ACC204 Past Questions and Answers
The cheques in which an entity may issue to the third party and have been credited to the cash book but not yet debited by the bank in the bank statement because the bearers have not presented them to the bank for payment is known as…….
Error cheques
Unpresented cheques..A
Dishonoured cheques
Uncredited cheques
The total amounts an entity owed its suppliers at a particular date is referred to as what?
a.
Trial balance
b.
Individual control account
c.
Sales ledger control account
d.
Purchase ledger control account..A
One of these is not an item of current liabilities:
a.
Overdraft
b.
Income in advance
c.
Account payable
d.
Prepaid Insuranc..A
The type of loan with a fixed rate interest and long-term maturity date and it is usually traded on the stock market is….
Longterm loan
Debenture..A
Mortgage loan
Convertible debt
The profit earned by a business in 2017 was $72,500. The proprietor injected new capital of $8,000 duringthe year and withdrew goods for his private use which had cost $2,200.If net assets at the beginning of 2017 were $101,700, what were the closing net assets?
a.
16840..A
b.
35000
c.
180000
d.
39400
The gross amounts an entity owed its suppliers at a particular date is referred to as?
Control order
Purchase ledger control account..A
Sales ledger control account
Trial balance
A computer program that assist book-keepers and accountants in recording and reporting on a financial transaction is called?
Accounting packages
Accounting software..A
Computerised accounting system
Manual accounting system
The owner of a business invests cash of N250,000 into his business, the usual postings in the ledger would be to debit Cash Account with N100,000 and credit Capital Account with N100,000
a.
Debit Cash Account with N50,000 and credit Capital Account N200,000
b.
Debit Cash Account with N200,000 and credit Capital Account N50,000
c.
Debit Cash Account with N250,000 and credit Capital Account N250,000..A
d.
Credit Cash Account with N250,000 and debit Capital Account N250,000
A business purchased a motor car on 1 July 2018 for $20,000. It is to be depreciated at 20 per cent per yearon the straight line basis, assuming a residual value at the end of five years of $4,000, with a proportionatedepreciation charge in the year of purchase.The $20,000 cost was correctly entered in the cash book but posted to the debit of the motor vehiclesrepairs account.How will the business profit for the year ended 31 December 2018 be affected by the error?
a.
Overstated by $76,840
b.
Understated by $16,800
c.
Overstated by $18,400
d.
Understated by $18,400.A
If a motor van was acquired for N55,000 with an estimated useful life of 5years and the residual value of N5000, using the straight line method of depreciation, what is the annual depreciation charge will be?
a.
N5,000
b.
N10,000..A
c.
N8,000
d.
N15,000
The amount which an entity owes its supplies and others in the course of its business activities, such liabilities are usually expected to be paid within one accounting year is known as……
a.
Cash received in advance
b.
Accont receivable
c.
Accounts payable..A
d.
Accruals expenses
The accounting process of entering transactions into the journal is called
a.
Entering
b.
journalising..A
c.
Posting
d.
Ongoing
The general journal entry might involve only two accounts.where more than two accounts are involve such a journal entry is called a compound journal entry
a.
compound journal entry..A
b.
None of the the above
c.
Many journal entry
d.
Multiple journal entry
A special journal is designed
a.
Row
b.
Column
c.
Tabular..A
d.
None
The type of loan with a fixed rate interest and long-term maturity date and it is usually traded on the stock market is…….
a.
Mortgage loan
b.
Debenture..A
c.
Convertible debt
d.
Longterm loan
Which one of the following would occur if the purchase of computer stationary was debited to the computer equipment at cost account?
a.
None of the above
b.
An overstatement of profit and an overstatement of non-current assets..A
c.
An understatement of profit and an overstatement of non-current assets
d.
An overstatement of profit and an understatement of non-current assets
A general journal records transactions according to the manner in which they will be posted to the respective______________
a.
Credit
b.
Account..A
c.
Ledger
d.
Debit
All of these are errors that do not affect the trial balance except
a.
compensating error
b.
error of commission
c.
Transposition error..A
d.
error of omission
__________is designed in a tabular form to record one type of transaction involving sales and purchases.
a.
Special journal..A
b.
Periodic Journal
c.
Personal Journal
d.
General journal
The accounting entries for assets withdrawn from business for private use in case of cash are…….
a.
Cr drawings account and Cr cash account
b.
Dr drawings account and Cr cash account.A
c.
Dr cash account and Cr drawings account
d.
Dr cash account and Dr drawings account
When the owner of a business invests cash into his business, the usual postings in the ledger would be to debit an Account and credit anpther Account. This means that two separate accounts would be___________
a.
