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Question 1 Report
Which of the following methods gives a conservative closing stock value during a period of rising prices?
Answer Details
The LIFO (Last-In, First-Out) method gives a conservative closing stock value during a period of rising prices. In the LIFO method, the assumption is that the last goods purchased are the first goods sold. Therefore, the cost of goods sold is based on the cost of the most recent purchases, while the value of the ending inventory is based on the cost of the oldest purchases. In a period of rising prices, the cost of the most recent purchases will be higher than the cost of the oldest purchases, resulting in a lower ending inventory value and a higher cost of goods sold. This will result in a lower net income, which is a conservative approach. On the other hand, the FIFO (First-In, First-Out) method assumes that the first goods purchased are the first goods sold. Therefore, the cost of goods sold is based on the cost of the oldest purchases, while the value of the ending inventory is based on the cost of the most recent purchases. In a period of rising prices, the cost of the oldest purchases will be lower than the cost of the most recent purchases, resulting in a higher ending inventory value and a lower cost of goods sold. This will result in a higher net income, which is an aggressive approach. Simple average and periodic simple average methods are not generally used to value inventory during a period of rising prices because they do not differentiate between the cost of older and newer purchases. Therefore, the correct answer to the question is "LIFO."
Question 2 Report
| Adodo Enterprises and Loss Account (Extract) | |||
| ₦ | ₦ | ||
| Opening stock | 5,000 | Sales | 100,000 |
| Purchases | ? | ||
| ? | |||
| Less closing stock | 5,600 | ||
| Cost of goods sold | ? | ||
| Gross profit | ? | ||
| 100,000 | 100,000 | ||
If the opening stock is 5% of sales. calculate the purchases
Answer Details
Question 3 Report
What is the balance of cash with the petty cashier at the end of period 1?
Answer Details
Question 5 Report
Expenditure incurred on consumables and goods for resale is?
Answer Details
Expenditure incurred on consumables and goods for resale is called "revenue expenditure." Revenue expenditure refers to the expenses that a business incurs to support its normal operations, such as salaries, rent, utilities, and purchases of goods for resale. These expenses are incurred in the current accounting period, and they are deducted from the revenues earned during the same period to determine the net income of the business. The purpose of revenue expenditure is to generate revenue in the short term and maintain the day-to-day operations of the business. These expenses are usually recurring, and they do not result in the acquisition of long-term assets. On the other hand, capital expenditure refers to the expenses incurred to acquire or improve long-term assets, such as property, plant, and equipment. These expenses are not deducted in the current accounting period but are capitalized and depreciated over the useful life of the assets. Sunk costs are costs that have already been incurred and cannot be recovered, regardless of the decision made. Miscellaneous expenses refer to expenses that do not fit into any specific category. Therefore, the correct answer to the question is "revenue expenditure."
Question 6 Report
Given:
Net profit b/d.....................₦10,000
Interest on capital:...M...........₦2, 000
.......................K...........₦1, 000
Partners' on salary....K...........₦800
Interest on drawings...M...........₦500
Profit sharing ratio M and K 3:2
Determine M's share of profit?
Answer Details
Question 7 Report
One of the purposes of maintaining the account of a branch at the head office is to?
Answer Details
Question 8 Report
What is the net working capital?
Question 9 Report
The standing order is a payment instruction given by a?
Answer Details
A standing order is a payment instruction given by a customer to the bank. It is an agreement between the customer and the bank to make regular payments of a fixed amount to another person or organization. This payment can be made daily, weekly, monthly, or at other agreed intervals. The customer sets up the standing order with the bank, and the bank ensures that the payments are made on the agreed dates. This type of payment is useful for recurring bills or expenses, such as rent or mortgage payments, utility bills, or charitable donations.
Question 10 Report
Sule and Ahmad are in partnership sharing profits and losses equally. If Khadija is admitted as new partner tot take 1/5 as her share, what is the new partner to take 1/5th as share, what is the new profit or loss sharing ratio?
Answer Details
Question 11 Report
I Space occupied by each department.
Ii Average value of stock held by each department.
Iii Departmental turnover.
Iv Number of articles sold by each department .
From the information above, the two most logical bases for apportioning expenses that are common to departments are?
