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If a monthly insurance premium is remitted to a company by the state government, the initial deductions from employees are recorded in _____

A. the General fund
B. Agency fund
C. Special fund
D. General long-term fund

Which of the following are sources of revenue to state governments in Nigeria?

I. Statutory allocation.
II. Fines from customary courts.
III. Petroleum tax.
IV Income tax.

A. I and II only.    B. II and III only.    C. I and IV only.    D. III and IV only.

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 transaction
C. provides a comprehensive record of business done with particular suppliers
D. ensures that every expenditure ¡s reviewed and verified before payment is made.

In a cash book, the opening balance was N 7,600, closing balance N 9,200 and the total cash received during the period was N 18,000. What was the amount of cash paid out during the period?

A. N 8,900 B. N 9,900    C. N 14,600   D. N 16,400 .

To record the transfer of stock from one department to another the correct entry would be to debit _____

A. goods outwards and credit goods inwards
B. merchandise account and credit department stock account
C. department transferring and credit department receiving
D. department receiving and credit department transferring.

Adama’s bank account showed an overdraft of 600 on 31st March. Ongoing through the account, it was discovered that the N 1,080 paid into the account on 29th March had not been credited. What should be the balance in Adama’s cash accounts?

A. N 1,680 Dr.       B. N 1,080 Cr.    C. N 600 Dr.    D. N 480 Cr.

Shares issued to a vendor in payment of business purchased would require a debit to _____

A. cash account and credit to share capital account
B. share capital account and credit to vendors account
C. vendor’s account and credit to share capital account
D. share capital account and credit to cash account

The term fiscal compliance means ______

A. all financial and related laws and regulations are adhered to
B. only the budget for the current period is complied with and no deficits allowed
C. all physical assets requirements have been met
D. fiscal planning is necessary for proper accountability in the public sector.

Which of the following are advantages of departmental accounts?

I. The department making the highest profit can be easily determined
II. The capital of the business can be calculated easily
III. Easy knowledge of the sources of funding.
IV. Encouragement of healthy rivalry among the various departments

A. II and IV only.    B. II and III only.   C. II and IV only.    D. III and IV only

Why are adjustments in the profit loss account necessary?

A. To cover some expenses of the following year.
B. To ascertain the actual expenses during the year.
C. To show the provisions made during the year.
D. To show the total expenses paid and income received during the year.

The manufacturing cost can be classified based on _____

A. timing of charges, degree of averaging and size of capital
B. degree of averaging, ease of traceability and timing of charges
C. degree of averaging, size of floor space occupied and cost accounts
D. number of employees, timing of charges and management style.

Bank Account

  N   N
Capital 50,000 Purchases 20,000
Sales 38,500 Rent 2,590
    Motor vehicles 6,500

What is the balance of the bank account shown

A. N 88,500 debit    B. N 88,500 credit    C. N 59,410 credit    D. N 59,410 debit.

Which of the following statements is correct about the head office current account and the branch current account?

A. Both always have debit balances.
B. Both always have credit balances.
C. The head office current account has a credit balance while the branch current account has a debit balance.
D. The head office current account has a debit balance while branch current account has a credit balance.

The objective of allocating all costs to products is to ______

A. produce a scientifically accurate cost
B. avoid unallocated overhead and compute total product cost
C. co-ordinate the cost and financial accounts
D. compute the contribution of the product to the final profit.

The instruments that are general when firms enter into business transactions with others are called ______

A. purchases documents
B. journals
C. source documents
D. invoices.

ASSURE Edu Services Balance Sheet (Extract) as at 31st December, 1997.

  N   N
Paid up capital 200,000 Fixed assets 300,000
Share premium 15,000    
Profit & Loss a/c 60,000 Investments 180,000
Long-term loan 180,000 Stock 28,000
    Debtors 90,000
Creditors 200,000 Provision (3,000) 87,000
Other current liabilities 100,000 Cash 60,000
    Bank 100,000
  755,000   755,000

Determine the owners’ equity.

A. N 200,000    B. N 215,000    C. N 275,000    D. N 755,000

A source document for the sales day book is _____

A. requisition form   B. an invoice   C. a customer advice   D. a credit advice.

An effective accounting system should provide information _______

A. on new products and methods
B. for customer feedback and requirements
C. on internal and external reporting for managers and third parties
D. for promoters, directors, labour unions and distributors.

Mayana Corporation uses special journal to record its transactions. If one of Mayana’s customers returns merchandise purchased with cash (for a refund), it makes an entry ¡n the ______

A. Cash receipts journal    B. Sales journal   C. General journal    D. Cash disbursement journal.

In the absence of a sales day book or sales account, the credit for sales can be computed from ______

A. creditors’ control account
B. debtors’ control account
C. opening figures of the balance sheet
D. closing figures of the balance sheet.


Club debtors at start 150
Cash sales 4850
Club debtors at close 900
Cash received from debtors 550

What is the amount of club sales?

