1. The Term ‘accounting period’ is used to refer to the __.
A. period within which debtors are expected to settle accounts
B. time span, usually one year, covered by financial statement
C. time span during which taxes are paid to the Inland Revenue Board
D. budget period, usually one year, relied on by the accountant
2. Assigning revenues to the accounting period in which goods were sold or services rendered and expenses incurred is known as ___.
A. matching concept
B. consistency convention
C. adjusting for revenue
D. passing of entries
3. An effective accounting system should provide information __.
A. for customer feedback and requirement
B. on new products and methods
C. for promoters, directors, labour unions and distributors
D. on internal and external reporting for managers and third party
4. Which of the following accounting records are source documents?
A. Sales invoice and cash book
B. Sales invoice and debit note
C. journals and ledger
D. cash book and debit note
5. The instruments that are generated when firms enter into business transactions with others are called __.
B. source documents
C. purchases documents
6. The document that is used to acknowledge the acceptance of the return of goods by the seller from the buyer is known as __.
B. debit note
C. credit note
7. The act establishing the Institute of Chartered Accountants of Nigeria (ICAN) came into force on
A. 1st September, 1963
B. 1st October, 1960
C. 1st September, 1960
D. 1st October, 1963
8. An advantage of the use of the voucher system is that it __.
A. reduces the number of cheques that will be written during any given period
B. provides a highly flexible system for handling unusual transactions
C. ensures that every expenditure is reviewed and verified before payment is made
D. provides a comprehensive record of business done with particular suppliers
Use the information below to answer questions 9 and 10.
9. The total for the purchases ledger control account is __.
10. What is the balance c/d in the purchases’ ledger control account?
Use the information below to answer question 11 and 12.
11. Calculate the net profit
12.What is the gross profit margin?
13. The main objective of accounting report is to provide information about __.
A. a company's shareholders
B. the efficacy of assets
C. a company's economic resources
D. an entity’s management
14. If liabilities amounted to ₦12,045, other assets ₦360,800 and equity ₦26,896, the cash at hand would be __.
15. In preparing the final accounts, the Bad debt account is closed by a transfer to the __.
A. balance sheet
B. profit and loss account
C. trading, account
D. provision for bad debts account.
Determine the cost of goods sold.
17. Which of the following is used to update the cash book bank reconciliation?
A. Interest received and unpresented cheques
B. Commission and debit note
C. Interest received and direct credit
D. Unpresented cheques and direct credit
18. The two legally recognized professional accounting bodies in Nigeria are the __.
A. Nigerian Accounting Association and the Executive Cost and Management Accountants of Nigeria
B. Institute of Certified Public Accountants of Nigeria and the Institute of Cost and Management Accountants of Nigeria
C. Association of Accountants of Nigeria and the Institute of Management Accountants of Nigeria
D. Institute of Chartered Accountants of Nigeria and the Association of National Accountants of Nigeria.
19. A source document is used for verifying, the __.
A. amount due from debtors
B. selling, price of goods
C. actual cost of an asset
D. amount due to creditors
20. The rule of accounting equation requires that account payable should be placed under __.
21. The double entry principle of accounting was developed by __.
A. William Pickles
B. Akintola Williams
C. Luca Pacioli
D. Frank Wood.
22. The concept that has much influence over asset valuation and income determination is__.
Use the information below to answer questions 23 and 24.
On January 1 2005, a machine was bought for ₦56 000 to last for 5 years with a residual value of ₦1,000
23. Calculate the yearly depreciation expenses using the straight-line method.
B. ₦11 000
C. ₦11 300
24. The rate of the yearly depreciation expense would be __.
25. In the trading. profit and loss account of a manufacturing organization, purchases is __.
A. always the same amount as the total factory overhead cost
B. equivalent to the total cost of goods manufactured
C. always the same as the price cost
D. given separately
26. Goods worth ₦50 000 were sent at different times from head office to the branch during the year. By the end of the period, only ₦40 000 worth of goods had arrived at the branch. Which of the following is correct about the treatment of this transaction?
A. Branch should debit goods received from head office with ₦50 000
B. Head office should debit goods sent to branch account with ₦10 000
C. Head office should debit goods sent to branch account with ₦50 000
D. Branch should debit goods received from head office with ₦10 000
Calculate the total of the trial balance
A. ₦33 325
B. ₦41 850
C. ₦46 825
D. ₦64 300
28. Bariga, a stockbroker bought stationery for ₦12 000 by cash. To record this transaction, debit
A. cash and credit stationery
B. stationery and credit cash
C. stationery and credit purchases
D. purchases and credit stationery
29. Cash discount is often recorded on __.
A. the debit side of the cash book
B. the credit side of the cash book
C. both credit and debit side of the cash book
D. the folio column of the cash book
30. The standing order is a payment instruction given by a __.
A. customer to a fellow customer
B. bank to an employee
C. hank to the customers
D. customer to the bank
31. The major function of accounting bodies in Nigeria is to __.
A. promote the ethics of the profession
B. show the dynamic nature of the profession
C. provide good remuneration to the members
D. provide proper financial management of businesses
32. Ledger account is mainly classified into __.
A. fixed and current accounts
B. nominal. real and personal accounts
C. bank and cash accounts
D. management. financial and public sector accounting
33. The historical development of accounting reveals that it__.
A. is an ideal subject for financial development
B. is a product of its own environment.
C. deals with debit and credit of items
D. is a product of financial development
34. In a trial balance. income and liabilities are __.
B. credited and debited respectively
D. debited and credited respectively
35. Ibrahim, a micro business operator, sold 10 bags of sugar to Jide at total cost of ₦12 000. The record in Jide’s book would be to debit __.
A. purchases ₦12 000 and credit sugar account ₦12 000
B. purchases ₦12,000 and credit Ibrahim ₦12,000
C. Ibrahim ₦12,000 and sugar account ₦12,000
D. Jide ₦12,000 and credit purchases ₦12,000
Determine the bank balances.
A. ₦6,950 credit
B. ₦6,000 credit
C. ₦6,000 debit
D. ₦6,950 debit
37. Accounting information seeks to provide__.
A. analysis of accounts to trade debtors
B. permanent records for all transactions
C. audited reports on the accounts of a company
D. data about the employees of a company
38. When the debit side total of an account exceeds the credit side total while balancing an account, it means that the account has __.
A. debit balance
B. credit balance
C. been understated
D. been overdrawn
39. One of the differences between bookkeeping and accounting is that the former __.
A. records data while the latter interprets it
B. is regarded as the language of the business while the latter ascertains its strength
C. interprets data while the latter records it
D. summarizes information while the latter communicates it
40. The concept which states that revenue should recognized at the point when the sale is deemed to have been made is __.
C. going concern