FINANCIAL ACCOUNTING FIRST TERM EXAMINATION SS 2

FIRST TERM

 FINANCIAL ACCOUNTING FIRST TERM EXAMINATION SS 2

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
2. 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

1. reserve b. liability c. provision d. prepayment

3.When allotment of shares is made applicants for shares of a company become

1. 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

1. 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

1. #10,500cr b. #5,800 c. #5,800dr d.#10,800dr
2. The balance as per cash book is
3. #8000cr b. #6000cr c. #6000dr d. #8000dr
4. 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
5. The manufacturing account is prepared to determine the cost of
6. trading b. production c. factory overhead d. raw materials used.

13.An example of direct expense is

1. insurance b. carriage inwards c. purchases of raw materials d. royalty

14.A suspense account is used to

1. 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

1. 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
2. The accounting concept that states that a firms financial affairs must be separated from that of the owner’s private transaction is
3. 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
20. #5,500 b. #4,250 c. #2,750 d. #1,250
21. Bola’s share of profit is
22. #4,500 b. #4,250 c. #3,000 d. #2,750
23. Share can be issued in the following way except. a. at par b. at premium c. at discount d. at book
24. Which of the following date line is correct for a profit and loss account?
25. for the year ended 31^st dec. 2009 b. as at 31^st dec, 2009 c. for the period 31^st dec 2009 d. as at the year 2009

23.Factory wages form part of

1. 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
25. 36,000 b. 31,000 c. 20,000 d. 10,000
26. The total sales for the month is
27. 36,000 b. 31,000 c. 30,000 d. 20,000
28. Subscription can be divided into
29. two b. three c. four d. five
30. In a manufacturing enterprise depreciation of plant is treated in the
31. trading account b. profit and loss account c. manufacturing account d. appropriation account

28.Accounts payable is classified as a

1. 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

1. materiality b. periodicity c. objectivity d. conservatism

30.Carriage outward expenses of a business are treated in the

1. balance sheet b. income surplus account c. profit and loss account d. trading account
2. Sales of #3,000 to Atilola was debited to Akinola account. This is an error of
3. compensation b. commission c. principle d. transposition
4. 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
34. #19,000 b. #10,000 c. #9,000 d. #1,000
35. The net book value of the asset at the end of the third year of use is
36. #80,000 b. #72,900 c. #70,000 d. #65,610
37. 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
38. The excess of assets over liabilities of a non profit making organization is a. surplus b. deficit c. working capital d. accumulated fund
39. 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
39. #1,970 b. #1,890 c. #1,690 d. #1,390
40. The total income received for the year is
41. #2,640 b. #2,180 c. #1,890 d. #1,690
42. The parties who are paid last in the event of winding up are
43. preference shareholders b. debenture holders c. ordinary shareholders
44. trade creditors
45. The process of distributing shares to successful applicants is
46. allocation b. appointment c. allotment d. application
47. The double entry system of bookkeeping was introduced by
48. Adam Smith b. A. R Jamming c. Frank wood d. Lucia pacioli
49. Items in a debtors control account include
50. credit purchases b. cash paid c. discount received d. discount allowed
51. 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
52. 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
50. drawings b. creditors c. debtors d. accruals
51. An obligation which a business owes another business or a person is
52. 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

1. What is purchase consideration?

2a.What are the component of financial system?

1. Differentiate between money market and capital market
2. Define goodwill

3a.      State three features of income and expenditure account

1. State three reasons for preparing manufacturing account
2. Differentiate quoted and unquoted company

4a.     State the reasons for dissolution of partnership

1. Differentiate between receipt and payment and income and expenditure
2. 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 1^st 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

1. cash book
2. application and allotment

iii. 1^st call

1. final call
2. share capital account

5.Bakare had taken over Obasanjo business on 1^st 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:

1. The purchase consideration was agreed at #138,000
2. 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.
3. Mr David Enterprises keeps his books on a single entry basis. The following information relates to his business for the year 1998 and 1999.

1^st feb 1998                     31^st 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 31^st 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