ACCOUNT

Principles of Accounts 1994-2004 JAMB Questions Principles ofAccounts 1994 1. The term ‘accounting period’ is used to refer to the A. time span during which taxes are paid to the Inland Revenue Board B. Budget period, usually one year, relied on by the accountant C. time span, usually one year covered by financial statement D. period within which debtors are expected to settle accounts. 2. Assigning revenues to the accounting period in which goods were sold or services rendered and expenses incurred is known as A. passing of entries B. consistency convention C. matching concept D. adjusting for revenue. 3. The accounting convention which states that ‘profitmust not be recognized until realized while all losses should be adequately provided for’ is termed A. materiality B. objectivity C. consistency D. conservatism. 4. Accounting information is used by investors and creditors of a company to predict A. future cash flows of the company B. future tax payments of the company C. potential merger candidates for the company D. appropriate remuneration for the company’s staff. 5. Antics ElectronicsCompany recently bought six generators. Which of the following is the correct method of recording this transaction. A.Debit generator account and credit cash account. B. Debit purchases account and credit cash account. C. Debit cash account and credit purchases account. D. Debit cash account and credit generator account. 6. When a business incurs labours cost in installing a fixed asset, the cost is treated as A. additional cost to the asset B. business wages and salaries C. installation cost of the asset D. business cost of the asset. 7. What is the cardinal rule of the double entry system? A. Debit the increasing account and credit the decreasing account. B. Debit the receiving account and credit the giving account. C. Debit the asset account and credit the liability account. D. Debit the revenue account and credit the expenditure account. 8. Malam Gambo bought a freezer for his shop costing N 10,500. In recording, he debited office expenses account and credited the bank account.What book keeping error has he committed? A. Error of commission B. Error of reversal of entries.C. Error of principle. D. Compensation error. 9. The use of the folio in the ledger is for A. Referencing purposes B. Particulars of the transaction C. the account titles D. Only credit items. 10. Account of Tanko Nig Ltd. Dr. Cr. N N 1/10 Bal. b/f 5,000 2/10Cash 3,000 Sales 10,000 15/10 Bank 6,500 What is the closing balance of the account shown above? A. N5,000 B. N6,500 C. N5,500 D. N15,000. 11. The suspense account is used to correct book keeping errors where the A. amount involved is quite significant B. iteminvolved is not material C. item involved is unknown D. error does not affect the agreement of the trial balance. 12. The discount column of a three column cashbook is not balanced off but periodically transferred to the discount accounts because discounts. A. are not important in cash book B. are cash items only C. do not form part of double entry D. are used for bank reconciliation. 13. When is a petty cash account debited? A. When the fund is established and every time money is spent B. when the fund is established and every time it is replenished C. when the fund is established andwhen the size of the float is decreased D. Everytimemoney is drawn fromthe pettycash. 14. When preparing a bank reconciliation statement, which of the following is deducted from the balance per bank statement? A. Bank charges. B. Uncleared cheques C. returned cheques D. Unpresented cheques. 15. The financial position of an organization at a particular time can be ascertained from the A. statement of sources and application of funds B. statement of retained earnings C. balance sheet D. profit and loss account. 16. Given: N Purchase 20,000 Sales 40,000 Carriage inwards 5,000 Carriage outwards 5,000 Opening stock 10,000 Closing stock 5,000 What is the cost of good sold? A. N30,000 B. N25,000 C. N20,000 D. N15,000 17. The net profit or loss for the year is determined in the profit and loss account after A. deducting purchases from sales B. deducting cost of goods sold from sales and adding administrative expenses C. adding commissions received to gross profit D. eliminating all expenses from gross profit and adding any other income. Use the table below to answer question 18 and 19 Stock Cost price Qty (units) N Opening balance1/1/90 3.00 3,000 Purchases January 3.50 15,000 Purchases February 4.00 25,000 Sales January 4.50 13,000 Sales February 5.00 28,000 18. Using LIFO, determine the value of closing stock. A. N9,600 B. N7,600 C. N 6,000 D. N2,000. 19. What is the gross profit at the end of February, if the closing stock were valued at N20,000? A. N65,000 B. N57,000 C. N48,000 D. N37,000. 20. A trial balance shows provision for doubtful debts, N 190 and debtors,N6,000. It is required towrite off further N320 as bad debts and maintain the provision at 2½%of debtors. To do this, the profit and loss should show a A. credit ofN 20 and a debit of N 100 B. credit ofN 28 and a debit of N 300 C. credit of N48 D. debit entry ofN 414 21. If a bad debt previously written off is subsequently repaid, the amount collected is recorded as an A. income in the profit and loss account B. income in the balance sheet C. addition cash in the profit and loss account D. expense in the balance sheet. 22. Beginning and ending accounts receivable balanceswere N 8,000 and N 15,000 respectively. If collections from customers during the period were N 36,000, them total sales on account would be A. N23,000 B. N29,000 C. N36,000 D. N43,000. 23. From which of the following sources are creditors control account most likely to be posted? A. Supplier’s invoices B. Cash disbursements journal C. Subsidiary debtor’s ledger D. Purchases journal. Use the information below to answer questions 24 and 25 Chukwuma Okeke did not keep his books based on the double entry principle. On 1st January1993, Cash in hand wasN60, Bank overdraft N1,100, Debtor N7,240, Stock N27.450, FurnishingsN2,000 and creditorsN6,990. As at 31stDecember 1993,Cash in handwasN40,Cash at bank wasN 1,050, Debtors N6,750, StockN29, 180, FurnishingsN2,000 and CreditorsN6,090. 24. Compute the capital as at 1st January 1993. A.N29,800 B.N28,900 C.N26, 700 D.N20,800. 25. Determine his net profit as at 31st December 1993. A. N2,000 B. N2,200 C. N3,500 D. N4,200. 26. Which of the following categories of labours cost will be classified as direct? A. Accountant’s salary B. Factoryworkers’ salary C.Managing director’s salary D. Cashier’s salary. Use the information below to answer questions 27 and 28 Unit Unit Total Unit Cost Cost Sold N N Begining inventory 20 6 120 SaleNo. 1 18 Purchase No. 1 30 8 240 SalesNo. 2 20 Purchase No 2 10 9 90 Total 60 38 27. Using the FIFO method of stock valuation, the ending inventory cost is A. N146 B. N165 C. N186 D. N314 28. Using the LIFO inventory procedures, the ending inventory cost is A. N136 B. N176 C. N196 D. N264 29. The major difference between the receipt and payment account and the income and expenditure account is that while the former A. is kept by the treasurer, the latter is not B. dealswith all receipt and payments in the year regardless of the time it relates to the latter is for just that year C. is a T-account the latter is not D. is not in the ledger, the latter is. 30. The following information relates to a hockey club: N Subscription owing at the beginning 40 Subscription owing at the end 35 Subscription received in the advance at the beginning 15 Subscription received During the period 2,560 The amount to be shown in the income and expenditure account would be A. N2,500 B. N2,540 C. N2,570 D. N2,590. 31. The net profit from the trading account of a non-profit making organization would be treated as income in the A. income and expenditure account B. receipt and payment account C. balance sheet D. statement of affairs Use the information below toanswer questions 32 and33. Ada andUdo are lawyers whowent intopartnership as Ado & Co. Ada brought cash of N12,000, furnishing worthN18,000 and amotor vehicleworthN70, 000 Udo on the other hand brought in cashN10,000, his building valued atN05,000 and a personal computer worth N135,000. 32. What is the capital of Ado & Co.? A. N22,000 B. N100,000 C. N150,000 D. N250,000. 33. What is the profit sharing ratio if it is based on capital contributed by Ada and Udo? A. 2:1 B. 3:2 C.2:3 D. 1:2 34. The major distinguishing element between the final accounts of a partnership and a sole trader is the A. drawings account B. appropriation account C. capital account D. creditors account. 35. Good will appears in the books of a business only if it has been A. purchased at a certain price B. raised in connection with the admission of a newpartner C. raised to account for the true value of a business on the death of a partner D. raised in order to prevent the balance sheet showing that the business is insolvent. 36. Kayode, Akpan and Kachalla are in partnership. Their respective capital accounts had the following balances: N40,000N50,000 andN70,000. The partners agree to admitWamo as a newpartner with a one-fifth interest in the partnership capital in exchange forN50,000 cash.Wamo’s equity in the resulting partnership is A. N32,000 B. N50,000 C. N42,000 D. N50,000. 37. Under which of the following conditions is a partnership dissolved? A. Change of the partnership’s head office. B. Admission of a newpartner. C. Purchase of a large quatity of fixed assets. D. Retirement of a manager who is not a partner. 38. When shares issued are paid for the accounting entry required is A. debit bank or cash account and credit share capital and/or premium account B. credit bank or cash account and debit shares capital and/or premium account C. debit shares account and credit capital account D. credit shares account and debit capital account. Use the information below to answer questions 39 and 40 Alimited liability companyhas an authorized share capital ofN50 million split into100 million shares. 80 million shares were offered for subscription at 60k per share payable in full on application. These have been fully subscribed and issued. 39. What is the nominal value of each share? A. N2 B.N0.80 C.N0.60 D.N0.50 40. What is the issued capital? A. N40million B.N48million C. N50million D.N80million. 41. The document setting out theregulations regarding shares,meetings and internal organization of a company is known as A. memorandum of association B. articles of association C. prospectus D. company law. 42. An advantage of using accounting ratio is that they A. can be easily calculated B. facilitate decision-making C. are stipulated by law D. show errors and frauds. 43. The accounts of Buba (Nig.) Plc showed the following for the year ended December 31, 1993: N Gross sales 219,900 Sales returns and allowances 4,900 Net sales 215,000 Accounts receivable (net): 1/1/93 20,000 31/12/93 30,000 The turnover of accounts receivable is A. 6.14 times per year B.8.14 times per year C. 8.60 times per year D. 8.64 times per year. 44. Given: Sales N20,000 Costs of sales N15,000 The gross profit margin would be A. 33.33% B. 25.00% C. 20.00% D. 14.28% Use the information below to answer questions 45 and 46 Perebeni Enterprises has two departmentsA and B, with following information A B N N Open. Stock 5,000 1,500 Purchases 26,000 3,000 Close. Stock 7,000 2,500 Sales 45,000 4,000 The following expenses are to be shared in the ratio 4:1 Rent N8,300 General Expenses N3,200 45. What are the company’s gross profit for the year? A.N11,500 B.N12,500 C.N20,000 D.N23,000. 46. What is the net profit (or loss) contributed by department B? A. N2,000 B. (N2,000) C. (N300) D. N300. 47. The expenditure on a good or service which is consumed either immediately or within a current accounting period is called A. fixed expenditure B. capital expenditure C. annual expenditure D. recurrent expenditure 48. The receipts froma special tax levy to paymaturing interest obligation are recorded in A. Capital Project Fund B. Debt Service Fund C. Tax Assessment Fund D. Special RevenueFund. 49. The cash basis of accounting requires the recognition of revenue only when they are A. due B. earned C. paid D. received. 50. The amount for individual items on a government budget is called a A. vote B. deposit C. loan D. grant. 1. Which of the following factors’ has aided the development of Accounting? A. The emergency of nation states B. The discovery of mineral resources in commercial quantity. C. The growth in size of businesses and the separation of ownership andmanagement. D. The development and management of a sophisticated monetary system. 2. Which of the following concepts stipulates that accounting profit is the difference between revenue and expenses? A. Accrual concept B. Conservation Concept C. Prudence Concept D.Materiality concept. 3. An effective accounting system should provide information A. on new products and methods B. for customer feedback and requirements C. on internal and external reporting for managers and third parties D. for promoters, directors, labour unions and distributors. 4. Which of the following accounting records are source documents? Principles of Account 1995 A. Journals and ledgers B. Sales invoice and cashbook C. Cash book and debit note D. Sales invoice and debit note. 5. Given:Motor van, N3,600, Premises, N5,000: Loan from R.Nwaeke,N1,000: Cash at bank,N1,650: Stock of goods, N4,800:Creditors,N2,560: Cash in hand, N250 andDebtors, N6,910. Calculate the capital figure. A. N19,650 B. N18,650 C. N17,850 D. N19,850. 6. Which of the following transactions isBEST recorded in the general journal? A. Payment of rent with a cheque. B. Payment of stock with cash C. Purchase of an asset on credit terms D. Transfer of cash from head office to branch. 7. Diamon Ringo business was started when Mr. Diamon brought in a Cheque of N 500,000 which was paid into the bank account. Which of the following entries properly records the transaction? A. Cash account was creditedwith N 500,000 and the capital account was debitedwith N500,000 B. Bank account was debited with N 500,000 and capital account was credited with N 500,000 C. Bank account was creditedwith N500,000 and capital account was debited with N500,000. D. Mr. Diamon’s’account was debitedwith N500,000 and the cheque account was credited withN500,000. 8. One major advantage of a ledger is that it A. is a book of original entry B. is only accessible to shareholders during liquidation C. removes the need for preparing a balance sheet after each transaction D. can be used by any type of business. 9. Atrial balance is usuallyprepared by an accounting from account balances in the ledger for the purpose of A. classifying account in the ledger B. testing arithmetical accuracties of the ledger account balances C. identifying the balance sheet items D. providing a basis for establishing the accountant’s competence. 10. What are the advantages of an imprest petty cash book? (i.) Cheque can be drawn easily (ii.) Acheck on the use of cash (iii.) Liability of the petty cashier is limited to the value of petty cash. (iv.) Loses through the petty cashier can be minimized. A. I, II, and III and III only B. I, II and IVonly C. I, III and IVonly D. II, III and IVonly. 11. Bola, UTC’s regular customer, owed N1,000 on account of radio brought. If he sent in a cheque for N 1,500, UTC would send him a A.credit noteB. debit noteC. journal voucherD.waybill. 