ACC311 TMA Solutions

ACC311 List of Questions

Q1 Payments relating to the acquisition of the enterprise own equity investment is grouped under :
Financing activities
Investing activities
Operating activities
Business activities

Q2 Cash in hand, demand deposits and foreign currencies are examples of :
Cash equivalent
Cash flow

Q3 The activities under taken by an organization in pursuant to its objectives as indicated in the memorandum of Association and Articles of Association are grouped under :
Normal activities
Financing activities
Investing activities
Operating activities

Q4 The method of preparing cash flow by adjustment to net profit for the effects of any deferrals or accruals which are items of a non – cash nature is
Operating method
Financing method
Direct method
Indirect method

Q5 The actual amount of dividends paid should be recognized as an:
Outflow under finanacing activities
Inflow under financing activites
Outflow under investing activities
Outflow under operatiing activities

Q6 Cash flow arising from taxes on incomes should be separately disclosed and should be classified as cash outflow under:
Separately in a cash flow statement
operating activities
Financing activities
Investing activities

Q7 Cash in flow from Interest received should be recognized as an inflow under :
Financing activities
Investing activities
Operating activities
All of the above

Q8 Cash flows from transactions involving acquisition and disposal of non – current assets, investment properties and other productive assets needed or used in producing the enterprise usual goods and services other than inventory held for resale is cash flow from :
Operating activities
Financing activities
Investing activities

Q9 The method of preparing cash flow statement that reports gross cash receipts and disbursements related to operations is :
Direct method
Indirect method
Cash method
Direct balance method

Q10 Short term highly liquid investments that are readily convertible to known amount of cash and will be subject to an insignificant risk of changes in value is :
Cash in flow and Out flow
Cash investments
cash equivalents

Q11 ________ is a fundamental measure of business performance. It measures the overall returns from all investments
Net Profit margin
Return on capital employed
Gross Profit magin
Net profit percentage

Q12 Calculate the Earning Per share of Success Limited if profit before tax is â?¦1,464,970, taxation â?¦454,500 and a share capital of â?¦500,000 at 50k each

Q13 Calculate the quick ratio of Excellent Nigeria limited if current assets, Current liabilities and closing inventory â?¦2,989,000, â?¦1,165,000, â?¦950,000 respectively.
1. 67 ê?½ 1
2 . 56 ê?½ 1
0. 84 ê?½ 1
1 . 75 ê?½ 1

Q14 Extracts from the statement of financial position of ABC limited reveal that Trade receivables â?¦1,500,000, Trade payables â?¦1,701,000 and from Income statement credit purchases of â?¦5,250,000 and credit sales of â?¦13,600,000. Calculate the Trade Receivable collection period
40 days
45 days
118 days
60 days

Q15 To analyse the bank’s financial statements we use the acronym:

Q16 ________ measures the proportion of the current period earnings that was reinvested in the business for growth
P/E ratio
Retention ratio
Dividend per share

Q17 The ratio which shows the net return in percentage earned by each holder of ordinary shares of the company is :
Dividend cover ratio
Dividend payout ratio
Price Earnings ratio
Dividend yield ratio

Q18 The ratio which measures that proportion of the business assets that is financed with owner’s funds and in effect measures the degree of protection to unsecured creditors in the events of liquidation is :
Proprietary ratio
Gearing ratio
Debt/ Equity ratio
Interest cover ratio

Q19 The most acceptable norm for quick ratio is :

Q20 Comparing the ratio of one company with some other selected companies in the same industry at the same point in time is :
Time series analysis
Industry – Average analysis
Pro – forma analysis
Cross – Sessional analysis

Q21 WhIch type of debenture can only be repayable when the company goes into liquidation :

Q22 A company cannot proceed to make any allotment of its shares to the public for subscription unless the ————- of the issued amount has been received
Maximum subscription
Full subscription
Initial subscription
Minimum subscription

Q23 __________ involves the formation of a new business which acquires the assets and Liabilities of the two or more existing businesses which are then liquidated
Business combination

Q24 In company accounts , the balance in the share premium account is shown as a separate item in the statement of financial position grouped under the heading:
Revenue Reserve
General Reserve
Capital Reserve
Share Premium Reserve

Q25 To issue shares at a discount , the following conditions must be fulfilled EXCEPT:
The discount issue must be sanctioned by the court
At least one year must have elapsed since the date on which the company was entitled to commence business
The issues must be of a different class already in issue
The shares must normally be issued within the month after permission has been granted by the High court

Q26 Share premium account can be used for the following purposes only EXCEPT:
To pay dividend to existing share holders
To write off debentures
To write off expenses of issuing shares and debentures
To pay up unissued shares for distribution to members as bonus shares

