Accounting

Question 1
Transactions are recorded or posted to the ledger in line with
Options
A) Accounting Concept
B) Source document
C) Double Entry Principle
D) Data collection
The correct answer is C.
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Question 2
Show how the following transaction will be recorded applying the double entry principle:
Rent ₦50,000 was paid by Mr. Roi to his landlord on 1st July, 20 × 7 by cheque.
Options
A) Dr Rent A/c; Dr Bank A/c
B) Dr Bank A/c; Cr Rent A/c
C) Dr Rent A/c; Cr Bank A/c
D) Dr Rent A/c; Cr Mr. Roi
The correct answer is C.
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Question 3
A statement in a double entry system in which are recorded all the transactions of one specific class, which takes place during the period is called
Options
A) Double entry system
B) Ledger
C) Cash Book
D) Petty Cash Book
The correct answer is B.
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Question 4
The advantage of double entry is that
Options
A) it is easy to prepare the final account
B) it increase assets
C) has cash and bank column
D) It disburses cash
The correct answer is A.
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Question 5
Accounts can be classified into
Options
A) cash and credit transactions
B) cash and credit accounts
C) personal and private account
D) personal and impersonal account
The correct answer is D.
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Question 6
Goods were purchased for resale on credit costing ₦150,000 on 30th September 20X8 from Tosanwumi International. The entry to record these transaction is debit
Options
A) Tosanwumi International, credit purchase Account
B) Purchase Account ₦150,000, credit Tosanwumi International Account ₦150,000
C) Credit Account ₦150,000, Credit Tosanwumi International ₦150,000
D) Tosanwumi International ₦150,000, credit credit Account ₦150,000
The correct answer is B.
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Question 7
If only wages is shown on the trial balance, it should be charged to the
Options
A) profit and loss account
B) trading account
C) balance sheet
D) wages account
The correct answer is A.
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Question 8
Use the following information to answer this question
The following are the final accounts of a trading organisation Wazobi ventures, for the year ended 30th June, 19×8
₦ ₦
Sales
Less: cost of goods sold 233,000
170,000
63,000
less: Overhead Expenses
Admin expenses
Selling expenses
Other overhead expenses 16,800
15,000
6,200
Net profit 25,000
What is the Gross Profit on percentage of sale?
Options
A) 2.7%
B) 0.27%
C) 27.0%
D) 29.8%
The correct answer is C.
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Question 9
Use the following information to answer this question
The following are the final accounts of a trading organisation Wazobi ventures, for the year ended 30th June, 19×8
₦ ₦
Sales
Less: cost of goods sold 233,000
170,000
63,000
less: Overhead Expenses
Admin expenses
Selling expenses
Other overhead expenses 16,800
15,000
6,200
Net profit 25,000
Calculate the net profit on percentage of expenses.
Options
A) 60%
B) 25%
C) 13%
D) 65.7%
The correct answer is D.
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Question 10
Mr Ojo gives you the following information on 31st July 2017
Opening Stock 7,000
Closing Stock 12,000
Purchases 60,000
Expenses 4,500
Uniform margin of 33 1313 %
You are required to calculate the sales
Options
A) #55,000
B) #82,500
C) #27,500
D) #50,000
The correct answer is B.
Question 11
Use the following to answer this question.
Industry ltd, issued 100,000 shares at ₦1 each out of its Authorized share capital of ₦200,000 at ₦1 each. At the of the first call, all shareholders paid in full, except for two shareholder who owes ₦20,000.
The company’s paid-up capital is
Options
A) ₦70,000
B) ₦80,000
C) ₦220,000
D) ₦120,000
The correct answer is B.
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Question 12
Use the following to answer this question.
Industry ltd, issued 100,000 shares at ₦1 each out of its Authorized share capital of ₦200,000 at ₦1 each. At the of the first call, all shareholders paid in full, except for two shareholder who owes ₦20,000.
The Unissued capital of the company is
Options
A) ₦310,000
B) ₦200,000
C) ₦210,000
D) ₦100,000
The correct answer is D.
