Your results on Financial Accounting 2010 are shown below

1. Which of the following is not an external user of accounting information?

• Management
• Creditors
• Shareholders
• Government

2. Atrial balance is prepared to

• detect fraud.
• ascertain losses in a trading period.
• determine opening capital.
• test arithmetical accuracy of ledger entries.

3. Which of the following is the reason why a seller allows a customer cash discount?

• Agreement to become a regular customer
• Introducing a new customer to the seller
• Settlement of account within a stated period
• Placing a large order

4. A ledger is a

• principal book of accounts.
• book of original entry.
• record of credit transactions.
• summary of entries.

5. Which of the following is not found in a trial balance?

• Opening stock
• Closing stock
• Capita
• Rent paid

6. Use the following information to answer questions 6 to 8

Jan 1		₦
1/1/08	Capital introduced by cash	50000
2/1/08	Bough goods for retail by cash	10000
3/1/08	Bought fixtures by cash	5000
4/1/08	Sold goods to Lagbaja on credit	3000
5/1/08	Bought goods on credit from Tamedu	8000

Cash balance at 5/1/08

• #35,000.
• #50,000.
• #40,000.
• #30,000.

7. Balance in Purchases Account at 5/1/08 is

• #23,000.
• #18,000.
• #10,000.
• #8,000.

8. Balance in the Capital Account at 5/1/08 is

• #60,000.
• #50,000.
• #35,000.
• #5,000

9. A Suspense Account is used to

• correct errors.
• record errors detected until corrected
• prepare the balance sheet.
• extract the trial balance

10. Which of the following is added to the proprietor’s capital?

• Net profit
• Gross profit
• Net sales
• Gross sales

11. Where a wrong figure occurs in only one account with the second figure correctly stated, this is an error of

• transposition
• compensation
• omission
• commission.

12. A temporary difference in the Trial Balance totals is kept in the

• Adjustment Account.
• Suspense Account.
• Imprest Account.
• Appropriation Account.

13. In the preparation of bank reconciliation statement uncredited cheques are

• added to the balance as per bank statement.
• deducted from the balance as per bank statement.
• added to the balance as per cash book
• ignored totally

14. Which of the following is found in the general ledger?

• Capital Accounts
• Sales Accounts
• Loan Accounts
• Drawings Accounts

15. Use the following informations to answer questions 15 and 16

1/1/06	Debtors	D2600
1/1/06	Provision for bad debts	D60
31/12/06	Bad debts	D60
31/12/06	New provision for bad debts	5% on debtors

What is the amount of the new provision for bad debts?

• D130
• D127
• D124
• D120

16. The provision for bad debtsin the profit and loss account is

• D187
• D127
• D67
• D60

17. The balance in a Sales Ledger Control Account indicates the

• difference between debtors and creditors.
• total sales.
• total purchases.
• total debtors.

18. Sales was D12,500, total expenses was D2,500 and net profit is 10% of sales. What is the gross profit?

• D11.250
• D8,750
• D3,750
• D. 1,250

19. Which of the following is the equivalent of the Receipts and Payments Account?

• Income and Expenditure Accounts
• Cash Book
• Subscriptions Account
• Profit and Loss Account

20. Subscriptions received in advance are

• included in the Income and Expenditure Account.
• not included in the Receipts and Payments Account.
• shown as a current asset in the Balance Sheet.
• shown in the Balance Sheet as a current liability.

21. Where records maintained are inadequate to facilitate the preparation of a trading and profit and loss accounts, this is described as

• cost accounting
• bookkeeping
• incomplete records
• double entry

22. Opening stock of raw materials

Opening stock of raw materials	24750
Purchases of raw materials	123640
Carriage on raw materials	10000
Factory supervisor’s salary	30000
Wages of factory hands	50000
Royalties paid	18000
Work-in-progress (opening)	23000
Raw material returned	12200

The value of raw material consumed is

• 121,440
• 113,390
• 111,190
• 101,190
•  

23. The prime cost is

• #199,190
• #169,190.
• #151,190.
• #146,190.

24. The total overhead expenses is

• #142,000.
• #115,000.
• #110,000.
• #92,000.

