SS 2 Financial Accounting Third Term Examination

THIRD TERM
Examination malpractices may lead to a repeat of the subject or suspensions don’t be involved.
SUBJECT FINANCIAL ACCOUNTING CLASS: S. S. S 2 DURATION 3 HRS

OBJECTIVE
1. A reserve is an amount
a. set aside from profit for an unknown liability b. of loss from trading activities c. of profit from trading activities d. set aside from profit for specific purpose.
2.An amount set aside to meet expenses whose value is not certain is a
a. reserve b. liability c. provision d. prepayment
3.When allotment of shares is made applicants for shares of a company become
a. promoter b. creditors c. debtors d. shareholder
4.Goodwill may be brought into the books when a. no partner retires b. assets are more than liabilities c. profit for the period is high d. a new partner is admitted
5.A statement of affairs shows a. receipt and payment b. revenue and expenditure c. financial position d. profit or loss
6.Working capital is the excess of
a. current assets over fixed assets b. current liabilities over current assets c. fixed assets over current liabilities d. current assets over current liabilities
7.Share premium is classified in the balance sheet as a. fixed capital b. capital reserve c. revenue reserve d. short term capital
8.Which of the following accounts or statement is used to determine credit purchases figure in an incomplete records? a. bank account b. control account c. profit and loss account d. statement of affairs
Use the following to answer questions 9 and 10
#
Balance as per cash book 8000cr
Unpresented cheques 14,400
Uncredited cheques 2,600
A cheque for #2000 paid to a creditor had been in error in the cash column.Bank commission of #800 had not
Been entered in the cash book.
The debit side of the cash book(bank column) had been under cast by #5000
9.The adjustment balance as per cash book is
a. #10,500cr b. #5,800 c. #5,800dr d.#10,800dr
10. The balance as per cash book is
a. #8000cr b. #6000cr c. #6000dr d. #8000dr
11. The addition of prime cost and factory overheads is a. total factory overheads b. market value of goods produced c. cost of goods produced d. work in progress
12. The manufacturing account is prepared to determine the cost of
a. trading b. production c. factory overhead d. raw materials used.
13.An example of direct expense is
a. insurance b. carriage inwards c. purchases of raw materials d. royalty
14.A suspense account is used to
a. correct errors b. record errors detected until corrected c. transfer errors d. report errors
Use the following to answer questions 15 and 16
1/7/10 30/6/11
Stock 1,460 4200
Motor van 3,600 3,200
Creditors 600 700
Drawing during the year amounted to #1,500
15.Opening capital is a. #5,660 b. #5,060 c. #4,460 d. #2,960
16.Closing capital is a. #8,100 b. #7,400 c. #6,700 d. #2,040
17.Assets acquired is recorded by debiting
a. asset account.crediting cash account b. cash account,crediting asset account c. purchase of business account,crediting sales of business account d. asset account, crediting purchase of business account
18. The accounting concept that states that a firms financial affairs must be separated from that of the owner’s private transaction is
