The term "accounting period" is used to refer to the
Answer
(C)
time span, usually one year, covered by financial statement
2
Assigning revenues to the accounting period in which goods were sold or services rendered and expenses incurred is known as
Answer
(C)
matching concept
3
The accounting convention which states that profit must not be recognized until realized while all losses should be adequately provided for it termed
Answer
(D)
conservatism
4
Accounting information is used by investors and creditors of a company to predict
Answer
(A)
future cash flows of the company
5
Antics Electronic Company recently bought six generators. Which of the following is the correct method of recording this transaction?
Answer
(B)
Debit purchases account and credit cash account
6
When a business incurs labour cost in installing a fixed asset, the cost is treated as
Answer
(A)
additional cost to the asset
7
What is the cardinal rule of the double entry system?
Answer
(B)
Debit the receiving account and credit the giving account
8
Mallam Gambo bought a freezer for his shop costing N10,500. In recording, he debited office expenses account and credited the bank account. What book-keeping error has he committed?
Answer
(C)
Error of principle
9
The use of the folio in the ledger is for
Answer
(A)
referencing purposes
10
The suspense account is used to correct book-keeping error where the
Answer
(C)
item involved is unknown
11
The discount column of a three column cashbook is not balanced off but periodically transferred to the discount account because discounts
Answer
(C)
do not form part of double entry
12
When is a petty cash account debited?
Answer
(B)
When the fund is established and every time it is replenished
13
When preparing a bank reconciliation statement, which of the following is deducted from the balance per bank statement?
Answer
(D)
unpresented cheques
14
The financial position of an organization at a particular time can be ascertained from the
The net profit or loss for the year is determined in profit and loss account after
Answer
(D)
eliminating all expenses from gross profit and adding any other income
17
If a bad debt previously written off is subsequently repaid, the amount collected is recorded as an
Answer
(A)
income in the profit and loss account
18
Beginning and ending accounts receivable balances were N8,000 and N15,000 respectively. If collections from customers during the period were N36,000, then total sales on account would be
Answer
(D)
N43,000
19
From which of the following sources are creditors control account most likely to be posted?
Answer
(D)
purchases journal
20
Which of the following categories of labour cost will be classified as direct?
Answer
(B)
factory workers' salary
21
The major difference between the receipt and payment account and the income and expenditure account is that while the former
Answer
(B)
deals with all receipts and payments in the year regardless of the time it relates to, the latter is for just that year
22
The net profit from a trading account of a non-profit making organization would be treated as income in the
Answer
(A)
income and expenditure account
23
The major distinguishing element between the final accounts of a partnership and a sole trader is the
Answer
(B)
appropriation account
24
Goodwill appears in the books of a business only if it has been
Answer
(B)
raised in connection with the admission of a new partner
25
Kayode, Akpan and Kachalla are in partnership. Their respective capital accounts had the following balances: N40,000, N50,000 and N70,000.
The partners agree to admit Wamo as a new partner with a one-fifth interest in the partnership capital in exchange for N50,000 cash. Wamo's equity in the resulting partnership is
Answer
(D)
N50,000
26
Under which of the following conditions is a partnership dissolved?
Answer
(B)
admission of a new partner
27
when shares issued are paid for, accounting entry required is
Answer
(A)
debit bank or cash account and credit share capital and/or premium account
28
A limited liability company has an authorized share capital of N50 million split into 100 million shares 80 million share was offered for subscription at 60k per share payable in full on application. These have been fully subscribed and issued
What is the nominal value of each share?
Answer
(D)
N0.50
29
A limited liability company has an authorized share capital of N50 million split into 100 million shares 80 million share was offered for subscription at 60k per share payable in full on application. These have been fully subscribed and issued
What is the issued capital
Answer
(A)
N40
30
The document setting out the regulations regarding shares, meetings and internal organization of a company is known as
