What is the classification and recording of business transactions in the books of account? *BookKeeping* Rudimentary form of accounting started with bookkeeping by _________ *Luca Pacioli* An ________ in his book titled “Summa de Arithmetical, Geometrica, proportioni et proportionalita,” published in 1494 on Arithmetic, Geometry and Proportion, he devoted a chapter to expound the principles of the double entry system. *Italian monk* The starting point in the study of accounting is ________; others are cost accounting, management accounting, auditing, government accounting, and tax management. *financial accounting* __________ is the procedure for accumulating data to provide information for managerial action. *Cost accounting* __________ is the process of recognizing and reflecting in the appropriate books of accounts and records government generated revenue and disbursed expenditure in such a way as to extract with ease relevant financial information vital for appropriate decision making from time to time, and in compliance with the laws regulating government finances. *Government accounting* The ________ system refers to the keeping of accounting record by hand written of relevant posting in the books of accounts. It means that electronic device such as computer is not used in posting. *manual accounting* A set of numbers and codes that define each account head and also differentiate between classes of accounts is known as _________ *chart of accounts* ____ can be defined as broad basic assumptions that underlie the periodic financial statements of business enterprises. *Accounting concepts* Going by the International Financial Reporting Standards (IFRS) that is now in operation globally, the current name for Balance sheet is _______ *Statement of Financial Position* Going by the International Financial Reporting Standards (IFRS) that is now in operation globally, the current name for Profit and Loss Account is _______ *Statement of Comprehensive Income* In a business, the ownership interest or claims are called _____________ *Owner's equity* ______ can be defined as a tangible or intangible resource that is owned or controlled by an accounting entity, and which is expected to generate future economic benefits *Asset* _______ are amounts provided to allow for liabilities that are anticipated but not yet quantified precisely, or for reductions in asset values. *Provisions* Which is the most common form of payment in business because of its convenience and safety? *Cheque* The law requires the seller to give the buyer a receipt for goods or services that have been paid for in cash. However, there is no legal requirement to do so in the case of payments by _______. *Cheque* The main book of account in which all transactions are recorded is called _______. *Ledger* The __________ in which is recorded cash received and cash paid. It is written up from receipts or petty cash vouchers where employees are reimbursed expenses. *petty cash book* The _____________ in which are recorded cheques received (and cash paid into the bank) and payments made by cheque (and cash withdrawn from the bank). This is written up from the bank paying-in book stub and cheque book stubs *Cash book* The _______ in which is recorded the goods purchased on credit that are returned to suppliers. It is written up from the credit notes received from suppliers. *purchases returns day book* The accounting entries required to post the motor van on credit and the sale of fixtures and fittings are first recorded in the __________ before they enter the general ledger. *Journal* _______ are generally referred to as the unsold portion of goods held for resale. *Inventories* When a trial balance does not balance and there is no time or it is inconvenient to immediately locate and correct the errors because the final accounts are urgently required, the Trial balance can be made to balance by inserting the balance figure and describing it as _________. *Suspense account* ________ are goods previously sold to customers but were later returned either in whole or in part probably as a result of: i. Wrong specification, model, colour etc. ii. Deficiency iii. Disagreement between the buyer and seller that can be traced to either pricing, discount, payment terms etc. iv. Shortage in quantity, weight and other measuring discrepancies. v. Government policy. *Return Inwards* ____ represents the cost of transporting goods meant for resale into the organisation. *Carriage inward* The _______ represent the value of stock of goods that are meant for sale which a business has at the end of the accounting year or a stated period or date. *closing stocks* __________ is the profit derived after all expenses and cost of sales have been deducted from the net income including sales of goods and other income. *Net profit* What type of error in accounting involves wrong addition of figures? *Casting error* What type of error involves a situation in which errors cancel each other out? *Compensating Errors* What type of error is made whereby a transaction is posted to the wrong class of accounts? *Error of Principle* What type of error occurs when a transaction is recorded with the wrong amount at the beginning of the recording process i.e. errors that are made when the source document is being raised or when the source document is being posted to the appropriate subsidiary book? *Error of Original Entry* The _________ helps to ascertain the arithmetical accuracy of all the postings made. *trial balance* Which method inventory valuation uses a predetermined rate set by the entity’s management for the purpose of calculating the cost of sales and inventory? *Standard cost* The assumption is that the last batches of goods are considered to be sold first prior to earlier purchases. This means that later batches are assumed to be sold before earlier ones. This method is known as _________ *Last In First Out* What method of valuing