a. business entity b. going concern c. consistency d. duality
Use the following information to answer questions 19 and 20
Ade Bola
# #
Capital 40,000 30,000
Drawing 10,000 15,000
Interest on drawing is 5%, profit is shared equally
Net profit for the period is #4,250
19. Ade’s share of profit is
a. #5,500 b. #4,250 c. #2,750 d. #1,250
20. Bola’s share of profit is
a. #4,500 b. #4,250 c. #3,000 d. #2,750
21. Share can be issued in the following way except. a. at par b. at premium c. at discount d. at book
22. Which of the following date line is correct for a profit and loss account?
a. for the year ended 31st dec. 2009 b. as at 31st dec, 2009 c. for the period 31st dec 2009 d. as at the year 2009
23.Factory wages form part of
a. administration cost b. selling and distribution cost c. overhead cost d. prime cost
Use the following information to answer question 24 and 25
Sales ledger balances 01/06/12 9,000
30/06/12 30,000
Total for the month cash sales 10,000
Returns inwards 3,000
Cheque dishonoured 4,000
24. The credit sales for the month is
a. 36,000 b. 31,000 c. 20,000 d. 10,000
25. The total sales for the month is
a. 36,000 b. 31,000 c. 30,000 d. 20,000
26. Subscription can be divided into
a. two b. three c. four d. five
27. In a manufacturing enterprise depreciation of plant is treated in the
a. trading account b. profit and loss account c. manufacturing account d. appropriation account
28.Accounts payable is classified as a
a. prepayment b. provision c. current liability d. long term liability
29.The accounting concept that provides that accounting statements should not be influenced by personal opinion is
a. materiality b. periodicity c. objectivity d. conservatism
30.Carriage outward expenses of a business are treated in the
a. balance sheet b. income surplus account c. profit and loss account d. trading account
31. Sales of #3,000 to Atilola was debited to Akinola account. This is an error of
a. compensation b. commission c. principle d. transposition
32. A trial balance has credit total of #43,000 and debit total of #34,000.
A suspense account should be opened and debited with a. #43,000 b. #34,000 c. #9,000 d. #4,500
Use the following information to answer questions 33 and 34
cost of asset #100,000 depreciation 10% on reducing balance basis
33. Depreciation for the second year of use is
a. #19,000 b. #10,000 c. #9,000 d. #1,000
34. The net book value of the asset at the end of the third year of use is
a. #80,000 b. #72,900 c. #70,000 d. #65,610
35. The sum of money due from members of a club which is yet to be paid at the end of the accounting period is a. subscription in advance b. subscription in arrears c. excess expenses d. excess income
36. The excess of assets over liabilities of a non profit making organization is a. surplus b. deficit c. working capital d. accumulated fund
37. An event that will not required a change in the profit sharing ratio of partners in a firm is when a. a partner dies b. a partner retires c. a new partner is admitted d. partners assets value appreciates

Use the following information to answer 38 and 39
Receipt and payment 31st December 2016
# #
Cash in hand 460 new equipment. 200
Subscription 520 cleaners wages. 540
Donations. 500 stationery. 140
Sales of tickets 490. repairs. 110
Entrance fee. 670
38. The surplus for the year is
a. #1,970 b. #1,890 c. #1,690 d. #1,390
39. The total income received for the year is
a. #2,640 b. #2,180 c. #1,890 d. #1,690
40. The parties who are paid last in the event of winding up are
a. preference shareholders b. debenture holders c. ordinary shareholders
b. trade creditors
41. The process of distributing shares to successful applicants is
a. allocation b. appointment c. allotment d. application
42. The double entry system of bookkeeping was introduced by
a. Adam Smith b. A. R Jamming c. Frank wood d. Lucia pacioli
43. Items in a debtors control account include
a. credit purchases b. cash paid c. discount received d. discount allowed
44. Income and expenditure account is prepared to determine the a. gross profit or loss b. net profit or loss c. surplus or deficit d. accumulated fund or working capital
45. The document which sets out guidelines for the internal management of a joint stock company is a. memorandum of association b. article of association c. memorandum of
understanding d. certificate of incorporation
46. The objective of a cooperative society is to protect the a. position of the members b. interest of the members c. career of the members d. dividend of the members
47. When the debit side total of a ledger is greater than the credit side total the balance is a. cash balance b. debit balance c. credit balance d. bank balance
48. Chuks bought goods worth #1,000 on credit and was given on discount of 21/2%.
the discount receivable is a. #75 b. #25 c. #20 d. #15
49. A current asset item in the balance sheet of a sole trader is
a. drawings b. creditors c. debtors d. accruals
50. An obligation which a business owes another business or a person is
a. an asset b. an expenses c. an income d. a liability
PART 1 ANSWER ANY TWO QUESTION FROM THIS PART
1a. Differentiate between shares and debentures
b.State the three way by which shares can be issued
c. What is purchase consideration?
