Financial Accounting Past Questions UNILAG

Financial Accounting Past Questions and Answers: University of Lagos (2008)

Boost your preparation for financial accounting exams with this comprehensive guide featuring University of Lagos Financial Accounting past questions (2008). This article provides detailed solutions, practical examples, and additional explanations to aid both students and teachers in mastering key concepts in financial accounting.

Financial Accounting Past Questions and Answers

1. 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

Answer: C
Explanation: In double-entry accounting, when an asset account increases, another asset account may also increase due to transactions like transferring funds between bank accounts. This follows the accounting equation: Assets = Liabilities + Equity.

2. The amount required to replenish the petty cash imprest is:

A. N399
B. N394
C. N358
D. N101

Calculation:

Initial imprest: N500
Petty cash vouchers: N394
IOU slip: N65
Total cash accounted: N394 + N65 = N459
Cash shortage: N500 – N459 = N41

Required replenishment:

$(\text{vouchers}) + N41 (\text{shortage}) = N435$ Correct Answer: A

3. If a customer returns merchandise purchased with cash, the transaction is recorded in the:

A. Cash receipts journal
B. Sales journal
C. General journal
D. Cash disbursement journal

Answer: D
Explanation: Refunds for merchandise are recorded in the cash disbursement journal because they represent cash outflows.

4. An advantage of the voucher system is that it:

A. Reduces the number of cheques written
B. Provides flexibility for unusual transactions
C. Creates a comprehensive supplier record
D. Ensures expenditures are verified before payment

Answer: D
Explanation: A voucher system ensures internal control by verifying transactions before payment is made, reducing fraudulent expenditures.

5. The Act establishing the Institute of Chartered Accountants of Nigeria (ICAN) came into force on:

A. 1st September 1960
B. 1st October 1960
C. 1st October 1963
D. 1st September 1965

Answer: C
Explanation: ICAN was established under Act No. 15 of 1965, effective from October 1, 1963.

6. Total debit and credit columns in the trial balance are:

Bank Account: N59,410
Capital Account: N50,000
Purchases Account: N20,000
Rent: N2,500
Stationery: N90
Typewriter: N6,500
Sales: N38,000

Calculation:

Debit: 59,410 + 20,000 + 2,500 + 90 + 6,500 = N88,500
Credit: 50,000 + 38,000 = N88,500

Answer: C. N88,500

7. A business transaction is recorded when the:

A. Owner invests in another company
B. Business retains profits
C. Business applies for overdraft
D. Owner collects cash from the accountant

Answer: D
Explanation: A transaction is recorded when it directly affects the business’s financial records, such as cash withdrawals by the owner.

8. Manufactured goods are transferred to the trading account 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

Answer: A
Explanation: Factory cost of production is recorded as a debit to the manufacturing account and a credit to the trading account.

9. Responsibility accounting focuses on:

A. Historical accounting
B. Controllable costs
C. Storekeeping
D. Stock valuation

Answer: B
Explanation: Responsibility accounting emphasizes assigning costs to managers who can control them, fostering accountability.

10. A bank collection not recorded in the company’s books appears on the bank reconciliation as:

A. An addition to balance per books
B. A deduction from balance per bank statement
C. An addition to balance per bank statement
D. A deduction from balance per books

Answer: A
Explanation: A collection made by the bank but not yet recorded increases the balance in the company’s books.

11. Purchase of two generators should be recorded as:

A. Acquisition of fixed assets
B. Office expenses
C. Acquisition of stock
D. Part of capital

Answer: A
Explanation: Generators are fixed assets as they provide long-term economic benefits.

12. Cost reports for management should reflect:

A. Detailed information
B. Summary figures
C. Non-controllable expenses
D. Useful data for decision-making

Answer: D
Explanation: Cost reports are tailored to aid decision-making, focusing on relevant and comparable data.

13. Actual cash in the till on July 15th was:

Given:

Initial imprest: N500
Petty cash vouchers: N394
IOU slip: N65

Actual Cash:

$500 - (394 + 65) = N 41$ Correct Answer: B

Additional Resources for Financial Accounting

Meta Details

Captivating Title: Financial Accounting Past Questions for University of Lagos (2008) with Answers
Focus Keyphrase: Financial Accounting Past Questions UNILAG
SEO Title: Financial Accounting UNILAG 2008 Questions and Answers for Exam Preparation
Slug: financial-accounting-past-questions-unilag
Meta Description: Prepare for financial accounting exams with UNILAG past questions (2008). Includes answers and detailed explanations.