25. Bad debts written off is shown as A. debit in the sales

• debit in the sales ledger
• debit in the purchases ledger
• credit in the sales ledger
• credit in the purchases ledger

26. The balance of the sales ledger control account represents

• total sales
• total credit sales
• total creditors
• total debtors.

27. The accounting principle that states that insignificant expenditures are not to be taken into account is the

• realization concept.
• materiality convention.
• marching concept.
• consistency convention

28. Which of the following transactions will increase the working capital of a business?

• Payment in cash to a creditor
• Payment by cheque to a creditor
• Sale of fixed asset in cash
• Cash received from debtors

29. The realization concept states that

• . revenue is recognized as being earned when ownership of goods passes to the customer.
• revenue and profit should not be anticipated.
• similar items should be accounted for in a similar way from one accounting period to another
• transactions must be expressed in monetary terms
• 30. Where fixed capitals are maintained, partners’ drawings are transferred to the
• credit of Capital Accounts.
• debit of Capital Accounts.
• credit of Partners†Current Accounts.
• debit of Partners†Current Accounts

31. The method that provides a reliable check upon cash and stock at the branch and discloses the gross profit in the account is

• cost plus percentage
• cost price
• average cost
• selling price.

32. A partner whose liability goes beyond his capital is known as

• dormant patner
• limited patner
• general partner
• nominal partner

33. Aba and Baba are partners who agreed to share profits and losses in the ratio 4: 3 respectively. Extracts from their books for the year ended 31/12/08 are:

	ABA	BABA	TOTAL
Capital	20000	15000	35000
Drawings	2520	10000	2520
Interest on drawings	504		504
Interest on capital	2000	1500	3500
Net profit 31/12/08			34636

Aba’s share of profit is

• 21,204
• 19,792
• 18,352
• 18,080

34. Baba’s share of profit is

• 16,128
• 14,844
• 13,764
• 13,560

35. The rate of interest on capital is

• 15%.
• 10%.
• 8%.
• 5%.

36. Carriage inwards is shown on the

• debit side of the trading account.
• credit side of the trading
• credit side of the profit and lossaccount.
• debit side of the profit and loss account.

37. An expense is termed an ‘accrual’ because it

• is yet to be paid for.
• is a profit and ioss account
• must appear in the balance sheet.
• is a trading account item.

38. The accounting treatment when goods are sent to branch at cost is, debit Branch Stock Account and credit

• Branch Stock Adjustment Account
• Goods Sent to Branch Account.
• Branch Debtors Account
• Branch Profit and Loss Account.

39. The document prepared for the disbursement of government fund is

• an invoice
• a receipt
• a payment voucher
• a bill

40. A financial plan of action expressed in monetary terms is a/an

• warrant
• budget
• imprest
• consolidatedvfund

41. Which of the following reserves is not used for bonus shares?

• Revaluation reserve
• Share premium
• Capital redemption reserve fund
• General reserve

42. The accounting concept which assumes that the business will continue to be in existence into the foreseable future is

• dual aspect
• business entity
• accrual
• going-concern.

43. When shares are sold ‘at par’ it means they are issued at

• the market value
• the normal value
• a discount
• a premium

44. Which of the following does not form part of shareholders fund?

• ordinary shares
• share premium
• Profit
• Debenture

45. Use the following information to answer questions 45 and 46. On 1/7/07, a trader owed wages of Le 2,000. During the year ended 30/6/08, wages of Le 2,400 were owed and Le 8,000 were paid.

• e wages of the year ended 30/6/08 is
• Le 12,400.
• Le 8,400.
• Le 8,000.
• Le 7,600

46. Wages recorded in the balance sheet as at 30/6/08 is

• Le 8,000.
• Le 6,000
• Le 2,400
• Le 2,000

47. The collection and organization of data is

• accounting process.
• central processing.
• data processing.
• data manipulation.

48. Money received from a customer is recorded in the customer’s account and bank account; the accounting concept applied is

• business entity.
• dual aspect.
• going-concern.
• money measurement

49. The amount for which a business is sold is the

• goodwill
• consolidated fund.
• purchase considerations.
• capital reserve.

50. Which of the following is a prime cost?

• Royalty
• Salary
• Commission
• Discounts allowed

ANSWERS

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