FINANCIAL ACCOUNTING FIRST TERM EXAMINATION SS 3

Examination malpractices may lead to a repeat of the subject or suspensions don’t be involved.

SUBJECT: FINANCIAL ACCOUNTING                    TIME: 3HRS             CLASS: SS  3

OBJECTIVE

1. Which of the following is the effect of a reduction in provision for doubtful debt?
2. reduction in net profit b. reduction in cash balance c. reduction in gross profit d. increase in gross profit
3. The reward given to a debenture holder is called a. profit b. reserves c. premium d. interest
4. Subscription in advance is an example of a. prepayment b. accrual c. debtors d. provision
5. Which of the following is an example of personal account?
6. stock b. fixtures c. equipment d. debtors

Use the following to answer question 5 to 10

#

Sales                                                                             45000

Opening stock                                                                20000

Closing stock                                                                 30000

Expenses                                                                       15000

Fixed assets                                                                  40000

Debtors                                                                         10000

Creditors                                                                       5000

Purchases                                                                      25000

5. The cost of goods sold is a. #45000 b. #30000 c. #25000 d. #15000
6. Net profit is            a. #45000 b. #30000 c. #15000 d. #20000
7. Net profit percentage is a. 100% b. 67% c. 50% d. 33%
8. Current ratio is a. 16:1 b. 15:1 c. 8:1 d.2:1
9. Working capital is a. #60000 b. #45000 c.#40000 d. #35000
10. Gross profit percentage is a. 100% b. 67% c. 50% d. 33%
11. Working capital is measured by the excess of
12. current asset over current liabilities b. fixed asset over current asset c. current asset over fixed asset d. long term liabilities over fixed assets
13. Overdraft is usually shown as a. credit balance in the cash column of the cash book b. debit balance in the cash column of the cash book c. debit balance in the loan account d. credit balance in the bank column of the cash book

Use the following information to answer question 13 to 17

#

Purchases:               raw materials                                                  20000

Finished goods                                           15200

Stock 1/1/89            raw materials                                                  3000

Work in progress                                             2500

Wages                      direct                                                        22800

Indirect                                                    7200

Factory expenses           electricity                                                 12000

Insurance                                                 2000

Stock 31/12/89         raw materials                                                  4000

Work in progress                                           4500

13. What is the cost of raw materials available? a. #23000 b. #22500 c. #20000 d. #19000
14. The cost of materials used is a. #23000 b. #21000 c. #20000 d. #19000
15. The prime cost is a. #49000 b. #45800 c. #43800 d. #41800
16. The amount of factory overhead is a. #28200 b. #23200 c.# 21200 d. #19200
17. The cost of manufactured goods is a. #67500 b. #65500 c. #63000 d. #61000
18. A suspense account is used to a. agree the trial balance b. record sales c. record purchases
19. correct an errors
20. A sales day book is used to record a. cash sales of stock b. credit sales of stock c. cash and credit sales of stock d. cash sales of fixed asset
21. Which of the following fixed assets is not depreciable?
22. building b. tools c. land d. motor van

Use the following information to answer questions 21 to 24

Fixed assets                                             12000

Current asset                                            5000

Current liabilities                                     2300

Capital                                                                10000

Longterm liabilities                                 4700

21. What is the total asset? a. #17300 b. #17000 c. #15000 d.#14700
22. What is the total net asset? a. #10000 b. #14700 c. #15000 d. #17000
23. Total liabilities amount to a. #17000 b. #14700 c. #12300 d. #7000
24. The working capital is a. #10000 b. #2700 c.#7300 d. #7000
25. Which of the following is not charged to manufacturing account?
26. raw materials b. factory wages c. distribution expenses d. direct expenses

Use the following to answer questions 26 to 29

Debtors                                                    30000

Creditors                                       20000

Opening stock                                          15000

Closing stock                                18000

Wages                                          3000

Salaries                                                    10000

Purchases                                     30000

Sales                                             60000

26. The gross profit percentage is a. 67% b. 55% c. 50% d. 45%
27. The net profit percentage is a. 100% b. 67% c. 50% d. 33%
28. The working capital is a. #48000 b. # 33,000 c. # 28000 d. #10000
29. The stock turnover is a. 4.0 times b. 3.6 c. 3.3time d. 1.6 times
30. one of the following is not a liabilities  a. loan b. accruals c. debtors d. creditors
31. The successful of distributing shares to successful applicants is
32. allocation b. appointment c. allotment d. application
33. The accounting entries for cash realized from the sale of assets on dissolution of

partnership is debit

1. cash account credit partners capital account b. asset account credit cash account
2. cash account credit realisation account d. realisation account credit cash account
3. The parties who are paid last in the event of winding up are
4. preference shareholders b. debenture holders c. ordinary shareholders d. trade

creditors

Use the following information to answer question 34 and 35

Receipt and payments 31st December 2016

#                                        #

cash at bank.        460.  new equipment     200

subscription         520.   cleaners wages.    540

donations.            500.    stationery.             140

sales of tickets.   490.    repairs                   110

entrance fees.      670

34. The surplus for the year is a. #1,970 b. #1,890 c. #1,650 d. #1,390
35. The total income received for the year is a. #2,640 b. #2,180 c. #1,890 d. #1,690
36. In incomplete records, opening capital is ascertained by preparing
37. closing capital b. control account c. statement of affairs d. statement of single entry

Use the following information to answer questions 37 to 39

#

Authorized share capital :

75,000 ordinary share capital          750,000

25,000 6% preference shares.        250,000

1,000,000

Issued and paid up capital :