12. A payment of cash of N20 to John was entered on the receipt side of the cashbook in error and credited to John’s account. Which of the following journal entries can be used to correct the error? A. John: N40 Dr,Cash N40Cr B. Cash N40Dr, John: N40Cr. C. John: N20Dr,Cash N20Cr. D.Cash:N20Dr, John:N20 Cr. 13. The following represents extracts from the trading account of a retail outlet for a given month: N Opening Stock 2,400 Closing Stock 6, 400 Other expenses 2,000 Sales 11,000 Profit 900 What is the purchase figure for the month? A.N13,000 B.N12,100 C.N12,000 D.N11,200. 14. Adama’s bank account showed on overdraft of N600 on 31stMarch. On going through the account. It was discovered that the N1,080 paid into the account on 29thMarch had not been a credited.What should be the balance in Adama’s cash accounts? A.N1.680Dr. B.N1,080Cr. C.N600Dr. D.N480Cr. 15. Why are adjustments in the profit and loss account necessary? A. to cover some expenses of the following year. B to ascertain the actual expenses incurred and income earned during the year. C. To show the provisions made during the year D. To show the total expenses paid and income received during the year. Use the information below to answer questions 16 and 17. MACHINERY Historical cost 5,000,000.00 Estimated useful life 20 years Residual value N25,000:00 Date of acquisition 1/1/71 Depreciation method Straight line 16. Accumulated depreciation on the asset as at 31/12/81 was A. N2,487,500.00 B.N2,736,250.00 C. N4,511,192.00 D.N4,975,000.00. 17. The book value of the asset as at 31/12/86 was A. N3,731,250.00 B. N2,487,500.00 C. N1,268,750.00 D. N1,020,000.00 Use the information below to answer question 18 and 19 The following is a draft balance sheet as at 31/12/92 Accumulated Cost Depreciation Net N N N Fixed Assets 200,000 100,000 100,000 (Tan) Current Assets: Stock in trade 10,000 Trade debtors 4,500 Cash at bank 22,800 Cash in hand 9,700 Trade creditors ? Capital ? Trade creditors’ account was maintain at 25% of the capital 18. What was the balance in the trade creditors account as at 31/12/92? A. N29,800 B.N29,500 C. N29,400 D.N29,000. 19. What was the balance in the capital account as at 31/12/ 92? A. N76,000 B.N83,000 C. N117,600 D.N117,650. 20. The trial balance showedwagesN 2,500 and a note stated that N500 wages were due but unpaid.When preparing final accounts and balance sheet, it is required to debit profit and loss account with A. N3,000 and showwages accruedN500 in the balance sheet B. N2,000 and show wages accruedN 500 in the balance sheet C. N3,000 and showwages prepaidN500 in the balance sheet. D. N2,000 and showwages paid in advanceN500 in the balance sheet. 21. Sales ledger control account contains the total amount in respect of A. creditors B. debtors C. investors D. shareholders. 22. The purchases ledger account control of a company had an opening balance of N45,600 credit and closing balance ofN72,600 credit. Themade company payments of N437,000 to credit suppliers during the period; and had discount received ofN18,600 on this account.What were the credit purchases for the period? A. N509,600 B. N482,600 C. N428,600 D. N18, 400. 23. The starting point for the production of accounts from incomplete records is to A. ascertain the total sales B. compute the opening stock of goods sold C. verify the total purchases D. prepare an opening statement of affairs. Use the information below to answer questions 24 and 25. I.Aretailer when fixing hisselling price addsone-quarter: to the cost of the article. II. The expense of the retailer is 10% of his sales. III. The total sales is N23,000 IV. He turned over his stock five times in the year 24. Compute the average amount of stock in hand at cost price. A. N3,860B. N3,806 C.N3,680 D. N3,086. 25. The net profit for the year is A. N5,750 B.N5,650C.N3,200 D.N2, 300. 26. Given: N Prime cost 320,000 Factory cost 32,000 Working in progress at beginning 25,000 Working in progress at close 19,000 Administrative expenses 21,000 Determine the production cost. A. N296,000 B.N277,000 C. N258,000 D.N246,000. 27. The factory cost of goods produced is made up of A. prime Cost and factory overhead B. prime cost and office overhead C. rawmaterials consumed and fixed cost D. Rawmaterials andAdministrative overhead. 28. The belowinformation is provided for Amusa Company Ltd. a manufacturer. N Prime cost 999,000 Manufacturing Overhead 132,000 Closing work in progress transferred to the trading Account 1,116,000 If included in the manufacturing overhead were rents of N 5,000 paid in advance, what is the openingwork in progress for the period? A N85,000 B.N80,000 C. N70,000 D.N65,000. 29. Subscription in arrears areA. credited to the income and expenditure account and shown as A. liability in the balance sheet B. debited to the income and expenditure account and shown as an asset in the balance sheet C. credited to the income and expenditure account and shown as a asset in the balance sheet D. debited to the income and expenditure account and shown as a liability in the balance sheet. 30. Where a non-profit making organization prepares the account using accruals basis of reporting the statement showing howwell the organization is doing is the A. appropriation account B. balance sheet C. income and expenditure account D. receipts and payment account. 31. A charitable club has the following Figures:- N Subscriptions received in 1991 2,800 Subscriptions unpaid in 1990 300 Subscriptions paid for 1992 150 Subscriptions due 1991 180 Howmuch should be charged to the income and expenditure of this club as subcribution for 1991? A. N2,530 B. N2,680 C. N2,830 D.N2,980 32. Amember of a club paid N1,000 as his subscription for 1993 and N1,200 as subscription for 1994. If the financial year of the society ended on 31st December 1993 theN1,200 subscription will be treated in the balance sheet as A. current asset B. current liability C. capital D. profit. 33. Which of the following is a strong feature of partnership? A. The life of the partnership is generally assumed to be indefinite B. The owners are liable personally for all debts of the business. C. The transfer of ownership is frequent an easy to accomplish D. The partnership is complex to form because of many legal and reporting requirements. 34. Interest on a partner’s drawing is debited to the A. partner’s current account and credited to the profit and loss appropriation account B. profit and loss appropriation account C. profit and loss account and credited to the partner’s current account. D. partner’s current account and credited to the profit and loss account. 35. A partnership on admitting a new member, revalued the business’ land and building from N30,000 to N70,000. The difference ofN40,000 should be A. credited to land and building account B. debited to asset revaluation account C. credited to asset revaluation account D. credited to profit and loss appropriation account Use the information belowto answer questions 36 and 37. Halidu andHamed are business partners with N30,000 andN20,000 capital respectively.At the end of the financial year, a profit ofN12,000 which includedHalidu’s salary ofN3,000 wasmade 36. Halidu’s share of the profit is A. N7,500 B. N6,000 C. N5,400 D. N4,500. 37. Hamed’s share of the profit should be A. credited to partners’ capital account B. credited to partners’ current account C. credited to appropriation account D. debited to partners’ drawings account. 38. The conversion of a partnership business into a limited liability company affords the A. general partners the chance of enjoying the limited liability protection B. limited liability partners the chance of en joying the limited liabilityprotection C. creditors the chance of enjoying the limited liability protection D. debtors the chance of enjoying the limited iabilityprotection. Use the information below to answer questions 39 and 40 Yakubu(Nigeria)Limited (Extract)Balance Sheet as at 31st December 1993. Authorized Issued N N N Ordinary shares 100,000 80,000 10% preference shares 30,000 20,000 Share premium 20,000 Profit and lossA/C 13,000 Trade creditors 30,000 Accruals 5,000 Stock 10,000 Debtors 40,000 Bank 25,000 39. Equity shareholder fund is A. N130,000 B. N120,000 C. N113,000 D. N100,000 40. If a 10% dividend is approved, what is the dividend payable to ordinary shareholders? A. N13,000 B. N11,300 C. N10,000 D. N8,000 41. Which of the following ratios gives an idea of the liquidity of a firm? A. Turnover ratio B. Quick ratio C. Debt ratio D. Divided yield. 42. A total ofN400,000 shares of N1 each are to be issued bySariki CompanyLtd. at a price ofN1.20 per share. Applications were received for 600,000 shares out ofwhich 100,000were dishonored. If the available shares are distributed pro rata, what refund will be due a subscriber who applied for 5,000 shares? A. N1,000 B. N1,200 C. N4,800 D. N6,000 43. The measure of a company’s ability to pay its debts. quickly is called A. current ratio B. turnover ratio C. acid test ratio D. return on investment. 44. Department accounts aremaintained to ascertain the A. profits of the entire organization B. contribution of each department C. expenses of each department D. sales of each department. 45. TheAsa branch ofEmene CompanyLtd. Made a sale of N 549,000 from the goods sent from the head office during the period ended 31/12/94. These sales were based on a 22% mark up. If branch expenses wereN34,400 and therewere no discrepancies, what should be the net profit of the branch for the period? A. N6,500 B. N64,600 C. N85,380 D. N514,600 46. Which of the following statement is current about the head office current account and the branch current account? A. Both always have debit balances B. Both always have credit balances C. Thehead office current account has a credit balance while the branch current account has a debit balance. D. The head office current account has a debit 7. Books of original entry are use for A. recording business transactions B. the adjustment of accounts C. reminding the bookkeeper to post transactions in the ledger D. Informing about the state of affairs. 8. The term posting in accounting refers to A. recording entries in the journal B. transferring the balances in the ledger to the trial balance C. tracing amounts fromthe journal to the ledger to find errors D. transferring entries to the ledger from the journal. 9. Erroneous rearrangement of financial figures such as writingN624 as N264 is called A. transposition B. principle C. commission D. omission 10. BankAccount N N Capital 50,000 Purchase 20,000 Sales 38,500 Rent 2,590 Motor V 6,500 What is the balance of the bank account shown above? A. N88,500 debit B. N88,500credit C. N59,410 credit D. N59,410debit. 11. Which of the following demonstrates the imprest system? A. Float-> expenses paid—>cash in bank--> float. B. Float --> cash frombank --> expenses paid float C. Float--> expenses paid--> cash frombank --> float D. Float--> cash in bank--> expenses paid -> float. 12. When a sum of money appears on the credit side of the cash book. but not on the debit side of the bank statement, the sum is regarded as balance while the branch current account has a credit balance. 47. Which of the following are sources of revenue to share governments in Nigeria? I Statutory allocation, II Fines from customary courts, III Petroleumtax IV Income tax. A. I and II only B. II and III only C. I and IVonly D. III and IVonly. Use the information to answer questions 48 and 49 EkoLocalGovernmentExpenditure N Hospital building 200,000 Drugs 180,000 Hospital beds and Mattresses 40,000 Doctors’ and nurses’ Salaries 120,000 Administrative expenses 50,000 48. Capital expenditure is A. N420,000 B. N380,000 C. N240,000 D. N200,000 49. Recurrent expenditure is A. N390,000 B. N360,000 C. N350,000 D. N170,000 50. A governmental accounting system must make sure that A. revenue exceeds expenditure B. all applicablelegal provisions arecompliedwith C. capital expenditure is equal to revenue D. capital project fund is tied to recurrent expenditure. 1. The most important reason for studying accounting is that A. the information provided by accounting is useful inmaking decisions B. accounting plays an important role in a society C. the study of accounting leads to a challenging career D. accounting provides gross profit information. 2. In preparing accounting records, the owners of a business and the business are treated as A. the same person B. having business relationship C. separate legal entities D. partners 3. Creditors use accounting information for the purpose of A. planning sales to a company B. controlling a company’s affairs C. investing in a company D. assessing a company liquidity. 4. The instruments that are generated when firms enter into business transactions with others are called A. purchases documents B. journals C. source documents D. invoices. 5. The document that is used to acknowledge the acceptance of the return of goods by the seller from the buyer is known as A. credit note B. debit note C. invoice D. voucher. 6. The effects of the payment of a liability is that it A. increases both assets and liabilities B. increases assets and decreases liabilities C. decreases assets and increases liabilities D. decrease both assets and liabilities. Principles ofAccounts 1997 A. uncredited cheques B. dishonoured cheques C. direct remittance to the bankD. unpresented cheques. 13. An examination of the cahs book on 3rd August 1993 showed a different balance from the bank statement of 31st July 1993which readN722.Uncredited chequeswere Bimpe N40:WaleN60while unpresented cheques were: Usman N 20. KaluN32 andMusa N70.What is the cash book balance after the reconciliation? A. N700 B. N770 C. N800 . D. N822. Use the information to answer questions 14 and 15 On 30/05/93 Tolu & Co. paid 2 years rent of N50,000 which was debited to the rent account 14. At 31/12/93, what portion of that amount was prepaid? A. N14,583 B. N25,000 C. N35,417 D. N37,415 15. The adjustment needed as at 31st December, 1993 as? A. debit rent account and credit adjustment account B. debit prepayment account and credit rent account prepayment account D. debit adjustment account and credit prepayment account 16. The receipt of cash from a customer who bought goods with N800 list price25% trade discount and 2/10, n/30 term would, If paid within discount period, amount to A. N576 B. N588 C. N600 D. N624 17. At the end of a financial period, the trading profit and loss account of a company showed a profit of N120,000. It was however recorded that revenue ofN12,000 was recovered as expenses while expenses of N4,000 had been recorded as revenue. What should be the correct profit for the period? A. N104,000 B. N128,000 C. N136,000 D. N144,000 18. Given N Net profit 25,000 Cost of sales 25,000 Sales 85,000 Determine the total expenses. A.N45,000 B.N35,000 C.N25,000 D.N15,000 19. Given capital,N13,000;officemachinery,N9,000; creditors, N900; stock of goods, N1,550; debtors, N275; cash at bank, N5,075 and loan from Jumbo, N2,000.What is the balance sheet total? A. N19,500 B. N18,500 C. N17,900 D. N15,900 20. The recording of wages due but not yet paid, is an example of an adjustment for A. apportionment of revenue between two periods B. recognizing accrued expenses C. recognizing unaccounted revenue D. recognizing prepaid expenses. 