Hello and Welcome to SSCE (WAEC and NECO) Practice Test - Financial Accounting

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The accounting concept that states that a firm’s financial affairs must be separated from that of the owner’s private transactions is

A. business entity.    B. going concern.    C. consistency.    D. duality.

Which of the following is the equation for determining net profit or Loss from the records of a firm?

A. Closing Capital - Drawings- Capital Introduced
B. Opening Capital + Drawings - Closing Capital
C. Closing Capital + Opening Capital - Drawings
D. Closing Capital Drawings - Opening Capital

Advertising was paid by cheque covering 12 monthly instalments ending March 31, 2012.
Electricity was paid by cash covering 15 monthly instalments from March 1, 2011.

Advertising owing in respect of the year ended June 30, 2012 is

A. GHc 12,000.
B. GHc 9,000.
C. GHc 10 6,000.
D. GHc 3,000.

What is the ledger entry for the sale of plant and machinery on credit to Wilson?

A. Credit Sales Account and debit Cash Account
B. Credit Plant and Machinery Account and debit Wilson’s Account
C. Credit Sates Account and debit Wilson’s Account
D. Credit Plant and Machinery Account and debit Cash Account

Net profit for the year is

A. D 12,260.    B. D 3,740.    C. D 2,440.    D. D 2,040

Purchase invoice is first entered in the

A. purchases account.    B. cashbook.    C. sales journal.     D. purchases journal

Which of the following describes a trial balance?

A. It is a special account
B. It is a list of balances in the books
C. It reveals the financial position of a business
D. It shows all the entries in the books of a business

Which of the following expenses is allocated according to the floor area?

A. Wages and salaries    B. Rent and rates    C. Canteen expenses    D. Discount allowed

In the balance sheet of a social club, subscription owing is treated as a

A. current liability.   B. current asset.    C. tangible asset    D. long-term liability

Which of the following relates to cash basis of accounting?

A. Accruals and prepayments are considered
B. Debtors and creditors are recorded
C. Fixed assets are written off in the year of purchase
D. Profits are maximized

In preparing a profit and loss account, a decrease in provision for doubtful debts accounts is treated as

A. current liability.    B. expenses.    C. income    D. current asset

Which of the following accounts has a credit balance?

A. capital    B. Cash    C. Drawings     D. Premises

Goods stolen at the branch is debited to

A. Defalcations Account.
B. Branch Stock Account.
C. Branch Adjustment Account.
D. Branch Debtors Account

Opening capital is

A. D 5,660.     B. D 5,060.     C. D 4,460.     D. D 2,960.

The accounting concept that assumes that a business will continue operating for an indefinite period is

A. business entity.    B. going concern.    C. consistency.    D. duality

Goodwill is recognized in partnership accounts when

A. the business makes a huge profit.
B. the business has good customer relationship.
C. a partner is dormant.
D. a new partner is admitted

Mr. White acquired Mr. Black’s business for GHc 410,000. The total assets were GHc 670,000 and liabilities amounted to GHc 320,000.

How much was paid for goodwill?

A. GHc 350,000    B. GHc 260,000    C. GHc 90,000    D. GHc 60,000

Which of the following is a spreadsheet application?

A. Excel    B. Word    C. Internet    D. Windows

Which of the following is not stated in the partnership agreement?

A. Profit sharing ratio    B. Interest on capital    C. Interest on fixed asset    D. Purpose of partnership

The process of using sales ledger balance to cancel off purchases ledger balance is

A. balancing.    B. set off.    C. reconciliation.    D. cancelling

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