a. Explain accounting ratio giving one example of liquidity ratio
b. State three users of accounting ratios
c. Outline three limitations to the use of accounting ratios
List five users of accounting information and state their respective interest in the accounting information
a. Identify the errors in the following transactions and state if they would affect the agreement of the trial balance totals
– Purchase of consumable posted to purchases account
b. An invoice amount incorrectly posted to purchases day book
c. Returns outwards posted to the personal account only
d. The totals sales ₦120,000 was recorded as ₦102,000
e. Payment of cheque to Ige entered on the receipt side of the cash book and credited to Ige’s account
a. What are incomplete records?
b. Outline three limitations of keeping incomplete records
c. State three reasons a business keeps incomplete records
A crane hired by a building construction company would be classified as
- A. a financial cost
- B. an administration cost
- C. a direct manufacturing cost
- D. an overhead cost
The two column cash book records
- A. all receipts in cash only and payments by cheque
- B. receipts and payments in cash only
- C. all receipts and payments both in cash and by cheque
- D. receipts and payments by cheque only
Which of the following rules is applicable in the absence of a partnership agreement? Interest is payable
- A. on drawings at the rate of 5% per annum
- B. on any contribution in excess of agreed capital at 5% per annum
- C. at 5% per annum on the current account balances
- D. on agreed capital contributed at 5% per annum
Use the following information to answer the question
Taurus Ltd was incorporated with the legal right to issue five million ordinary shares. The company has issued three million of the shares at GH⊄ 0.60 per share. To date, the company has made calls of GH⊄ 0.40 per share. All calls have been paid by shareholders except for GH⊄ 100,000 owing from one shareholder.
The authorized number of shares is
- A. 3,000,000
- B. 8,000,000
- C. 5,000,000
- D. 100,000
Use the following information to answer the question
Taurus Ltd was incorporated with the legal right to issue five million ordinary shares. The company has issued three million of the shares at GH⊄ 0.60 per share. To date, the company has made calls of GH⊄ 0.40 per share. All calls have been paid by shareholders except for GH⊄ 100,000 owing from one shareholder.
The paid up share capital is
- A. GH⊄ 300,000
- B. GH⊄ 250,000
- C. GH⊄ 500,000
- D. GH⊄ 600,000
Discount allowed is shown in financial statements as
- A. an asset
- B. an income
- C. a liability
- D. an expenses
Use the following information to answer the question
Sammy acquired plant an machinery costing ₦120,000 with an estimated useful life of 4 years and residual value of ₦2,000. The sum of the year digits method is used.
The value of the asset at the end of the first year is
- A. ₦5,000
- B. ₦8,000
- C. ₦2,000
- D. ₦3,000
Use the following information to answer the question
Sammy acquired plant an machinery costing ₦120,000 with an estimated useful life of 4 years and residual value of ₦2,000. The sum of the year digits method is used.
The depreciation to be charged for the third year will be
- A. ₦3,000
- B. ₦4,000
- C. ₦1,000
- D. ₦2,000
Which of the following items are apportioned on the basis of purchases in preparing departmental accounts?
- A. Lighting and cooling expenses
- B. Carriage outwards
- C. Carriage inwards
- D. Selling and distribution expenses
If sales is D 12,000 and the gross profit mark -up percentage is 25%. What is the cost of sales?
- A. D 2,400
- B. D 9,000
- C. D 9,600
- D. D 3,000
Carriage inwards on raw materials is recorded in the
- A. balance sheet
- B. profit and loss account
- C. trading account
- D. manufacturing account
Which of the following items is found in the profit and loss account of a company?
- A. Proposed dividends
- B. Transfer to general reserves
- C. Director's remuneration
- D. Proceeds from issue of shares
The error that affects the agreement of a trial balance totals is
- A. error of commission
- B. undercasting
- C. compensating error
- D. error of principle
Wages of machine operators in manufacturing account are treated as
- A. indirect expenses
- B. direct expenses
- C. direct labour
- D. indirect labour
The concept which underlines double entry bookkeeping is
- A. money measurement concept
- B. historical cost concept
- C. accrual concept
- D. duality concept
The reason for treating carriage inwards in the trading account is because
- A. it is an expense on goods sold to customer
- B. carriage outwards is an expense item in the profit and loss account
- C. it is an expense on goods purchased
- D. it does not appear in the balance sheet
Use the following information to answer the questions
The transactions of All Girls’ Social Club for the year 2021 are as follows:
Bar sales D 30,000; Bar purchases D 17,000 and Rent D 1,200
| 31st December | 2020 | 2021 |
| D | D | |
| Stock at bar | 1400 | 1600 |
| Owing for bar supplies | 6500 | 7300 |
The net profit on the bar to be transferred to the income an expenditure account for the year ended 31st December 2021 is
- A. D 11,600
- B. D 11,800
- C. D 13,000
- D. D 12,400