Addressed
b.
Opened..A
c.
Explained
d.
Posted
Assets, with a life-span of more than one year, within the business on an ongoing basis, in order to generate revenue are called
a.
Current Assets
b.
Property Plant & Equipment
c.
Non-Current Assets..A
d.
Non-Fixed Assets
Given that an asset register has a net book value of $67,460. A non-current asset costing $15,000 had been soldfor $4,000, making a loss on disposal of $1,250. No entries had been made in the asset register for thisdisposal.What is the correct balance on the asset register?
a.
62210..A
b.
42710
c.
53710
d.
51210
Using the residual balance method of depreciation, if a motor vehicle that cost N17,150 has a useful life of 5years and a residual value of N500, calculate the annual depreciation rate;
a.
0.21
b.
0.51..A
c.
O.42
d.
0.72
__________________could be associated with the different activities, but the common target in these activities is to employ the money (funds) during the time period seeking to enhance the investor wealth
a.
Borrowing
b.
Investing..
c.
Financing
d.
Donating
Given that, a owner of a business invests cash of N100,000 into his business, the usual postings in the ledger would be to
a.
Debit Capital Account and credit investment account
b.
Debit Cash account and cerdit capital account..A
c.
Credit Capital Account and debit investment account
d.
Credit Cash account and debit capital account
A situation in which the last batches of goods are considered to be sold first prior to earlier purchase is said to be…….
a.
Inventory method
b.
Average method
c.
LIFO method..A
d.
FIFO method
The debit side of a trial balance totals $800 more than the credit side. Which one of the following errors would fully account for the difference?
a.
The petty cash balance of $800 has been omitted from the trial balance.
b.
$400 paid for plant maintenance has been correctly entered in the cash book and credited to the plant asset account
c.
A receipt of $800 for commission receivable has been omitted from the records.
d.
Discount received $400 has been debited to discount allowed account…A
The accounting entries for assets withdrawn from business for private use in case of cash are….
Dr cash account and Cr drawings account
Dr drawings account and Cr bank account..
Dr drawings account and Dr cash account
Cr drawings account and Cr cash account
The amount which an entity owes its supplies and others in the course of its business activities are usually expected to be paid within one accounting year is known as…
Cash received in advance
Commission
Account payable..A
Account receivable
An organisation\’s asset register shows a net book value of $145,600. The non-current asset account in thenominal ledger shows a net book value of $135,600. The difference could be due to a disposed asset nothaving been deducted from the asset register. Which one of the following could represent that asset?
a.
Asset with disposal proceeds of $5,000 and a net book value of $5,000
b.
Asset with disposal proceeds of $15,000 and a profit on disposal of $5,000..A
c.
Asset with disposal proceeds of $15,000 and a net book value of $5,000
d.
Asset with disposal proceeds of $15,000 and a loss on disposal of $5,000
A company bought a property in Chelsea four years ago on 1 January for $ 170,000. Since then propertyprices have risen substantially and the property has been revalued at $210,000.The property was estimated as having a useful life of 20 years when it was purchased. What amountwould be transferred to revaluation reserve?
a.
34000
b.
136000
c.
210000
d.
74000..A
An error which occurs when an entry is made to the wrong account of a different class, a norminal account is debited to a real account is an error of:
Compensation
Principle..A
Original Entry
Ommission
A general journal records transactions according to the manner in which they will be posted to the respective______________
a.
Account..A
b.
Debit
c.
Ledger
d.
Credit
According to International Accounting Standards Board (IASB) conceptual framework for the preparation and presentation of financial statements a Liability
a.
A future economic benefits are expected to flow to the entity.
b.
A resource controlled by the entity as a result of past events
c.
A present obligation of the entity arising from past events..A
d.
Assets values are overstated and profit understated
One of the following items is not of revenue expenditure.
Wages
Incidental freight..A
Discount allowed
Repairs
Which one of these is not an item of current liabilities:
Prepaid insuranc..A
Overdraft
Income in advance
Account payable
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The reconciliation statement is done using two basic transaction namely; I)Uncredited cheques II)Dishonoured cheques III)Unpresented cheques IV)Bank charges
a.
I and III only..A
b.
III and IV only
c.
III only
d.
I only
Information that must be capable of being compared from period to period within the same entity is?
Comparability..A
Verifiability
Accountability
Prudency
A business\’s bank balance increased by $750,000 during its last financial year. During the same period itissued shares of $1 million and repaid a loan note of $750,000. It purchased non-current assets for$200,000 and charged depreciation of $100,000. Working capital (other than the bank balance) increased by$575,000.What was its profit for the year?
a.