21. The process of allocating the cost of an intangible asset over its useful life is known as A. depreciation B. extraction C. depletion D. amortization 22. The principal use of control accounts is to A. Localize errors within the ledgers B. prevent fraud C. increase sales D. record assets and liabilities 23. In the absence of a sales day book or sales account, the credit for sales can be computed from A. creditors control account B. debtors control account C. opening figures of the balance sheet D. closing figures of the balance sheet 24. Which of the following conditions best represents the net effect of discount allowed on credit sales on the account of a business? A. Decrease in the closing balance of sales ledger control account B. increase in net profit C. increase in the values of sales. D. decrease in the value of purchases in the trading account. 25. The total of the creditors at the beginning of the year was N4,600 and at the end of the year N5,250. During the year, N26,500was paid to suppliers and N130was received in discounts from these suppliers. The purchases for the year would be A. N26,630 B. N27,038 C. N27,150 D. N27,280 26. Given N Capital at the beginning 20,000 Drawings 3,000 Capital at end 30,000 Newcapital introduced 8,000 What is the profit for the period? A. N4,000 B. N5,000 C. N6,000 D. N8,000 27. In analyzing incomplete records, which of the following should be investigated? A. The general ledger. B. The purchases daybook and sales day book C. The nature trading activities and the basis on which goods are sold. D. The asset register together with the depreciation schedule 28. Which of the following stock valuation methods is suitable under inflationary conditions? A. FIFO B. LIFO C. Simple average D.Weighed average 29. Given N Direct material 10,000 Director labour 5,000 Director expenses 2,000 Factory overhead 4,000 What is the prime cost? A. N21,000 B. N17,000 C. N15,000 D. N6,000 30. The understatement of closing value of work-inprocess would have the effect of A. understating cost of goods manufactured B. overstating prime cost of goods manufactured C. overstating cost of goods manufactured D. understating prime cost of goods manufactured. 31. EmekaManufacturing Company (Extract) Manufacturing Account. Direct material N5,000 Direct labour N4,000 Direct expenses N3,000 Factory overhead N2,500 Selling and distribution N1,500 Calculate the production cost. A. N16,500 B. N15,000 C. N14,000 D. N12,500 32. The difference between a trading account and a manufacturing account is that while the manufacturing account A. has no particular period, the trading account has B. does not consider the cost of goods involved, the trading account does C. is concerned with the cost of production the trading account is not D. is not concerned with the stock of raw materials, the trading account is. 33. An income and expenditure account is a summary of A. all income and expenditure during a period B. revenue income and expenditure during a period C. receipts and payment during a period D. the trading income during a period Use the information below to answer questions 34 and 35 Gbagada Social Club Receipt and PaymentsAccount for the year 1993 N N Balance b/d 720 Rent 180 Subscriptions 14,300 Furniture 3,500 Proceed from raffle draws 2,000 Rate 580 Stationery 120 Musa N Kalu N Lawal N Musa N Kalu N Lawal N Welfare expenses 1,000 Raffle prize 950 Balance c/d 10,690 17,020 17,020 Additional Information 1:1:93 31:12:93 N N Subscription in arrears 300 450 Furniture 7,000 Subscription received in advance 500 400 Rate owing 50 60 34. Subscription relating to the accounting year 1993 in the income and expenditure account is A. N15,050 B. N14,550 C. N14,300 D. N13,400 35. Accumulated fund on 1st January 1993 is A. N8,570 B. N8,470 C. N7,850 D. N7,520 36. Adamu Babaji andChukwu are in partnership and they share profit and losses on ratio 3:2:1. Their respective capitals areN20,000,N15,000 andN5,000 on which they are entitled to interest at 5% per annum. The profit for the year before charging interest on capital amounted toN5,500. Calculate the profit for Adamu. A. N583 B. N1,000 C. N1,167 D. N1,750 Use the table below to answer questions 37 and 38 Partners CurrentAccount Interest Interest On on capital 10,000 8,000 8,000 capital 800 600 360 Drawings 8,800 10,000 6,000 Share of 28,800 18,000 14,000 profit 26,200 13,100 13,100 Balance Balance b/d 1,800 4,300 540 c/d 1,800 4,300 540 28,800 18,800 14,000 The current account above for Musa, Kalu and Lawal has some errors in the arrangement of accounts. 37. The correct closing balance forMusa’s current account is A. N36,200 credit B. N16,600credit C. N16,600debit D. N1,800 credit 38. The correct closing balance of Lawal’s current account is A. N21,100 debit B. N14,740 debit C. N14,740 credit D. N540 credit 39. Faruk and Osawe are in partnership sharing profits and losses in the ratio of 3:7. Faruk is to receive a salary ofN9,000. In one accounting period, the business recorded a loss of N1,500 (before deduction of Faruk’s salary). The appropriate distribution of the net loss would be A. Faruk,(N450);Osawe,(N1,050) B. Faruk,(N3,150); Osawe (N7,350), C. Faruk,(N2,250);Osawe,(N5,250), D. Faruk, (N8,550);Osawe,(N1,050) 40. On partnership dissolution, ifpartner’s capital account has a debit balance and the partner is insolvent, the deficiencywill in accordance with the decision of the case of Garner vMurry, be A. Borne by all the partners B. Borne by the insolvent partner, C. Written off, D. Borne by the solvent partners 41. Share premium can be used to i.Write off discount on shares ii. Give loans to directors, iii. Pay dividends, iv. Pay company’s formation expenses A. i and iv only B. i and iii C. ii and iii only D. iii and iv only 42. A company has 5% debentures worth N500,000, ordinarycapitalN2,000,000, and preference sharesN1,500,000. If the company made a profit of N1,000,000, the debenture interest would amount to A. N1,000,000 B. N500,000 C. N50,000 D. N25,000 43. Alabede (Nig.) limited issued 50,000 ordinary shares of N1 each at market value of N2.50 each. The share premiumis A. N125,000 B. N100,000 C. N75,000 D. N50,000 44. Adividend of%in a companyon 500,000 ordinary shares ofN1 nominal value has been declared. Howmuch will a shareholder receive if he has 200 shares? A. N500,000 B. N50,000 C. N200 D. N20 Us the information below to answer questions 45 & 46. Udohtrading company Balance sheet as at 31st December, 1992 Capital 39,000 Land 20,000 Loan term 15,000 Building 30,000 Creditors 9,000 Stock 4,000 Acruedwages 5,000 Cash 8,000 Debtors 6,000 68,000 68,000 45. What is the working capital? A. N12,000 B. N11,000 C. N8,000 D. N4,000 46. The acid test ratio in the company is A. 1:1 B. 1:2 C. 2:3 D. 3:2 47. If goods are invoiced to the branch at cost and the invoice par value is N2,000 with 5% discount rate, cash remitted to the head office is A. N2,100 B. N2,000 C. N1,900 D. N100 48. Which of the following are advantages of departmental accounts? (i) The department making the highest profit can be easily determined (ii) The capital of the business can be calculated easily (iii) Easy knowledge of the sources of funding (iv) Encouragement of healthy rivalry among the various departments. A. i and iv only B. ii and iii only C. ii and iv only D. iii and iv only 49. Public sector accounting is based on A. cash B. accrual C. budgets D. consolidated fund. 50. The end result of governmental accounting procedure is to A. keep proper records of government expenditures B. give financial information to the public and investors C. produce timely and accurate financial re ports timely and accurate financial reports for legislators and the public D. give information on the performance of public enterprises Principles of Account 1998 1. The Act establishing the Institute of Chartered Accountants of Nigeria (ICAN) came into force on A. 1st September, 1960 B. 1stOctober, 1960 C. 1st October,1963 D. 1st September,1965. 2. Cost reports for attention of management should reflect A. as much details as possible B. summary figures only C. details of non-controllable expenses D. cost and comparable data useful in decisionmaking. 9. If the inventory at the end of the current year is understated and the error is not caught during the following year, the effect is to A. understate income this year and understate in next year B. overstate income this year and overstate in next year C. understate this year’s income with no effect on next year’s D. overstate the income for the two-year period. 10. The total of the discounts received column in the cash book is posted to the A. credit of the discounts received account B. debit of the discounts allowed account C. credit of the discounts allowed account D. debit of the discounts received account. Use the information below to answer questions 11 and 12 The initial imprest as at July 1stwasN500. Petty cashvoucers withthe custodianby July 15th added up toN394.AnIOUslip received froma co-workerwasN65 and therewas a shorage ofN5 cash. The co-worker made refund on July 18th just before the imprestwas replenished. 11. What was the actual cash in the till as at 15th July? A. N106 B. N101 C.N70 D. N36 12. The amount required to replenish the paymentsmade from the imprest was A. N399 B. N394 C. N358 D. N101 13. StateBank collected a note forAl-MakuraCompany. This collection, not yet recorded inAl-Makura’s books, appears on the bank reconciliation as A. an addition to balance per books B. a deduction frombalance per bank statement C. an addition to balance per bank statement D. a deduction from balance per books. 14. Mayana Corporation uses special journals to record its transactions. If one of Mayana’s customers returnsmerchandize purchasedwith cash (for a refund), it makes an entry in the A. cash receipts journal B. sales journal C. general journal D. cash disbursement journal. 15. Sobande Incorporation acquire a machine that involved the following expenditures and related factors N Gross invoice price 15,000 Sales tax 900 Purchases discount taken 300 Freight 750 Assembly of machine 500 Installation ofmachine 800 Assorted spare parts for future use 1,200 Turning and adjusting machine 700 3. Responsibility accounting is particularly concerned with A. historical accounting B. controllable costs C. storekeeping D. valuation of stocks 4. An advantage of the use of the voucher system is that it A. reduces the number of cheques that will be written during any given period B. provides a highly flexible system for handling unusual transactions C. provides a comprehensive record of business donewith particular suppliers D. ensures that every expenditure is reviewed and verified before payment is made. 5. A business transaction is recorded in the books of accounts when the A. owner of the business invests his N10,000 in another company B. business retains part of its profits for future expansion purposes C. business applies for overdraft facilities from its bankers D. owner of the business collects N5,000 from the accountant. 6. When a transaction causes an asset account to increase, there is A. a decrease of equal amount in the owner’s equity account B. an increase in a liability account C. an increase of equal amount in another asset account D. a decrease of equal amount in a liability account. 7. N Bank account 59,410 Capital account 50,000 Purchases account 20,000 Rent 2,500 Stationery 90 Typewriter 6,500 Sales 38,000 In preparing a trial balance from the list of balances given above, what is the total in debit and credit columns? A. N147910 B. N138500 C. N88500 D. N85800 8. The purchase of two generators by Hassan Electronics Enterprises should be recorded as A. an acquisition of fixed assets. B. an expense in its general office expenses column. C. an acquisition of stock, D. a part of capital in the capital account. What is the initial accounting cost of the machine? A. N19,550 B. N18,950 C. N18,350 D. N17,500 16. A pottery company had sales of N176,000 during the current period and a gross profit rate of 40%. The company’s cost ofmerchandize available for sale during the periodwasN128,000. The company’s ending inventory is A. N22,400 B. N32,000 C. N51,200 D. N76,800 Use the information below to answer questions 17 and 18 Wazobia Enterprises Balance Sheet as at 1/1/95 Liabilities N Assets N Capital 40,000 Furnishing 10,000 Ceiling fan 1,500 Cash in hand 28,500 40,000 40,000 If at 31/1/95 the following informationwas ascertained (i) Rent shopN12,000 paid for the year (ii) Total purchases N15,000 (iii)Total sales N8,200 (iv) Stock of goods left N10,000 (v) Paid sales boy N500. 17. What is the new balance sheet total as at 31/1/95? A. N40,000 B. N41,500 C. N41,700 D. N48,500. 18. What is the balance on its cash account as at 31/1/95? A. N22,800 B. N21,200 C. N9,200 D. N800 19. On 1st January, 1993, Lobo Company purchased equipment for N18,000. It uses straight-line depreciation and estimates an eight-year useful life and a N2,000 salvage value.On 31st December, 1996, it sells the equipment for N8,000. In recording this sale, it should reflect A. N10,000 loss B. N2,000 loss C. N6,000 gain D. N8,000 gain 20. The balance on a purchases ledger control account represents the A. present amount that a business owes its suppliers at date. B. Total credit available to the business at the end of the year to be utilized in future C. total credit the business enjoyed for the particular year fromits suppliers. D. total credit owed the business by its customers. 21. Apowerful instrument of control over both the sales ledger and the clerk whose duty is to post the ledger is the A. total debtors account. B. Purchases day book C. sales daybook D. Cash book.. 22. Mini Enterprises sales Ledgers as at 31/12/94 read: N Balance b/f 12750 Total credit sales 28185 Payments by debtors 12112 Discount allowed 638 Sales returns 1500 Prepare the sales ledger control account and deter mine the balance due from debtors. A. N40935 B. N27961 C. N26685 D. N1185 23. Determine the year’s purchases from the following information relating to a firm N Total creditor’s b/f 7200 Total cash payments to suppliers 98800 Total creditors c/f 8400 A. N7,200 B. N98,800 C. N100,000 D N105,200 24. Derive the total sales figure from the following information extracted from a firm’s cash book and other relevant records. N Total debtors b/f 5,600 Total cash receipts from debtors and cash sales 153,000 Total debtors c/f 6,800 A. N6,800 B. N153,000 C. N154,200 D. N159,800 25. The statement of affairs prepared fromincomplete records can be described as A. the summary of all the business transac tions of the trader ascertained by the accountant B. a balance sheet at a particular date showing the assets and liabilities of the business C. a schedule of all the business ventures entered into for the period to which the records relate D. the statement that shows the profit or loss made during the period. 26. The contribution margin on a job is the A. gross profit B. net profit C. excess of sales revenue over variable costs D. difference between fixed and variable costs. 27. The objective of allocating all costs to product is to A. produce a scientifically accurate cost B. avoid unallocated overhead and compute total product cost C. co-ordinate the cost and financial accounts D. compute the contribution of the product to the final profit. Use the information below to answer questions 28 and 29 Rawmaterials inventory at the beginning of a periodwas N46,800 and at the close of the period therewas a balance of N38,600. Fromthe purchasesmade during the period, defective materials costingN9,200were returned. Cost of materials consumed during the period wasN448500. 