inventory has the underlying assumption that earlier purchases of goods for resale are considered sold prior to subsequent purchases? *FIFO* Break-Even point (B. E. P.) is determined as the point where total income from sales is equal to total expenses (both fixed and variable). Strongly Agree One of these does not support C-V-P Analysis Assumptions All costs cannot be resolved into fixed and variable elements What type of accounting system of any organization is the foundation of the internal financial information system? cost Which unit of organisation needs a variety of information to plan, to control and to make decisions? Management unit What may be defined as “Gathering of cost information and its attachment to cost objects, the establishment of budgets, standard costs and actual costs of operations, processes, activities or products; and the analysis of variances, profitability or the social use of funds”? Cost Accounting What decisions are complex and many interacting factors need to be considered including: the type of market in which the firm operates, the degree of competition, demand and the elasticity of demand, the cost structure of the product and firm, the state of the economy and numerous other factors? Pricing decisions Costs may be classified in numerous ways, but a fundamental and important method of classification is into ________ and _______ costs. direct and indirect The three elements of indirect costs: indirect materials, indirect labour and indirect expenses are collectively known as ____________ overheads It follows therefore that direct costs do not have to be spread between various categories because the whole cost can be attributed directly to a production unit or saleable service. The total of direct costs is known as _______ Prime costs The sum of directs and indirect costs is equal to _____. Total costs _____ is the process of making the balance on the bank column of a cash book to agree with the balance on the bank statement received from the bank. Bank reconciliation These are cheques deposited into the bank, but which have not been credited to the customer’s account by the bank as at the date of preparing the bank statement. Uncredited lodgements These are payments made directly by the bank as a result of previous instructions given by the customer to the bank. They include an order to pay annual insurance premium, professional membership subscription etc. Standing Orders What type of accounting provides information to management of a business to help them take better decision and to improve upon the efficiency and effectiveness of existing operations? Management accounting Only complete and reliable financial statements can be of any use to the creditors, investors, government agents and other interested parties. To guarantee these, the accounts must be ____ by an independent person. audited Some of these are advantages of manual system over the computerised accounting system are except: The security of the manual system is threatening because it is prone to destruction by flood and fire deface without any back-up. What is a set of numbers and codes that define each account head and also differentiate between classes of accounts? Chart of Account The main statutory document for the regulation of business in Nigeria is the Companies and Allied Matters Act 1990 (as amended in _____ ) 2004 What involves an accounting process that starts with bookkeeping and ends with the preparation and interpretation of financial statements? Financial accounting Accounting information should possess the following qualities before users can rely on it. Incomparability Expenditure incurred to cover a long period of time as a result of which some portions are capitalised or deferred pending the time it is written off against the profit (in statement of profit or loss) for subsequent years e.g. preliminary expenses, research and development expenses, discount on shares etc. Fictitious assets What represents the value of money, properties and other resources brought in by the owner to start the business and other additions after the commencement of the business? Owner’s equity What are the services and goods that have been consumed or enjoyed during the year but which payment has not been made either in full on in part at the end of that financial year? Accrual What are goods and services that have been paid for, but the benefit is yet to be enjoyed or consumed either in full or in part known as? A good example is payment of rent in advance Prepayment These are amounts set aside out of profit earned by a company and constitute part of shareholders fund. Reserves Another name for control accounts is _________. Suppliers accounts The bank reconciliation becomes necessary as a result of differences between the _________ prepared by an account holder and the bank statement prepared by the bank. Cash book These are cheques which have been issued for payment by a bank account holder but have not been presented for payment at the bank as at the date the bank prepared the bank statement. Unpresented cheques A cheque may be dishonoured for the following reasons: If the cheque is dated correctly. A __________ is any item, process or activity for which a separate measurement of cost is required. Cost object The Break-even analysis, or more descriptively, ________ studies the relationship between costs, volume, sales and profit. cost-volume-profit analysis What is a summary of customers or suppliers ledger in total? Control account This type of reserve is distributed to the shareholder and other capital providers in form of debenture interest, retained profit etc. Revenue Reserves They are non-distributable reserves that are retained to comply with certain laws or for accounting requirement. e.g. capital redemption reserve fund, share premium, revaluation reserve etc. Capital Reserves They are reserves not set aside for a specific purpose General Reserves