Exam Questions Third Term SSS 1 Financial Accounting

FINANCIAL ACCOUNTING

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(1) Which of the following is the book of original entry for all payments and receipt whether by cash or cheque

(a) Sales day book (b) Purchase day book (c) Cash book (d) journal book

(2) Which of the following fixed asset is not depreciable

(a) Building (b) Budding (c) Tools (c) Land (d) Motor van

(3) Prepayment is shown in the balance sheet as

(a) Current account (b) liability (c) Capital (d) fixed asset

(4) A trial balance is

(a) an attempt to balance the account (B The credit balance of the account

(c) List of all balances extracted from the ledger (d) the debit balance of the account

(5) The purpose of a trading account is to ascertain

(a) sales (b) Gross profit or loss (c) Net profit or loss (d) appropriated profit

6 The balance sheet is a statement showing

(a) all assets and liabilities (b) All balances (c) Credit entries

(d) Debit entries on the business

Use the following information to answer question 7 to 9

N

Stock 1/1/17 4, 500

sales 13, 500

Purchase 5,000

Carriage inward 500

stock 31/12/17 4,200

Return inwards 600

7. Calculate the cost of sales

8. calculate the net sales

9. Gross profit

10. discount allowed is a charge made against

(a) Trading A/c (b)Profit and loss A/C (c) Appropriation A/C (d) Current A/C

11. Opening stock + purchase + carriage inwards is equal to

(a) Total sales (b) Cost of goods sold (c) cost of good available for sale (d) gross profit

12. Carriage inwards are incurred on goods

(a) On display (b) sold (c) in process (d) purchase

13. Which of the following is not an asset

(a) Bad debt provision (b) Rent in arrears (c) sales (d) accrued wages

14. Which of the following expenses the accounting equation?

(a) Capital + assets + liabilities (b) Asset – liabilities = capital (c)Liabilities – capital = asset

(d) Asset + capital = liabilities

15. Excess of current asset over the current liabilities is called ____________

(a) Running capital (b) working capital (c) circulating capital (d) Real capital

16. ______________ is the situation whereby a firm has no working capital

(a) overdraft (b) over trading (c0 over buying (d) over selling

17. Total asset less current liabilities means __________

(a) Capital employed (b) Circulating capital (c) working capital (d) current capital

18. _____________ is the indebtedness of the business to outsiders

(a) asset (b) Capital (c) Liabilities (d) Income

19. The sales day book is used to record

(a) Cash and credit sales (b) Credit sales (c) cash sales (d) sales to middlemen

20. The systematic recording of business transaction is monetary terms is

(a) Auditing (b) Book – keeping (c) debiting (d) crediting

21. An allowance given to a customer by a supplier for prompt payment is

(a) Trade discount (b) discount received (c) discount allowed (d) cash discount

22. Which of the following is a n example of direct examples

(a) Royalties (b) Carriage inward (c) Carriage outward (d) Manufacturing wages

23. When a transaction is completely left out from the books, it is an error of

(a0 Commission (b) Omission (c) Principle (d) compensation

24. Which of the following errors will affect the total f a trial balance

(a) complete reversal of entry (b) compensating error (c) Error of original entry

(d) Error in addition

25. The going concern concept assumes that

(a) Every transaction is represented by a debit and credit entry

(b) the currency must not change (c) the firm is a legal entity

(d) The business will continue to operate indefinitely

26. The concept which deals with the exclusion of trivial item in the accounting records is

(a) consistency (b) going concern (c) Materiality (d) money measurement

27. The distinguishing feature between a two column and three cash book is

(a) Discount column (b) Bank column (c) Ledger column (D) ledger folio

28. The lodgment of business cash into the business bank account is an example of

(a) Central entry (B) Bank reconciliation (c) Self balancing (d) Reversal entry

29. Purchase account is over cast by N200 . this is

(a) An error of omission (b) Compensating error (c) Error of commission

(d) Error of principle

30. The income accruing to debenture holder is called ______

(a) interest (b) net profit (c) shares

31. The amount by which assets exceed specific liabilities is called______ (a) reserve (b) provision (b) bonus

32. A subsidiary record is a book _____ (a) of original (b) found in the journal

(c) containing the ledgers

33. In which ledger is the control account prepared? (a) General ledger (b) sales ledger (c) purchases ledger

34. A suppliers personal accounts are found in the _____ (a) purchases ledger (b) sales account (c) sales ledger

35. A business firm incurs labour cost in installing machinery. This should be treated as _______ (a) machinery cost (b) salaries (c) wages

36. Which of the following is an impersonal nominal account? (a) salaries account (b) machinery account (c) creditors account

Instruction: Use the information below to answer questions 8 and 9.

OLURIN started business on 1st January, 1998 with the following assets:

Motor Van 195,000

Buildings 300,000

Stock of Goods 35,000

In addition, she had cash of N60,000, out of which N20,000 was borrowed from a friend.

37. The capital of the business is _____ (a) N500,000 (b) N520,0000 (c) N480,000

38. The liabilities of the business amount to ___ (a) N20,000 (b) N40,000 (c) N80,000

39. Which of the following is a primary source of entry into the debtors’ ledger?

(a) sales invoices (b) suppliers invoices (c) payment vouchers

THEORY

On the 31st march 2017, Rachael’s cash book showed a debit balance of N2,270. on comparison, the following were found.

(a) Cheques drawn anointing to N1, 500 ha not been presented for payment

(b) A standing order N600 to a club was not taken into consideration.

(c) A dividend of N300 was paid directly into the Bank and not recorded in the cash book.

(d) Bank charges of N50 were entered in the bank statement only.

(e) Cheque for N1,000 were entered into the cash book and paid to the Bank but had not been cleared and thus not credited.

(f) A customer, Bolaji , paid N120 directly into the Bank without notifying the firm.

2(a) What is trial balance

(b) state four (4) errors that cannot be disclosed by the trial balance .

3(a) Explain the term “Accounting concepts)

(b) Explain the following concept

(i) Going, concern

(ii) Matching

(iii) materiality

(iv) Money measurement

(v) consistency

4.The following are the list of balance taken from ledger of okokwo, a sole trader as at

31st Dec 2017 N

stock at 1st January 17 5,850

Plant and machinery at cost 36,450

Accumulated depreciation 14,570

Sales 96, 400

purchases 48,800

Discount received 1,200

Discount allowed 1,330

Purchases returned 540

sales return 770

Rent and rates 2,490

Debtors 6,359

Drawing 8,470

Stock at 31st, Dec 17 6,200

Capital 24,930

Cash at Bank 2,200

You are required to prepare Trading , profit and loss account . for the year ended 31st Dec 2017

(5) . Ojo Enterprises started business on January 207 with a capital of N16,000. the following transactions were carried out during the month of January

January 1 Purchased furniture by cash N2,400

January 2 Purchased stationery N200 cash

January 3 Purchased goods by cash N3,500

January 4 Purchased goods on credit from Nagogo 5,000

January 15 sold goods for cash N6,000

January 18 Sold goods for charlotte Umedo on credit 2,400

January 20 Paid advertisement expenses 200 cash

January 25 Paid Nagogo n3,500 cash being part of settlement of goods purchased

January 28 Paid rent in cash N300

January 31st Paid salaries and wages N600 cash