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Question 13
Given:
Ordinary share dividend ₦100,000, General reserve ₦4,100, Net profit b/d ₦27,370, corporation tax ₦2,500, Profit and loss ₦28,200, Interim ordinary dividend ₦4,050, Goodwill 20,50 provide for preference Dividend ₦2100 and Final ordinary Dividend of 5% and also write off Goodwill at ₦1500.
The retained profit in the Appropriation account is
Options
A) ₦55,570
B) ₦36,320
C) ₦50,000
D) ₦30,000
The correct answer is B.
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Question 14
Retained profits is an example of
Options
A) Revenue reserve
B) Capital reserves
C) General reserves
D) Loan capital
The correct answer is A.
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Question 15
Use the information below to answer this question.
Ojo, Sam and Ade are in partnership sharing profit in the ratio 4 : 3 : 1 respectively.
Extract from their books for the year ended are
Interest on drawings and capital is allowed 5% respectively and profit for the year amounted to ₦4,950
Ojo’s share of profit is
Options
A) 2475
B) 1322.5
C) 4950
D) 6000
The correct answer is B.
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Question 16
Use the information below to answer this question.
Ojo, Sam and Ade are in partnership sharing profit in the ratio 4 : 3 : 1 respectively.
Extract from their books for the year ended are
Interest on drawings and capital is allowed 5% respectively and profit for the year amounted to ₦4,950
Sam’s share of profit is
Options
A) 7000
B) 4921
C) 3000
D) 991.8
The correct answer is D.
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Question 17
The rate of interest on capital for Ade is
Options
A) 250
B) 200
C) 300
D) 400
The correct answer is C.
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Question 18
Use the information to answer this question
Receipts and Payment Account (Extract)
N
Bal b/f 3650 Insurance 900
Subscription (99) 7500 Rate 11,700
(2000) 1000 Bal c/d 8,050
Fees 8500
20,650 20,650
The following information were given:
Rates owing
Insurance prepaid
Subscription in arrears 1/199
3,600
50
700 31/12/99
2000
1000
600
Calculate the subscriptions in the Income and expenditure account
Options
A) 8400
B) 7400
C) 6400
D) 7200
The correct answer is B.
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Question 19
Use the information to answer this question
Receipts and Payment Account (Extract)
N
Bal b/f 3650 Insurance 900
Subscription (99) 7500 Rate 11,700
(2000) 1000 Bal c/d 8,050
Fees 8500
20,650 20,650
The following information were given:
Rates owing
Insurance prepaid
Subscription in arrears 1/199
3,600
50
700 31/12/99
2000
1000
600
The figure ₦1000 represent what in the balance sheet.
Options
A) Assets
B) Liability
C) capital
D) Subscription
The correct answer is B.
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Question 20
Use the information to answer this question
Receipts and Payment Account (Extract)
N
Bal b/f 3650 Insurance 900
Subscription (99) 7500 Rate 11,700
(2000) 1000 Bal c/d 8,050
Fees 8500
20,650 20,650
The following information were given:
Rates owing
Insurance prepaid
Subscription in arrears 1/199
3,600
50
700 31/12/99
2000
1000
600
What is the opening cash balance
Options
A) ₦20,600
B) ₦8,050
C) ₦3,650
D) ₦8,500
The correct answer is C.
Question 21
Which of these will not appear in the preparation of control account.
I. Bad debts
II. Discounts
III. Returns
IV. Provision for bad debts
Options
A) I only
B) II and III
C) I and III only
D) IV only
The correct answer is D.
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Question 22
Use the following Information to answer this question.
Stock of finished goods: Jan 1st
Dec 31st
Stock of Raw materials: Jan 1st
Dec 31st
Purchase of Raw Materials
Manufacturing Wages
Depreciation: Factory equipment
Direct expenses
Factory Fuel
Carriage inwards on Raw Materials ₦
50,640
71,380
32,160
29,640
145,000
52,000
16,500
12,500
7,000
7,000
Cost of raw materials consumed is

Options
A) ₦53,000
B) ₦150,000
C) ₦152,120
D) ₦148,120
The correct answer is C.