1275000
b.
1325000
c.
1375000
d.
1175000..A
One of these is not an advantage of computerised accounting system.
a.
Accuracy
b.
Speed
c.
Back-up
d.
Inaccurate data entry..A
A sole trader\’s business made a profit of $32,500 during the year ended 31 March 2018. This figure wasafter deducting $100 per week wages for himself. In addition, he put his home telephone bill through thebusiness books, amounting to $400 plus sales tax at 17.5%. He is registered for sales tax and therefore hascharged only the net amount to his statement of comprehensive income.His capital at 1 April 2017 was $6,500. What was his capital at 31 March 2018?
a.
33730
b.
38930..A
c.
33800
d.
39000
A business can make a profit and yet have a reduction in its bank balance. Which ONE of the following might cause this to happen?
a.
The charging of depreciation in the statement of comprehensive income
b.
The sale of non-current assets at a loss
c.
The lengthening of the period of credit given to customers..A
d.
The lengthening of the period of credit taken from suppliers
Non Current assets are distinguished from current assets by the following characteristics EXCEPT
a.
Used to generate Income directly or indirectly for a business
b.
Not normally acquired for resale
c.
Long-term in nature
d.
Usually stock in trade..A
A manufacturing company receives an invoice on 29 February 2020 for work done on one of its machines.$25,500 of the cost is actually for a machine upgrade, which will improve efficiency. The accountsdepartment do not notice and charge the whole amount to maintenance costs. Machinery is depreciated at25% per annum on a straight-line basis, with a proportional charge in the years of acquisition and disposal.By what amount will the profit for the year to 30 June 2020 be understated?
a.
$21250\’
b.
$23375\’..A
c.
$25500\’
d.
$19125\’
The following were obtained from the books of Alonge& Sons Nig. for half-year 2020:NSales ledger balances, 1 January 2020: – Debit N20,040- Credit N56Purchases ledger balances, 1 January 2020: – Debit N12- Credit N14,860Activities during the half-year to 30 June 2020:Payments to trade accounts payable N93,685Cheque from credit customers N119,930Total purchases (credit purchases N95,580) N186,000Total sales (credit sales N124,600) N350,070Bad debts written off N204Discounts allowed N3,480Discounts received N2,850Returns inwards N1,063Returns outwards N240Sales ledger credit balances at 30 June 2020 N37Purchases ledger credit balances at 30 June 2020 N26Provision for bad debts N230Cash refund to credit sales customers N5,120 Cash refund cash sales customers N1,240Cash refund from credit suppliers N850Cash refund from cash purchases suppliers N910Balances in the sales ledger set off against purchases ledger N438Dishonoured cheque N2,300. The balance of purchase ledger control account is……………..
a.
N152,097
b.
119930…
c.
N26,926
d.
124600
The following were obtained from the books of Maryam & Sons Nig. for half-year 2018:NSales ledger balances, 1 January 2018: – Debit N20,040- Credit N56Purchases ledger balances, 1 January 2018: – Debit N12- Credit N14,860Activities during the half-year to 30 June 2018:Payments to trade accounts payable N93,685Cheque from credit customers N119,930Total purchases (credit purchases N95,580) N186,000Total sales (credit sales N124,600) N350,070Bad debts written off N204Discounts allowed N3,480Discounts received N2,850Returns inwards N1,063Returns outwards N240Sales ledger credit balances at 30 June 2018 N37Purchases ledger credit balances at 30 June 2018 N26Provision for bad debts N230Cash refund to credit sales customers N5,120 Cash refund cash sales customers N1,240Cash refund from credit suppliers N850Cash refund from cash purchases suppliers N910Balances in the sales ledger set off against purchases ledger N438Dishonoured cheque N2,300. The balance of sale ledger control account is……………..
a.
N93,685
b.
N14,091
c.
N95,580..
d.
N111,316
The cash book and bank statement of XYZ Consults revealed the following balances at the end of its financial year 31 December 2018: Cash book N96,800 DR, Bank statement N107,000 DR.Further discoveries made were:i. Unpresented cheques at the year-end amounted to N74,200ii. Uncredited cheques amounted to N258,000iii. A cheque payment to a creditor with a value of N55,100 was recorded in the cash book as N51,500iv. Standing order payment of N17,000 for trade association subscription captured in the bank statement has not been recorded in the cash book.v. A customer of the firm makes a direct payment to the bank through wire transfer for the sum of N25,000 and the credit advice was received before the cash book was balanced. However, this amount was entered on the reversed side of the cash book.vi. A supplier made a cheque payment directly into the bank account as a refund for excess billing and this amount is in the bank statement but not yet recorded in the cash book. The amount involved is N8,500.vii. The following amounts in the bank statement are not yet recorded in the cash book: bank charges N35,600 and overdraft interest N22,300.viii. A third party cheque of N18,000 lodged with the bank was dishonoured but this has not been reflected in the cash book. the balance of adjusted cash book of XYZ Consults will be……………….
a.
