2015 Account

1. An expenses is said to be revenue in nature if it

• A. adds or contributes to the operating income of the business
• B. necessitates the introduction of additional capital
• C. reduces the capital of the business
• D. adds to or improves the value of fixed assets

2. An entry in a subsidiary book which does not form part of the double entry system is a

• A. contra entry
• B. single entry
• C. journal entry
• D. memorandum entry

3. Determine wage expenses from the given information, wages outstanding at the beginning, wages paid during the period 15000 and wages outstanding of the period 2,000

• A. N16,000
• B. N17,000
• C. N13,000
• D. N14,000

4. Which method of pricing can be used satisfactorily in either rising or falling price situation?

• A. Market price
• B. Average method
• C. FIFO
• D. Standard price

5. Use the information below to answer this question.

   Calculate the acid test ratio

   

• A. 5 : 1
• B. 6 : 1
• C. 6 : 1 : 1
• D. 4 : 1

6. What will be the number of shares to be issued to a subscriber who applied for 50,000 units.

• A. 20,000
• B. 18,000
• C. 15,000
• D. 12,000

7. Use the information below to answer this question.
   Buhari and Osinbajo are in partnership with the following partnership agreement
   Buhari              Osinbajo

   Capital 40, 000    70, 000
   Salary 10, 000      15, 000
   Int.on capital 5%      5%
   Profit/loss sharing ratio 40 : 60
   The net profit for the year ended is N80,000.
   “Drawings are N80, 000 and N12, 000 for Buhari and Osinbajo respectively”

What is Osinbajo share of profit?

• A. N19, 800
• B. N49, 500
• C. N48, 000
• D. N29, 700

8. The major distinguishing element between the final account of a partnership and that of a sole trader is the

• A. drawing account
• B. capital account
• C. Creditor account
• D. Appropriation account

Use the information below to answer this question.

Determine the debtors collection period

• A. 114 days
• B. 68 days
• C. 37 days
• D. 41 days

10. Prime cost is one of the following

• A. expenses which can be identified with an allocated to cost centers
• B. aggregate direct material cost, direct labour cost and variable direct expenses
• C. the cost taken into account in the production process whether direct or indirect
• D. the cost of commodities supply to an undertaking

11. The accounting concept that allows the cost of kitchen cutlery to be expensed, though it can be used for more than one year is

• A. Materiality
• B. Accrual
• C. Going concern
• D. Business entity

12. Use the information below to answer this question.
    Timo and Chris are computer engineers who went into partnership as Teachi and Co. Timo brought cash of N12,000 furniture worth of N18,000 and vehicle worth of 70,000. Chris equally brought in cash of 10,000 his building valued at 105,000 and personal computers worth N35,000.

    What is the profit sharing ratio if it’s based on capital contribution by Teechi and Co?

• A. 2 : 3
• B. 3 : 2
• C. 6 : 5
• D. 5 : 6

13. When the invoice of a customer is overcast, the supplier will send to him a

• A. debit note
• B. cheque
• C. credit note
• D. payment voucher

14. Using LIFO method of stock valuation, analyze the issue quantities and their prices

• A. 260 units at N1.50
• B. 700 units at N1.50
• C. 200 units at N1.50 and 500 units at N1.00
• D. 350 units at N1.50 and 350 units at N1.00

15. CR. DR.
    Sales ledger balance 9, 500
    Sales ledger balance 420
    Bought ledgers balance 6, 115
    Bought ledger balance 350
    Credit sales 82, 000
    Purchases journal 54, 700
    Discount allowed 450
    Discount received 200
    Cash refunded to customers (debtors) 120
    Purchases ledger balance 250
    Sales ledger balance 120

    The amount brought down in the sales ledger control account would be

• A. N9, N1740; N120
• B. N90, N990
• C. N90, N870; N120
• D. N80, N750

16. The ledger entries to be made if cash sales is banked is debit

• A. cash, credit sales
• B. sales, credit cash
• C. bank, credit cash
• D. bank, credit sales

17. In a bank reconciliation statement, Dishonoured cheques is added to

• A. unpresented cheques
• B. uncredited cheques
• C. statement of account
• D. aggregate balance as per cash book

18. Which of the following is a debit entry in debtors control account?

• A. discount allowed
• B. return inwards
• C. credit sales
• D. cash from debtors

19. Which of the following is not a proper form of the accounting equation

• A. fixed assets + current assets – liabilities = capital
• B. fixed assests + current assests + liabilities = capital
• C. fixed assets – liabilities + current assets = capital
• D. fixed asset + current asset – capital = liabilities

20. The accounting convention that state that, stock should be value that the lower of cost and net realized value is ————— convention

• A. marching
• B. consistency
• C. realization
• D. prudency

21. What does liquidity ratio measure?

• A. measures operating efficiency of a company
• B. measures the ability of a company to meet its current obligations.
• C. measures the value of investments of a company
• D. measures the financial leverage of a company

22. Derive the stock turnover period.

(Average stock = 23,000. Cost of sales = 300,000 year = 365 days).

• A. 28 days
• B. 42 days
• C. 27 days
• D. 23 days

23. The following accounting entries are made when bad debt is recovered

• A. debit bad debts accounts and credit bad debt recovered account
• B. debit debtors accounts and recovered account
• C. debit bad debts recovered account and credit bad debts account
• D. debit bad debts account and credit profit and loss account

24. One of the items listed below will not be found in a company’s memorandum and article of association. Which is it?

• A. objects and their alteration
• B. location of business
• C. bank signatories
• D. powers of directors

25. The act of making necessary adjustment after comparing the actual cost with targeted cost is cost —————————-

• A. conversion
• B. control
• C. allocation
• D. analysis

26. Sales ledger control account contains the total amount in respect of

• A. creditors
• B. debtors
• C. investors
• D. shareholders

27. The following account are prepared when goods are sent to branch except

• A. Branch stock
• B. Goods set to branch account
• C. Branch adjustment account
• D. Branch debtors account

28. The basis of accounting for public sector is

• A. accrual basis
• B. cost basis
• C. revenue basis
• D. cash basis

Use the information below to answer this question

Segun Ojo, didn’t keep her books on double principle. On 1st Jan, 2014, cash in hand was 850, bank overdraft 3500, debtor 15,500, stock 18,000, fittings 9,000 and creditors 12,700. As at Dec, 2014, cash in hand was 1200, cash at bank 2,500, debtors 10,000, stock 20,500, furnishing 4,000 and creditors 17,000

29. Determine the closing capital 31/12/2014

• A. 17,500
• B. 38,200
• C. 20,700
• D. 27,200

30. If the partnership agreement does not specify how net profit is to be divided, the profit should be divided

• A. equally
• B. in accordance with an established
• C. in proportion of current account balances
• D. in proportion of weighted average of capital