28. What was the total purchases made during the period? A. N487100 B. N457700 C. N449500 D. N440300 29. What is the cost of materials available for use during the period? A. N487100 B. N449500 C. N448500 D. N440300. 30. Anon-profit-making organization differs froma profit making on in that A. it does not earn income B. proceeds from sale of shares form part of its income C. all its income is committed D. annual subscriptions and levies form part of its income. 31. The limitations of the receipts and payments account arise mainly because of the reliance A. cash movement as evidence of transaction B. the accounting officer to report C. the capital account of the organization D. the transaction papers as evidence of transaction 32. The trading account is to a sole trader what income and expenditure account is to a A. partnership B. public limited organization C. manufacturing organization D. non-profit-making organization. 33. Which of the following indicate that a partnership business is in place? (i) there is a business (ii) it is run commonly bypartners (iii) it has profit-making in view(iv) partners’ liability is limited. A. i and ii only B. i,ii and iii only C .i,ii and iv onlyD. ii,iii and iv only. 34. When forming a partnership, new partners should record non-monetary assets on the new partnership’s books at A. their current fair market values B. their historical costs when first used C. their historical costs when first purchased by each new partner D. the highest values practical so that future income tax deductions aremaximized. 35. Umar andAhmed share profits and losses equally and have capital balances ofN40,000 andN60,000 respectively. IfAbdullahi purchases a one-third interest with no bonus, howmuch will he have to contribute to the partnership? A. N33,333 B. N40,000 C. N44,444 D. N50,000 36. Which of the following is an intangible asset and a measure of a firm’s superior earning power? A. Patent B. Goodwill C. Trademark D. Right issue. Use the information below to answer questions 38 and 39 Dan&Baker are in partnershipwith capitals ofN50,000 andN30,000 each.The partnership agreementprovides that: (i) profits be sharedin the ratio of capital (ii)Baker be paid a salary ofN8,000 (iii) both partners pay interest on drawings at6% p.a. At the end of the year, Dan drewN15,000whileBaker drewN14,000 in four equal installment on 31/3, 30/6, 30/ 9 and 31/12. The net profit for the year was N48,000. N5,000 is to be written off theGoodwill account. 38. What is the interest on the drawings by Baker? A. N210 B. N315 C. N450 D. N840 39. Determine the total interest on capital due to the partners. A. N1200 B. N1800 C. N3000 D. N4800 40. The ordinary shareholders enjoy the following rights except the right to A. vote at annual general meetings B. elect the board of directors C. participate in additional issues of shares D. receive dividends at a predetermined rate. 41. Granada Corporation has net assets ofN600,000 and contributed capital ofN180,000. The corporation has 30,000 shares of common stock outstanding with no preferred stock. This suggests that the corporation has A. a book value of N14 per share B. a book value of N20 per share C. a deficit ofN420,000 D. retained earnings ofN600,000 42. Under which of these conditions can a company issue shares at discount? (i) a resolution must be passed at a general meeting (ii) the amount of discount must be stated in the resolution (iii) the sharemust have existed for at least six years. (iv) on the order of a court. A. i,ii and iii only B. i,ii and iv only. C. i,iii and iv only D. ii,iii and ivonly 43. The part of equity which is payable on winding up is called A. general reserve B. revenue reserve C. capital reserve D. normal reserve 44. To compute gearing ratio, divide A. profit by capital employed B. current assets by current liability C. profit by total assets D. long-term debt by equity capital. 45. Which of the following entries is effected by a department when goods are charged to it at selling prices? A. Stock account is debited B. Purchases account is debited C. stock account is credited D. mark-up account is debited. 46. The difference between the closure of the books of a branch and those of a separate company is that A. there is retained earnings account on the branch books B. the revenue and expense account is closed to branch current account C. there is no retained earnings account on the branch books D. the revenue and expense account is not closed to the home office current account 47. The term fiscal compliance means A. all financial and related laws and regulations are adhered to B. only the budget for the current period is compiled with and no deficits allowed C. allphysical assetsrequirementshave beenmet 1. Accrual concept stipulates that A. revenue should be recognized when it is earned B. costs should be recognized when the expenditure is paid C. revenue should be recognized only when cash is paid D. costs should be recognized when they are incurred. 2. The basic role of accounting is to; A. detect fraud B. altest to financial statement C. measure performance D. protect shareholders 3. The need for changes in accounting theory in Nigeria was influenced by the A. dynamics of commercialization and privatization policies B. growth in size of business units C. introduction of he structural adjustment programme D. inconvertibility of the nation’s currency. 4. A book-keeping error occurs when there is a. A. deliberatemanipulation of records B. unintentional correct posting in the ledger C. intentional failure to record transactions and oversights that are no intended D. interest records and completely oversights that are not intended. D. fiscal planning is necessary for proper accountability in the public sector. 48. In a public corporation, the capital expenditure incurred in a financial period is A. spread over the useful life of the assets through depreciation B. apportioned at a pre-determined rate stipulated by law C. written off in the year in which they occur D. merged with recurrent expenditure and reported in one lump sum. 49. Money not required tomeet chargeable expenditure in any fiscal year under cash accounting, should be A. surrendered to the consolidated revenue fund B. carried forward to the next financial year C. reserved tomeet any deficits or contingencies D. returned to the taxpayer. 50. If a monthly insurance premiumis remitted to a company by the state government, the initial deductions from employees are recorded in A. thegeneral fund B. agency fund C. special fund D. generallong-termfund. Principles ofAccounts 1999 5. When a proprietor withdraw cash from the business for private use, he A. debits cash account and credits drawings account B. credits cash account and debit its bank account C. debits bank account and credit drawings account D. credits cash account and debit drawings accounts. 6. A basic unifying concept in accounting implies that A. where creditors’ accoun is zero, the assets are equal to the owner’s equity., B. there should be a balance in he creditors’s account in order tomeasure total assets C. revcenues should be supported by invested and owners’s capital D. total assets can be less than liability and equity. 7. A source document for the sales day book is A. requisition form B. an invoice C. a customer advice D. a credit advice. 8. In a cash book, the opening balance was N7,600, closing balanceN9,200 and the total cash received during the period was N18,000. What was theamount of cash paid out during the period? A. N8,900 B. N9,800 C. N14,600 D. N16,400 9. If the total discount allowed in cash book was N230 and the total discount received was N255 and the total following is true concerning the two discounts? A. They must be balanced in the cash book and the difference taken to the debtors ledger, B. theymust be balanced in the cash, balance and the difference taken to the trial balance. C. They should not be balanced in the cash book before being taken to the trial balance. D. They should not appear in the trial balance a theywere already either received or paid out. 10. Which of the following bank reconciliation items should not be added or subtracted from the bank statement balance to determine the adjusted cash balnce? A. Outstanding cheques B. Bank service charges C. deposits in the mail not yet received by the bank D. Bank error, charging a company for another company’s cheques. 11. The fixed amount ofmoney given to a petty cashier at the beginning of a period is called A. imprest B. petty cash C. float D. cash advance 12. A provision for bad debt account had N3,800 at the beginning of the year and N4,220 at the close of the year. If bad debts are calculated at the rate of 1/20% of annual credit sales. what was the credit sales for the period? A. N210,000 B. N844,400 C. N840,000 D. N500,000. 13. Asa company bought a vehicle worth N20,000 and the vehicle is to be depreciated 5% using the reducing balancemethod of depreciation, what would be the value of the assets after 3 years? A. N19,000.00 B. N18,050.50 C. N17,147.50 D. N16,290.13 Use the information below to answer questions 14 and 15 N Capital:Opening balance 307,000 Closing balance 342,000 Net profit for the period 121,600 Opening stock 98,800 Purchases 706,000 Carriage inwards 17,500 Cost of goods sold 740,700 Total selling, general and Administrative exps 526,000 Discount received 9,650 14. What is the closing stock for the period? A. N69,300 B. N84,300 C. N81,600 D. N106,400 15. Calculate the gross profit for the period A. N535,650 B. N628,300, C. N637,950 D. N647,600 16. Chibuike bought 36 notebooks atN10 each from John and was given a trade discount of 5%. In addition, he as offered 1%cash discount which he took advantage of. Howmuch did Chibuike pay? A. N338.58 B. 342.000 C. N345.42 D. N360.00. 17. Depreciation on a particular piece ofmachinery was N2,700 during the fifth year of its service life and N4,050 during the sixth year. The logical explanation for this is that. A. an addition was made to the asset during the sixth year. B. the estimate of salvage value on this equipment was decreased at the beginning of the fifth year C. a unit-of-output method of depreciation was used during the sixth year. D. the estimated remaining service life of the asset was increased at the beginning of the sixth year. 18. The main features of the single entry system are that A. books of accounts are not maintained and business relies only on bank statement B. the journal records are absent and only the main ledger is kept C. there are incomplete classifications and recording procedures D. only credit sales transactions and credit purchases are recorded. 19. The principal function of a sales ledger control account is to A. serve as internal check and provide quick information for the preparation of interimfinancial statements B. serve as external check and provide quick information for the preparation of interimfinancial statements C. provide quick information for the preparation of customers’ statements, D. provide information for the control of salesmen’s activities 20. In dealing with incomplete records, fixed assets are posted to A. opening profit and loss as brought forward figures B. closing balance sheet as carried forward figures C. closing balance sheet as brought forward figures D. closing profit and loss as bought forward figures. Use the information below to answer questions 21 and22 Aminu and Sons credit purchases (Extract) as at February, 1996 N Feb 1 Credit balances 40,000 Debit balances 1,000 Feb 28 Purchases journal totals 500,000 Returns outwards journal total 50,000 Cheques paid to suppliers 400,000 Promissory notes sent to suppliers 30,000 Discount received from suppliers 8,000 Credit balances in the purchases ledger set off against debit balances in the sales ledger 2,000 21. The total for the purchases ledger control account is A. N480,000 B. N490,000 C. N500,000 D. N540,000 22. What is the balance c/d in the purchases ledger conrol account? A. N2,000 B. N8,000 C. N40,000 D. N45,000. 23. Given: N Total cash received from debtors 30,000 Total purchases for the period 21,000 Amount owed by debtors at the beginning of the period 4,000 Equipment bought 2,500 Amount owed by debtors at the end of the period 3,000 Determine the value of sales for the period. A. N29,000 B. N31,500 C. N46,500 D. N50,000 24. When the factory cost of production has been ascertained, manufactured goods are transferred to trading accounts by A. debiting manufacturing account and crediting trading account B. crediting sales account and debiting trading account C. debiting sales account and crediting trading account D. crediting manufacturing account and debiting trading account. 25. Lawal and Co makes blocks and sells to builders. In computing prime cost, which of the following costs would be considered appropriate? A. Cement, sand and carriage outward B. Water, carriage inwards and cement C. Sales boys wages, cement and sand D. carriage outwards, carriage inwards and cement. 26. Manufacturing cost can be classified based on A. timing of charges, degree of averaging, ease of traceability and timing of charges B. degree carriage inwards and cements C. degree of averaging and size of capital D. number of employed, timing of charges and management style. 27. The difference between the factory cost of production and prime cost production is A. directmaterials B. direct labour C. selling expenses D. overhead. 28. Receipts and payments account of a non-profit making organisation is principally a summary of the A. bank entries B. cash book entries C. expenditure entries D. balance sheet entries. 29. Given: N Club debtors at start 150 Cash sales 4,850 Club debtors at close 900 Cash received from debtors 550 What is the amount club sales A. N6,150 B.N4,850 C. N4,650 D.N1,300 30. A credit balance on a receipts and payments account indicates that the non-profit making organisation. A. had more revenues than expenses during the period B. did not owemuch liabilities during the period C. received more cash than it paid out during the period D. made more cash payments than it received during the period. 31. Goodwill can be valued in partnershipwhen, A. partnersmake profits B. large losses are made C. a partner retires D. a new branch is opened. 32. As part of the initial investment, a partner contributes office equipment that originally cost N20,000 and on which provision for depreciation ofN12,500 had been recorded. If the partners agree on a valuation ofN9,000 for the equipment, what amount should be debited to the office equipment, what amount should be debited to the office equipment account? A. N7,500 B.N9,000 C. N12,500 D.N20,000 33. When a partner makes a drawing of stock items from a partnership, the accounting impact of the drawing is to increase the partner’s A. Goodwill account balance B. Current account credit balance C. Current account debit balance D. Profit and account credit loss balance. 34. AppropriateAccount Kudu Wale Interest on capital 750 550 Salaries 800 600 Share of profits 3,300 3,300 Determine the net profit of the partnership A. N9,300 B. N6,600 C. N 4,850 D. N4,450 35. Dele and Seun who are in partnership, have decided to convert their business into a limited liability company where both become directors. To convert the business A. Theywill simply continue since there are no newmembers. B. The partnership is formally ended and new company books opened. C. The shares and all other items will be shared equally and not in their former ratios. D. Computation of goodwill must b e done as it is legally required. 