costing $10,000 has an estimated useful life of 5 years and a residual value of $1,000. Using the straight-line method, what is the annual depreciation?
- A. $1,000
- B. $1,800
- C. $2,000
- D. $2,200
If electricity used in December is to be paid in January, it is treated as:
- A. A prepayment
- B. An accrued expense
- C. An asset
- D. Revenue
What is the effect of writing off a bad debt on profit?
- A. Increases gross profit
- B. Decreases gross profit
- C. Increases net profit
- D. Decreases net profit
Which inventory valuation method assumes that the first goods purchased are the first ones sold?
- A. FIFO
- B. LIFO
- C. AVCO
- D. Weighted Average
The primary purpose of a trial balance is to:
- A. Calculate profit or loss
- B. Check the arithmetic accuracy of the ledger
- C. List all assets and liabilities
- D. Prepare bank reconciliation
Which of the following errors would NOT be revealed by a trial balance?
- A. A transaction recorded only once
- B. A transaction posted to the wrong side of an account
- C. An error of original entry (incorrect amount in both debit and credit)
- D. An error in calculating the balance of an account
Which item appearing on the bank statement would NOT normally be in the cash book until the statement is received?
- A. Cheques deposited by the business
- B. Direct debit payments
- C. Cheques issued by the business but not yet presented
- D. Bank deposits made by customers
What does a Sales Ledger Control Account normally show?
- A. The total amount owed to suppliers
- B. The total amount owed by customers
- C. The total cash sales
- D. The total credit purchases
Which of the following is an example of capital expenditure?
- A. Repair of a machine
- B. Purchase of raw materials
- C. Purchase of a new delivery van
- D. Payment of electricity bill
Revenue expenditure is primarily spent on:
- A. Acquiring non-current assets
- B. Maintaining non-current assets
- C. Expanding the business capacity
- D. Significantly improving non-current assets
If sales are $200,000, cost of sales is $120,000, and operating expenses are $30,000, what is the gross profit?
- A. $50,000
- B. $80,000
- C. $170,000
- D. $120,000
Using the figures from Question 19, what is the net profit?
- A. $50,000
- B. $80,000
- C. $170,000
- D. $120,000
Answer Key
- A
- D
- C
- B
- B
- C
- D
- D
- B
- B
- D
- A
- B
- C
- B
- B
- C
- B
- B
- A