Answer Details
Question 12 Report
Which of the following is a common cause of a discrepancy between head office and branch trial balance?
Answer Details
Question 13 Report
Use the information to answer below to answer questions 7 and 8.
I Operating machines
Ii Furniture
Iii Fixtures and fitting
Iv Loan from friends
V Creditors
What are the current liabilities?
Answer Details
Question 14 Report
Replacement and renewal of fixed assets are?
Answer Details
Replacement and renewal of fixed assets are considered capital expenditures. Fixed assets are assets that are used in the production of goods or services and have a useful life of more than one year. Examples of fixed assets include buildings, machinery, and vehicles. Over time, fixed assets can become obsolete, outdated, or worn out and need to be replaced or renewed. When a fixed asset is replaced or renewed, it involves a significant expenditure of funds, and the benefits of the new asset are expected to last for more than one year. Therefore, it is considered a capital expenditure rather than a revenue expenditure. Capital expenditures are expenditures that are expected to benefit a business over a long period, usually more than one year. They are expenditures made to acquire, improve, or maintain fixed assets. Capital expenditures are recorded as assets on the balance sheet and are usually depreciated over the useful life of the asset. In contrast, revenue expenditures are expenses that are incurred in the normal course of business operations and are expected to benefit a business within the current accounting period. They are typically recorded as expenses on the income statement and reduce the net income of the business for the current period. In summary, the replacement and renewal of fixed assets are considered capital expenditures because they involve significant expenditures of funds and are expected to benefit the business over a long period.
Question 15 Report
If the capital of the partnership is unfixed, what is K's current accounts?
Answer Details
If the capital of the partnership is unfixed, it means that the partners have not agreed on a specific amount of capital to contribute to the partnership. In this situation, K's current account will reflect any money they have put into or taken out of the partnership, including their share of profits or losses. Without any further information, we cannot determine K's current account balance. It would depend on the transactions K has made with the partnership, such as investments, withdrawals, profits, and losses. Therefore, we cannot select any of the options provided, and the correct answer is "NO OPTION".
Question 16 Report
The book value per share is obtained by dividing?
Answer Details
The book value per share is obtained by dividing the shareholders' equity by the outstanding shares. Shareholders' equity represents the residual interest in the assets of a company after all its liabilities have been deducted. In other words, it is the amount of money that would be left over if all the company's assets were sold and all its debts paid off. Outstanding shares refer to the total number of shares of the company's stock that are currently owned by shareholders and are available for trading in the stock market. By dividing the shareholders' equity by the outstanding shares, we can determine the book value per share, which represents the amount of shareholders' equity that can be attributed to each share of stock. For example, if a company has a total shareholders' equity of $10 million and 1 million shares of stock outstanding, the book value per share would be $10 ($10 million divided by 1 million shares). This means that each share of stock represents $10 of the company's net assets. The book value per share is an important financial metric that investors can use to evaluate the value of a company's stock. It can be compared to the current market price of the stock to determine whether the stock is undervalued or overvalued.
Question 18 Report
Which of the following is credited to the consolidated revenue fund?
Answer Details
Question 20 Report
Use the information below to answer questions 29 and 30.Work-in-progress 1/1........................₦1,000
Work-in-progress 31/12......................₦2,000
Production cost of goods manufactured.......₦20,000
Sales.......................................₦50,000
Stock of finished goods 1/1.................₦4,000
Stock of finished goods 31/12...............₦5,000
Selling and distribution expenses...........₦2,000
Administrative expenses.....................₦1,000Determine the gross profit?
Question 21 Report
Which of the following items are current assets?
Answer Details
The current assets among the given options are: Stock, bills receivable, cash, and debtors. Current assets are those assets that can be easily converted into cash within a short period, usually within one year. They are assets that are expected to be consumed or converted into cash in the normal course of business operations. Stock, also known as inventory, refers to the goods that a company sells or intends to sell. Bills receivable are the written promises by customers to pay for the goods or services provided by the company. Cash is the most liquid asset and includes money in hand, money in the bank, or any other highly liquid investments. Debtors are customers who owe money to the company for goods or services that have been delivered but not yet paid for. All of these assets are expected to be converted into cash within a relatively short period of time and are therefore considered current assets. In contrast, bad debt and work-in-progress are not considered current assets because they are not easily convertible to cash or are not expected to be consumed within a year. Bills payable are a liability, not an asset.
