Accounting-3

1. The distinguishing feature between a two-column cash book is

A. discount column
B. cash column
C. bank column
D. ledger folio

2. The lodgment of business cash into the business bank account is an example of

A. contra entry
B. bank reconciliation
C. self-balancing ledger
D. reversal entry

3. A credit balance is

A. a liability or an expense
B. an expenditure or an income
C. an asset or an expense
D. an income

4. A credit balance is

A. a liability or an expense
B. an expenditure or an income
C. an asset or an expense
D. an income

5. The capital of a sole trader changes as a result of

A. paying wages by cash
B. equipment purchased by cheque
C. drawing by cheque
D. purchase on credit

6. The order of financial accounting process involves i. recording ii. presenting iii. collecting iv. Analyzing

A. I, ii, iii and iv
B. ii, iii, i and iv
C. iii, i, ii and iv
D. iv, iii, ii and iv

7. A dishonored cheque is

A. debited in cash book
B. credited in the cash book
C. double entry in the cash book
D. credited in the bank book

8. A petty cashier received a float of GHC 84. The imprest is

A. GHC 204
B. GHC 120
C. GHC 84
D. GHC 36

9. Which of the following is not a book of original entry?

A. cash book B. purchases ledger returns
C. returns outwards journal
D. general journal

Use the following information to answer questions 10 to 12

						₦
Net profit						60,000
Total Assets						520,000
Current liabilities						150,000
Current assets						280,000

10. The current ratio is?

A. 1.87 : 1
B. 1 : 1.87
C. 1 : 2
D. 2 : 1

11. The capital employed is

A. ₦ 740,000
B. ₦ 580,000
C. ₦ 370,000
D. ₦ 280, 000

12. The returns on capital employed is

A. 17.2%
B. 16.2%
C. 15.2%
D. 11.2%

13. The double entry principle states that

A. every debit entry must have a corresponding credit entry
B. every credit entry must have a corresponding double entry
C. every debit must have a corresponding double entry
D. every assets must have a corresponding liability

14. Which of the following is a nominal account?

A. machinery account
B. drawings account
C. debtors account
D. wages account

15. Reserves account is kept in the

A. private ledger
B. creditors ledger
C. nominal ledger
D. debtors ledger

16. An advantage of control account is

A. locating figures
B. creditors ledger

17. The accumulative fund of a non-for-profit making organization is

A. consistency concept
B. realization concept
C. going concern concept
D. business entity concept

18. A business is treated as being separated from owners. This statement is emphasized by

A. consistency concept
B. realization concept
C. going concern concept
D. business entity concept

19. Which of the following is recorded on the debit side of the Trial Balance?

A. bank overdrafted
B. returns outwards
C. purchases
D. capital

Use the following information to answer the questions 20 and 21

			1/6/2011			30/5/2012
			D			D
Creditors			2,495			2,285
Debtors			1,215			2,145
Cash paid to creditors			——-			32,170
Cash paid to debtors			——-			40,650
Goods returned to supplier			——-			500

20. Purchases for the year is

A. D32,880
B. D32,780
C. D32,460
D. D31,960

21. Sales for the year is

A. D42,795
B. D41,865
C. D41,580
D. D39,720

22. Which of the following is determined in the trading account?

A. factory overheads
B. cost of goods sold
C. prime cost
D. net profit

23. Cash receipts and payments involving discounts are entered in

A. three-column cash book
B. two-column cash book
C. analytical cash book
D. petty cash book

24. The minimum number of persons required to form a partnership business is

A. 2
B. 3
C. 5
D. 10

25. Which of the following accounts has credit balance?

A. return inwards account
B. machinery account
C. sales account
D. cash account

26. The accounting principle that states that, In the preparation of account statements, revenues are recognized as soon as goods is passed on to the customer is the

A. materiality concept
B. matching concept
C. constituency concept
D. realization concept

27. Agreement between partners is contained in the partnership

A. act
B. deeds
C. accord
D. deal

28. a low current ratio in business indicates that the business is

A. long term loan repayment problem
B. efficient in the utilization of its resources
C. unable to pay its bills on time
D. growing its net assets effectively