A. N 6,150    B. N 4,850    C. N 4,650    D. N 1,300

To compute gearing ratio, divide ______

A. profit by capital employed
B. current assets by current liability
C. profit by total assets
D. long term debt by equity capital.

Capital: opening balance 307,000
Closing balance 342,000
Net profit for the period 121,600
Opening stock 98,800
Purchases 706,000
Carriage inwards 17,500
Cost of goods sold 740,700
Total selling, general and administration expenses 526,000
Discount received 9,650

What is the closing stock tar the period?

A. N 69,300    B. N 81,300    C. N 81,600    D. N 106,400

Which of the following accounts is kept by local governments in Nigeria?

A. Balance sheet
B. Advances account
C. Debtors account
D. Profit and loss account.

Which of the following conditions best represents the net effect of discount allowed on credit sales on the accounts of a business?

A. Decrease in the closing balance of sales ledger control account
B. Increase in net profit.
C. Increase in the value of sales.
D. Decrease in the value of purchases in the trading account.

If the total discount allowed in a cash book was N 230 and the total discount received was N 255, which of the following is true concerning the two discounts?

A. They must be balanced in the cash book and the difference takento the debtor’s ledger
B. They must be balanced in the cash book and the difference taken to the trial balance.
C. They should not be balanced in the cash book before being taken to the trial balance.
D. They should not appear in the trial balance as they were already either received or paid out.

Share premium can be used to

I. write off discount on shares
II. give loans to directors
III. pay dividends
IV. pay company’s formation expenses

A. I and IV only     B. I and III only    C. II and III only    D. III and IV only.

Umar and Ahmed share profits and losses equally and have capital balance of N 40,000 and N 60,000 respectively. If Abdullahi purchases a one third interest with no bonus, how much will he have to contribute to the partnership?

A. N 33,333   B. N 40,000   C. N 44,444    D. N 50,000

Which of the following demonstrates the imprest system?

A. Float  expenses paid  cash ¡n bank  float
B. float  cash from bank  expenses paid  float
C. float  expenses paid  cash from bank  float
D. Float  cash ¡n bank  expenses paid  float.

The measure of a company’s ability to pay its debts quickly is called ______

A. current ratio      B. turnover ratio      C. acid test ratio       D. return on investment.

The contribution margin on a job is the _______

A. Gross profit
B. Net profit
C. Excess of sales revenue over variable costs
D. Difference between fixed and variable cost.

In preparing accounting records, the owners of a business and the business are treated as _____

A. the same person
B. having business relationship
C. separate legal entities
D. partners.

Which of the following entries is effected by a department when goods are charged to it at selling prices?

A. Stock account is debited
B. Purchases account is debited
C. Stock account is credited
D. Mark-up account is debited.

The statement of affairs prepared from incomplete records can be descried as ______

A. the summary of all the business transactions of the trader ascertained by the accounts
B. a balance sheet at a particular date showing the assets and liabilities of the business
C. a schedule of all business ventures entered into for the period to which the records relate
D. the statement that shows the profit or loss made during the period.

Partners Current Account
  Musa Kalu Lawal   Musa Kalu Lawal
  N N N   N N N
Interest on Capital 10,000 8,000 8,000 Interest drawings 800 600 300
Drawings 18,000 10,000 6,000 Share of profit 26,200 13,100 13,100
  28,800 18,000 14,000 Balance c/d 1,800 4,300 540
Balance c/d 1,800 4,300 540        

The current closing balance of Lawal’s current account is _______

A. N 21,100 debit    B. N 14,740 debit    C. N 14,740 credit    D. N 540 credit.

Halidu and Hamed are business partners with N 30 000 and N 20. 000 capital respectively. At the end of the financial year, a profit of N 12,000, which included Halidu’s salary of N 13 000, was made.

Halidu’s share of the profit is _______

A. N 7,500.      B. N 6,000      C. N 5,400    D. N 4,500

Sobande Incorporation acquired a machine that involved the following expenditures and related factors.

Gross invoice price 15,000
Sales tax 900
Purchases discount taken 300
Freight 750
Assembly of machine 500
Installation of machine 800
Assorted spare parts for future use 1,200
Turning and adjusting machine 700

What is the initial accounting cost of the machine?

A. N 19,550    B. N 18,950    C. N 18,350    D. N 17,500

State Bank collected on a note for Al-makura Company. This collection, not yet recorded in Al-Makura’s books, appears on the bank reconciliation as _____

A. an addition to balance per books
B. a deduction from balance per bank statement
C. an addition to balance per bank statement
D. a deduction from balance per books.

Raw materials inventory at the beginning of a period was N 46,800 and at the close N 9,200 were returned. Cost of materials consumed during the period was N 448,500.

What is the cost of materials available for use during the period?

A. N 487,100    B. N 448,500    C. N 449,500   D. N 440,300

On 30/5/93 Tolu & Co paid 2 years rent of N 50,000 which debited to the rent account.

At 31/1 2/93, what portion of that amount was prepaid?

A. N 14,583       B. N 25,000       C. N 35,417    D. N 37,415

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