Question 22 Report
The second and final call account was debited with?
Question 23 Report
Use the information below to answer questions 43 and 44.
A company advertised and issued ₦750,000, 12% preference shares of ₦1 each to be issued at ₦1.50 per share. Applications for ₦1,370,000 were received at 30k per share. 70k per share (including premium) was due om 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 were allotment shares on pro-rata basis.
The share premium account would be?
Question 24 Report
The process of bookkeeping includes records produced from?
Question 25 Report
Use the information below to answer questions 20 and 21.Jan. 1 Received 1,000 units at ₦10 each
Jan. 2 Received 2,000 units at ₦12 each
Jan. 3 Issued 1,500 units
Jan. 4 Received 1,000 units at ₦11 each
Jan. 5 Issued 1,000 unitsUsing FIFO method, what is the value of the closing stock?
Answer Details
Question 26 Report
In the not-for-profit-making organization, the excess of income over expenditure is?
Answer Details
In a not-for-profit organization, any surplus of income over expenses is added to the accumulated fund. The accumulated fund represents the organization's savings and is used to support its ongoing activities and future plans. This surplus can be reinvested in the organization or used to support future programs and projects. It is important for a not-for-profit organization to maintain a healthy accumulated fund so that it can continue to fulfill its mission and serve its constituents over the long term. Therefore, "added to the accumulated fund," is the correct answer.
Question 27 Report
Given:
Capital...............................₦2375 000
Debtors...............................₦495 000
Motor vehicle.........................₦870 000
Creditors.............................₦245 000
Prepayment............................₦500 000
Bills receivable......................₦505 000
Furniture.............................₦150 000
What is the total debit for the trial balance?
Answer Details
Question 28 Report
Use the information above to answer question 9 and 10.
Period 1:
........Cash to petty cashier.............₦1000
........Petty cashier pays out............₦780
Period 2:
........Petty cashier pays out............₦840
If the float is increased to ₦1200, how much should the petty cashier receive after period 2?
Answer Details
Question 29 Report
Use the information to answer the question.
..........................30/9/06.......30/9/07.....
............................N.............N.........
Accrued insurance premium...600...........710.......
Prepaid rent income.........490............630......The cash book includes ₦1,850 and N,2,100 in respect of insurance premium and rent income respectively.What amount is to be credited to the profit and loss account in respect of rent income?
Answer Details
Question 30 Report
Given:Balance as per cash book...................₦20,000
Unpresented cheques........................₦5, 200
Direct credit to the bank..................₦1, 000
Direct debit from the bank.................₦1, 000
Credit in the cash book....................₦500Calculate the balance as bank statement at the end of the year?
Answer Details
The balance as per cash book is ₦20,000. Unpresented cheques are ₦5,200, meaning they have been recorded in the cash book but have not yet cleared the bank. Therefore, they must be deducted from the balance as per cash book to get the adjusted cash book balance, which is: Adjusted cash book balance = Balance as per cash book - Unpresented cheques = ₦20,000 - ₦5,200 = ₦14,800 There is a direct credit of ₦1,000 to the bank account, which means the bank owes the business ₦1,000. Similarly, there is a direct debit of ₦1,000 from the bank account, which means the business owes the bank ₦1,000. These two transactions cancel each other out, so they do not affect the adjusted cash book balance. Finally, there is a credit of ₦500 in the cash book, which means that the cash book balance needs to be increased by ₦500. Therefore, the adjusted cash book balance plus the credit in the cash book is: Adjusted cash book balance + Credit in the cash book = ₦14,800 + ₦500 = ₦15,300 This adjusted cash book balance plus credit in the cash book represents the balance as per bank statement. Therefore, the balance as per bank statement at the end of the year is ₦15,300. Answer (₦27,700) is incorrect.
Question 31 Report
Apart from the common control accounts, a control account can also be opened for?
