Financial Accounting Practice Exam Quiz!

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Financial Accounting Practice Exam Quiz! - Quiz

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Questions and Answers
  • 1. 

    The balance in a sales ledger control account indicates:

    • A.

      Difference between debtors and creditors

    • B.

      Total sales

    • C.

       total purchases

    • D.

      Total debtors

    Correct Answer
    D. Total debtors
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 2. 

    Sales was N12,500, total expenses was N2,500 and net profit is 10% of sales. What is the gross profit?

    • A.

      N11,250

    • B.

      N8,750

    • C.

       N3,750

    • D.

      N1,250

    Correct Answer
    C.  N3,750
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 3. 

    Which of the following is equivalent to the Receipt and Payments account?

    • A.

      Income and expenditure account

    • B.

      Cash Book

    • C.

      Subscription Account

    • D.

      Profit or Loss Account

    Correct Answer
    B. Cash Book
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 4. 

    Subscription received in advance are

    • A.

      Included in the income and expenditure account

    • B.

      Not included in receipt and payment account

    • C.

      Shown as a current asset in the balance sheet

    • D.

      Shown in the balance sheet as current liability

    Correct Answer
    D. Shown in the balance sheet as current liability
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 5. 

    Where records maintained are inadequate to facilitate the preparation of a trading, profit or loss account, this is described as

    • A.

      Cost accounting

    • B.

      Book keeping

    • C.

      Incomplete records

    • D.

      Double entry

    Correct Answer
    C. Incomplete records
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 6. 

    Use the information below to answer the following question. Opening stock of raw materials                    24,750 Purchases of raw materials                         123,640 Carriage on raw materials                              10,000 Closing stock of raw materials                      45,000 Factory supervisor’s salary                             30,000 Wages of factory workers                               50,000 Royalties paid                                                    18,000 Insurance of factory                                         62,000 Work in progress                                               23,000 Raw materials returned                                    12,200 The value of raw materials consumed is

    • A.

      N121,440

    • B.

      N113,390

    • C.

      N111,190

    • D.

      N101,190

    Correct Answer
    D. N101,190
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 7. 

    Use the information below to answer the following question. Opening stock of raw materials                    24,750 Purchases of raw materials                         123,640 Carriage on raw materials                              10,000 Closing stock of raw materials                      45,000 Factory supervisor’s salary                             30,000 Wages of factory workers                               50,000 Royalties paid                                                    18,000 Insurance of factory                                         62,000 Work in progress                                               23,000 Raw materials returned                                    12,200 The prime cost is

    • A.

      N199,190

    • B.

      N169,190

    • C.

      N151,190

    • D.

      N146,190

    Correct Answer
    B. N169,190
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 8. 

    Use the information below to answer the following question. Opening stock of raw materials                    24,750 Purchases of raw materials                         123,640 Carriage on raw materials                              10,000 Closing stock of raw materials                      45,000 Factory supervisor’s salary                             30,000 Wages of factory workers                               50,000 Royalties paid                                                    18,000 Insurance of factory                                         62,000 Work in progress                                               23,000 Raw materials returned                                    12,200 The total overhead expenses is

    • A.

      N142,000

    • B.

      N115,000

    • C.

      N110,000

    • D.

      N92,000

    Correct Answer
    D. N92,000
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 9. 

    Bad debts written off is shown as 

    • A.

      Debit in sales ledger

    • B.

      Debit in purchases ledger

    • C.

      Credit in sales ledger

    • D.

      Credit in purchases ledger

    Correct Answer
    C. Credit in sales ledger
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 10. 

    Where fixed capital are maintained, partner’s drawings are transferred to the 

    • A.

      Credit of Capital Account

    • B.

      Debit of Capital account

    • C.

      Credit of Partner’s Current account

    • D.

      Credit of Capital Account

    Correct Answer
    D. Credit of Capital Account
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 11. 

    A partner whose liability goes beyond his capital is known as 

    • A.

      Dormant partner

    • B.

      Limited partner

    • C.

      General partner

    • D.

      Nominal partner

    Correct Answer
    C. General partner
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 12. 

    An expenses is termed an “accrual” because it 

    • A.

      Is yet to be paid

    • B.

      Is a profit or loss account item

    • C.

      Must appear in the balance sheet

    • D.

      Is a trading account item

    Correct Answer
    A. Is yet to be paid
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 13. 

    Use the following information to answer question 13 and 14 On 1/7/07, a trader owed wages of N2,000. During the year ended 30/6/08, wages of N2,400 were owed and N8,000 were paid. The wages of the year ended 30/6/08 is

    • A.

      N12,400

    • B.

      N8,400

    • C.

      N8,000

    • D.

      N7,000

    Correct Answer
    B. N8,400
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 14. 

    Use the following information to answer question 13 and 14. On 1/7/07, a trader owed wages of N2,000. During the year ended 30/6/08, wages of N2,400 were owed and N8,000 were paid. Wages recorded in the balance sheet as at 30/06/08 is 

    • A.