N2,353
b.
N76,800…A
c.
N3,283
d.
N1,200
Drawings are basically found in the books of sole proprietorship as a result of owners________________
a.
Withdrawal of cash
b.
All of the above..A
c.
Withdrawal of assets
d.
Withdrawal of goods
A profit represents the surplus of revenue over expenses while a loss is
a.
Surplus of expenses
b.
The excess of expenses over revenue..A
c.
Loss over Profit
d.
Profit over loss
The difference between the sales revenue and cost of sales is knomn as …………..
a.
Gross profit…A
b.
Gross raw materials
c.
Net profit
d.
Receivables
Given that a business venture bought machinery for N450,000 with payment of N300,000 and the balance on account due in one year, the general journal would record this transaction as
a.
Machinery account debit of N300,000 and credit cash account with N450,000, account payable with N150,000.
b.
Machinery account debit of N450,000 and credit cash account with N300,000, account payable with N150,000..A
c.
Machinery account debit of N450,000 and credit cash account with N150,000, account payable with N300,000.
d.
Machinery account credit of N450,000 and debit cash account with N300,000, account payable with N150,000.
One of the following items is not of revenue expenditure.
Incidental freight..A
Repairs
Discount allowed
Wages
A trader\’s net profit for the year may be computed by using which of the following formulae?
a.
Opening Capital
b.
Opening capital + drawings capital introduced closing capital
c.
Closing capital + drawings capital introduced opening capital..A
d.
Opening capital drawings + capital introduced closing capital
Which of the following calculations could produce an acceptable figure for a trader\’s net profit for a period if no accounting records had been kept?
a.
Closing net assets plus drawings minus capital introduced minus opening net assets…A
b.
revenue figure cannot be calculated from this information
c.
Closing net assets minus drawings plus capital introduced minus opening net assets
d.
Closing net assets minus drawings minus capital introduced minus opening net assets
The reconciliation statement is done using two basic transaction namely; I)Uncredited cheques II)Dishonoured cheques III)Unpresented cheques IV)Bank charges
a.
I only
b.
III and IV only
c.
I and III only
d.
III only
The distinction between the sales revenue and cost of sales is referred to as ……..?
Net profit
Gross profit…
Receivables
Gross material
Adamu Baike Dairy uses sophisticated machines to produce evaporated milk. In June 2019, it sold one of its dairy machines that cost N150,000 for N30,000 cash. The accumulated depreciation on the machine is N110,000.Determine the gain or loss. What would be the gain or loss if the accumulated depreciation were N132,000?
a.
150000..
b.
-10000
c.
-110000
d.
30000
Depreciation is
a.
The amount spent to buy a non-current asset
b.
The part of the cost of non-current asset consumed during its period of use by the company..A
c.
The salvage value of a non-current asset
d.
The amount of money spent replacing non-current assets
On 1st July 2020, Makela had accounts receivable of N50,000 on which he had made an allowance of 2%. During the financial year, the following information emerged:(i) Debt N2,000 owed by Ian only realised N700 and the balance declared bad(ii) Other bad debts written off during the year amounted to N4,300(iii)Bad debts written off in 2019 now recovered N800(iv) Accounts receivable balance as at 30th June 2021 is N58,500 before adjusting for:a. Trade debt of N1,800 owed by Morgan is certified uncollectibleb. A number of cheques for N3,200 received from debtors were dishonoured by the banksc. Allowance of doubtful debts at 4%. What is the value of bad debt recovered?
a.
N233.83
b.
N114,901.50…A
c.
N660
d.
N2,396
Given that a motor van is acquired for N55,000 with an estimated useful life of 5 years and the residual value of N5,000, the annual depreciation charge will be………………..using straight line method
a.
N5,000,
b.
N17,150
c.
N55,000
d.
N10,000…A
…………
Non-current assets acquired by a business entity are treated as a?
Capital expenditure…A
Revenue expenditure
Operating activities
Investing activities
An approach that maintains inventory record on a continous basis whenever there is movement in the level of inventory whether through purchases or sales is……………….
a.
Computerised accounting approach
b.
Relevancy approach
c.