Answer Details
Apart from the common control accounts such as accounts receivable and accounts payable, a control account can also be opened for cash account. A cash control account is used to reconcile the cash book and bank statement. This is done by comparing the balance in the cash control account with the balance in the bank statement to identify any discrepancies. The cash control account can help a business to identify any errors in the cash book or bank statement, and ensure that the balance of cash is accurate.
Question 32 Report
Use the information to answer questions 334 and 35.
.........................Departments
...........................P..........Q...........R
Sales value...............N?........₦23,400....N?
Selling expenses..........₦1,100....₦1,400.....₦1,280
Administrative expenses...₦1,400....₦1,000.....₦1,020
Cost of sales.............₦6,900....₦6,700.....₦5,500
Sales value of department Q doubles that of p, which is 1/3 of R. Depreciation which amounts to ₦1,800 is to be apportioned among the three departments in the ratio 3:5:7 respectively.
What is the sales value of department R?
Answer Details
Question 34 Report
Musa, a prepaid customer of XYZ and KLM, bought ₦1500 recharge card from XYZ, and ₦2000 recharge recharge card from KLM, for business calls. The entry to record these transaction is debit?
Answer Details
The correct entry to record the transaction is: Telephone ₦3,500, Credit Cash ₦3,500 This is because the customer Musa bought recharge cards from two different companies, XYZ and KLM, and paid cash for the cards. The entry to record the transaction should show an increase in the Telephone account (as this represents the value of the airtime purchased), and a decrease in the Cash account (as the customer paid for the recharge cards with cash). Therefore, the account to be debited is Cash, while the account to be credited is Telephone.
Question 35 Report
Which of the should not be added or subtracted from the bank statement balance to determine the adjust cash balance?
Answer Details
Question 36 Report
If Odukoya takes money out of business bank account for his own private use, the effect of the transaction is?
Question 37 Report
In a partnership account, conversation of non-cash assets into cash is referred to as?
Answer Details
In a partnership account, the conversion of non-cash assets into cash is referred to as realization. Realization is the process of converting non-cash assets, such as property or investments, into cash. This may occur when a partnership is dissolved, and the partners need to divide the partnership's assets and liabilities. The process of realization involves selling the partnership's assets, paying off its debts, and distributing the remaining cash to the partners according to their capital account balances. Realization is an important concept in partnership accounting because it determines how the partners will divide the partnership's assets and liabilities. The amount of cash that each partner receives will depend on their capital account balance, which reflects their investment in the partnership. For example, if a partnership has non-cash assets, such as property or investments, worth $100,000 and liabilities of $50,000, the partnership's net assets would be $50,000. If the partnership is dissolved and the assets are sold for cash, the $50,000 in liabilities would be paid off, leaving $50,000 in cash to distribute to the partners. If one partner had a capital account balance of $30,000 and the other had a balance of $20,000, the first partner would receive 60% of the cash ($30,000/$50,000), and the second partner would receive 40% of the cash ($20,000/$50,000). In summary, realization is the process of converting non-cash assets into cash in a partnership account, and it determines how the partners will divide the partnership's assets and liabilities.
Question 38 Report
The cost incurred by departments that support the production departments with such activities as maintenance, production control and storage are called?
Answer Details
The cost incurred by departments that support the production departments with activities such as maintenance, production control, and storage are called "service costs." These costs are associated with the services provided by support departments to the production departments, which help them carry out their production activities efficiently. For example, maintenance departments ensure that the production machinery is in good working condition, production control departments coordinate production schedules and ensure that materials and resources are available when needed, and storage departments provide storage facilities for raw materials and finished products. Service costs are indirect costs that are not directly related to the production of goods or services, but they are necessary to ensure that the production process runs smoothly. The cost of these services is allocated to the production departments based on a predetermined formula, such as the number of hours of service provided or the square footage of space used. Therefore, the correct answer to the question is "service costs."
Question 39 Report
Use the information below to answer questions 17 and 18.Total current assets..................₦2,000
Total fixed assets....................₦4,000
Current liabilities...................₦1,200
Drawings..............................₦200
Long-term loan........................₦2,000Determine the capital of the business?
Question 40 Report
Use the information to answer questions 334 and 35.
.........................Departments
...........................P..........Q...........R
Sales value...............N?........₦23,400....N?