Q27 When a company sells all the shares to an issuing house, usually a financial institution which in turn sells them to the public at a profit is :
Public offer
An offer for subcription
Private placement
Offer for sale

Q28 Issue of shares to existing shareholders at a price lower than the existing market price is :
Bonus issue
Offer for sale
Private placement
Right issue

Q29 _________ is a bond acknowledging a loan to a company
Share capital
Redeemable debenture

Q30 The internal surgical operation undertaken by a company by way of changing the capital sturcture is :
Controlling ownership
None of the above

Q31 _______ are amounts set aside out of profit earned by the company which are not designed to meet any liability, contingency, commitment or dimunition in value of assets known to exist at the statement of financial position date

Q32 Items found in Appropriation account include the following EXCEPT:
Transfer to Reserves
Interim dividend
Loan interest
Proposed dividend

Q33 The account where profit after tax is shared is called :

Q34 _________ is the acceptance of the offer to take up shares
Paid up capital

Q35 _________ relates to money received prior to payment being requested
uncalled- up capital
calls in arrears
calls in advance
Paid up capital

Q36 ________ applies when a retatively large , dominant business acquires the assets and possibly the liabilities of one or more existing businesses

Q37 _________ is a situation whereby a company issues shares to existing shareholders without asking for payment.
Offer for sale
Private placement
Rights issue
Script issue

Q38 _________ document which gives legal authority to the company to operate as a legal personality
Certificate of incorporation
Memorandum of Association
Articles of Association

Q39 ________ shares entiled its holders to additional dividend aside their fixed rate of dividend in the year of huge profit
Participitating prefernce shares
Cumulative preference shares
Redeemable Preference shares
Convertible Preference shares

Q40 ________ is the price per share as stated in its memorandum of association
Discount price
Premium price
Market price
Par value

Q41 In the absence of any partnership agreement, the partnership Act, 1890 stands. The Act includes the following EXCEPT:
There should be no interest on capital
There should be no interest on drawings
There should be 10% interest on loan
Profits and losses should be shared equally

Q42 ___________ partner allows his name to be used by the firm for prestige and reputation purpose
sleeping partner
Quasi Partner
Limited partner
Dormant Partner

Q43 Where there is a change in partnership, it may become necessary for the assets of the firm to be————

Q44 The type of goodwill which does not arise from acquisition of a business by another but it is generated internally is known as:
Inherent goodwill
Purchased goodwill
Positive goodwill
Negative goodwill

Q45 What rule states that “where upon dissolution, a partner’s capital is in debit and he is unable to contribute the full deficiency, the loss must be divided amongst the solvent partners”
Dissolution rules
Partnership Act 1890
Garner VS Murray
Partnership deed

Q46 A situation where two existing partnerships decide to join together and form one firm is ————-
Joint venture

Q47 XYZ partnership profits for the three years ended 31st December, 2016 were 2014 â?¦100,000, 2015 â?¦60,000 and 2016 â?¦30000. The XYZ partnership has agreed to value goodwill for purpose ofchange in partnership a 2 years purchase of average profit
â?¦ 60,000
â?¦ 30,000
â?¦ 120,000

Q48 ________ simply means those profits in excess of normal profit which a business might be expected to make:
Excess profit
Super profit
Inherent profit

Q49 _______ arises as a result of acquisition of one business by another
Permissive goodwill
Inherent goodwill
Purchased goodwill

Q50 The benefit and advantage of good name, reputation and connection of a business which has been carried on for some time previously is :

Q51 What adjustments should be made in the books of the head office in branch accounts when cash are in transit
Dr. Cash in transit a/c and Cr. Branch Current a/c
Dr. Branch current a/c and Cr. cash in tansit a/c
Dr. Head office current a/c and Cr. Cash in transit a/c
Dr cash in transit a/c and Cr. Head office current a/c

Q52 In branch accounts what adjustments should be made in the books of the head office when goods are in transit
Dr. Branch Current a/c and Cr. Goods in transit a/c
Dr. Head office current a/c and Cr. Goods in transit a/c
Dr. Goods in transit a/c and Cr. Branch current a/c
Dr Head office current a/c and Cr. Branch current a/c

Q53 When goods are sent to the branch along with pro- forming invoice, the transfer price can also be referred to as :
Cost price
Invoice price
Cost plus mark- up
selling price

Q54 The difference of a credit balance in a translated trial balance of a foreign branch means there is:
An exchange gain
An exchange loss
An exchange contra entry
An exchange super account

Q55 The difference between the debit and credit side of the translated trial balance of the foreign branch is the:
Current Account
Foreign balance
Translation difference
Exchange diffference

