Beginning and ending accounts receivable balances were N8,000 and N15,000 respectively. If collections from customers during the period were N36,000, then total sales on account would be
- A. N23,000
- B. N29,000
- C. N36,000
- D. N43,000
If a bad debt previously written off is subsequently repaid, the amount collected is recorded as an
- A. income in the profit and loss account
- B. income in the balance sheet
- C. additional cash in the profit and loss account
- D. expense in the balance sheet
The net profit or loss for the year is determined in profit and loss account after
- A. deducting purchases from sales
- B. deducting cost of goods sold from sales and adding administrative expenses
- C. adding commissions received to gross profit
- D. eliminating all expenses from gross profit and adding any other income
Given;
Purchases = N20,000
Sales = N40,000
Carriage inwards = N5,000
Carriage outwards = N5,000
Opening stock = N10,000
Closing stock = N5,000
What is the cost of goods sold?
- A. N30,000
- B. N25,000
- C. N20,000
- D. N15,000
The financial position of an organization at a particular time can be ascertained from the
- A. statement of sources and application of funds
- B. statement of retained earnings
- C. balance sheet
- D. profit and loss account
When preparing a bank reconciliation statement, which of the following is deducted from the balance per bank statement?
- A. Bank charges
- B. Uncleared cheques
- C. Returned cheques
- D. unpresented cheques
When is a petty cash account debited?
- A. When the fund is established and every time money is spent
- B. When the fund is established and every time it is replenished
- C. When the fund is established and when the size of the float is decreased
- D. Every time money is drawn from the petty cash
The discount column of a three column cashbook is not balanced off but periodically transferred to the discount account because discounts
- A. are not important in cashbooks
- B. are cash items only
- C. do not form part of double entry
- D. are used for bank reconciliation
The suspense account is used to correct book-keeping error where the
- A. amount involved is quite significant
- B. item involved is not material
- C. item involved is unknown
- D. error does not affect the agreement of the trial balance
The use of the folio in the ledger is for
- A. referencing purposes
- B. particulars of the transaction
- C. the account titles
- D. only credit items
Mallam Gambo bought a freezer for his shop costing N10,500. In recording, he debited office expenses account and credited the bank account. What book-keeping error has he committed?
- A. Error of commission
- B. Error of reversal of entries
- C. Error of principle
- D. Compensating error
What is the cardinal rule of the double entry system?
- A. Debit the increasing account and credit the decreasing account
- B. Debit the receiving account and credit the giving account
- C. Debit the asset account and credit the liability account
- D. Debit the revenue account and credit the expenditure account
When a business incurs labour cost in installing a fixed asset, the cost is treated as
- A. additional cost to the asset
- B. business wages and salaries
- C. installation cost of the asset
- D. business cost of the asset
Antics Electronic Company recently bought six generators. Which of the following is the correct method of recording this transaction?
- A. Debit generator account and credit cash account
- B. Debit purchases account and credit cash account
- C. Debit cash accounts and credit purchases account
- D. Debit cash account and credit generator account
Accounting information is used by investors and creditors of a company to predict
- A. future cash flows of the company
- B. future tax payments of the company
- C. potential merger candidates for the company
- D. appropriate remunerations for the company's staff
The accounting convention which states that profit must not be recognized until realized while all losses should be adequately provided for it termed
- A. materiality
- B. objectivity
- C. consistency
- D. conservatism
Assigning revenues to the accounting period in which goods were sold or services rendered and expenses incurred is known as
- A. passing of entries
- B. consistency convention
- C. matching concept
- D. adjusting for revenue
The term “accounting period” is used to refer to the
- A. time span during which taxes are paid to the inland revenue board
- B. budget period, usually one year, relied on by the accountant
- C. time span, usually one year, covered by financial statement
- D. period within which debtors are expected to settle accounts