MID TERM TEST FIRST TERM FINANCIAL ACCOUNTING SS 2

FIRST TERM MID TERM TEST

                             Subject: Financial Accounting       Class: SS 2                                   Time:

OBJECTIVE: ANSWER ALL 

1. Which of the following error affects the trial balance  a. Commission b. Omission c. Original entry d. All of the above
2. Sales of goods for #500 to Eddy was not posted. This is an error ——– a. Omission b. Compensation c. Principal d. Original entry
3. Purchase of goods from chukwuma’s account. This is an error of ——- a. Omission b. Compensation c. Commission d. Principle
4. A typewriter for office use sold for #5000 was posted to sales account. This is an error of —— a. Omission b. Compensation c. Commission d. Principle
5. Goods purchased for #92 was entered in the book as #29. This is an error of —— a. Omission b. Compensation c. Commission d. Original entry
6. Which if the following would not allow a trial balance to agree? a. Where a transaction is completely omitted from the books b. Where the correct amount is entered c. Where the figures entered on one side is different from the one entered on the other side d. Where an item is entered in the wrong class of account
7. If incorrect entries on the debit side equals incorrect entries on the credit side, the error is that ——– a. Original entry b. Omission c. Commission d. Compensation
8. A list of balance extracted from the ledger is known as ———– a. Balance sheet b. Statement of affairs c. Trading account d. Trial balance
9. Trial balance is ——– a. An attempt to balance the account b. The credit balances of the account c. List of all balance extracted from the ledger 
10. A suspense account is used to ——— a. Agree the trial balance b. Record sales c. Record purchase d. correct errors
11. To correct an error, the purchase account was debited while the suspense account was debited while the suspense account was credited. Which of the following was the cause of the error ———- a. Under casting of purchase b. Overcasting of purchase c. Original entry d. Omission of creditor’s balance
12. Purchase of goods of #200 was treated as sales and entered as sales day book and had been carried through the account as such. This is an error of ——– a. Omission b. Principle c. Reversal of entries d. Original entry
13. Commission of #5000 to a sales representative is debited to salaries account. This is an error of———— a. Reversal of entries b. Principle c. Commission d. Compensation
14. Pending the location of an error, the difference disclosed in a trial balance is treated in ——— a. Suspense account b. Trading account c. Control account d. Profit and loss account
15. Kunle extracted a trial balance in the 31st December, 2005 and realized that the total of debit balance exceed the total of credit balance. Pending investigation, the difference should be a. Debited to suspense account b. Credited to suspense account c. Debited to assets account d. Credited to assets account 
16. Factory cost consist of ——- a. Direct material and factory overhead b. Direct labour and direct expenses c. Direct labour and factory overhead d. Direct materials, direct labour, direct expenses, and factory overhead

17. A business which convert raw material to finished goods prepares ——– a. Trading account b. Profit and loss account c. Balance sheet d. Manufacturing, trading, profit and loss account and balance sheet
18. An agreement made by partners to regulate and govern their business is known as——– a. Partnership act b. Partnership deed c. Partnership code 
19. Which of the following is treated under partnership appropriate account? a. Interest on loan b. Salary of workers c. Salary of partners d. Interest on drawing
20. In a partnership, goodwill is recognized when a. New partner is admitted b. A partner is dormant c. The business is making huge profit d. It is a limited partnership
21. In a partnership business, the net profit serves as opening figure for ——- a. Trading account b. Profit and loss account c. Current account d. appropriate account
22. Drawing appears on the ——- a. Debit side of the profit and loss account b. Credit side of the profit and loss account c. Debit side of the current account d. Debit side of the appropriate account
23. A control account is ——— a. An imprest b. A statement of affairs c. A bank reconciliation statement d. A self-balancing ledger system
24. Which of the following is not a debit item in a creditor’s control account? a. Cash paid b. Return outward c. Purchase d. Discount received
25. The purchases ledger control account is also referred to as? a. Total creditor’s account b. Total debtors account c. Cash account d. Personal account
26. The balance in debtors control ledger account will not be affected by ——— a. Bad debt b. Cash received c. Credit sales d. Depreciation
27. Which of the following is not contained in the sales ledger control account? a. Returns inward b. Returns outward c. Receipts from debtors d. Dishonored cheque
28. Which of the following is not credited to debtors control accounts? a. Provision of bad debt b. Bad debt c. Discount allowed d. Bills received 
29. Items on the left hand side of a total debtors account are debited in the a. Purchase ledger b. Sales ledger c. General ledger d. Journal
30. The transformation of pieces of information into more useful formats is ——— a. Data processing b. Information processing c. Computerization d. System analysis

SECTION B.

Answer THREE in all 

1a. Definitely suspense account

1. List four errors that affect the agreement of the trial balance
2. Show the journal entries to correct the following errors: 

(a) The purchases of furniture #60 had been entered in the furniture expenses account

(b) Sales of goods #20 to Ayo had been completely omitted from the books

(c) The payment of cash to ogundele #100 had been entered in the debit of the cash book and credit side of ogundele’s account

(d) Purchase of goods #300 from Ayoola entered in Ayodele’s account

(e) The sales account is undercast by #600 as also is wages account

(f) Cash payment of #95 to Ronaldo entered in the cash book as #59.(359)

3. The following balances were extracted from the books of olotu enterprises on 30th October 1993 

                                                                                                                #

Purchase ledger (cr) 1/10/93                                                        7,532

Sales ledger (dr) 1/10/93                                                               7,948

Purchase day book                                                                        90,454

Sales day book                                                                                77,530

Return outwards day book                                                             3,960

Return inwards day book                                                              14,180

Cheque received from customers                                                56,680

Cheque paid to suppliers                                                               61,860

Cash refunds from a supplier

Who was overpaid                                                                                240

Discount allowed                                                                                3774

Discount received                                                                               2678

Credit note received                                                                             280

Debit notes issued                                                                                530

       You are required to prepare

(a) Debtors control account

(b) Creditors control account

4. E. Diali a manufacturer of expanded materials. The following balance have been extracted from the books of the business for the year ended 31st December 1991.

                                                                                           #                                #

Capital                                                                                                            18,400

Drawings                                                                      720

Raw material                                                             8,000

Work -in- progress                                                    3,250

Finished goods                                                           6,000

Manufacturing wages-direct                                    6,450

Indirect                                                                        2,800

Miscellaneous expenses                                               260

Traveling expenses                                                     2,400

Rent and rates factory                                                   600

Freehold premises                                                    10,000

Plant and machinery factory                                   16,000

Sales                                                                                                              98,200

Debtors and creditors                                                4,050

Salaries and wages                                                     3,500

Bank                                                                               6,000

Cash                                                                               2,000

Selling and admin expenses                                       1,850

Discount received                                                                                        150

Discount allowed                                                        120

Purchase of raw materials                                     45,000     

                                                                                   —————–              —————–

                                                                                      20,000                      20,000

                                                                                   —————–               ——————

Additional information: 

(i) Stock at 31st Dec.1991

Raw material              #9,500

Work -in-progress      #3,750

Finished goods           #5,840

(ii) Rate paid in advance #250

(ii) A provision of bad debts of 300 is to be made

(iv) Depreciation provision are to be provided on plant and machinery at 20% 

You are required to prepare manufacturing trading and profit and loss account for the year ended 31st December, 1991.