Accounting & Bookkeeping

Accounting: Rules First, Then Application

Accounting is the most rule-bound objective paper in the commerce syllabus. Almost every MCQ resolves to a classification decision — is this item capital or revenue, direct or indirect, an asset, a liability, or a provision? Get the classifications right and the numericals stop being difficult.

What These 364 Questions Cover

The bank is strongest on the mechanics of bookkeeping, in rough order of weight:

• Journal entries and the double-entry principle — purchases, sales, returns, discounts, outstanding and prepaid expenses, and the effect of each entry on the accounting equation.
• Subsidiary books — cash book, purchases and sales books, and bills receivable and payable.
• Final accounts — trading and profit-and-loss accounts, balance-sheet presentation, and adjustments for closing stock, depreciation and bad debts.
• Depreciation — straight-line and written-down methods, and their effect on profit.
• Trial balance and rectification — which balances sit on which side, and the errors a trial balance will not reveal.
• Partnership accounts — admission and retirement of a partner, and goodwill.

Thinner sections to be aware of: cost and management accounting (16 questions, focused on overheads and cost classification), auditing (a handful of items on vouching and verification), ratio analysis and company accounts (share capital and debentures) are represented but lightly.

Still Missing From This Page

Standard costing and variances, budgetary control, break-even analysis, revaluation of assets on a partner’s admission, and cash-flow statements appear in many commission syllabuses but have no questions here yet. Treat those topics from your own notes until they are added.

How to Use These Sets

Each explanation names the rule the question tests, because the same rule returns later with different figures. When you miss an item, record the rule rather than the number — the arithmetic is rarely the hard part.

Classification Traps to Memorise

• Revenue expenditure keeps the business running; capital expenditure acquires or extends an asset.
• Discount allowed is an expense; discount received is income.
• Depreciation is a non-cash charge against profit; a provision is charged even though the loss is only probable.
• Drawings reduce capital; a salary paid to the proprietor is not a business expense.
• Carriage inward forms part of the cost of goods sold; carriage outward is a selling expense.