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1. Which of the following is the basic accounting equation?

• Assets = Capital + Liabilities
• Capital = Assets + Liabilities
• Liabilities = Assets + Capital
• Assets = Liabilities – Equity.

Q2. A sales Day Book is used for recording

• credit sales
• sales returns
• hire purchase
• cash sales

3. An analytical cash book is used to

• indicate sources of cash received
• categorise petty cash payment
• separate cash and bank balance
• analyse amounts due from debtors.

4. Which of the following concepts is expected to hold when a proprietor makes a drawing of goods or cash from the business?

• business entity
• realisation
• going corncern
• dual-aspect

5. In a partnership business, the net profit serves as opening figure for

• trading account
• profit and loss account
• current account
• appropriaate account

6. Which of the following is the effect of an increase in the provision for discount allowed?

• increase in net profit
• Decrease in gross profit
• Decrease in net profit
• Increase in gross profit.

7. In the preparation of manufacturing accounts, prime cost plus factory overheads equal to cost of

• materials available
• production
• sales
• materials used

8. Returns inwards is also called

• purchases returns
• sales returns
• goods on sale or return
• goods in transit

9. Use the following information to answer questions 9 to 11. Tale Ltd. has 100,000 ordinary shares of #1 each and 60,000 5% preference shares of #1 each. Both were fully paid. # Profit and loss appropriation b/f 10,000 Net profit for the year 6,000 Proposed dividend on ordinary shares 4,000 – – . : Interim dividend 6,000 Goodwill written off 600

• e balance of the profit and loss appropriation account as at the end of the year was
• #16,000
• #10,000
• #5,400
• #1,400.

10. The authorised capital of Tale Ltd is

• #176,000
• #166,000
• #160,000
• #16,000.

11. The dividend payable to preference shareholders is

• #9,000
• #6,000
• #3,000
• #2,400.

12. Which of the following is not a characteristic of a computer?

• Large storage capacity
• Very fast
• Highly accurate
• Highly diligent

13. Final accounts of a not-for-profit making organization is made up of

• subscriptions account and income and expenditure accounts
• subscriptions accounts and balance sheet
• income and expenditure account and balance sheet
• receipts and payments account and income and expenditure account.

14. Which of the following is a debit entry in debtors control account?

• credit sales
• bad debts
• returns inwards
• discounts allowed

15. Use the following information to answer questions 15 and 16. # Opening capital 60,000 Drawings 4,000 Cost of sales 50,000 General expenses 7,000 > Mark-up 50% Net profit is

• #43,000
• #25,000
• #23,000
• #18,000

16. Closing capital is

• #81,000
• #78,000
• #74,000
• #64,000.

17. Which of the following is not found in a partnership balance sheet?

• capital
• drawings
• creditors
• bank balance

18. Which of the following is not a debit item in partners appropriation account?

• interest on capital
• salary
• share of profit
• share of loss

19. The difference between factory cost of goods produced and its market value is

• interest
• premium
• manufacturing profit
• manufacturing overhead

20. Which of the following is not an item in the appropriation account of a company?

• General reserve
• Company tax
• Debenture interest
• Goodwill written off.

21. The purchase of furniture, an asset to the company was debited to purchases account. This Is an error of

• omission
• original entry
• principle
• commission

22. Which of the following terms is not used to describe the total amount stated in the memorandum of association approved by the Registrar of Companies?

• authorised capital
• registered capital
• issued capital
• nominal capital

23. A cash payment of #85 to Regina was entered in the books as #58. The entries to correct the error are: debit

• Reginaâ€s Account #27: Credit Csfeh Account #27
• Cash Account #=27: Credit Reginaâ€s Account #27
• Riginaâ€s Account #143: Credit Cash Account #143
• Cash Account #143: Credit Reginaâ€s Account #143.

24. Use the following information to answer questions 24 to 26.

Tale Ltd has 100,000 ordinary shares of N1 each and 60,000 5% preference shares N1 each. Both were fully paid.
Items N
1 Profit and loss appropriation b/f 10,000
2 Net profit for the year 6,000
3 Proposed dividend on Ordinary shares 4,000
4 Interim dividend 6,000
5 Good will written off 600
The balance of the profit and loss appropriation account as at the end of the year was

• N16000
• N10000
• N5400
• N1400
• Le 19,800.

25. The net profit is

• Le 42,200
• Le 37,200
• Le 32,700
• Le 19,800.

