“200”, Aptitude Test Questions and Answers
for Tutorial Assistant in Accounting – IFM.
ABSTRACT
This document contains 200 multiple-choice
questions to prepare candidates for the Tutorial Assistant in Accounting (IFM)
Public Service online aptitude test in Tanzania. It covers accounting
principles, international standards (IFRS), Tanzanian laws, accounting
theories, and key professional skills. Each question includes four horizontal
answer choices, the correct answer, and a detailed rationale. The questions are
carefully designed to challenge candidates’ understanding and analytical
abilities, providing a comprehensive and effective tool for exam preparation.
Prepared
by: Accountants
Compiled
by Johnson Yesaya Mgelwa
A
lawyer based in Dar-es-salaam.
0628729934.
Date:
April 1, 2025
Dear applicants,
This collection of questions and answers
has been carefully prepared to help all of you to understand the key areas
tested during the interview. The goal is to provide a useful, and practical
study guide so you can all perform confidently and fairly in the selection
process. I wish you the best of luck, and may this resource support you in
achieving success!
Warm
regards,
Johnson
Yesaya Mgelwa
For
Personal Use by Applicants Preparing for Tutorial Assistant in Accounting – IFM,
aptitude test/ Interview.
ALL
QUESTIONS COMPILED TOGETHER.
1. Which of the following best describes
the accrual basis of accounting?
A. Recording income when received and
expenses when paid B. Recording income when earned and expenses when incurred C.
Recording transactions only when cash changes hands D. Recording income and
expenses once per fiscal year
Answer: B
Rationale: The accrual basis of accounting
recognizes revenue when it is earned and expenses when they are incurred,
regardless of when cash is exchanged. This provides a more accurate picture of
a company’s financial position than the cash basis, which only records when
money changes hands.
2. Which financial statement shows the
financial position of a company at a specific date?
A. Income statement B. Balance sheet C.
Statement of cash flows D. Statement of changes in equity
Answer: B
Rationale: The balance sheet, also called the
statement of financial position, presents a company’s assets, liabilities, and
equity at a specific point in time. Other statements, like the income statement
and cash flow statement, show performance or flows over a period.
3. What is the primary purpose of
auditing?
A. To prepare tax returns B. To detect all
fraud C. To provide assurance on financial statements D. To prepare financial
statements
Answer: C
Rationale: Auditing is an independent examination of
financial information with the purpose of expressing an opinion on whether
financial statements present a true and fair view. While it may detect fraud,
that is not its primary aim; its main role is providing assurance to
stakeholders.
4. IFRS stands for which of the following?
A. International Financial Reporting
Standards B. Internal Financial Review Standards C. International Fiscal
Reporting Standards D. Institute of Financial Reporting Standards
Answer: A
Rationale: IFRS means International Financial
Reporting Standards, issued by the International Accounting Standards Board
(IASB). These standards provide a global framework for how public companies
prepare and disclose financial statements.
5. In double-entry accounting, every
transaction affects:
A. At least one account B. Two or more
accounts C. Only asset accounts D. Only liability accounts
Answer: B
Rationale: Double-entry accounting requires that
every transaction is recorded in at least two accounts: one debit and one
credit, ensuring that the accounting equation (Assets = Liabilities + Equity)
remains balanced.
6. Depreciation is best described as:
A. Allocation of the cost of an asset over
its useful life B. Valuation of assets at fair market value C. A method to
reduce taxable income only D. An adjustment to increase asset value annually
Answer: A
Rationale: Depreciation is the systematic allocation
of the cost of a tangible fixed asset over its useful life. It reflects the
consumption of the asset’s economic benefits rather than changes in market
value.
7. Which of the following is classified as
a current asset?
A. Building B. Inventory C. Long-term loan D.
Equipment
Answer: B
Rationale: Current assets are expected to be
realized, sold, or consumed within one year or within the entity’s normal
operating cycle. Inventory qualifies as a current asset, whereas buildings and
equipment are non-current, and loans are liabilities.
8. Which ratio measures a company’s
ability to meet short-term obligations?
A. Debt-to-equity ratio B. Return on
equity C. Net profit margin D. Current ratio
Answer: D
Rationale: The current ratio (current assets ÷
current liabilities) measures liquidity, showing the company’s capacity to pay
short-term obligations with short-term assets. Debt-to-equity measures
leverage, while ROE and profit margin measure profitability.
