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Question 1 Report
Stationery which will be used over a long period of time is usually recorded as an expense instead of an asset. This concept is called
Answer Details
This concept is called "materiality."
Question 2 Report
Recurrent expenditures are expenses for the period not exceeding
Answer Details
Recurrent expenditures are expenses that are incurred repeatedly over a short period of time, typically within one fiscal year. So, the correct answer would be: - 1 year
Question 3 Report
Which of the following stock valuation method is suitable under inflationary conditions?
Answer Details
Question 4 Report
Use the information below to answer this question:
i. cash at bank ii. cash in hand iii. premises iv. land v. creditors vi. loan from friends/bank
Determine the fixed assets
Answer Details
- iii and iv (premises and land) are considered fixed assets. Fixed assets are long-term tangible assets that a company uses to produce income and are not expected to be converted into cash within the normal operating cycle of the business. They are usually held for a period of more than one year and are not intended for sale in the ordinary course of business.
Question 5 Report
Given:
Depreciation of plant and machinery Factory rent Indirect wages General indirect expenses Lubricants Carriage inwards Factory power Bank charges Carriage outwards |
₦ 1,600 650 695 726 1,235 829 350 612 2,900 |
Determine the total factory overhead cost
Answer Details
Question 6 Report
Capital and revenue expenditures of government are usually accounted for under funds which include
Answer Details
Question 7 Report
The corresponding entry of personal accounts found in the debit side of the cashbook is to
Answer Details
Question 8 Report
Use the information below to answer this question
A company advertised and issued 750,000, 12% preference shares of N1 each to be issued ₦1.50 per share. Applications for 1,370,000 were received at 30k per share. 70k per share (including premium) was due on allotment while 25k per share was due on each of the remaining two calls. All amounts due were received. Application money for 120,000 shares was refunded to unsuccessful applicants and the remaining applicants were allotted shares on prorata basis.
The second final call account was debited with
Answer Details
The second final call account was debited with the 12% preference share capital account ₦187,500.
Question 9 Report
Use the information below to answer this question
Zahki Plc balance sheet (extract) as at 31st December 1997.
₦ ₦
Paid up capital 200,000 Fixed assets 300,000
Share premium 15,000
Profit and loss account 60,000 Investment 180,000
Long-term loan 180,000 Stock 28,000
Debtors 90,000
Creditors 200,000 provision(3000) 87,000
Other current liabilities 100,000 Cash 60,000
Bank 100,000
755,000 755,000
The quick ratio is
Question 10 Report
The accounting method that reports incomes when earned and expenses when incurred is called
Answer Details
The accounting method that reports incomes when earned and expenses when incurred is called accrual accounting.
Question 11 Report
Use the information below to answer this question:
i. cash at bank ii. cash in hand iii. premises iv. land v. creditors vi. loan from friends/bank
What are the current assets?
Answer Details
The current assets are i and ii (cash at bank and cash in hand).
Question 13 Report
Use the information below to answer the question
Gross profit b/d Less: Salaries and wages Electricity Depreciation Net profit c/d |
Dept A |
Dept B ₦ 4,000 1,200 ? ? 1,600 4,000 |
Total |
It is the tradition of the organization to apportion expenses in the proportion 60%:40% for A and B respectively.
The depreciation to be charged to department B is
Answer Details
- ₦400
Question 14 Report
The purchase consideration that is lower than the net asset implies that, the buyer has gained the advantage of
Answer Details
Question 15 Report
Use the information below to answer this question
Zahki Plc balance sheet (extract) as at 31st December 1997.
₦ ₦
Paid up capital 200,000 Fixed assets 300,000
Share premium 15,000
Profit and loss account 60,000 Investment 180,000
Long-term loan 180,000 Stock 28,000
Debtors 90,000
Creditors 200,000 provision(3000) 87,000
Other current liabilities 100,000 Cash 60,000
Bank 100,000
755,000 755,000
Determine the owner's equity
Question 16 Report
If a company values its stock in the period of rising prices using LIFO method, there is a tendency for it to
Answer Details
Question 17 Report
Use the information below to answer this question
A company advertised and issued 750,000, 12% preference shares of N1 each to be issued ₦1.50 per share. Applications for 1,370,000 were received at 30k per share. 70k per share (including premium) was due on allotment while 25k per share was due on each of the remaining two calls. All amounts due were received. Application money for 120,000 shares was refunded to unsuccessful applicants and the remaining applicants were allotted shares on prorata basis.
The share premium account would be
Answer Details
The share premium account would be credited with the application and allotment of ₦375,000. This can be calculated as follows: - Total amount received for the 1,250,000 shares allotted: 70,000 x 1,250,000 = ₦87,500,000 - Total amount received for the 120,000 shares refunded: 30,000 x 120,000 = ₦3,600,000 - Total premium received: ₦87,500,000 + ₦3,600,000 = ₦91,100,000 - Total premium received per share: ₦91,100,000 / 1,250,000 = ₦72.88 - Premium received in excess of the issue price: ₦72.88 - ₦15 = ₦57.88 - Total premium received in excess of the issue price: ₦57.88 x 1,250,000 = ₦72,350,000 - The share premium account would be credited with the application and allotment of ₦72,350,000.
Question 18 Report
Use the information below to answer this question
At the end of a financial period, the trading profit and loss account of a sole trader shows a profit of
₦180,000 it is however discovered that revenue of
₦15,000 is recorded as expenses while expenses of
₦4,000 is recorded as revenue.
