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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

The quick ratio is ______

A. 0.82 : 1    B. 0.91 : 1    C. 0.95 : 1    D. 1.53 : 1


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


The following is a draft balance sheet as at 31\12\92

Accumulated
  Cost Depreciation Net
  N N N
Fixed Assets (Tan) 200,000 100,000 100,000
Current Assets      
Stock in trade   10,000  
Trade debtors   4,500  
Cash at bank   22,800  
Cash in hand   9,700  
Trade creditors   ?  
Capital   ?  

Trade creditor’s account was maintained at 25% to the capital

What was in the capital account as at 31/12/92?

A. N 76000      B. N 83,000       C. N 17,600       D. N 117,650


Faruk and Osawe are ¡n partnership sharing profits and losses in the ratio of 3:7. Faruk is to receive a salary of N 9,000. In one accounting period, the business recorded a loss of N 1,500 (before deduction of Faruk’s salary). The appropriate distribution of the net loss would be _______

A. Faruk, (N 450); Osawe, (N 1,050)
B. Faruk, (N 3,150) Osawe, (N 7,350)
C. Faruk, (N 2,250); Ösawe, (N 5,250)
D. Faruk, (N 8,550); Osawe, (N 1,050).


Given:

  N
Direct material 10,000
Direct labour 5,000
Direct expenses 2,000
Factory overhead 4,000

What is the prime cost?

A. N 21,000    B. N 17,000    C. N 15,000    D. N 6,000


On partnership dissolution, if a partner’s capital account has a debit balance and the partner is insolvent, the deficiency will, in accordance with the decision of the case of the Gamer y. Murray, be ______

A. borne by all the partners
B. borne by the insolvent partner
C. written off
D. borne by the solvent partners.


Given:

  N
Capital at the beginning 20,000
Drawings 3,000
Capital at end 30,000
New capital introduced 8,000

What is the profit for the period?

A. N 4,000    B. N 5,000    C. N 6,000    D. N 8,000


In dealing with incomplete records, fixed assets are posted to _____

A. opening profit and loss as brought forward figures
B. closing balance sheet as carried forward figures
C. closing balance sheet as brought forward figures
D. closing profit and loss as brought forward figures.


Yakubu (Nigeria) Limited.(Extract Balance sheet as at 31st December, 1993 Authorized issued)

  N N N
Ordinary shares 100,000 80,000  
10% preference shares 30,000 20,000  
Shares premium   20,000  
Profit and loss A/C   13,000  
Trade creditors   30,000  
Accruals   5,000  
Stock     10,000
Debtors     40,000
Bank     25,000

If 10% dividend is approved, what is the dividend payable to ordinary shareholders?

A. N 13,000      B. N 11,300       C. N 10,000       D. N 8,000

 


Which of the following factors has aided the development of Accounting?

A. The emergence of nation states
B. The discovery of mineral resources in commercial quantity
C. The growth in size of businesses and the separation of ownership and management.
D. The development and management of a sophisticated monetary system.


Emeka Manufacturing company (Extract)

Manufacturing Account.

  N
Direct material 15,000
Direct labour 4,500
Direct expenses 3,000
Factory overhead 2,500
Selling and distribution 1,500

Calculate the product cost.  A. N 16,500     B. N 15,000      C. N 14,000     D. N 12,500


Alabede (Nig.) Limited issued 50,000 ordinary shares, 1 each at a market value of N 2.50 each. The share premium is ______

A. N 125,000    B. N 100,000    C. N 75,000    D. N 50,000.


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.


The total of the creditors at the beginning of the year was N 4,600 and at the end of the year N 5,250. During the year, N 26,500 was paid to suppliers and N 130 was received in discount from these suppliers. The purchases for the year would be _____

A. N 26,630    B. N 27,038    C. N 27,150    D. N 27,280


In a public corporation, the capital expenditure incurred in a financial period is ______

A. spread over the useful life of the assets through depreciation
B. apportioned at a predetermined rate stipulated by law
C. written off in the year in which they occur
D. merged with recurrent expenditure and reported in one lump sum.


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 ratios gives an idea of the liquidity of a firm?