36. If a sole proprietorship is purchased for cash, then A. The purchaser debits his business purchase account with the consideration he pays. B. All assets and liabilities must be bought C. Goodwill results where value liabilities taken is higher than the value of assets. D. The vendor debits his businesspurchase account with the consideration he receives. 37. Themarket price per ordinary share of a corporation listed on the stock exchange is most closely related to its A. Earnings per share B. Redemption price per share C. Book value per share D. Call price per share 38. Which of the following events increases a corporation’s shareholders equity? A. Donation of shares out of the corporation’s own stock to the corporation B. The corporation’s purchase of treasury stock. C. Shares of previously subscribed stock issued to subscribing stockholders D. Amunicipality donation of land to the corporation Use the information below to answer questions 39 and 40 ZoomPlc Balance Sheet (Extract) as at 31stDecember 1997 N N Paid-up capital 200,000 Fixed assets 300,000 Share premium 15,000 Investment 180,000 Profit & loss a/c 60,000 Stock 28,000 Debtors 90,000 Creditors 200,000 Provision (3,000) 87,000 Other current Cas 60,000 Liabilities 100,000 Bank 100,000 755,000 755,000 39. The quick ratio is A. 0.82 : 1 B. 0.91 : 1 C. 0.95 : 1 D. 1.53 : 1. 40. Determine the owner’s equity A. N200,000 B. N215,000 C. N275,000 D. N755,000 41. If a promote pays a lawyer N5,000 for services rendered in preparing aMemorandumof Incorporation, the journal entry is to debit A. Preliminary expenses, credit cash, accounts. B. Promoters, credit creditors’Accounts. C. Lawyer’s credit cash accounts D. Cash credit incorporation accounts. 42. Calls in advance are treated in the balance sheet as A. Current asset B. Current liability C. fixed assets D. fixed liability. 43. Shares issued to a vendour in payment of business purchased would require a debit to A. Cash account and credit to share capital account B. Share capital account and credit to vendor’s account C. Vendor’s account and credit to share capital account. D. Share capital account and credit to cash account. 44. The best method of allocating expenses among departments is to A. Allocate expenses to each department in proportion to the sales of that department B. Charge against each department those costs which are within its control C. Charge expenses against each department in proportion to the purchases of that department. D. Allocate expenses to each section of the department in relation to the number of people. 45. To record the transfer of stock fro one department to another, the correct entry would be to debit A. Gods outwards and credit goods inwards. B. Merchandise account and credit department stock account C. Department transferring and credit department receiving D. Department receiving and credit department transferring. Use the information belowto answer question 46 and 47. Amoga Limited invoiced goods at a cost of N 10,000 to its Ikeja branch at a margin of 20%. The branch later returned goods worth N 1,200 at invoice price to the head office. 46. The profit margin should be A. debited to goods sent to branch account B. debited to branch stock adjustment account C. credited to branch adjustment account D. credited to branch stock account. 47. What is the correct entry in the head office books at the point of initial transfer of the goods? A. Branch stock account would be credited withN10,000 B. Branch stock account would be debited withN12,000 C. Goods sent to branch account would be debitedwith N10,800. D. Goods sent to branch account would be creditedwith N12,000. 48. Capital and revenue expenditures of government are usually accounted for under funds which include A. Personal advances, technical and public funds. B. Technical, special trust and commercial funds. C. Personal advances, treasury clearance and special trust funds. D. Commercial loans and treasury clearance funds. 49. Which of the following accounts is kept by local governments in Nigeria? A. Balance sheet B. Advances account. C. Debtors account D. Profit and loss accounts. 50. The conventional source of public revenue include A. Loans, taxation, foreign reserves and dividends. B. Interest, royalties, taxation and loans C. Crude oil, interest, posted price and taxation D. Taxation, deficit budgeting, royalties and loans. 1. On November 1, 1998, Zaria Holdings owedN13,600 in respect of creditor. On November 15, it purchased goods worth N69,000 and paid a cheques ofN51,600. On November 29, one of theHoldings’cheque’s worth N3,000 was returnedwhile the creditor granted N1,500 discount. Theamount owed byZaria Holdings as at November 29 is A. N32,5000 B. N32,000 C. N31,000 D. N29,500 2. To write off bad debt, debit A. Debtor’s account and credit provision for bad debt. B. Bad debt account and credit debtor’s account. C. Debtor’ account and credit bad debt. D. Provision for bad debt. 3. In order to make the cash book balance equal to the bank statement, it is usual to add A. Uncredited cheques. B. Direct payments by bank C. Bank charges D. Unpresented cheques. Use the information below to answer the questions 4 and 5 N Sale 20,000 Cost of sales 10,000 Operating expenses 2,500 Expenses prepaid included in operating expense 500 4. Calculate the net profit. A.N12,500 B.N10,000 C. N8,000 D.N7,500 5. What is the gross profit margin? A. 100% B. 50% C. 40% D. 30% 6. The main object of book keeping is to record economic. A. Transactions systematically for routinemanagerial decisionmaking. B. Events clearly to ensure adequate checks and balances C. Events clearly to facilitate strategic managerial decision- making D. Transactions systematically to ascertain the financial position of a business. 37. Which of the following is an example of intangible asset? A. Trade debtorsB. Stock of goods C. trade creditors D. Motor vehicles 8. A source document that aids the ascertainment of amount paid out of a current is the A. Teller B. Cheque stub C. Cheque D. teller stub 9. Yahuza Enterprises Trial Balance (Extracts) as atDec. 31, 1998. N N Capital 21,000 Premises 90,000 Debtors 35,000 Provisions 1/1/98 Depreciation 9,000 Bad and doubtful debts 1,500 If a premise is to be depreciated at 10% on cost and a 5% provision is to be allowed on debtors, the total asset in the balance sheet is A. N125,000 B. N114,500 C. N105,500 D. N105,250 10. The most convenient cash book used by a petty trader operating in an area where there is no banking facility is A. Four column B. Three column C. Single column. D. two column 11. A general journal contains A. Date narration, folio, debit and credit. B. Date narration, folio, debit and purchases. C. Folio, credit, date, debit and sales. D. Debit, credit, narration, date and discount. 12. Which of the following errors will affect the trial balance totals? A. Posting discount allowed to the debit side of the discount allowed account. B. Omission of one account from the list when extracting from the ledgers. C. Failure to post sales of N 2,000 and purchases of N2,000 from subsidiary ledgers. D. Omission of sales ofN 3,000 and purchase of N2,000. 13. An expense account is closed by a debit to A. An asset account and credit to the expense account. B. The expense account and a credit to an asset account. C. Profit and loss account and a credit to the expense account. D. The expense account and a credit to profit and loss account. Principles ofAccounts 2000 14. The accounting convention which stipulates thatmoney or goods taken from the business by the owner for personal use should be treated as deductions from capital is A. Cost B. Prudence C. Consistency D. Entity Use the information below to answer questions 15 and 16 Cost rawmaterials consumed 300,600 Carriage inwards 6,700 Returns of rawmaterials 10,800 Closing stock of rawmaterials 100,250 Manufacturing wages 27,000 Lighting, power, insurance and rent relating to the factory are apportioned 1/3/5, 1/6/ and 1/7with totalsN30,000, N75,000; N36,000 andN56,000 respectively. 15. What is the cost of the opening raw materials? A. N418,350 B. N404,950 C. N400,250 D. N398,250 16. The production cost of finished goods is A. N524,600 B. N408,000 C. N381,600 D.N327,600 17. Amin Ltd. Creditors Ledger ControlAccount (Extracts) Beginning control account N Balances: Debit 32,000 Credit 61,000 Purchases during the year: Cash 30,000 Credit 60,000 Payment to suppliers: Cash 13,000 Cheque 29,000 Debtor’s contra 6,000 The closing control account balance is A. N41,000 B. N65,000 C. N71,000 D. 77,000 18. Given: N Depreciation of plant and machinery 1,600 Factory rent 650 Indirect wages 695 General indirect expenses 726 Lubricants 1,235 Carriage inwards 829 Factory power 350 Bank charges 612 Carriage outwards 2,900 Determine the total factory overhead cost A. N4,485 B. N5,256 C. N6,085 D. N6,556 19. Given N Cash book items: Paid to suppliers 10,800 Expenses paid 6,900 Drawingsmade 900 Balances at start 15,750 Balances at end 3,870 Drawings from bank to shop 1,720 Determine the receipt from debtors A. N22,470 B. N17,470 C.N8,440 D.N5,000 20. The items entered in an opening statement of affairs of an enterprise that keeps incomplete record are A. Sales income B. Receipt from debtors C. Fixtures and fittings D. Rent paid 21. In a manufacturing company, the total cost of goods produced is equivalent to A. Purchases B. Sales C. Cost of goods sold D. Cost of materials used. 22. Given: Sales Ledger ControlAccount (Extracts) N Balance b/f 10,600 Total cash payments by debtors 32,275 Total credit sales 59,193 Discount received 9,700 Balance c/f 20,751 Discount allowed 2,890 Determine the sales returns A. N24,577 B. N13,877 C. N7,067 D. N2,890 23. The simplest form of single entry procedure consist of keeping a A. Day book or general journal B. Cash book and ledger accounts showing debtors and creditors balances C. Cash journal, sales journal and purchases journal D. Day book in which transaction are described in chronological order. 24. A fixed cost is fixed only in relation to A. The quantity of goods produced B. The quantity of goods sold C. A given period of time a range of activities D. Agiven period of time and the nature of activity. 25. One of the shortcomings of single entry procedures is that A. A trial balance is not available B. Profits are overestimated C. There are no subsidiary books D. There are no control accounts. 26. When a customer’s cheque is returned unpaid in a debtor’s control accounting system, the treatment will be A. debit bank, credit customer and credit control account. B. credit bank, debit customer and debit control account. C. debit customer, credit control account and credit bank. D. credit control account, debit bank and debit customer. 27. Didi Ltd. Offered 10,000 ordinary shares ofN1.50 each at a discount of 2% which were fully subscribed. With regard to the offer above, A. Shares are never offered at a discount; the offer is invalid B. The value of shares in the capital account will be lowered by 2%. C. The company incurs a loss to the tune of 2% of the offer. D. Each of the subscribers loses 2% of investment. Usethe information belowtoanswer questions 28and29 MaroMerchant Bank Plc is to issue 500,000 ordinary shares of 50k each at N 3,000 per share. Applications were received for 1,550,000 shares fully paid, 1,250,000 shares are to be issued on a pro rata basis and excess subscriptions were dishonored and refunds made 28. The refund due to an application for 25,000 shares is A.N45,000 B.N30,000 C.N7,500 D.N5,000 29. What will be the number of shares to be issued to a subscriber who applied for 30,000 shares? A.N20,000 B.N18,000 C.N15,000 D.N12,000 30. Which of the following items does not feature in the balance sheet of a club? A. Arrears of current year’s subscription B. Salary arrears paid in the current year C. Rental income received in advance D. Advance subscription in respect of a coming year. 31. An outright sale of partnership amounts to the A. compenstion of vendors by the purchase B. admission of a newpartner C. purchase of rights of a dead partner D. change of sharing ratio of vendors 32. Given: N Opening Cash balance 20,000 Sale of match tickets 15,000 Clearing of pitch 1,200 Refreshments 3,500 Referees’ allownace 1,000 Cost of petrol for bus 1,120 Donation from local government 3,800 The club’s cash balance is A. N39,180 B. N34,830 C. N34,830 D. N31,980 Use the information belowtoanswerquestion 33and34 Maimalari Ltd had 1. Earnings per share 30k 111. Par value of each share N1.20 1V.Market price per shareN1.50 33. The companys’ yields is A. 20.00% B. 25.00% C. 31.33% D. 39.17% 34. What will be the price earnings ratio of the company? A. 3.91 B. 3.19 C. 2.95 D. 2.55 35. The partnership Deed noramally specifies A. how profits or losses are to be shared B. the capital to be contributed annually C. how salaries are paid to employees. D. the profit that should be earned annually 36. The accumulated fund of a non-trading concern can equally be referred to as A. members’ equity B. share capital C. general fund D. surplus fund 37. When a purchased business is revalued the effects is that. A. a decrease in the value of assets has no effect no value of goodwill B. an increase in the value of asset is treated as an increase in the value of goodwill C. a decrease in the value of asset is treated as a decrease in the value of goodwill D. an increase in the value of asset is treated as decrease in the value of goodwill 38. An item of appropriation in partnership profit and loss account is. A. interest on partners’ capital B. interest on partners’ loan C. employees’ salaries D. partners drawings Use the information belowto answer question 39 and 40 Rakya ad Joy are in partnership and agreed that 5% interest per annumis to be charged on drawings. The drawing made byboth partners in one year were: Rakiya,N200 onMarch 31 and N300 on September 30, Joy, N100 onApril 1 andN240 on July 1 39. The interest on Joy’s drawing is A. N6.00 B. N7.25 C. N9.00 D. N9.75 40. Assuming that Rakiya was not credited with any in come during the period, what is her closing current ac count balance? A. N340.00 credit B. N349.75 debit C. N500.00 credit D. N511.25 debit 41. A business is acquired at par when the A. purchase consideration equals good will B. purchase consideration equals net value C. purchase consideration is greater than the net value is greater than the liabilities. Yola SocialClub Statement ofAccount 1999 FinancialYear N 31/12/98: Subscription in arrears 21,000 Subscription in advance 12,000 Receipts during 1999: Arrears 1998 21,000 Dues 1999 48,000 Advance 2000 11,000 The subscription transferable to the income and expenditure account is A. N48,000 B. 59,000 C.N60,000 D.N69,000 43. The most appropriate basis for apportioning inventory holding cost among departments is to use the value of A. purchase B. opening stock C. closing stock D. average stock 44. The body constitutionally charge with the accounts of the Federation and other Assembly in the A. PublicAccounts Committee B. PublicAudit Committee C. InternalAudit Committee D. ExternalAuditCommittee. 45. 1. Meet growth and diversification needs. 11. Reach out to particular customers or markets 111. Complywith some regulatory directives. 