9. What is the main objective of internal
control systems?
A. To increase profit margins B. To ensure
accuracy, reliability, and safeguard assets C. To reduce taxes payable D. To
comply with environmental laws
Answer: B
Rationale: Internal controls are processes designed
to provide reasonable assurance regarding the achievement of objectives such as
reliable financial reporting, compliance with laws, operational efficiency, and
safeguarding of assets.
10. Which accounting concept assumes that
a business will continue operating indefinitely?
A. Accrual concept B. Matching concept C.
Going concern concept D. Prudence concept
Answer: C
Rationale: The going concern concept presumes that
the business will continue to operate in the foreseeable future, meaning assets
are not intended for forced liquidation. This underpins valuation and
preparation of accounts.
11. Which of the following is an example
of a liability?
A. Accounts receivable B. Accounts payable C.
Inventory D. Prepaid expenses
Answer: B
Rationale: Accounts payable represents amounts owed
to suppliers for goods or services purchased on credit. It is a liability,
while accounts receivable and inventory are assets, and prepaid expenses are
prepayments treated as current assets.
12. Which of the following best describes
equity in accounting?
A. Assets minus liabilities B. Liabilities
minus assets C. Total assets plus liabilities D. Assets only
Answer: A
Rationale: Equity represents the residual interest
in the assets of an entity after deducting liabilities. In the accounting
equation, Equity = Assets – Liabilities.
13. What is the matching principle in
accounting?
A. Recording revenues when cash is
received B. Recording assets
at their original cost C. Recording
expenses in the period they help generate revenues D. Recording liabilities
when paid
Answer: C
Rationale: The matching principle requires expenses
to be recognized in the same period as the revenues they help generate. This
ensures accurate measurement of profitability for a given accounting period.
14. A trial balance is prepared primarily
to:
A. Show all assets and liabilities B.
Confirm that debits equal credits C. Prepare the final accounts D. Record cash
transactions
Answer: B
Rationale: A trial balance lists all ledger accounts
with their debit or credit balances at a given date. Its main purpose is to
check that total debits equal total credits, ensuring arithmetical accuracy of
postings.
15. Which type of error occurs when a
transaction is completely omitted from the books?
A. Error of commission B. Error of principle C. Compensating
error D. Error of omission
Answer: D
Rationale: An error of omission happens when a
transaction is entirely left out of the accounting records. Errors of
commission occur when entries are made in the wrong account, while errors of
principle break accounting rules.
16. In cost accounting, fixed costs are
those that:
A. Remain constant regardless of
production volume B. Vary
with the level of production C. Are only incurred in peak season D. Change in
proportion to sales
Answer: A
Rationale: Fixed costs remain unchanged within the
relevant range of activity, regardless of output. Examples include rent,
insurance, and salaries. Variable costs, by contrast, vary directly with
production levels.
17. Which of the following represents a
cash inflow from investing activities?
A. Issuance of shares B. Payment of
dividends C. Purchase of inventory D. Sale of equipment
Answer: D
Rationale: In the cash flow statement, investing
activities include acquisition or disposal of long-term assets and investments.
Sale of equipment generates a cash inflow under investing activities, while
share issuance is financing.
18. Which accounting standard deals with
inventory?
A. IAS 1 B. IAS 2 C. IAS 7 D. IAS 16
Answer: B
Rationale: IAS 2 covers accounting for inventories,
prescribing the accounting treatment for determining costs and recognizing
expenses, including write-downs to net realizable value. IAS 7 covers cash
flows, IAS 16 covers property, plant, and equipment.
19. Goodwill arises when:
A. A company acquires another for more
than fair value of net assets B.
A company purchases assets at market value C. A company earns net profit in a year D. A
company increases share capital
Answer: A
Rationale: Goodwill is the excess of purchase
consideration over the fair value of net assets acquired during a business
combination. It represents intangible benefits like reputation, customer
loyalty, and brand strength.
20. Which of the following best describes
a contingent liability?
A. A definite obligation payable within
one year B. A loan taken
from a financial institution C. A possible obligation dependent on future
events D. A liability recorded on the balance sheet always
Answer: C
Rationale: Contingent liabilities are possible
obligations that arise from past events and whose existence will be confirmed
only by uncertain future events not wholly within the entity’s control. They
are disclosed in notes, not recognized directly.
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