Perpetual inventory approach…A
d.
FIFO method
A temporary account where the difference between the debit side and credited side of the trial balance is placed untill the errors that caused the difference are detected and corrected is refers to as what?
a.
Error account
b.
Suspense account…A
c.
Ledger account
d.
Petty cash account
Which of the following is an advantage of control account.
It helps in preparing trading account.
It is a useful instrument of fraud prevention and control….A
It is useful in punishing frausters.
It shows the expenditure of the entity.
An approach that maintains inventory record on a continous basis whenever there is movement in the level of inventory whether through purchases or sales is……….
Relevancy approach
LIFO approach
Perpetual inventory…A
Computerised accounting approach
Profit and loss account is prepared to determine.
Strength of the company
Gross profit
Net profiy
Company\’s performance…A
A method of depreciation in which a fixed amount is charged to the Income Statement every year is………………method
a.
Sum of the yeas digits
b.
Reducing Balance
c.
Straight Line..A
d.
Sinking Fund
Assuming the debit side of an account shows a balance of N582,900 and the credit totals is N580,900, this error can be regarded as…….
a.
error of commission
b.
wrong punching of the calculator…A
c.
None of the Above
d.
error of commission
Which of the following is NOT information to be disclosed in financial statements?
a.
Directors Report…A
b.
Statement of financial position
c.
Statement of comprehensive income
d.
Statement of accounting policies
The computer programs that assist book-keepers and accountants in recording and reporting on a financial transaction is referred to as:
a.
Financial accounting system
b.
Manual accounting system
c.
Accounting software..A
d.
Computerised accounting system
Non Current assets are distinguished from current assets by the following characteristics EXCEPT
a.
Long-term in nature
b.
Used to generate Income directly or indirectly for a business
c.
Not normally acquired for resale
d.
Usually stock in trade…A
Usman Cottage Farm acquired a tractor on 1st January 2019 at the cost of N5 million and paid the vendor N3 million cash on same day with the balance payable in two equal annual instalments on the anniversary of the purchase.Which account should be debited?
a.
Vendor Account…A
b.
Hiree Account
c.
Tractor Account
d.
Cash Account
In times of rising prices, what effect does the use of historical cost concept have on the values of a company assets and profit?
a.
Assets values are overstated and profit understated
b.
Assets values and profit are not affected
c.
Assets values and profits are both understated
d.
Assets values are understated and profit overstated…A
N10,000 received from John Marku was entered on the payments side of the cash book with the double entry completed in his account. The journal entries to correct the error are
a.
Dr. John Marku account N10,000 Cr. Cash book with N10,000…A
b.
Dr. Cash book with N10,000 Cr. John Marku account N10,000
c.
Dr. Cash book with N20,000 Cr. John Marku account N20,000
d.
Dr. John Marku account N20,000 Cr. Cash book with N20,000
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The following data of accruals and prepayments relate to APC for Change, a trading entity located in PDP State of INEC Republic:Balances as at 30th June 2019:Rent prepaid N58,000Salaries accrued N45.300Commission received in advance N14,500Electricity prepaidN24,000Balances as at 30th June 2020:Outstanding rent N36,200Prepaid salaries N38,750 Commission in arrears N26,300Electricity prepaidN12,000During the accounting year, APC for Change recorded the following transactions:Paid rent of N254,000 by chequePaid Salaries of N578,000 through bank transferCommission receivedN98,760 by CashElectricity paid by cash N87,000. The total value of accrued rent is……………..
a.
N12,000
b.
N12,000..A
c.
N38,750
d.
N36,200
Inventories are generally referred to as the
a.
Unsold portion of goods held for resale…A
b.
Raw material
c.
Goods Sold
d.
Stocks
The basic three types of inventories are; I)Raw materials II)Work-in-progress Finished goods Iv)Opening stock V)Closing stock
a.
Iv,II,I only
b.
III,IV,V only
c.
I,V,II only
d.
I,II,II only…A
Which of the following is NOT an accounting convention?
a.
Materiality
b.
Consistency
c.
Realisation…A
d.
Prudence
when an entity pays rent of N180,000 for 18 months period, the first N120,000 relates to the current financial year while the remainder N60,000 0 represents ………………..
a.
Goodwill
b.
Bankoverdraft
c.
Accruals
d.
prepayment…A
Which of this error can affect the balances of the trial balance.
Error of Original entry
Error of Transposition
Error of ommission..A
Error of Commission
A quality of financial information that allows a choice to be made among alternative courses of action is said to be
a.
Verifiable
b.
Understandable..A
c.
Faithfully represented
d.
Comparable