1V. Increase employees’ income Which of the reasons above do consider in estalishing branches. A1 and 11 B. 1, 11 and 111C. 11, 111 and 1V D. 111 and1V 46. The channel through which all government borrowing and domestic lending transactions pass is called A. special trust fund B. agency fund C. national laon fund D. contingency fund 47 Given: Dept A Dept B Floor space 400m2 60m2 Machine 1200 1400 Turnover N36million N64million Labour hoours 1000 1400 A joint cost N72million incurred by the two depart mentswas apportioned N30 million to A. and N42 million to B. The basis used for apportionment must have been A. labour hours B. floor space C. turnover D.machine hours 48. Recurrent expenditure are expenses for the period not exceeding. A. 10 years B. 5 years C. 2years D. 1 year 49. Amajor benefit derived fromthe reconciliation of branch and head office books is to A. determine accurate returns by the branch B ascertain the correct profit or loss on branch activites C. enable the branch to keep control over stock D. enable the branch to ascertain debtors balance 50. Haial Limitedwith three departments has a total of N7,2000,000 as the net debtors for the year ended 31/12/ 97. The company’s policy provides for 15% bad debt annually.Whcih of the following represents the total balance of debtors before adjustments? A.N6,120,000 B. 6,120,300 C.N8,280,000D.N8,820.00 1. The current growth in the volume of trading and financial dealings in Nigeria is helped by A. Increased financial activities. B. Government intervention C. Credit as a factor in business D. Paying for goods in cash. 2. Cost accounting entails provision of information A. For investment purpose B. For decision making C. To shareholders D. To stockholders 3. The main objective of accounting report is to provide information about A. A company’s shareholding B. An entity’smanagement C. The efficacy of assets D. A company’s economic resources. 4. If liabilities amounted toN12,045, other assetsN36,800 and equityN26,896, the cash at hand would be A.N2,241 B. N2,214 C. N2,141 D. N2,114. Use the information below to answer questions 5 and 6 Given N Fixed assets 85,600 Sales 197,000 Stock 34,300 Salaries and wages 37,000 Purchases 127,700 Share capital 120,000 Creditors 16,050 Motor expenses 10,500 Debtors 25,000 5. What is the cash balance? A. N12,095 B. N12,590 C. N12,905 D. N12,950 6. Determine the total of the trial balance. A. N335,050 B. N333,050 C. N323,050 D. N230,550 7. The accuracy of journalizing is checked by A. Ensuring that debit totals equal credit totals. B. Posting all journal entries to ledger accounts. C. Adding all figures in the debit column. D. Comparing accounts in the ledger against the journals. 8. Hauwa Ltd bought 10 bags of rice for N500 each. The company was given 5% and 12% trade and cash discounts respectively.What will be recorded as discount received in the company’s book? A. N250 B. N570 C. N600 D. N850 9. A cash book had opening balance of N15,200, closing balance N18,400 and total cash received during the period N36,000.What was the amount of cash paid out during the same period? A.N17,800B. N19,600 C.N29,200 D.N32,800 Principles ofAccounts 2001 10. In a petty cash book, the closing balance was N235, imprestN1250, while the stationeryexpenseswereN655. howmuch was paid for other general expenses? A. N360 B. N355 C. N350 D. N305. 11. When a bill is negotiated to a abank, it is said to be A. Surrendered B. Cashed C. Discounted D. Accepted 12. Given that the balance as per cash book after necessary adjustments was N4,315, unpresented cheques were N1,688 and the bank statement balancewasN4,791,what was the balance of the uncredited cheques? A. N1,223 B. N1,212 C.N1,202 D.N1,115 13. If a property developing company sells a completed building to an interested third party, this sale can be treated in the books of the company as A. Capital receipt B. Revenue receipt C. Windfall receipt D. Miscellaneous Receipt. Use the information below to answer questions 14 and 15 Palaju Enterprises had fixed assets ofN3,100,000 at the end of the year. Fixed assets costingN900,000 with provision for depreciation ofN150,000were disposed of during the period. Fixed assets ofN100,000 were added during the year. Provision for depreciation was N350,000 at the beginning of the year and N300,000 at the end of the year. 14. What was the value of fixed assets at the beginning of the year? A. N2,900,000 B. N3,800,000 C. N3,900,000 D. N4,000,000 15. The depreciation expense charged for the year is A. N450,000 B. N250,000 C. N150,000 D. N100,000 16. Areduction in the catalogue price of an article given by a wholesaler to a retailer is called a A. Bad debt B. Trade discount C. Premium D. Cash discount. Use the information below to answer questions 17 and 18. Stock ControlAccount [Extract] as at January, 2000 Date Receipts Issues Balance Qty Unit Amt Qty Unit Amt Amt Price Price N N N N N Jan. 1 100 5. 00 500.00 - - - 500.00 Jan. 5 50 6.00 300.00 - - - 800.00 Jan. 7 - - - 40 6.00 240.00 560.00 Jan. 10 50 4.00 200.00 - - - 760.00 Jan. 15 - - - 50 4.00 200.00 560.00 Jan. 20 - - - 10 X Y Z 17. What is the stock valuation method used? A. Last In First Out B. First In FirstOut. C. Average cost D. Weighted average. 18. The value of x is A. N4.00 B. N5.00 C. N5.50 D. N6.00 Use the information below to answer questions 19 and 20 N Purchases ledger opening balance 4,000 Sales ledger opening balance 6,000 Credit purchases during the year 25,000 Discounts allowed 1,000 Returns inwards 2,000 Credit sales during the year 10,000 Returns outwards 6,000 19. Calculate the sales ledger balance . A.N3,000 B.N6,000 C.N10,000 D.N13,000 20. What is the purchases ledger balance? A.N4,000 B.N23,000 C.N24,000 D.N29,000 21. For an incomplete record to provide necessary information, it must be converted to A. Complete records B. Double entry records C. Statement of affairs D. Single entry. Use the information below to answer questions 22 and 23 Given: 31/12/98 31/12/99 Assets: Plant & Mach. 1,500 1,200 Fixtures 700 520 Stock 500 600 Debtors 900 400 Cash 200 300 Liabilities: Creditors 500 600 Loan 600 400 22. Determine the total fixed asset from the opening balance sheet A. N2,200 B. N2,020 C. N1,720 D. N1,270 23. What is the capital from the opening balance sheet? A. N3,600 B. N2,700 C. N2,070 D. 1,520. 24. Given: N Directmaterial 2,500 Direct labour 5,500 Direct expenses 1,000 Overhead expenses 1,500 From the data above, compute the prime cost A. N8,500 B.N7,500 C.N6,500 D. N6,000 Use the information below to answer questions 25 and 26 Bar opening stock 10,000 Amount owed to bar suppliers at the beginning of the year 10,000 Bar sales 50,000 Bar credit purchases 40,000 Payment to suppliers 30,000 Bar expenses 1,000 Bar closing stock 15,000 25. What is the bar profits? A. N20,000 B. N15,000 C. N14,0000 D. N10,000. 26. How much is owed to supplier? A. N50,000 B. N40,000 C. N30,000 D. N20,000 27. Lubricating oil and spare parts ofmachinery are examples of A. Directmaterial B. Indirectmaterials C. Indirect expenses D. Direct expenses Use the information below to answer questions 28 and 29 N Subscriptions received during the year 30,000 Subscription owed last year 4,000 Subscription received for next year 6,000 28. TheN6,000 subscription received is A . Current asset B. Current liability C. Fixed asset D. Capital 29. What is the subscription to be charged to income and expenditure account? A.N36,000 B.N34,000 C.N30,000 D.N20,000 30. Aclub received rent N10,000 and donation N30,000. It paidN6,000 for entertainment and is still owingN16,000. The balance of the receipts and payment account is A.N24,000 B.N22,000 C.N14,000 D.N8,000 31. Given N Club training profit 12,000 Members’ subscription 15,000 Profit on sale of fixed assets 2,500 Loss on sale of investment 1,000 Wages 16,500 Other expenses 10,000 Determine the club’s excess of income over expenditure A. N500 B. N1,500 C. N2,000 D. N2,500 32. The excess of income over expenditure is usually transferred to the A. Accumulated fund B. Profit and loss account C. Current assets in the balance sheet D. Current liabilities in the balance sheet. 33. Partner’s salaries and drawing are usually posted to the A. Trading account B. Current account C. Capital account D. Partners’ accoun. 34. marmuhu and Yusuf are in partnership sharing profits and losses in the ratio 2 : 1. On 31/3/2000, the partnership decided to admit Idris who is to take ¼ of future profits without changing the ratio of Murhunu and Yusuf.What is the newprofit-sharing ratio ofMarhunu and Yusuf? A. 50%: 25% B. 50% : 20% C. 25%: 50% D. 25% : 25%. 35. If a partner pays a premium of N500 for 1/5 share of profit, then the total value of goodwill is A. N500 B. N2,000 C. N2,500 D. N3,000 36. On the dissolution of a partnership business, the net book value of the assets is transferred to A. Debit of realization account. B. Credit of realization account. C. Debit of bank account D. Credit of bank account 37. Baba Ltd acquired the business of Bello Ltd and caused the separate existence of the latter company to terminate. This situation is best described as A. Absorption B. Merger C. Conversion D. Dissolution. 38. Where a company acquires controlling shares of another and the consideration is paid in cash, the entries in the books of the purchases are debit A. Investment and credit cash B. Investment and credit shares C. Purchases and credit cash D. Purchases and credit shares. 39. Given Capital 200,000 Total assets 210,000 Liabilities 10,000 210,000 210,000 If the business is purchase at a price including a goodwill ofN20,000, whatmust have been the purchase price? A. N190,000 B. N210,000 C. N220,000 D. N230,000. 40. The main difference between the ordinary and preference shareholders is that A. The former receive dividends while the latter do not B. The latter are not members of the company while the former are C. In the case ofwinding up, the former are paid first before the latter. D. The former have rightswhile the latter do not Use the information below to answer questions 241 and 42 Given: N Authorized capital: 100,000 ordinary shares ofN1 each issued and fully paid: 50,000 ordinary shares ofN1 each 50,000 10,000 8% preference shares ofN1 each 10,000 Reserves 25,000 Creditors 15,000 Debtors 13,000 Cash in hand 5,000 41. Determine the net current assets. A.N43,000 B.N28,000 C. 13,000 D.N3,000 42. Calculate the shareholder’s fund. A. N60,000 B. N75,000 C. N85,000 D. N185,000 43. The lawthat currently regulates the registration of companies in Nigeria is the A. Constitution of the Federal Republic ofNigeria, 1999. B. Nigerian EnterprisesPromotion Decree, 1972. C. Companies andAlliedMatters Decree, 1972. D. CompaniesDecree, 1968. 44. XandY are twodepartments that are to share 50%of all joint costs equally and the balance in the ratio 2 : 1. If a umofN150,000 is incurred jointly,what will the portion attributable to X? A. N37,500 B. N62,500 C. N87,500 D. N100,000 45. Department F transferred some goods to department G at a selling price. The goods were not sold at the end of the accounting period.Which account is affected at the time of preparing a combined balance sheet? A. Creditors B. Debtors C. Stock D. Suspense. 46. The correct entry to reflect the receipt of cash sent by a branch to a head office is A. Debit cash and credit branch current account B. Debit branch current account credit cash C. Credit branch debtors and debit cash D. Credit branch current account and debit branch debtors. 47. To account for expenses paid by head office on behalf of the branch, the branch should A. Debit head office account and credit cash B. Debit profit and loss account and credit head office account C. Credit cash and debit profit and loss account D. Credit profit and loss account and debit head office account. 48. The officer responsible for ascertainingwhether all public expenditure and appropriation are in line with approved guidelines is the A. Account General B. Auditor General C. FinanceMinister D. Permanent Secretary Use the information below to answer questions 49 and 50 Given: PTF Trial balance [Extract] as at 31 December 1999. Dr Cr N’000 N’000 Cash 2,000 Investments 3,000 Accounts receivable 6,000 Fund balance 11,000 11,000 11,000 49. Assuming all the investments realized N4m, what will be the ending fun balance? A. N8m B. N11m C. N13m D. N16m 50. If only 1/3 of the investment is sold for N2m and N5m realized from the accounts receivable, what will be the balance of the fund? A. N9m B. C. N13m D. N16m Principles of Account 1999 - Type A 1. In preparing the final account, the bad debt account is closed by a transfer to theA. Balance sheet B. Provision for bad debt C. Profit and loss account C. Trading account. 2. Given N Stock (1/4/94) 800 Purchases of flour 2,450 Sales 4,745 Wages of bakery staff 675 Carriage outwards 50 Salary of administrative staff 225 Stock (31/3/95) 940 Capital 1,540 Determine the cost of goods sold. A. N2,575 B.N2,985 C. 3,250 D. 3,925. 3. In a petty cash book the imprest is N1,380 Expenses: N Stationery 350 Cleaningmaterial 335 General expenses 265 Howmuch was received tomaintain the imprest at the end of the month? A. N950 B. N970 C. N430 D. N380 4. Income statement for the year ended June 30, 2001 N N Office rent 20,000 Revenue 820,000 NEPA(light) 15,000 Salary of staff 120,000 Miscellaneous Expenses ? Net income ? . . Miscellaneous expenses is 10% of revenue. Calculate the net income A. N583,000 B. N563,000 C. N483,000 D. N683,000 5. An entry in a subsidiary book which does not formpart of the double entry system is a A. Contra entry B. Journal entry C. Single entry D. Memorandum entry. 6. In an incomplete record, the preparation of the bank reconciliation ensured that A. All cash taking are banked B. The cash book is correct C. There are no overdrafts D. There are no hidden loans. Principles ofAccount 2002 7. I. Fixtures account II. Machinery account III. Wages account IV. Rent account. Which of the above are nominal account? A. III and IV B. I and II C. I and III D. II and III 8. NAFARA&SONS Balance Sheet items as at 31stDecember, 9187 N Capital 74,480 Creditors 15,875 Prepaid expenses 580 Motor vehicles 34,750 Furniture 35,850 Accrued expenses 645 Stock 8,100 Cash balances 9,911 Debtors 1,809 Compute the value of current assets. A. N20,400 B. 20,465 C. 35,695 D. N19,820 Use the information below to answer questions 9 and 10 The Assets and Liabilities of Udo Co. Ltd, as at 31st December, 2000. N Capital 50,000 Debtors 46,000 Loan 100,000 Stock 20,000 Motor vehicle 120,000 Building 70,000 Accrued wages 30,000 Bank 30,000 9. The value of capital invested by own owners is A. N110,000 B. N105,000 C. N101,000 D. N100,000 10. The liabilities ofUdoCo. Ltd is A. N180,000 B. N181,000 C. N177,000 D. N110,000 11. The normal accounting entry to record the dishonour of a cheque by a businessman is to A. Debit cash book and credit suspense account. B. Debit cash book and credit drawer C. Credit cash book and debit suspense account D. Credit cash book and debit drawer. Use the information below to answer questions 12 and 13 Statement of Assets and Liabilities as at 31st December, 2001. N(m) Shareholder’s interest 240 Current liabilities 20 Current assets 110 Fixed assets 140 12. What is the net working capital? A. N90m B. N70m C. N100m D. N80m 13. Determine the value of the trade investment. A. N8m B. N10m C. N15m D. N20m 14. The concise statement used to explain entries in the general journal is known as A. Narration B. Summary C. Inforrnation D. Commentary Use the information below to answer questions 15 and 16. Erero’sTradingAccount for themonth ended 31/05/2001. N N N Opening stock 45,000 Sales 161,000 Purchases 110,000 Less returns 4,000 Less returns 6,000 104,000 157,000 149,000 less closing stock ??? Cost of sales ??? Gross profit ??? 