1.

The amount set aside out of profit for a specific purpose is (a) depletion (b) reserve (c) provision
(d) depreciation
2. Which of the following is NOT a cause of depreciation (a) inflation (b) obsolescence (c) erosion
and decay (d) wear and tear
Use the following information below to answer questions 3 and 4 A motor van cost #60,000,000
at 1st January 2013, it was depreciated at 8% using the fixed installation method
3. What was the accumulated depreciation as at December 31st 2012 (a) 9,60,000(b) 9,216000 (c)
4,800000 (d) 4,416,000
4. What was the net book value of the motor van as at December 31st 2012 (a) #55,584,000 (b) 55,
200,000 (c) 50,784,000 (d) 50,400,000
5. Which of the following is NOT depreciable (a) building (b) tools (c) land (d) furniture
6. Patents and trademarks are classified under (a) fixed assets (b) current assets (c) wasting assets
(d) intangible assets
7. Which of the following does not lead to depreciation of assets (a) wear and tear (b) devaluation of
naira (c) obsolescence (d) usage
8. Which of the following does not belong to the group (a) straight line (b) insurance policy (c)
accumulated depreciation (d) diminishing balance
9. The balance sheet is a statement showing (a) all assets and liabilities (b) all balances (c) credit
entries (d) debit entries
10. The purpose of a trading account is to ascertain (a) sales (b) gross profit or loss (c) net profit or
loss (d) appropriated profit
11. Discount allowed is a charge made against (a) trading a/c (b) profit and lose a/c (c) appropriate
a/c (d) current a/c
12. Debentures is classified as (a) capital (a) fixed assets (c) short term liability (d) long term
liabilities
13. Which of the following is added to the proprietor's capital (a) net profit (b) gross profit (c) net
sales (d) gross sales
14. Which of the following is NOT part of the double entry system (a) trading a/c (b) profit and loss
a/c (c) balance sheet (d) cash book
15. Which of the following statement is Not correct (a) profits increase capital (b) losses reduce
capital (c) drawings reduce capital (d) drawings increase capital
16. Which of the following statement is correct (a) net sales = sales + sales returns (b)cost of goods
sold = opening stock+ closing stock (c) gross profit= net sales - cost of goods sold (d) None of
the above
17. Which of the following is posted to trading account (a) carriage outwards (b) carriage inwards (c)
Rent (d) Discount allowed
18. Which of the following is NOT found in a trial balance (a) opening stock (b) closing stock (c)
capital (d) Rent paid
19. A statement that measures the performance of a business over a period of time is the (a) Balance
sheet (b) bank statement (c) profit and loss a/c (d) bank Reconciliation statement
20. When the cost of goods sold is added to closing stock, the resulting figures is (a) carriage inwards
(b) cost of sales (c) gross profit (d) cost of goods available for sale
21. The effect on profit when closing stock is understated is (a) increase in profit (b) decrease in
profit (c) no charge in point (d) doubling of profit
22. Carriage outwards expenses of a business are treated in the (a) Balance sheet (b) income surplus
a/c (c) profit and loss a/c (d) trading a/c
23. A return outward is _ purchases (a) added to (b) deducted from (c) similar to (d) not related to
24. Purchases returns is the same as (a) purchases journal (b) returns outward (c) net sales (d) returns
outward journal
25. Which item wou ld be recorded as a credit entry in a purchases ledger control a/c (a) amount paid
to credit suppliers (b) contra with the sales ledger control a/c (c) discount received from credit
suppliers (d) interest charged on late payment
26. Which account may appear as a credit balance in a trial balance (a) carriage outwards (b) discount
received (c) drawings (d) inventory
27. The account of a business are prepared on the basis that the business will continue to operate for
the foreseeable future. Which accounting principle is being applied (a) accruals (b) consistency
(c) going concern (d) realisation
28. On 1st February 2022 Kenyatta's fixtures and fittings had a net book value of #12950. She
purchased fixtures,#2250. During the depreciation for the year ended 31st January 2023 was
#4900. What was the netbook value of the fixtures and fittings on 31st January 2023? (a) #5,800
(b) #7,150 (c) #10,300 (d) #15,600
29. Mia made a payment to Alia, a credit supplier. In error she debited the account of Alina. Which
type of error did Mia make (a) commission (b) compensating (c) original entry (d) principle
30. Ahmed bought a motorbike and paid the following amounts
Motorbike #8000
Number plate #100
Insurance #400
What was Ahmed's capital expenditure (a) #400 (b) #500 (c) #800 (d) #8100
31. A trader provided the following information at the end of the first year of trading
Revenue 5000
Profit and loss 500
Expenses 1400
Closing inventory 800
What was the purchases for the year (a) 2300 (B) 3900 (c) 4900 (d) 6700
32. Where is discount allowed recorded (a) on the credit side of the purchases ledger control account
(b) on the credit side of the sales ledger control account (c) on the debit side of the purchases
ledger control account (d) on the debit side of the sales ledger control account
33. Why would a bank manager look at a trader:'s financial statement (a) to calculate how fast trade
payables were being paid (b) to check if trader would be able to repay a loan (c) to find out if
customers will receive continuous supplies. (d) to know if inventory levels are too high
34. Gonna purchased goods costing #1,800 less trade discount of 30% she was allowed cash discount
of 5%. How much should Gonna have to pay for the goods (a)#1,080 (b) #1,197 (c)#1,260 (d)
#1,800
35. Which of the following books of account is part of the double entry system (a) general journal (b)
petty cash book (c) sales returns book (d) purchases returns book
36. In which of the following books will the trade discount be recorded (a) cash book (b) general
ledger (c) invoice (d) purchases day book
37. Which of the following subsidiary books involves cash movement (a) sales day book (b)
purchases day book (c) returns inward book (d) cash book
38. A debit entry in the cash account and a corresponding credit entry in Aliu's account indicate a _
(a) sales of goods to Aliu for cash (b) purchase of goods from Aliu for cash (c) receipt of cash
from Aliu (d) payment of cash to Aliu
39. Carriage outwards expenses of a business are treated in the (a) profit and loss a/c (b) balance
sheet (c) income surplus a/c (d) trading account
40. A statement that measures the performance of a business over a period of time is the (a) Bank
Reconciliation statement (b) balance sheet (c) bank statement (d) profit and loss a/c
SECTION B
1. Calculate the trading profit & loss account
Sales. 14600
Purchases 5500
Rent 2000
Salaries. 1000
Returns inward. 150
Discount received. 400
Closing stock. 250
Opening stock. 100
2. Emeka had the following balances in the books as at 31st December 2022 prepare his balance
sheet.
Capital. 45000
Motor vehicle. 57000
Office equipment. 14250
Net profit. 5000
Bank loan. 27500
Stock. 5000
Debtors 7500
Creditors ,7500
Cash in hand. 750
3. Mr Ojoba had the following balances in his books on 1st July 1990
Sundry creditors. 9,724
Debit balance in purchases ledger 660
The following transactions took place during the month of July;
Payment to creditors. 28,360
Bills payable accepted. 15,129
Discount received. 1,838
Purchases returns and allowance. 748
Sales and purchases ledger transfers. 1,498
Credit purchases. 47,317
Purchases debit balance at close. 856
Prepare the total creditor accounts for the month of July