Q56 A branch that has its own separate accounting records is ________ branch
An independent
A dependent branch
A local branch
A foreign branch

Q57 The column in branch inventory which does nto form part of the double entry system in branch account is called:
Inventory column
Branch column
Memorandum column
Adjustment column

Q58 The account where all resources and all remittances are maintained in branch account is :
Current Account
Memorandum account
Branch account
Head office account

Q59 The method employed to translate the trial balance of a foreign branch where the investing company view its investment in the share capital of the foreign operations rather than investment in the individual assets and liabilities is :
Historic rate method
Gross Investment method
Temporal method
Closing rate method

Q60 The method employed to translate the trial balance of a foreign branch where the investing company views its investment in the individual assets and liabilities of the overseas operations is the :
Gross Investment method
Temporal method
closing rate method
Net Investment method

Q61 If commission expense is â?¦88,000, using the proportion of sales figures of â?¦1,200,000 ad â?¦800,000 respectively. What is the commision expense for department A

Q62 What is the value of electricity expenses by department B if electricity expense for the company is â?¦30,000 and the company uses the total floor ratio of 2:5 to apportion expenses

Q63 What if sales for Dept A and Dept B is â?¦1,200,000 and â?¦800,000 and discount allowed is â?¦24,000, what is the discount allowed expense for each department?
14,000 â?¦9,600
12000 , â?¦12,000
9,600 , â?¦14,400
14,000 , â?¦10000

Q64 If purchases for Dept A is â?¦944,000, Dept B â?¦65,000 and discount received expense is â?¦100,000. What is the discount received expense for each department using the proportion fo pruchases of each dept
â?¦41,000 â?¦59000
â?¦50000 â?¦50000
â?¦59,000 â?¦41,000
â?¦40,000 â?¦60,000

Q65 Extracts from NOUN Nig. Ltd information show cleaning expenses of â?¦60,000. What is the cleaning expenses for Dept A. if dept A and B occupy floor area in the raio of 2: 5 respectively

Q66 The unsold closing inventory acquired form another department will appear on the ——— side of the statement of financial position
  Non â?? current asset
Current liability
Non â?? current liability
Current asset

Q67 At the end of the accounting year, the journal entry to eliminate the unrealized profit in creation of inventory reserve is :
Dr. Profit or loss account and Cr. Inventory Reserve
Dr. Inventory Reserve and Cr. Profit or loss a/c
Dr.Inventory Reserve and Cr. Unrealized Profit a/c
Dr. Inventory account and Cr. Profit or loss account

Q68 The basis of allocating depreciation expenses of each department is :
No of employees using the asset
Assets employed by each department
      The location of the asset
The method of depreciation used

Q69 The basis of allocating rent and rates in departmental accounts is :
No of employees in the building
No of assets in the building
Amount of electricity consumed by each department
Floor area

Q70 Unrealized profit included in unsold inventory at the end of the accounting period is eliminated by creating an appropriate:
Profit reserve
Inventory reserve
Cost reserve
  Unrealized profit reserve

Q71    Goods and services may be charged by one department to another usually on either of the following bases EXCEPT:
Cost plus agreed percentage of profit
Ruling cost price
Ruling market price

Q72 One of the methods of keeping departmental accounts include:
Vertical method
Horizontal method
  Separate set of books are kept for each department
  Straight line method

Q73   The advantages of departmental account include the following EXCEPT:
  Determination of dividend accruing from each department
The progress of each department can be monitored
Policies can be formulated for each department based on their trading result.
It allows for error detection

Q74 The profit added in the inter â?? departmental transfer included in the unsold inventory is regarded as:
Inventory profit
Trading profit
   Realized profit
Unrealized profit

Q75   Example of an expense that cannot be apportioned in departmental accounts is:
Interest on loan
Wages/ salaries
Rent and rates

Q76 The basis of allocating carriage inward/ discount received in departmental account is :
Sales of each department
Purchases of each department
Time basis
No of carriage inward

Q77 Whenever goods or services are provided by one department to another, their cost should be separately recorded and credited to ————–
Both departments
To the department benefiting thereby
The department providing it
All of the above

Q78 Whenever goods or services are provided by one department to another, their cost should be separately recorded and Charged to ——-
The department benefiting thereby
The department providing it
To both departments
  None of the above

Q79 Departments which transfers goods from one department to another department for further processing are called:
Inter- related departments
Independent departments
Dependent departments
Related departments

Q80   In department accounts, departments which have negligible inter departmental transfers are called:
Negligible departments
Inter departments
Dependent departments
Independents departments


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