157,000 157,000 The gross profit ratio for the company is 25%. 15. If the total expenses is N20,845, what will be the net profit for the company during the month? A.N19,149B. N16,168 C.N21,655 D.N18,405 16. The closing stock for this company is A.N72,000B. N45,000 C.N42,500 D.N31,250 17. In a departmental accounting system, which of the following expenseswill most likely be apportioned on the basis of turnover? A. Carriage outwards B. Carriages inwards C. Discounts received D. Returns outwards. Use the information below to answer questions 18 and 19. N Stock of rawmaterials (1st January) 3,000 Direct wages 2,500 Direct expenses 1,000 Factory overheads 2,000 Cost of rawmaterials used 5,500 Stock of finished goods (31st December) 2,000 18. Determine the prime cost A. N7,500 B. N6,500 C.N9,000 D. N8,000 19. The cost of goods manufactured is A. N11,000 B.N12,000 C.N14,000 D.N9,000 20. I. Orientation II. Entity III. Legal status IV. Finance Which of the characteristics above distinguishes a profit-making froma not-for-profit-making organization? A. I, II, III and IV B. I, II and III C. II and III D. I and II Use the information below to answer question 21 and 22. Adex Ltd. Issues stock to its retail branch at cost price. The following particulars relate to Ede branch N Stock at branch 1st January at cost 400 Goods sent to branch at cost 8,000 Returns to head office 340 Cash sales 9,160 Stock at branch 31st December at cost 720 21. What is the gross profit carried to the profit and loss account? A. N1,820 B. N1,640 C. N1,530 D. N1,870 22. Calculate the cost of goods credited to the head office trading account. A. N7,660 B. N7,500 C. N7,460 D. N7,200 23. Nasara manufacturing Plc has three direct labour employees that work 40 hours each a week for 50 weeks a year. Factory overhead costs of N60,000 is distributed on the basis of direct labour hours. Compute the overhead rate. A. N12 per hour B. N16 per hour C. N10 per hour D. N15 per hour Use the information below to answer questions 24 and 25. Receipts andPaymentsAccount [Extract] N N Balance b/d 4,000 Motor vehicle Expenses 820,000 Subscription Insurance 3,000 received ? Ambulance Donations Expenses 12,500 received 6,000 Electricity 1,000 Refreshment sales 10,000 Balance c/d ? . . . Subscriptions received are always put at 125% of the total donations received and refreshment sales. 24. What is the closing cash balance? A.N11,500B.N12,000C.N13,000 D.N13,500 25. Compute the subscriptions received A.N30,000 B.N28,000 C. N24,000D.N20,000 Use the information below to answer questions 26 and 27 Total Dept. P Dept. Q N N N Sales 10,000 6,000 4,000 Purchases 4,000 1,000 3,000 Discount received 1,000 ? Discounts allowed 2,000 ? Discount (allowed and received) are apportioned to the two departments on the basis of departmental sales and purchases. 26. Department P’s share of discount received is A. N750 B. N1,000 C. N250 D.N500. 27. What is department Q’s share of discount allowed? A. N2,000 B. N1,500 C. N800 D. N1,200 Use the information below to answer questions 28 and 29. Income andExpenditureAccount N N Waged 12,000 Subscriptions Received 20,000 Electricity 5,000 Donations Depreciation: received 10,000 Furniture 1,000 Profits on sale of investment 5,000 Other expenses ? Excess of income over expenditure ? . 35,000 35,000 It is the tradition of the club towrite off an amount equal to25% of the subscriptions received as other expenses. 28. What is theamount to be written off as other expenses? A. N4,500 B.N6,000 C.N4,000 D.N5,000. 29. Determine the club’s excess of income over expenditure A.N12,000 B.N15,000C.N10,000D. N14,500 30. The gross profit on manufactured goods is the difference between the cost of goods manufactured and the A. Market value of goods produced B. Prime cost of production C. Indirect cost of production D. Goods produced. 31. given that 1/3 of the N6,000 stock held by a branch is purchased fromoutsider. If goods are invoiced to branch at 25% on cost, the provision for unrealized profit is A. N1000.00 B. N333.33 C. N666.66 D. N800.00 32. A.S.D.ClubBalance Sheet [Extract] N N Accumulated fund 6,000 Motor van 4,000 Add surplus income 1,000 Stock 3,500 7,000 Debtors for subscriptions 1,000 Creditors for supplies 1,000 Bank 1,500 Subscription in advance 2,000 . 10,000 35,000 The working capital of the club is A. N5,000 B. N4,000 C. N3,000 D. N7,000 33. Costs that vary in proportion to the level of production in a manufacturing environment are known as A. Control costs B. Overheads C. Direct costs D. Indirect costs. 34. A company operating a chain of retail provision stores invoices goods to the branches at cost plus a mark-up of 25% on selling price? A. 35% B. 30% C. 20% D. 15% 35. Given: N Cash purchases 25,000 Trade creditors 45,000 Opening balance of trade creditors 35,000 Calculate the purchases for the period A. N80,000 B. N35,000 C. N105,000 D. N70,000 36. Which method of pricing can be used satisfactorily in either a rising or falling price situation? A. Standard price B. Market price C. FIFO D. Average method. 37. Given N Capital at start 3,250 Capital at close 6,250 Additional capital during the period 1,000 Calculate the profit or loss A. N8,500 loss B. N2,000 loss C. N2,000 profit D. N8,500 profit. 38. In a control account, discount received is found on the A. Debit side of the purchases ledger control account B. Debit side of the sales ledger contol account C. Credit side of the purchases ledger control account D. Credit side of the sales ledger control account. 39. In an incomplete record system, a trading account cannot be prepaid until the A. Day book has been balanced B. Amount of personal drawings has been established C. Cash book has been balanced D. Amount of sales and purchases has been established. Use the information below to answer questions 40 and 41. Date Qty Rate Total (units) (N) (N) January 2nd 500 25 12,500 March 7th 250 28 7,000 Issue weremade a follow: Date Qty (units) January 9th 200 February 14th 200 March 11th 200 40. The closing stock on March 11th by LIFO valuation is A. N4,200 B. N2,700 C. N4,500 D. N3,900 41. The value of closing stock as at February14th by simple average method is A. N3,900 B. N2,500 C. N4,100 D. N2,700. 42. Given an incomplete recordwithout sufficient information to determine profit, the necessary thing to do it to A. Drawup the statement of affairs. B. Draw up a T-account to establish the amount. C. Compare the journal entries with the cash book . D. Cross-check the cash book for further information. 4.3 Control accounts help to verify the arithmetic accuracy of the postings from the A. Subsidiary books into the trial balance B. Ledgers into the trial balance C. Journals into the ledgers D. Subsidiary books into the ledgers. 44. Keeping records under the single entry system has the advantage of A. Duality in terms of records B. Completeness in terms of records C. Accuracy in terms of operation D. Simplicity in terms of operation 45. Given: N Sales 195,200 Stock 1st January 34,000 Purchases 126,000 Sales returns 1,200 Purchases returns 2,000 If the gross profit is N66,000, what is the value of stock at 31st December? A. N30,000 B. N40,000 C. N50,000 D. N20,000 46. Given: N(m) Balance at 31December 14,744 Treasury Bills issued Jan – Dec 7,124 Revenue for the year 6,387 Expenditure 8,767 What is the opening balance on the consolidated revenue fund account? A. N10,000m B. N12,000m C. N9,000m D. N11,000m Use the information below to answer questions 47 and 48. The partnership agreement between Abba, Bada and Kaka contains the following provisions: (i) 5% interest to be paid on capital and no interest to be charged o drawings (ii) Profits and losses to be shared in the ration 3:2:1 respectively. (iii) Net profits as at 31/12/95N2,250. Abba Baba Kaba N N N Capital 5,000 4,000 3,000 Current account 250 100 175 Salary 300 300 - Drawings 600 500 250 47. Abba’s capital balance at the end of the year will be A. N5,475 B. N5,725 C. N4,400 D. N5,000. 48. Current account balance of Kaka at the end of the year will be A. N250 B. N350 C. N175 D. N325. 49. Upon the dissolution of a partnership, the Partnership Act provides that the amount realized should be A. Used to pay all taxes due to government B. Used to start a newpartnership business bymemberswho arewilling C. Shared equally by the existing partners D. Used in paying the debts and liabilities of the firm to persons who are not partners. 50. In the public sector, the method of accounting that reports revenues and expenditures in the period in which they are received and paid is called A. Fund accounting B. Commitment accounting C. Cash accounting D. Accrual accounting Principles ofAccounts 2003 1. Which of the following is used to update the cash book in bank reconciliation? A. Interest received and unpresented cheques B. Commission and debit note C. Unpresented cheques and direct credit D. Interest received and direct credit 2. The two legally recognized professional accounting bodies in Nigeria are the A. Institute of Certified Public Accountants of Nigeria and the Institute of Cost and Management Accountants of Nigeria. B. Association of Accountants of Nigeria and the Institute ofManagement Accountants of Nigeria C. Institute of Chartered Accountants of Nigeria and the Association ofNational Accountants of Nigeria D. Nigeria Accounting Association and the Executive Cost and Management Accountants ofNigeria. 3. Verifiability in accounting is only possible when there are A. minutes ofmeetings B. payment vouchers C. source documents D. audit certificates Use the information below to answer questions 4 and 5 N Capital 2 000 Bank 1 200 Purchases 2 500 Sales 6 700 Stock 1 300 Creditors 1 000 Fixed assets 3 700 Drawings ? Drawings are always estimated at 50% of capital 4. The trial balance total is A. N 9 700 B. N8 700 C. N7 900 D. N 7 800 5. Compute the amount withdrawn A. N 2 000 B. N 1 500 C. N 1 200 D. N1 000 Use the information below to answer questions 6 and 7. EzekielMalgwi is a retailer. He recorded sales representing 95% cash and 5% credit. He took the total cash sales of N19 000 from the business tray and banked it. 6. The credit sales for the period would be A. N5 000 B. N1 900 C. N1 000 D. N950 7. The transaction would be recorded in the cash book as debit A. cash and credit bank B. bank and credit cash C. cash and credit cash D. bank and credit bank 8. Which accounting concept supports the assertion that economic reality takes precedence over legal issues? A. Realization concept B. Substance over form C. Conservatism D. Measurement concept 9. The transaction that completes its double entry in the same ledger account appears in. A. cash account and personal account B. bank account and general ledger C. discount received and discount allowed D. cash account and bank account 10. Given: N Capital 1 000 Liabilities 500 Assets 1 500 The accounting equation can be expressed as A. N1000+ N500 +N1 500 =N3000 B. N1 000 –N500 +N1500 =N2000 C. N1000 +N500= N1 500 D. N1500 +N500= N2 000 11. The recording phase of accounting is known as A. bookkeeping B. trial balancing C. ledger accounting D. final accounting Use the information below to answer questions 12 and 13. Motor VehicleAccount as at 31st December, 2001 N Debit: Jan. 1, cost 1,950 000 Dec. 31, Addition 400000 Credit: Jan. 1, Depreciation 1,360000 June 30, Sales proceeds 700 000 The vehicle sold was purchased on January 1, 1998 at a cost of N1,000 000 and had depreciated at 25% on cost. 12. Assuming that depreciation is charged on theaddition of the year at the rate of 15% on reducing balance, what should be the net book value of the vehicle as at 31st December 2003? A. N111000 B. N280000 C. N289000 D. N340000 13. What is the actual profit or loss arising from the vehicle disposed of? A. N250 000 loss B. N50 000 loss C. N450 000 profit D. N575 000 profit 14. Given: I. Order of performance II. Order of liquidity III. Vertical order IV. Horizontal order The orders in which a balance asset is arranged are A. I and 11 B. I and IV C. II and III D. III and IV Use the information below to answer questions 15 and 16 N N Capital 24 000 Land and building 8,470 Mortgage on premises 11 090 Drawings 3,000 Profit and loss 3 600 Furniture and fittings 5,120 Motor Vehicles 3,462 Closing Stock 3,000 Debtors 11,474 Creditors 7 354 Cash 1,518 46,044 46 044 15. What is the capital employed? A. N44 600 B. N43 052 C. N43 044 D. N38 600 16. Calculate the value of fixed assets A. N15 992 B. N18 470 C. N27 000 D. N27 052 17. Provision for discount allowed can be recorded as a debit to A. the profit and loss account and a credit to provision for discount allowed B. provision for discount allowed and a credit to the profit and loss account C. discount allowed and a credit to the profit and loss account D. expenses and a credit to customers’ account Use the information below to answer questions 18 and 19 Date Details Feb. 1 Purchased 400 units at N1.00 each “ 5 Purchased 200 units at N2.00 each “ 10 Purchased 200 units at N3.00 each “ 15 Issued 320 units “ 20 Purchased 200 units at N4.00 each “ 25 Issued 120 units 18. Calculate the price per unit of closing stock using the periodic weighted averagemethod. A. N3. 20 B. N3. 00 C. N2. 20 D. N2. 00 19. Using the periodic simple average method, the cost per unit is A. N4. 25 B. N3. 25 C. N2. 25 D. N1. 