50,000 ordinary shares.                  500,000

20,000 6% preference shares.       200,000

700,000

Reserves:

general reserve.                                100,000

share premium.                                   75,000

profit and loss account.                     13,000

5% debentures.                                 100,000

creditors.                                             60,000

proposed dividend.                            66,000

1,114,000

37. What is the total of the share capital? a. #1,000,000 b. #875,000 c. #700,000 d. #500,000
38. Calculate the total capital reserves a. #175,000 b. #100,000 c. #75,000 d. #66,000
39. What is the total revenue reserves? a. #175,000 b. #105,000 c. #25,000 d. #13,000
40. The maximum amount which a firm is allowed to raise by way of selling shares is ——-

capital

1. authorized b. called – up c. issued d. paid -up
2. Debenture is classified under which of the following heading
3.   current asset b. current liability c. fixed assets d.long term liability
4. The term bad debts means debt … a.owed by a customer  b. owed by a supplier
5. receipt from sales of goods d. rent from premises sublet
6. The purchase of a photocopying machine for office use for #50,000 should be debited

to ——–account

1. asset b. bank c. cash d. purchases
2. The financial plan of government for a year is contained in the
3. budget b. cash book c. gazette d. vote book
4. The reward given to a shareholder is
5. dividend b. interest c. premium d. profit
6. An example of fictitious asset is
7. cash at bank b. debtors c. goodwill d. prepayment
8. Suppliers account are found in the —–ledger
9. general b. nominal c. private d. purchases
10. Damaged goods returned by a customer is usually accompanied by
11. credit note b. debit note c. proforma invoice d.return note
12. One of the following is not a method of depreciation
13. Straight line b. reducing balance c. Petty d. revaluation
14. The excess of current assets over current liabilities is ——- capital
15. authorized b. issued c. nominal d. working

SECTION B:  ANSWER ANY TWO QUESTION FROM THIS SECTION

1a.      define accounting

1. what are the function of stock exchange
2. Write short note on the following
3. Consignee II. Consignor  III. delcredere commission iv.jobber v. broker

3a.      What is capital market?

1. differentiate between capital market and money market

4a.      What is bank reconciliation statement?

1. Explain any five causes of disagreements between cash book and bank statement

SECTION C: ANSWER QUESTION 6 AND ANY TWO QUESTION FROM THIS SECTION

5. The profit and loss account of Okere nig ltd showed a balance on appropriation of #25000 and the net profit for the year was #97000. It was decided to deal with the balance as follows:
6. To provide for #5000 corporation tax.
7. To pay a dividend on 60,000 6% preference shares of #1 each
8. To pay a dividend of 10% on the 100000 ordinary shares.
9. To write off the existing balance of goodwill #6000
10. Transfer #8000 to general reserve
11. To carry forward the balance.
12. Debtors 10,000
13. Creditors 15,000
14. Furniture 50,000
15. Machinery 50,000
16. Cash 50,000
17. Bank 47, 400

Prepare the profit and loss appropriation account and balance sheet

6. Prosperous industries is a small business producing and selling food beverage.

The following list of balances have been extracted from the books as at 31st December 1999

#

Sales                                                                                        255000

Purchases of raw materials                                                             49000

Carriage inward on raw materials                                                  3000

Carriage outwards on finished goods                                         2000

Wages-factory operatives                                                                48250

Salaries –factory supervisors                                              13250

Management and clerical staff                                   33000

Sales and marketing staff                                                    29000

General expenses                                                                     5875

Electricity and rent                                                                   17000

Insurance                                                                                 3375

Advertising                                                                              6000

Discount received                                                                    2500

Plant and machinery                                                                 26000

Delivery van                                                                            10000

Stock at 1/1/98: raw materials                                                  9500

Work in progress                                                                6250

Finished goods                                                                12000

Stock at 31/ 12/98:  raw materials                                                  8250

Work in progress                                                                9000

Finished goods                                                                14500

Additional information:

1. Depreciation for the year is to be as follows:

plant and machinery at 13% per annum.

Delivery van at 25% per annum

1. At 31/12/98 insurance prepaid was #475 and general expenses owing amounted to #225
2. Apportionment of expenses is to be made as follows:

factory                                administration

Electricity and rent                                            85%                                   15%

Insurance and general expenses                           70%                                      30%

You are required to prepare:

1. A manufacturing account
2. A trading,profit and loss account for the year ended 31st December 1999.
3. On March 1 1999,seye purchased a motor car from Alaba for cash price of #20,920.

he agreed to pay for it in 3 equal installment of N6000 at the rate of 10% per annum.

depreciation  was allowed at 12% on cost. Deposit N6000.

prepare :

1. motor car account b. Alaba account c. interest payable account
2. provision for depreciation account e. profit and loss account
3. Temidayo limited issued 200,000 ordinary shares of #1 each at #1.25k per share payable as

follows:

20k on application

45k on allotment (including premium)

30k on first call

30k on second call

Required show the ledger entries to record the above transaction

9. The following information was extracted from the books of Igbaotun club of eko for the

year ended December 1998

Receipt

#

Subscription.       6900

Donations.           9600

Interest received  240

16,740

Payment

Salaries.                2250

Scholarship.                     2220

Drugs for the handicap   2070

Printing and stationery.      510

Office furniture.                  3090

Investment.                         4500

14,640

Additional information

1. Outstanding subscription #400
2. Accrued expenses :

Salaries. 400

Scholarship 920

Drugs 190

Printing and stationery 340, creditors 5, 340

Prepare :

1. Income and expenditure account

b  balance sheet as at that date