A. Turnover ratio      B. Quick ratio       C. Debt ratio      D. Dividend yield.


A charitable club has the following figures:

  N
Subscriptions received in 1991 2,800
Subscriptions unpaid in 1990 300
Subscriptions due 1991 150

How much should be charged to the Income and expenditure of this club as subscription for 1991?

A.  N 2,530      B. N 2,680      C. N 2,830       D. N 2,980


Given:

  N
Prime cost 220,000
Factory cost 32,000
Work in progress at beginning 25,000
Work in progress at close 19,000
Administrative expenses 21,000

Determine the production cost.

A. N 296,000    B. N 277,000    C. N 258,000    D. N 246,000


Adamu, Babaji and Chukwu are in partnership and they share profit and losses on ratio 3:2:1. Their respective capitals are N 20,000, N 15,000 and N 5,000 on which they are entitled to interest at 5% per annum. The profit for the year before charging interest on capital amounts to N 5,500. Calculate the profit for Adamu.

A. N 583    B. N 1,000    C. N 1,167    D. N 1,750


Chibuike bought 36 notebooks at N 10 each from John and was given a trade discount at 5%. In addition, he was offered I % cash discount which he took advantage of. How much did Chibuike pay?

A.  N 338.58     B. N 342.00    C. N 345.42    D. N 360.00 


Given:

  N
Net profit 25,000
Cost of sales 25,000
Sales 85,000

Determine the total expenses

A. N 45,000    B. N 35,000    C. N 25.000    D. N 15,000


If a promoter pays a lawyer 5,000 for services rendered in preparing a Memorandum of Incorporation, the journal entry is to debit are _____

A. preliminary expenses credit cash accounts
B. promoter, credit creditors accounts
C. lawyer’s credit cash accounts
D. cash, credit incorporation accounts.


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.


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.


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.



  N
Hospital buildings 200,000
Drugs 180,000
Hospital beds and mattresses 40,000
Doctors’ and nurses’ salaries 120,000
Administrative expenses 50,000

Recurrent expenditure is ______

A. N 390,000       B. N 360,000       C. N 350,000        D. N 170,000


The total of the discounts received column in the cash book is posted to the ______

A. credit of the discount received account
B. debit of the discounts allowed account
C. credit of the discount allowed account
D. debit of the discounts received account


The end result of governmental accounting procedure is to ______

A. Keep proper records of government expenditures.
B. give financial information to the public and investors.
C. produce timely and accurate financial reports for legislators and the public.
D. give information on the performance of public enterprises.


Interest on a partner’s drawings is debited to the ______

A. partner’s current account and credited to the profit and loss appropriate account
B. profit and loss appropriation account and credited to the partner’s current account
C. profit and loss account and credited to the partner’s account
D. partner’s current account and credited to the profit and loss account.


A governmental accounting system must make sure that _______

A. revenue exceeds expenditure
B. all applicable legal provisions are complied with
C. capital expenditure is equal to revenue
D. capital project fund is tied to recurrent expenditure.


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.


Given:
Motor van – N 3,600;
Premises - N 5,000;
Loan from R. Nwaeke - N 1 000;
Cash at bank - N 2,560;
Cash in hand – N 3,250
Debtor – N 6,910.

Calculate the capital figure.

A. N 9,650     B. N 8,650     C. N 7,850     D. N 6,850


The recording of wages due but not yet paid is an example of an adjustment for _______

A. apportionment of revenue between two periods
B. recognizing accrued expenses
C. recognizing unaccounted revenue
D. recognizing prepaid


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.


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.


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.


The starting point for the production of accounts from incomplete records is to ______

A. ascertain the total sales
B. computes the opening stock of goods sold
C. verify the total purchases
D. prepares an opening statement of affairs.


Amoga Limited invoiced goods at a cost of N 10,000 to its Ikeja branch at a margin of 20%. The branch later return goods worth N 1,200 at invoice price to the head office.

46. The profit margin should be _____

A. debited to goods sent to branch account
B. debited to branch stock adjustment account
C. credited to branch adjustment account
D. credited to branch stock account


Departmental accounts are maintained to ascertain the ______

A. profits of the entire organization
B. contribution of each department
C. expenses of each department
D. sales at each department.


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