Which is used to update the cash book in bank reconciliation?
Interest received and direct credits (e.g., customer payments) appear in the bank statement but not yet in the cash book, so they are used to update it.
The two legally recognized professional accounting bodies in Nigeria are
ICAN (Institute of Chartered Accountants of Nigeria) and ANAN (Association of National Accountants of Nigeria) are the recognized bodies.
Which is a source document?
Payment vouchers are source documents, providing evidence for recording transactions.
A trial balance shows debits of N900 and credits of N800 before adjustments. After corrections, both sides balance at N900. What is the trial balance total?
After corrections, the trial balance totals match at N900 for both debit and credit sides.
A sole trader withdraws 75% of their N2,000 capital. What is the amount withdrawn?
Withdrawn amount = 75% × N2,000 = 0.75 × N2,000 = N1,500.
A business records N1,900 cash book sales for the period. What are the cash book sales?
Cash book sales are directly recorded as N1,900.
Depositing cash into the bank is recorded in the cash book as
Debit bank (increases bank balance), credit cash (decreases cash balance).
Which accounting concept states economic reality takes precedence over legal form?
Substance over form prioritizes the economic substance of transactions over their legal structure.
Which transaction completes its double entry within ledger accounts?
Discount received and allowed are recorded in ledger accounts, completing double entry within the ledger.
Given: Capital N1,000, Liabilities N500, what are the Assets?
Assets = Capital + Liabilities = N1,000 + N500 = N1,500.
The recoupment phase of accounting is known as
Bookkeeping involves recording transactions, the initial recoupment phase.
The balance on the provision for depreciation account is
Provision for depreciation is deducted from fixed assets to show net book value.
A vehicle (cost N1,000, 25% depreciation) is sold for N500. What is the profit or loss?
Depreciation = 25% × N1,000 = N250. Net book value = N750. Loss = N500 - N750 = N250.
A vehicle costing N400,000 is depreciated at 15% per year (reducing balance) for two years. What is the net book value as at 31st December 2003?
Year 1: 15% × N400,000 = N60,000. Year 2: 15% × N340,000 = N51,000. Total depreciation = N111,000. Net book value = N400,000 - N111,000 = N289,000.
A business has total assets of N440,444 and current liabilities of N10,000. What is the capital employed?
Capital employed = Total assets - Current liabilities = N440,444 - N10,000 = N430,444.
Fixed assets include land and building (N410,000), drawings allocated to fixed assets (N3,000), and furniture (N5,720). What is the total fixed assets value?
Fixed assets = N410,000 + N3,000 + N5,720 = N418,720.
Provision for discount allowed is recorded as
Debit profit and loss (expense), credit provision for discount allowed (liability).
A business purchases 120 units for N3,000. What is the price per unit using the periodic weighted average method?
Weighted average cost = N3,000 / 120 = N25 per unit.
A ledger control account has an opening balance of N8,000, credit sales of N5,000, and cash received of N3,600. What is the closing balance?
Closing balance = N8,000 + N5,000 - N3,600 = N9,400.
In a sales ledger, a contra entry appears on the
Contra entry credits the debtors’ control account to offset a debit in the creditors’ control account.
Receivables: beginning N20,000, ending N30,000, cash received N30,000. What was the total sale on account?
Sales on account = Ending receivables + Cash received - Beginning receivables = N30,000 + N30,000 - N20,000 = N40,000.
A business pays expenses by cheque: N706, N794, N795, N856. The highest amount is charged to profit and loss. What is it?
The highest amount, N856, is charged to the profit and loss account.
Sales are N22,675, beginning inventory is 80% of sales. What is the beginning inventory?
Beginning inventory = 80% × N22,675 = 0.8 × N22,675 = N18,140.
A business records purchases of N520. What is the figure for purchases?
Purchases are directly recorded as N520.
Department S has a gross profit of N10,000 and expenses of N4,000. What is the net profit?
Net profit = Gross profit - Expenses = N10,000 - N4,000 = N6,000.
Department T is charged N400 depreciation. What is the depreciation charged?
Depreciation charged to Department T is N400.
How are credit sales by a department treated?
Credit sales are treated like cash debtors’ transactions, representing sales on credit.
Discounts granted to branch customers are treated as
Discounts are debited to the discount account and credited to branch debtors.
Invoices of goods sent to branches from head office are best treated as
Goods are recorded at cost plus mark-up to allocate profit to branches.
On dissolution, cash distribution to partners is based on
Cash is distributed based on partners’ capital balances after settling liabilities.
A business with multiple units comparing performance should adopt
Departmental accounts allow performance comparison across units.
Kune and a partner share profits 3:2, with total profit of N8,750. What is Kune’s share?
Kune’s share = (3 / (3+2)) × N8,750 = (3/5) × N8,750 = N5,250. (Note: The options seem incorrect; correct share is N5,250, but B is closest.)
When a new partner is admitted, what is revalued?
Assets and liabilities are revalued to reflect current market values.
The accounting entries for a new partner’s goodwill premium are
Debit cash (new partner’s payment), credit old partners’ capital (in profit-sharing ratio).
Expenses for promoting a company are
Preliminary expenses include costs like legal fees for company formation.
Debentures can be redeemed out of
New share issues provide capital to redeem debentures.
A company’s authorized share capital is N5,000,000 (5,000,000 shares at N1 each). What is its value?
Authorized share capital is N5,000,000.
A business has capital of N900,000, net profit of N67,000, no drawings. What is the owner’s equity?
Owner’s equity = N900,000 + N67,000 = N967,000.
A machine costs N50,000 with a 5-year useful life and no salvage value. What is the annual depreciation using straight-line method?
Annual depreciation = Cost / Useful life = N50,000 / 5 = N10,000.
In an imprest system, the petty cash float is N2,000. Expenses of N1,200 are incurred. What is the reimbursement amount?
Reimbursement restores the float to N2,000, so it equals expenses: N1,200.
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