      N8,000

    • B.

      N6,000

    • C.

      N2,400

    • D.

      N2,000

    Correct Answer
    C. N2,400
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 15. 

    The amount for which a business is sold is the

    • A.

      Goodwill

    • B.

      Consolidated fund

    • C.

      Purchases consideration

    • D.

      Capital reserved

    Correct Answer
    C. Purchases consideration
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 16. 

    Which of the following is a prime cost

    • A.

      Royalty

    • B.

      Salary

    • C.

      Commission

    • D.

      Discount allowed

    Correct Answer
    A. Royalty
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 17. 

    Which of the following errors will affects the totals of a trial balance?

    • A.

      Compensating error

    • B.

      Complete reversal of entry

    • C.

      Error in addition

    • D.

      Error of original  entry

    Correct Answer
    C. Error in addition
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 18. 

    When a transaction is completely left out, it is an error of

    • A.

      Commission

    • B.

      Omission

    • C.

      Principle

    • D.

      Compensation

    Correct Answer
    B. Omission
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 19. 

    Which of the following is not recorded in the partnership appropriation account?

    • A.

      Interest on capital

    • B.

      Partner’s drawing

    • C.

      Share of profit

    • D.

      Interest on drawing

    Correct Answer
    B. Partner’s drawing
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 20. 

    The reduction in the value of goodwill is

    • A.

      Amortization

    • B.

      Appreciation

    • C.

      Depletion

    • D.

      Depreciation

    Correct Answer
    A. Amortization
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 21. 

    The total current liabilities is ____________

    • A.

      N300.00

    • B.

      N1,000.00

    • C.

      N1,300.00

    • D.

      N1,500.00

    Correct Answer
    C. N1,300.00
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 22. 

    What is the total value of Agboola’s fixed assets?

    • A.

      N2,800.00

    • B.

      N1,500.00

    • C.

      N1,300.00

    • D.

      N500.00

    Correct Answer
    B. N1,500.00
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 23. 

    The total current assets is ____________.

    • A.

      N300.00

    • B.

      N1,000.00

    • C.

      N1,500.00

    • D.

      N1,300.00

    Correct Answer
    D. N1,300.00
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 24. 

    The following are balance sheet items except

    • A.

      Closing stock

    • B.

      Opening stock

    • C.

      Net profit

    • D.

      Prepayment

    Correct Answer
    B. Opening stock
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 25. 

    A balance sheet shows only ------ 

    • A.

      Fixed assets and current assets

    • B.

      Assets and current liabilities

    • C.

      Assets and capital

    • D.

      Assets and liabilities

    Correct Answer
    D. Assets and liabilities
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 26. 

    All the following except one are features of preference shares except?

    • A.

      They have a fixed rate of dividend

    • B.

      Their dividends are paid after all other classes of shares are paid

    • C.

      It's dividends can be accumulated

    • D.

      Preference shares can be converted to ordinary shares at a later time

    Correct Answer
    B. Their dividends are paid after all other classes of shares are paid
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 27. 

    All ordinary shares are participating in nature but not all preference shares are participating. This means that?

    • A.

      All Ordinary shares are not equity owners

    • B.

      All preference shares can vote and be voted for in choosing directors

    • C.

      All ordinary shares have the right to take part in the management of the business

    • D.

      All preference shares are debtors of the business

    Correct Answer
    A. All Ordinary shares are not equity owners
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 28. 

    When shares are issued at premium, this means that?

    • A.

      The company makes loss

    • B.

      The company makes gain

    • C.

      The company gives out shares for nothing

    • D.

      The company sell share without loss or gain

    Correct Answer
    B. The company makes gain
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 29. 

    When shares are issued at discount, this means that? 

    • A.

      The company makes loss

    • B.

      The company makes gain

    • C.

      The company gives out shares for nothing

    • D.

      The company sell share without loss or gain

    Correct Answer
    A. The company makes loss
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 30. 

    The word Quoted price in issue of shares means?

    • A.

      The price in the prospectus

    • B.

      The nominal price

    • C.

      The actual price the share was sold

    • D.

      The expected price the share was sold

    Correct Answer
    A. The price in the prospectus
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 31. 

    …………. is a terminology used to describe the amount allocated to a particular item of expenditure in government budget?

    • A.

      Vote

    • B.

      Warrant

    • C.

      Head

    • D.

      Gross pay

    Correct Answer
    A. Vote
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 32. 

    Jokotade returned goods to us ₦300. Which subsidiary book will this be entered?

    • A.

      Return Inward Journal

    • B.

      Cash Book

    • C.

      Return Outward journal

    • D.

      Purchases Journal

    Correct Answer
    A. Return Inward Journal
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 33. 

    One of the following is an example of non-banking institutions?

    • A.

      Capital Market

    • B.

      Insurance Firm

    • C.