29. Which of following is a recurrent expenditure in public sector accounting?

A. purchase of vehicles
B. purchase of drugs
C. construction of bore holes
D. construction of buildings

30. In departmental accounts, administrative expenses are recorded in the

A. trading account
B. balance sheets
C. profit and loss account
D. profit and loss appropriation account

31. The public account committee is an organ of

A. military regime
B. parliament regime
C. presidency
D. councilors

Use the following information to answer questions 32 and 33

						Le
Fitness						20,000
Market rates						120,000
Salaries						60,000
Maintenance of vehicle						49,000
Park collection						100,000

32. The balance at the end of the period is

A. Le 270,000
B. Le 139, 000
C. Le 131,000
D. Le 120,000

33. The total expenditure for the period is

A. Le 319,000
B. Le 270,000
C. Le 139,000
D. Le 109,000

34. Which of the following is not an item on the credit side of the purchases ledger control account?

A. cash received
B. cash payment
C. contra settlement
D. cheque payment

35. When a business is purchased from a sole trader, the excess of the purchase price over the net assets is

A. reserve
B. goodwill
C. freehold
D. valuation price

36. A set of instrument or programs which controls the operation of a computer is

A. software
B. hardware
C. monitor
D. keyboard

37. The process of detecting, tracing and eliminating errors in a computer program is

A. reproduction
B. debugging
C. sorting
D. retrieving

38. In a non-for-profit making organization, the cash book is referred to as

A. income and expenditure account
B. receipts and payments account
C. two column cashbook
D. petty cash book

39. When the going concern concept is no longer applicable, the fixed assets are recorded at their

A. net book value
B. realizable value
C. gross value
D. revalued amount

Use the following information to answer questions 40 and 41

						GHȼ
Stock of raw materials 1/1/100						5,000
Stock of raw materials 31/12/09						5,500
Purchase of raw materials						50,000
Carriage inwards						3,000
Direct labour						12,000
Factory overhead						17,500

40. The cost of raw materials consumed is

A. GH¢58,000
B. GH¢52,500
C. GH¢52,000
D. GH¢50,000

41. The prime cost is

A. GH¢6,500
B. GH¢64,000
C. GH¢58,500
D. GH¢52,500

42. Which of the following relates to the essence of partnership? To

A. run a charity organization
B. pursue a social objective
C. form a business for profit
D. run a religious objective

44. Upon the dissolution of partnership business, the party to be settled first out of the proceeds realized is

A. unsecured creditors
B. partner’s loan and advances
C. secured creditors
D. partners’ capital

45. Stock account is a type of

A. nominal account
B. personal account
C. real account
D. fixed assets account

46. At the end of trading period, cost of goods sold is debited to the trading account while cost of services is debited to the

A. balance sheet
B. manufacturing account
C. trading account
D. profit and loss account

47. Which of the following is not part of prime cost of production?

A. depreciation of factory equipment
B. direct expenses
C. direct wages
D. carriage on raw materials

48. Excess of current assets over current liabilities is

A. deferred capital
B. nominal capital
C. working capital
D. authorized capital

49. a statement showing a trader’s financial position as at a particular date is an

A. trading account
B. profit and loss account
C. balance sheet
D. appropriation account

50. A trading account is prepared to disclose the

A. net profile or loss for the year
B. gross profit or loss for the year
C. accumulated fund for the year
D. gross profit on manufacturing

Q	Ans	Q	Ans
1	A	26	B
2	A	27	B
3	B	28	A
4	D	29	B
5	C	30	C
6	C	31	C
7	B	32	C
8	–	33	D
9	B	34	A
10	A	35	B
11	C	36	A
12	B	37	B
13	A	38	B
14	D	39	D
15	C	40	B
16	D	41	A
17	D	42	C
18	D	43	C
19	C	44	B
20	C	45	C
21	C	46	D
22	B	47	A
23	A	48	C
24	A	49	C
25	C	50	B