2a.What are the component of financial system?
b. Differentiate between money market and capital market
c. Define goodwill
3a. State three features of income and expenditure account
b. State three reasons for preparing manufacturing account
c. Differentiate quoted and unquoted company
4a. State the reasons for dissolution of partnership
b. Differentiate between receipt and payment and income and expenditure
c. What is suspense account
PART 2 ANSWER QUESTION FOUR ANY OTHER TWO QUESTION FROM THIS PART
4. Union bank plc issued 50,000 shares of #1 each at par payable as follows
On application 30k
On allotment 20k
On 1st call 25k
On final call 25k
All the shares were subscribed and allotted and all cash received including the call money.
You are required to prepare the following accounts
i. cash book
ii. application and allotment
iii. 1st call
iv. final call
v. share capital account
5.Bakare had taken over Obasanjo business on 1st January 2000 on the basis of the last balance sheet
Which is as follows:
# #
Capital 95,400 Premises 63,000
Creditor 20400 stock 28,800
Debtors 18,900
Bank 5,100
115,800 115,800
Additional information:
a. The purchase consideration was agreed at #138,000
b. The business takes over the asset at the book value with the exception of premises which is taken over at #84,000 and stock at #27,600. He did not take over the bank balance. show the balance sheet of Bakare.
6. Mr David Enterprises keeps his books on a single entry basis. The following information relates to his business for the year 1998 and 1999.
1st feb 1998 31st jan. 1999
# #
Motor car 3,000 3,000
Stock 2,000 2,500
Debtors 3,100 4,500
Cash 250 300
Creditors 2,950 2,900
Bills payable – 400
Loan from Olabisi- 600
Investment – 2000
In addition, David has drawing of #500 on account and also introduced #300 as additional capital.
You are required to ascertain the opening capital,the net profit and to prepare a ballgame sheet as at 31st January 1999
7. Bayo and Sayo are in partnership they agreed to dissolved the partnership on 31st December 1993 and to sell the business
The balance sheet on that date was as follows
# #
Capital account
Bayo. 74,882. Goodwill. 10,000
Sayo. 5102. Plant & equipment 14,216
Loan Bayo. 20,000. Stock. 49,164
Creditors. 27,192. Debtors. 36,152
Cash. 17,644 127,176. 127,176
Profit and losses are shared between the two partners in ratio 3:5 respectively
The asset realized as follows
Debtors. 32,042
Stock 41,155
Plant and equipment 17,165
Goodwill 3,500
Dissolution expenses 473
Prepare the necessary account
8. The following information were extracted from the ledger of Eniola
Limited for the month of August 2002
#
1/8. Debit balance sales ledger. 10,005
Debit balance purchases ledger. 195
31/8 sales of goods. 25,000
return inwards 2000
bad debt written off. 300
discounts received. 550
discounts allowed. 275
purchases. 16,750
cash received 12,475
cash paid. 8,100
return outwards. 500
customer cheques dishonored. 1,000
interest charged to customers on account 50
Required : prepare sales ledger and purchases ledger control account
9. The super Nig Ltd takes over the following assets and liabilities standing in the books of a private business on 1st January 1991
Balance sheet
Capital. 16,100. Freehold premises 6,000
Plant and machinery 2000
Stock. 7,600
Creditors 1200. Furniture 200
Debtors. 1000
Cash. 500
17,300. 17,300
The purchase consideration is #20,000 and it is to be discharged by issue to the vendor of 10,000 ordinary shares #1 each fully paid, 1000 preference of #5 each fully paid and the balance in cash.
The company valued the freehold premises at #5,500,stock at #7,000 create a provision for bad debts equal to 5% of debtors the cash balance of #500 is not taken over.
show the journal entries in the book of super nig Ltd on 1st January 1991