      Money Deposit bank

    • D.

      Microfinance Bank

    Correct Answer
    B. Insurance Firm
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 34. 

    ………... signifies the embodiment of all structures, platforms and process put in place for smooth running and regulation of the  monetary flows n the Nigerian economy?

    • A.

      The Constitution

    • B.

      The Finance Act

    • C.

      The Nigeria Financial System

    • D.

      The Nigerian Judiciary

    Correct Answer
    C. The Nigeria Financial System
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 35. 

    The following are components of Nigeria's financial system except?

    • A.

      Financial Institution

    • B.

      Financial Markets

    • C.

      Financial Instruments

    • D.

      Financial Meddling

    Correct Answer
    D. Financial Meddling
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 36. 

    One of the following is not an Operators of Nigeria Financial System?

    • A.

      Federal Ministry of Finance

    • B.

      Central Bank of Nigeria

    • C.

      Tutor Generals of Education

    • D.

      The Nigeria  Deposit Insurance Corporation

    Correct Answer
    C. Tutor Generals of Education
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 37. 

    …………. is the section of the financial market that is used for buying and selling of assets which have short term life span that is financial instruments with original maturity within a year?

    • A.

      Capital market

    • B.

      Second Tier security Market

    • C.

      Finance Market

    • D.

       Money Market

    Correct Answer
    D.  Money Market
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 38. 

    ……………..are documents used to established the occurrence of a financial transaction?

    • A.

      Financial Documents

    • B.

      Source Documents

    • C.

      Financial transaction

    • D.

      Transaction Documents

    Correct Answer
    B. Source Documents
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 39. 

    ………an exchange of intentions between a potential buyer and a potential seller backed with a cash payment or cheque payment or promise to pay or set off payment.

    • A.

      Financial Documents

    • B.

      Cash Transactions

    • C.

      Financial transaction

    • D.

      Credit Transaction

    Correct Answer
    C. Financial transaction
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 40. 

    All the following are examples of source documents except?

    • A.

       Cheque Stub

    • B.

      Airfreight Note

    • C.

      I Owe You (IOU)

    • D.

      Paper Money

    Correct Answer
    D. Paper Money
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 41. 

    ……….. are usually stated in the invoice?

    • A.

      Payment Terms

    • B.

      Destination of goods

    • C.

      Name of shipper

    • D.

      Amount paid

    Correct Answer
    D. Amount paid
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 42. 

    ……… is a written acknowledgement that a person received money or property in payment following a sale or other transfer of goods or provision of service?

    • A.

      Cheque Stub

    • B.

      Airfreight Note

    • C.

      Receipt

    • D.

      Paper Money

    Correct Answer
    C. Receipt
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 43. 

    Transaction are usually affected by entries -----

    • A.

      One

    • B.

      Double

    • C.

      Three

    • D.

      Four.

    Correct Answer
    B. Double
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 44. 

    The term “folio” in account means -----

    • A.

      A page in the ledger.

    • B.

      An account in the book.

    • C.

      A page in the book.

    • D.

      A page in file.

    Correct Answer
    A. A page in the ledger.
    Explanation
    The term "folio" in account refers to a page in the ledger. In accounting, a ledger is a book that contains all the accounts of a company. Each account is assigned a specific page in the ledger, and this page is known as a folio. The folio helps in organizing and tracking the transactions related to a particular account.

    Rate this question:

  • 45. 

    When a buyer is under-charged, the seller forwards

    • A.

      A debit note

    • B.

      A credit note

    • C.

      An under cast note

    • D.

      A payment receipt

    Correct Answer
    A. A debit note
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 46. 

    “A business unit is assumed to operate into foreseeable future and earn reasonable net income”.  This statement is emphasized by the concept of

    • A.

      Business entity.

    • B.

      Going on concern.

    • C.

      Realization.

    • D.

      Accrual.

    Correct Answer
    B. Going on concern.
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 47. 

    The act of collecting, recording and interpreting accounting data is ------

    • A.

      Cost accounting

    • B.

      Management accounting

    • C.

      Financial accounting

    • D.

      Data processing.

    Correct Answer
    C. Financial accounting
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 48. 

    Transfer pricing is a term used in

    • A.

      Company account

    • B.

      Partnership account

    • C.

      Manufacturing account

    • D.

      Cash account

    Correct Answer
    C. Manufacturing account
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 49. 

    The process of ascertaining the new market value of an asset is termed

    • A.

      New Price

    • B.

      Re-costing

    • C.

      Revaluation

    • D.

      Market research

    Correct Answer
    C. Revaluation
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

  • 50. 

    A real account is the account of _________.

    • A.

      Expenses or losses

    • B.

      Gain or incomes

    • C.

      Physical tangible assets

    • D.

      Current liabilities

    Correct Answer
    C. Physical tangible assets
    Explanation
    *##*Correct*##*Incorrect

    Rate this question:

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