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Question 23
Use the following Information to answer this question.
Stock of finished goods: Jan 1st
Dec 31st
Stock of Raw materials: Jan 1st
Dec 31st
Purchase of Raw Materials
Manufacturing Wages
Depreciation: Factory equipment
Direct expenses
Factory Fuel
Carriage inwards on Raw Materials ₦
50,640
71,380
32,160
29,640
145,000
52,000
16,500
12,500
7,000
7,000
Options
A) 220,480
B) 213,480
C) 200,480
D) 190,000
The correct answer is A.
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Question 24
A fall or decrease in the economic service potential of an asset as a result of wear, tear and obsolescence is referred to as
Options
A) Estimate
B) Depreciation
C) Asset
D) Useful Life
The correct answer is B.
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Question 25
The cost of a machine is ₦10,000. The residual value is ₦4,000. It is expected to last for 4 years. Using the straight line method, what is the amount of depreciation charged per annum?
Options
A) 6000
B) 1000
C) 1500
D) 2500
The correct answer is C.
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Question 26
Use the question to answer this questionThe following information were extracted from the books of Miliki state
Sinking of bore holes
Purchase of Motor car
Stationery
Electricity
Purchase of drugs
Purchase of beds ₦
2,900,000
920,000
300,000
45,000
76,000
425,000
Recurrent expenditure is
Options
A) ₦345,000
B) ₦3,245,000
C) ₦421,000
D) ₦4,245,000
The correct answer is C.
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Question 27
Use the question to answer this questionThe following information were extracted from the books of Miliki state
Sinking of bore holes
Purchase of Motor car
Stationery
Electricity
Purchase of drugs
Purchase of beds ₦
2,900,000
920,000
300,000
45,000
76,000
425,000
Capital expenditure is
Options
A) ₦345,000
B) ₦3,245,000
C) ₦421,000
D) ₦4,245,000
The correct answer is D.
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Question 28
Goods can be charged to branches using any of these pricing methods except
Options
A) cost price
B) cost plus percentage
C) selling price
D) selling plus percentage
The correct answer is D.
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Question 29
Abelawo ltd operates a retail branch at Aba. All purchases are made by the head office in Onitsha and goods are charged to the branch at cost plus 50%. During the year ended. Goods sent to branch at invoiced price is ₦30,870, cash sales ₦13,020 and Bad debt amounted to 129. From the following, what is the profit?
Options
A) 20,580
B) 10,290
C) 7980
D) 30,870
The correct answer is B.
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Question 30
Use the question to answer this question:
Opening stock ₦
Department
A
B 100
800
Purchases:
A
B
Wages of workers
Salaries 1500
2000
50
100
Sales
A
B 3000
5000
Expenses are to be shared in the ratio of sales.
The cost of goods for department B is
Options
A) 4,120
B) 3400
C) 3000
D) 2800
The correct answer is D.
Question 31
Use the question to answer this question:
Opening stock ₦
Department
A
B 100
800
Purchases:
A
B
Wages of workers
Salaries 1500
2000
50
100
Sales
A
B 3000
5000
Expenses are to be shared in the ratio of sales.
The net profit for departmental A is
Options
A) 1880
B) 1600
C) 880
D) 425
The correct answer is D.
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Question 32
Every economic unit, regardless of its legal form of existence, is treated as a separate entity from parties having economic interest is
Options
A) realisation concept
B) entity concept
C) going concern concept
D) matching concept
The correct answer is B.
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Question 33
The two recognised accounting bases are
Options
A) cash and credit
B) personal and impersonal
C) Accrual and Cash
D) Drawings and Private
The correct answer is C.