Determine the adjusted net profit
Question 19 Report
The two leThe two legally recognized professional accounting bodies in Nigeria are the gally recognized professional accounting bodies in Nigeria are the
Answer Details
The two legally recognized professional accounting bodies in Nigeria are the Institute of Chartered Accountants of Nigeria (ICAN) and the Association of National Accountants of Nigeria (ANAN).
Question 20 Report
Use the information below to answer the question
Gross profit b/d Less: Salaries and wages Electricity Depreciation Net profit c/d |
Dept A |
Dept B ₦ 4,000 1,200 ? ? 1,600 4,000 |
Total |
It is the tradition of the organization to apportion expenses in the proportion 60%:40% for A and B respectively.
What is the net profit made by department A?
Answer Details
To find the net profit made by Department A, we need to determine the values of the missing amounts in the table. According to the tradition of the organization, expenses are apportioned in the proportion 60%:40% for A and B respectively. We can use this information to calculate the missing amounts in the table: - Salaries and wages: ₦3,000 x 60% = ₦1,800 for Department A, and ₦3,000 x 40% = ₦1,200 for Department B. - Electricity: ₦2,000 x 60% = ₦1,200 for Department A, and ₦2,000 x 40% = ₦800 for Department B. - Depreciation: ₦1,000 x 60% = ₦600 for Department A, and ₦1,000 x 40% = ₦400 for Department B. Now that we have determined the values of the missing amounts, we can calculate the net profit made by Department A: Gross profit: ₦6,000 Less: Salaries and wages: ₦1,800 Less: Electricity: ₦1,200 Less: Depreciation: ₦600 Net profit: ₦6,000 - ₦1,800 - ₦1,200 - ₦600 = ₦2,400 Therefore, the net profit made by Department A is ₦2,400.
Question 21 Report
The ordinary shareholders enjoy the following right except the right to
Answer Details
Question 22 Report
A source document is used for verifying the
Answer Details
A source document is used for verifying the amount due from debtors, the amount due to creditors, and the actual cost of an asset.
Question 23 Report
The issued share capital is the number of shares that are
Answer Details
authorized by the shareholders
Question 25 Report
Which of the following is a debit item in the purchase ledger control account?
Answer Details
Question 26 Report
Use the information below to answer this question
At the end of a financial period, the trading profit and loss account of a sole trader shows a profit of
₦180,000 it is however discovered that revenue of
₦15,000 is recorded as expenses while expenses of
₦4,000 is recorded as revenue.
The revenue to be added as an adjustment is
Question 27 Report
Sales ledger control account contains the total amount in respect of
Answer Details
The sales ledger control account contains the total amount in respect of debtors, who are individuals or companies that owe money to a business for goods or services they have purchased on credit. The sales ledger control account is used to track the amounts owed to the business by its customers and is an important part of a business's financial record-keeping system.
Question 28 Report
The formular for calculating depreciation using straight line method is
Answer Details
The formula for calculating depreciation using the straight-line method is: (Cost - Scrap Value) / Useful Life.
Question 29 Report
In a departmental accounting system, which of the following expenses will most likely be apportioned on the basis of turnover
Answer Details
Question 30 Report
Forlah, a stock broker bought stationery for ₦12,000 by cash. To record this transaction, debit
Answer Details
The correct way to record this transaction is to debit stationery and credit cash. This is because when a stock broker buys stationery for cash, the company's stationery account increases (debit) and the company's cash account decreases (credit).
Question 31 Report
Given:
₦
Total debtors b/d 31/12/99 25,000
Cheques received from debtors 255,000
Total debtors c/d 31/12/00 15,000
Calculate the sales figure
Answer Details
To calculate the sales figure, we need to determine the amount that was received from the debtors. We can do this by subtracting the total debtors b/d 31/12/99 from the total debtors c/d 31/12/00 and adding the cheques received from debtors. ((15,000 - 25,000) + 255,000) = 245,000 So, the sales figure is ₦245,000.
Question 32 Report
Given: i. The memorandum of association of the company ii. The article of association of the company iii. The incorporation documents.
From the above, which of the following is delivered to the registrar of companies for incorporation?
Answer Details
i, ii, and iii are typically delivered to the registrar of companies for incorporation. The memorandum of association outlines the purpose and objectives of the company, the names of the initial members, and the authorized share capital of the company. The articles of association set out the rules and regulations for the internal management of the company, including matters such as the appointment of directors, the conduct of meetings, and the distribution of profits. The incorporation documents include the memorandum and articles of association, along with other documents required by law, such as declarations of compliance and notices of appointment of directors. These documents are used to formally register the company with the relevant authorities and establish it as a separate legal entity.
Question 33 Report
Given:
₦
Bank overdraft 2,000
Cash 2,000
Furniture 4,000
Derive the total amount on the credit side of the trial balance
Question 34 Report
If goods are sent to branch at 25% on cost, what will be the cost of goods sent to the branch at a selling price of ₦100,000?
Answer Details
Question 37 Report
The excess of income over expenditure is usually transferred to the
Answer Details
The excess of income over expenditure is usually transferred to the accumulated fund.
Question 38 Report
Given:
Lankoh Company Ltd
₦
Stock 3,600,000
Cash at hand 800,000
Cash in bank 2,400,000
Debtors 580,000
Trade creditors 920,000
Bank overdraft 200,000
Tax liabilities 600,000
Salary owed to staff 180,000
What is the working capital?
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