26. The cost of goods sold is

• Le 185,100
• Le 139,200
• Le 136,200
• Le 131 200

27. The class of share to which payment of dividend depends on profit is

• forfeited shares
• ordinary shares
• bonus shares
• preference shares

28. Payment for shares in installments is done by means of

• calls
• circulars
• subscription
• invitation

29. Mark-up on goods sent to branch are recorded in the books by crediting

• Stock Adjustment Account; debiting Branch Stock Account
• Goods sent to Branch Accounts; debiting Branch Stock Account
• Bank Stock Account; debiting Stock Adjustment Account
• Branch Stock Account; credit Cash Account.

30. Which of the following is not part of cost of production?

• direct material cost
• direct wages
• factory overheads
• administrative overheads

31. Use the following information to answer questions 31 and 32.
Sulay Local Government
Tale Ltd has 100,000 ordinary shares of N1 each and 60,000 5% preference shares N1 each. Both were fully paid.
Items D
1 Construction of classrooms 500,000
2 Sinking of boreholes 100,000
3 Staff Salaries 150,000
4 Transport and Travels 7,000
5 Office Expenses 9,000
Recurrent expenditure is

• D180,000
• D164,000
• D150,000
• D30,000

32. 32. Capital expenditure is

• D780,000
• D750.000
• D600.000
• D500.000.

33.  Which of the following is not a subsidiary book?

• sales journal
• cashbook
• purchases ledger
• general journal

34. In bank reconciliation, when a cash book shows a credit balance, uncredited cheques are: I. deducted from the cash book balance II. added to the bank statement balance III. added to the cash .book balance

• I and II only
• I,II and III
• II and III only
• III only.

35. When provision is made for doubtful debt, the accounting entries are

• debit Profit and loss account; credit provision for doubtful debt account
• debit debtors account; credit trading account
• debit profit and loss account; credit sales account
• debit trading account; credit debtors account.

36. An approach for discovering missing figures in incomplete records is the use of

• cash book
• control accounts
• trading accounts
• balance sheet

37. A merchant paid #180,000 on rent for 18 months but charged #120,000 to profit and loss account for the year. The concept applied is

• business entity
• going concern
• accrual
• materiality

38. Which of the following is an advantage of the imprest system?

• Rewarding the imprest holder
• Reducing the buraen of petty cashier
• Reimbursing the petty cashier regularly
• Reducing the postings for small expenses into the main ledger.

39. Use the following information to answer questions 39 and 4O.
Henik Plc has departments A and B and has made the following information available concerning its operations:
Department A Department B
Turnover 100,000 80,000
Commission 3,600
Rent 6,000
Floor space 200 metresq 100metresq
How much commission was apportioned to department A?

• #9,600
• #3,600
• #2,000
• #1,600

40. Rent apportioned to Department B is

• #4,000
• #3,600
• #2,000
• #1,600.

41. The entries to record goods bought for cash are: debit

• Cash Account; Credit Purchases Account
• Purchases Account; Credit Cash Account
• Purchases Account; Credit Stock Account
• Purchases Account; Credit Goods Account

42. Carriage inwards is posted to

• trading account
• profit and loss account
• appropriation account
• balance sheet

43. Repairs to air conditioners was debited to office equipment account. This is an error of

• principle
• commission
• original entry
• compensation

44. The practice of identifying with one constant approach where a number of approaches exist for solving an accounting problem is the convention of

• conservatism
• consistency
• prudence
• materiality

45. Use the following information to answer questions 45and 46. # Opening debtors 40,000 Opening creditors , 30,000 Credit sales 100,000 Credit purchases 80,000 Bad debts 5,500 – Set-offs 65,500

• #80,000
• #140,000
• 134,500
• #69,000.

46. Closing creditors figure is

• #115,500
• #110,000
• #95,500
• #44,500.

47. Which of the following is a nominal account?

• bank account
• cash account
• sales account
• stock account

Q48. Which of the following is a storage device?

• diskette
• keyboard
• printer
• monitor

49. Trade creditors personal accounts are found in the

• purchases ledger
• sales ledger
• general ledger
• sales day book

50. Which of the following is not an instrument for controlling public expenditure?

• constitution
• Financial regulation
• Budget
• Memorandum of association.

ANSWERS

1. A
2. A
3. D
4. A
5. D
6. C
7. B
8. B
9. D
10. C
11. C
12. D
13. C
14. A
15. D
16. C
17. B
18. D
19. C
20. C
21. C
22. C
23. B
24. C
25. D
26. C
27. B
28. A
29. C
30. D
31. A
32. D
33. C
34. D
35. A
36. B
37. C
38. D
39. C
40. A
41. B
42. A
43. A
44. B
45. D
46. D
47. C
48. A
49. A
50. D