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Question 34
Given:
Additional capital
Capital
Closing capital
Net profit ₦
4000
8000
12000
1500
The drawings for the period stand at
Options
A) 1500
B) 3000
C) 12,000
D) 10,500
The correct answer is A.
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Question 35
The importance of bank statement is all except
Options
A) verifies the accuracy of balances of cash book and cheque book
B) helps to detect and rectify any error
C) helps to debit an account
D) helps to update the cash book
The correct answer is C.
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Question 36
Accounting standards are issued at the International level by the
Options
A) Standards Advisory Council
B) International Accounting Standards Board
C) Nigerian Accounting Standards Board
D) Standing Interpretations Committee
The correct answer is B.
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Question 37
The method of stock valuation in which the issue price is obtained by dividing the value of stock in hand by unit of stock in hand is
Options
A) FIFO
B) LIFO
C) SAP
D) WAP
The correct answer is D.
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Question 38
One of these is not a similarity between Joint Venture and Partnership.
Options
A) AIM is profit making
B) It is for a specific venture
C) Involves two people
D) have rights and duties
The correct answer is B.
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Question 39
Majority of commercial transactions are termed credit transactions, which means
Options
A) The buyers pay immediately for goods bought
B) Settlement is deferred to a future date
C) No account will be opened
D) Item of expenditure increases
The correct answer is B.
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Question 40
Bought motor vehicle ₦60 paying by cheque. The effect of the transaction will be
Options
A) Increase in assets of motor vehicle account
B) Decrease in assets of motor vehicle account
C) Increase in assets of bank account
D) Increase in liabilities of bank account
The correct answer is A.
Question 41
A proprietor withdraws cash from the business for private use, he
Options
A) credits cash account and debits bank account
B) credits cash account and debits drawing A/C
C) debits cash account and credits drawings account
D) debits bank account and credits drawings account
The correct answer is B.
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Question 42
The rules of double entry states that
Options
A) for every debit entry, there must be a corresponding debit entry
B) for every credit entry, there must be a corresponding credit entry
C) all transactions must be recorded in two accounts, one account is debited and another is credited
D) all transaction must be credited
The correct answer is C.
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Question 43
The difference between double entry and single entry is
Options
A) double entry is based on the dual concept while single entry is not based on dual concept
B) double entry is an account while single entry is not an account
C) double entry keeps personal account while single does not
D) double entry is useful for business enterprise while single entry is not
The correct answer is A.
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Question 44
A rent of ₦50,000 was paid by samson to his landlady by cheque. The double entry in Samson’s book is
Options
A) Debit rent account, Credit bank account
B) Debit Rent account, Credit Samson’s account
C) Debit Bank account, Credit Rent account
D) Debit Samson’s account, Credit Rent account
The correct answer is B.
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Question 45
The purpose of profit and loss account is to ascertain
Options
A) Gross profit
B) Capital
C) Expenses
D) Net profit
The correct answer is D.
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Question 46
Discount received is charge to
Options
A) current account
B) profit and loss
C) trading account
D) balance sheet
The correct answer is B.
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Question 47
Use the question to answer this question:
Opening stock ₦
Department
A
B 100
800
Purchases:
A
B
Wages of workers
Salaries 1500
2000
50
100
Sales
A
B 3000
5000
Expenses are to be shared in the ratio of sales.
What was the cost of goods sold?
Options
A) ₦25,000
B) ₦35,000
C) ₦50,000
D) ₦75,000
The correct answer is D.
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Question 48
Use the following to answer this question
Opening stock
Purchases
Sales
Closing Stocks ₦
20,000
70,000
100,000
15,000
What was the gross profit?
Options
A) ₦35,000
B) ₦75,000
C) ₦50,000
D) ₦25,000
The correct answer is D.
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Question 49
An ordinary share of ₦100 was issued at ₦80. The share was issued at
Options
A) premium
B) par
C) discount
D) loss
The correct answer is C.
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Question 50
Shares that are offered to existing shareholders at a price is called
Options
A) par
B) premium
C) right issue
D) bonus issue
The correct answer is C.

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