Selling expenses..........₦1,100....₦1,400.....₦1,280
Administrative expenses...₦1,400....₦1,000.....₦1,020
Cost of sales.............₦6,900....₦6,700.....₦5,500
Sales value of department Q doubles that of p, which is 1/3 of R. Depreciation which amounts to ₦1,800 is to be apportioned among the three departments in the ratio 3:5:7 respectively.
What is the sales value of department R?
Answer Details
Question 41 Report
Which of the following is a debit item in the purchases ledger control account.
Question 42 Report
The accounting convention which states that the performance of a business should be determined by matching all expenses against revenues is?
Answer Details
Question 43 Report
Which of the following branches of accounting was first developed?
Answer Details
The first branch of accounting that was developed is financial accounting. Financial accounting is the process of recording, summarizing and reporting the financial transactions of an organization. It provides information about the financial position, performance, and cash flows of an organization to external stakeholders such as investors, creditors, and regulators. It is considered the backbone of accounting as it provides the basic financial information that is used in other areas of accounting such as cost accounting and management accounting.
Question 44 Report
Which of the following is an item in the debit side of the sales ledger control account?
Answer Details
Question 45 Report
| Adodo Enterprises and Loss Account (Extract) | |||
| ₦ | ₦ | ||
| Opening stock | 5,000 | Sales | 100,000 |
| Purchases | ? | ||
| ? | |||
| Less closing stock | 5,600 | ||
| Cost of goods sold | ? | ||
| Gross profit | ? | ||
| 100,000 | 100,000 | ||
If the gross profit margin is 10% what is the value of the cost of goods sold?
Answer Details
The gross profit margin is the percentage of revenue that exceeds the cost of goods sold. It can be calculated as follows: Gross profit margin = (Gross profit / Sales) x 100% We are given the value of the gross profit margin as 10%. We can use this information along with the value of sales to calculate the gross profit. Then we can subtract the gross profit from the cost of goods sold to find its value. Let's first calculate the gross profit: Gross profit margin = (Gross profit / Sales) x 100% 10% = (Gross profit / ₦100,000) x 100% Gross profit = (10% / 100%) x ₦100,000 Gross profit = ₦10,000 Now we can use the formula to find the value of cost of goods sold: Cost of goods sold = Sales - Gross profit Cost of goods sold = ₦100,000 - ₦10,000 Cost of goods sold = ₦90,000 Therefore, the value of the cost of goods sold is ₦90,000. The correct answer to the question is option B.
Question 47 Report
Provision for bad and double debts in companies final accounts is treated in?
Answer Details
Provision for bad and doubtful debts is created by a company to estimate the amount of its accounts receivable that may not be recoverable in the future. It is a provision made to cover potential losses arising from non-payment of debts. In the final accounts of a company, the provision for bad and doubtful debts is treated in the Profit and Loss Account. The Profit and Loss Account summarizes the company's revenues, expenses, gains, and losses over a specified period of time, typically one year. The provision for bad and doubtful debts is considered as an expense for the company and is subtracted from the gross profit to arrive at the net profit. The treatment of provision for bad and doubtful debts in the Profit and Loss Account follows the accrual accounting principle, which recognizes revenue and expenses when they are incurred, not when they are received or paid. By recognizing the provision for bad and doubtful debts as an expense in the Profit and Loss Account, the company is able to account for potential losses that may arise from non-payment of debts, and this provides a more accurate picture of the company's financial performance. Therefore, the correct answer is option B: Profit and Loss Account.
Question 48 Report
Given:Furniture and fittings..................₦20,000
Equipment...............................₦15,000
Bank overdrafts.........................₦6, 500
Bar creditors...........................₦4,800
Subscription in arrears.................₦4,700
Subscription in advance.................₦650What is the accumulated fund?
Answer Details
Question 49 Report
Use the information to answer questions 40 and 41.
Capital balances b/d:.....P.............₦20,000
..........................K.............₦10,000
Drawings:.................P.............₦2, 000
..........................K.............₦1, 000
Share of profits:.........K.............₦4, 000
..........................K.............₦2, 000
Salary....................P.............₦1, 000
Interest on drawings:.....K.............₦100
..........................K.............₦20
Assuming that the partnership maintains a fixed capital, what is P's closing capital?
Answer Details
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