25 Use the information below to answer questions 20 and 21. Purchases ledger control account N N Balance b/d 2,900 Discount received 1,000 Credit purchases ? Bills payable 1,500 Bills payable Cash paid to dishonoured 1,600 Suppliers 8,000 Returns outwards 3,000 Dishonoured Cheques 2,000 Balance c/d ? ? ? Credit purchases are always put at 150% of the total cash paid to suppliers 20. Calculate the closing balance of the ledgeraccount A. N6 900 B. N6 400 C. N5 000 D. N4 000 21. Determine the credit purchases A. N15 500 B. N13 500 C. N13 400 D. N12 000 22. In a control account, provision for bad debts is found on the A. debit side of the purchases ledger control account B. debit side of the sales ledger control account C. credit side of the purchases ledger control account D. credit side of the sales ledger control account 23. The stock valuation data is important because it enables management to A. separate debtors from creditors B. determine the cost of stock at the end of business C. determine the cost of stock at the beginning of business D. determine the total cost of goods purchased 24. During the year ended 31stDecember 2001, Nuju Enterprises paid rent as follows: Jan. 20 N24 000 for a period of 4months May16 N30 000 for a period of 5months Oct. 15 N36 000 for a period of 6months What is the overpaid portion of the rent? A. N36 000 B. N18 000 C. N12 000 D. N6 000 25. Advertising expenses incurred on a product in a business organization should be charged to A. production department B. sales department C. administration department D. purchases department 26. Four broad classifications of overheads are A. production, selling, distribution and material B. production, selling, distribution and administration C. selling, distribution, production and wages D. distribution, selling, administration and material 27. Given: N Cost of raw material issue to production 37,000 Opening stock of rawmaterial 2,000 Purchases of rawmaterial 38,000 Wages 5,000 What is the closing stock of raw material? A. N4 000 B. N3000 C. N2 000 D.N1000 Use the information below to answer questions 28 and 29 PQManufacturing Company N Rawmaterials (1/1/2001) 3,500 Rawmaterials (31/12/2001) 4,900 Purchase of rawmaterials 56,000 Salary 63,000 Wages 148,050 Factory lighting 3, 080 Plant Depreciation 2,800 Factory Insurance 2,170 28. The overhead cost is A. N71 050 B. N68 250 C. N67 970 D. N66 080 29. The company consumed rawmaterialsworth A. =N=54 600 B. =N=56000 C. =N=57400 D. =N=59500 30. Income and expenditure account is more informative than receipts and payments account because it discloses A. Cash B. Cheques C. Debtors D. stocks 31. Acompany has two departments XANDY. Y transferred goods to X at a profit margin of 25%. =N=10 000 worth of goods was not sold at the end of the accounting period. Howmuch is the unrealized profit? A. =N=2 000 B. =N=2500 C. =N=12000 D. =N=12500 32. Given:Rich Social Club =N= Cash 100 000 Loan 30000 Subscription in arrears 5 000 Subscription in advance 15 000 33. A company has departmentsM and N. The expense incurredwholly inMis =N=5 000. General expenses incurred amount to=N=25 000. Expenses are apportioned in the ratio 2:3 for departmentsMand N respectively. What is N’s share of the expenses? A. =N=10000 B. =N=15000 C. 18000 D. 20000 Use the information below to answer questions 34 and 35 =N= Total sales of ticket 300 000 Amount received from the sales 260 000 Cash purchase of the club house 100 000 Credit purchase of equipment 60 000 Electricity bill paid 5 000 Salaries owed 2 000 34. What is the receipts and payment account balance? A. =N=260000 B. =N=233000 C. =N=155000 D. =N=100000 35. What is the balance of the income and expenditure account? A. =N=300000 B. =N=293000 C. =N=193000 D. =N=133000 36. The first step in converting a single entry to a double entry system of bookkeeping is to prepare a A. Suspense account B.Statement of affairs C. Realization accountC. Trial balance 37. Emeka Enterprises Statement ofAffairs at start Assets Liabilities =N= =N= Cash 70 000 Creditors 85000 Inventory 58 000 Bank Loan 60000 Machines 100 000 What is the capital at start? A. =N=53000 B. =N=63000 C. =N=73000 D. =N=83000 38. Receipts and payments account is the summary of A. Income and expenditure B. Cash book C. Balance sheet D. Profit and loss 39. Given: =N= Total debtors b/d 31/12/99 25 000 Cheques received from debtors 225 000 Total debtors c/d 31/12/00 15 000 Determine the sales figure. A. =N=295000 B. =N=265000 C. =N=245000 D. =N=215000 40. Which of these is a capital expenditure warrant? A. Provisional general warrant B. Development fund general warrant C. Reserved expenditure general warrant D. Supplementarywarrant 41. For the purpose of conversion of a partnership to a company, a total purchase consideration of =N=3.6m was paid. I f 30% of the purchase consideration was in cash and the rest by 50k shares, how many shares were issued? A. 1080 000 B. 2160 000 C. 3600 000 D. 5040 000 42. Given: I. The consolidated revenue fund balance b/d =N=650 000 II. Issues from contingency fund amounted to =N=240 000 III. Amount transferred to contingency fund is =N=210 000 What is the consolidated revenue fund balance? A. =N=1100 000 B. =N=680000 C. =N=440000 D. =N=410000 Use the information below to answer questions 43 and 44 =N= Goods from head office 13,400 Returns to head office 118 Rates and insurance paid 188 Wages paid 913 Cash remitted to head office 16,625 Stocks at 1/1/2000 1,875 Rent paid 325 Stock at 31/12/2000 1,975 Sundry expenses 200 43. The profit realized fromthe trade is A. N4 069 B. N1 817 C. N1 440 D. N1 328 44. What is the total expenses? A. N1 875 B. N1 764 C. N1 626 D. N1 426 45. The necessary accounts to be opened on the issue of ordinary share capital are A. preference share capital, cash and allotment accounts B. bank and ordinary share capital accounts C. cash and ordinary share capital accounts D. nominal value and ordinary share capital accounts 46. The amount of each invoiced goods sent to the branch is debited to A. branch expense account and credited to branch debtors’ account B. branch stock account and credited to the goods sent to branch account C. branch debtors’ account and credited to branch expense account D. goods sent to branch account and credited to branch expense account Use the information below to answer questions 47 and 48. ZEBRA PLC Balance sheet as at 31 st March, 2002 N N N Capital 100 000 Fixed assets: Current Land and Liabilities buildings 50,000 Creditors 30 000 Furniture 10,000 60,000 Current Assets: Stock 30,000 Debtors 30,00 Cash 10,000 70,000 130,000 130 000 The business was acquired on 1 st April, 2002 at a purchase consideration of N120 000 bySOZ. All assets and liabilities were taken over except the cash. To open the newfirm’s bank account, additional N20,000was paid into the bank. 47. The goodwill on purchase is A. N90000 B. N30000 C. N19000 D. N18000 48. Calculate the networth of the business A. N120000 B. N90000 C. N80000 D. N30000 49. Gross profit in the branch adjustment account is transferred to the branch A. trading account B. receipts and payments account C. profit and loss account D. income and expenditure account 50. Mamza Nigeria Limited issued 20 000 ordinary shares ofN1.50 per share On 2 nd July 2002. 1 500 ordinary shares were fully subscribed for and their monies received as below: N On application 0.40 On allotment 0.20 First call (including premiumofN 0.50) 0 70 The last and final call was yet to be made. What is the balance of the ordinary share capital account after the first call was received? A. N300 B. N1050 C. N1200 D. N1950s Principles ofAccounts 2004 1. The accounting principle that is applied to check arbitrary actions on the part of accountants is A. Consistency B. Materiality C. Objectivity D. Realization 2 The loss of equipment in a fire disaster results in A. decrease in current asset B. an increase in liabilities and assets C. a decrease in assets and capital, D. an increase in liabilities and a decrease in assets. 3. A source document is used for verifying the A. Amount due to creditors, B. Actual cost of an asset, C. Selling price of goods, D. Amount due from debtors 4. The rule of accounting equation requires that account payable should be placed under A. Liabilities, B. Equities C. Assets D.Capital Use the information below to answer questions 5 and 6 Cash Book N N Capital 6 600 Purchases 3.500 Sales 3 000 Stationery 1300 Debtors 2 500 Wages 2 700 The owner wishes to maintain an amount equal to 1/3 of capital as drawings 5. Theamount withdrawn is A.N2,100, B.N2, 200, C.N4,400, D.N6,400 6. The cash book closing balance will be A. N900, B.N2,400, C.N4,200,D.N4,600 7. A debit in the suspense account will appear in the balance sheet as A. A current asset, B. A current liability C. Capital D. Drawings 8. The recipient whose name appears on cheque is called a A. Payer B. Drawer C. Drawee D. Payee 9. The imprest account is subsidiary to the A. ledger account, B. Bank account C. Cash book D. Petty cash 10. The three-column cash book differs from the two-column cash book in A. Cash column, B. Discount column B. Bank column, D. Folio column 11. Zakari started business in January 2000. He bought a shop costingN54,000 and stock worthN7,600. profit for the year amounted toN22,100. His closing capital was N73,800 Zakari’s personal drawings amounted to A. N2,300, B.N9,900, C.N17,100,D.N19,500 12. The balance on the provision for depreciation account is A. added to fixed assets on the balance sheet B. deducted from fixed assets on the balance sheet C. deducted from the profit and loss account D. added to the current liabilities of the account 13. Given: Ratespaidduring the year amount toN2,250 atN125 permonth andN1,035waspaid for electricity in the same period anN115 permonth Determine theamount of prepaid rates A. N345, B.N750, C.N1,380 D.N1,500 Use the information below to answer questions 14 and 15 Date Receipt Issued (Units May 2 80@N3.00 - May 10 50@N3.20 - May 17 - 20 May 25 - 60 May 31 20@N2.90 - 14. What is the value of raw materials issued on May 17th based ion the LIFO method? A. N60, B.N61, C.N62, D.N64 15. Based on the FIFO method of valuation, the total cost of rawmaterials issued is A.N150, B. N160, C. N240, D. N250 16. Where closing stock is undervalued, the effect is A. an increase in gross profit, B. a decrease in gross profit, C. an increase in purchases, D. a decrease in purchases Use the information below to answer questions 17 and 18 N Opening balance 10,640 Purchases 26,912 Returns inwards 492 Returns outwards 810 Cash discount received 1,348 Cash discount allowed 1,560 Cash paid to suppliers 20,808 At the year-end, the purchases ledger showed a debitbalance ofN108. . 17. The total on the debit side of the purchase ledger control account will be: A. N22,966 B. N22,15 C. N21,834, D. N21,054 18. The balancing figure in the purchases ledger control account is A. N15,828 B. N15,720 C. N14,940 D. N14,694 19. In a sales ledger, contra entry is found on the A. debit side of the debtors’ control account B. debit side of the creditors’ control account C. credit side of the debtors’ control account D. credit side of the creditors’ control account 20. The beginning and ending accounts receivable balances wereN20,000 andN30,000 respectively. The collection from customers during the period was N70,000. What was the total sale on account? A. N20,000 B. N60,000 C. N80,000 D. N120,000 21. Given : General expenses account N Paid by cheque 671 Paid by cash 70 Acrued b/f 65 Acrued c/f 115 Determine howmuch to be charged profit and loss account A. N606, B.N786, C.N791, D.N856 22. In converting single entry to final account, the balancing figures on the income and expenses accounts are transferred to the A. revenue and expenditure account B. receipts and payments account C. profit and loss appropriation account D. profit and loss account Use the information below to answer questions 23 and 24 N Beginning inventory ? Purchases ? Ending inventory 4,800 Sales 12,800 Wages 1,040 Gross profit 5,900 The beginning inventory was estimated at 80% of sales. 23. Determine the amount for the beginning inventory A. N20,140 B. N10,240 C. N8,140 D. N7,240 24. What is the figure for purchases? A. N2,400, B. N2,500, C.N4,200,D.N5,200 25. Cost classification in relation to charges is determine by the level of A. rawmaterials B. labour C. activity D. profitability Use the information below to answer questions 26 and 27 N Materials consumed 16,600 Direct cost 5,400 Factory rent 2,300 Factory lighting 1,200 Cost of production to be transferred at cost plus 20% mark-up 26. The gross profit on manufacture is A. N6,120 B. N6, 100 C. N5,100 D. N5,000 27. The market value of goods produced is A. N30,500 B. N30,600 C. N31,600 D. N31,620 Use the information below to answer questions 28 and 29 On January 1, 2000, a club’s assets and liabilities were as follows: N Club house 8000 Subscription in arrears 300 Cash 1000 Wages owed 100 The club has 50members and annual subscription is N100 per member. Subscription received is N4,000 and this includes 1999 arrears ofN200 28. The accumulated fund is A. N9,400 B. N9,300 C. N9,200 D. N9,100 29. In the balance sheet, the subscription in arrearswill be A. N200 B. N300 C. N1,200 D. N1,300 30. Where the debit side of the income and expenditure account is higher than the credit side, the difference is a A. Deficit B. surplus C. Gain D. loss 31. In the balance sheet of a not-for profit making organization, subscription paid in advance is regarded as a A. current asset B. current liability C. capital D. reserve 32. A rapidly growing business organisation with multiple units that is interested in comparing the performances and weakness of each unit should adopt A. manufacturing accounts B. consolidated accounts C. departmental accounts D. joint venture accounts Use the information below to answer questions 33 and 34 Dept. S Dept. T Total N N N Gross profit b/d 6,000 4,000 10,000 Less: salaries&wages 1,800 1,200 3,000 Electricity ? ? 2,000 Depreciation 60 ? 1,000 Net profit c/d ? 1,600 4,000 6,000 4,000 10,000 33. What is the net profit by department S? A. N3,600 B. N3,000 C. N2,400 D. N2,000 34. The depreciation to be charged to department T is A. N300 B. N400 C. N500 D. N600 35. How are credit sales by a department treated? A. the same was as normal debtors’ transactions B. in a different way from normal debtors’ transactions C. as an addition to the sales manager’s account D. as an addition to the production manager’s account 36. Discounts granted to branch customers are treated as a debit to branch A. stock account and a credit to branch debtors’ account B. discount account and a credit to branch bank account C. stock account and a credit to branch bank account D. discount account and a credit to branch debtors’ account 37. Transfers from the head office to branches are best carried out at A. cost price B. selling price C. cost plus mark-up D. market price 38. On dissolution, the final distribution of cash to partners is based on A. partnership agreement B. articles of association C. goodwill D. capital balances Use the information below to answer questions 39 and 40 Jumoke andKunle have a original investment ofN25,000 and N15,000 respectively in a partnership. The articles of partnership provide 3%interest on capital and salaries ofN1,500 and N1,000 respectively for the PARTIES. The profit&loss are to be shared in the ration 3:2miscellaneous expenses of N2,500 were incurredwith gross profit ofN6,500 during the financial year. 39. The balance of profit and loss account will be A. N4,000 B. N2,800 C. N1,500 D. N300 40. What is Kunle’s share of the profit? A. N600, B. N300, C.N180, D.N120 41. When a newpartner is admitted to a partnership there is a need to revolved the A. capital of the business B. capital and liabilities of the business C. assets and capital of the business D. assets and liabilities of the business 42. The accounting entry to record the premium on goodwill is to debit A. cash and credit old partners’ capita, B. goodwill and credit revaluation C. assets and credit capital D. capital and credit assets 43. The expenses incurred in promoting a company are: A. promoters’ expenses, B. floating expenses B. preliminary expenses C. the board’s expenses 44. Debentures can be redeemed out of A. existing share capital reserve B. existing general reserve C. proceeds from new issue of shares D. withholding tax Use the information below to answer questions 45 and 46 Given: Share capital Issued N 600,000 10% preference shares ofN0.50 each - 600,000 ordinary shares ofN1 each 500,000 Capital reserves 250,000 Revenue reserves 207,000 Long-termliabilities 400,000 1,357,000 45. What is the value of the authorized share capital? A. N500,000 B. N600,000 C. N750,000 D. N1,200,000 46. The value of the owner’s equity is A. N400,000 B. N900,000 B. N957,000 D. N1,357,000 47. Share premiumis an example of A. revenue reserves B. capital reserves C. general reserves D. loan capital 48. According to the provisions of the 1999 constitution, all revenue generated by the Federal Governmentmust be paid into the A. Consolidated revenue fund, B. Federation account C. revenuemobilization allocation and fiscal commission’s account, D. equalization fund 49. The budget statement presented to the legislature by the Chief Executive is called A. an appropriation act, B. a budget bill C. an appropriation bill D. a budget proposal 50. The statement of assets and liabilities in the public sector can be described as the A. income and expenditure account of government B. appropriation account of government C. balance sheet of government D. funds flow statement of government