Which of the following is not an accounting software?
Adobe Photoshop (C) is a graphic design tool, not accounting software, unlike Tally (A), Zoho Books (B), and Tipalti (D).
What is the abbreviation for Debit and Credit in accounting?
Dr (Debit) and Cr (Credit) (D) are the standard abbreviations in accounting.
Which are the types of transactions in accounting?
Transactions are categorized as Revenue (day-to-day) and Capital (long-term) (A).
What is the full meaning of VAT?
VAT stands for Value Added Tax (B), applied to value added in production or distribution.
Which is NOT a branch of accounting?
Investment accounting (C) is not a formal branch, unlike Financial (A), Cost (B), and Management (D).
Which is a personal account in double-entry bookkeeping?
Debtors account (B) is a personal account, while Machinery (A), Rent (C), and Sales (D) are real or nominal.
Which document gives legal status to a company?
A Certificate of Incorporation (A) legally establishes a company.
What is a cost statement of a product for a specific period, including direct and indirect expenses?
A Cost sheet (B) summarizes production costs for a period.
Which journal records goods returned by customers from credit sales?
The sales returns journal (D) records goods returned from credit sales.
What is an obligation towards another company or party?
A Liability (A) is a debt owed to another party.
What are the universally accepted truths in accounting called?
Accounting principles (B) are foundational guidelines in accounting.
Assets that cannot be touched are called
Intangible assets (D), like goodwill, cannot be physically touched.
What is the abbreviation for the Institute of Chartered Accountants of Nigeria?
ICAN (B) is the abbreviation for the Institute of Chartered Accountants of Nigeria.
How is the cost of a patent recorded in financial statements?
Patents (B) are amortized over their useful life.
What is the strategy where management views business units as investments for profit?
Portfolio analysis (C) evaluates business units for profitability.
Accounting principles are generally based on
Accounting principles are based on practicability (A) for consistent application.
Which principle requires recording inventory at the lower of cost or market value?
The conservatism principle (D) records assets at the lower of cost or market value.
R and S share profits 3:2. They admit T with a 1/5 share. What is the new profit-sharing ratio?
T takes 1/5, leaving 4/5 split 3:2 (R:S), resulting in 12:8:5 (C).
Which is NOT a method for calculating purchase consideration?
Gross receipt method (D) is not used for purchase consideration.
What principle matches expenses with revenues they generate?
The matching principle (B) aligns expenses with related revenues.
Why is owner’s capital shown as a liability in the balance sheet?
The separate entity concept (C) treats the business as distinct, making capital a liability.
When is revenue from product sales reported?
Revenue is recognized when the sale is made (D), per accrual accounting.
What is an audit evaluating cost-effectiveness called?
A cost audit (B) evaluates cost-effectiveness.
What are renewal fees for a patent right?
Patent renewal fees are revenue expenditure (B), as they are recurring.
What does a management audit imply?
A management audit is an efficiency audit (D), assessing management processes.
Which ledger records trade payables and credit purchases?
The purchase ledger (D) records trade payables and credit purchases.
What is a future economic benefit owned by a company, like inventory?
An asset (C) is a resource with future economic benefits.
Financial accounting covers the performance of the
Financial accounting focuses on the company’s performance (A).
What records the movement of cash in and out of a company?
A cash flow statement (D) tracks cash movements.
What is written evidence supporting a business transaction?
A voucher (A) supports a business transaction.
Capital increases if
Capital increases with revenue (C), adding to owner’s equity.
Current assets minus current liabilities equals
Working capital (D) is current assets minus current liabilities.
What is also referred to as a tangible asset?
Fixed assets (B), like machinery, are tangible.
The rule ‘debit expenses and losses, credit income and gains’ relates to
This rule applies to nominal accounts (A) for expenses and income.
Rent paid to a landlord should be credited to
Rent paid reduces cash, so the cash account (A) is credited.
What concept assumes a business will operate indefinitely?
The going concern concept (B) assumes indefinite operation.
Which is not a real account?
Outstanding rent account (C) is a personal account, not a real account.
Which is an example of a long-term liability?
A bank loan repayable in 5 years (B) is a long-term liability.
Profit is part of
Profit increases owner’s capital (C).
A business has sales of N200,000, opening stock of N30,000, purchases of N120,000, and closing stock of N20,000. What is the gross profit?
Cost of goods sold = N30,000 + N120,000 - N20,000 = N130,000. Gross profit = N200,000 - N130,000 = N70,000.
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