The Way (Principles Of Account)
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The Act establishing the Institute of Chartered Accountants of Nigeria (ICAN) came into force on
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1stSeptember, 1960
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1st October, 1960
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1st October, 1963
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1st September, 1965.
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This quiz tests knowledge on accounting principles, focusing on topics like ICAN establishment, cost reporting, inventory effects, and petty cash management.
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- 2.
Cost reports for attention of management should reflect
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As much details as possible
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Summary figure only
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Details of non-controllable expenses
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Cost and comparable data useful in decision making.
Correct Answer
A. Details of non-controllable expensesExplanation
The cost reports for attention of management should include details of non-controllable expenses. This means that the reports should provide information about expenses that cannot be controlled or influenced by management, such as rent, utilities, or taxes. Including these details in the reports allows management to have a clear understanding of the overall costs and helps them make informed decisions regarding budgeting and resource allocation.Rate this question:
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- 3.
If the inventory at the end of the current is understand and the error is not caught during the following year, the effect is to
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Understate income this year and understate in next year
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Overstate income this year and overstate in next year
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Understate this year's income with no effect on next year's
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Overstate the income for the two-year period.
Correct Answer
A. Understate this year's income with no effect on next year'sExplanation
If the inventory at the end of the current year is understated and the error is not caught during the following year, it means that the actual value of the inventory is lower than what is recorded. This would result in a lower cost of goods sold and therefore, a higher gross profit. As a result, the income for this year would be understated. However, since the error is not caught and corrected in the following year, there would be no effect on the income for that year. Therefore, the correct answer is "understate this year's income with no effect on next year's".Rate this question:
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- 4.
The total of the discounts received column in the cash book is posted to the
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Credit of the discounts received account
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Debit of the discounts allowed account
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Credit of the discounts allowed account
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Debit of the discounts received account.
Correct Answer
A. Credit of the discounts allowed accountExplanation
The total of the discounts received column in the cash book is posted to the credit of the discounts allowed account because discounts received are considered as income for the business. By crediting the discounts allowed account, it increases the balance of this account, which represents the income received from discounts.Rate this question:
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- 5.
Use the information below to answer question 5 The initial imprest as at July 1st was N500. Petty cash vouchers with the custodian by July '15th added up to N394. an IOU slip received from a coworkerwas N65 and there was a shortage of N5 cash. The coworker made refund on July 18th before the imprest was replenished. What was the actual cash in the till as at 15th July?
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N106
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N101
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N70
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N36
Correct Answer
A. N101Explanation
The actual cash in the till as at 15th July was N101. This can be calculated by subtracting the IOU slip received from the coworker (N65) and the shortage of N5 from the total amount of petty cash vouchers (N394). Therefore, N394 - N65 - N5 = N324. Since the initial imprest was N500, the actual cash in the till is N500 - N324 = N176. However, the coworker made a refund of N75 on July 18th, so the actual cash in the till is N176 + N75 = N251.Rate this question:
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- 6.
Use the information below to answer question 6 The initial imprest as at July 1st was N500. Petty cash vouchers with the custodian by July '15th added up to N394. an IOU slip received from a coworkerwas N65 and there was a shortage of N5 cash. The coworker made refund on July 18th before the imprest was replenished. The amount required to replenish the payments made from the imprest was
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N399
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N394
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N358
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N101
Correct Answer
A. N358Explanation
The initial imprest was N500. Petty cash vouchers totaling N394 were given to the custodian by July 15th. Additionally, an IOU slip of N65 was received from a coworker and there was a shortage of N5 in cash. However, the coworker made a refund of N5 on July 18th before the imprest was replenished. Therefore, the amount required to replenish the payments made from the imprest is N358.Rate this question:
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- 7.
State Bank collected a note for AI-Makura Company. This collection, not yet recorded in Al-Makura's books, appears on the bank reconciliation as
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An addition to balance per books
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A deduction from balance per bank statement
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An addition to balance per bank statement
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A deduction from balance per books.
Correct Answer
A. A deduction from balance per bank statement -
- 8.
Mayana Corporation uses special journals to record its transactions. If one of Mayana's customers returns merchandise purchased with cash (for a refund), it makes an entry in the
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Cash receipts journal
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Sales journal
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General journal
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Cash disbursement journal.
Correct Answer
A. Sales journalExplanation
When a customer returns merchandise purchased with cash for a refund, Mayana Corporation would make an entry in the sales journal. The sales journal is used to record all sales transactions, including returns. This journal is specifically designed to track sales and related information, such as customer name, date of sale, and amount. By recording the return in the sales journal, Mayana can accurately track its sales and monitor any returns or refunds made to customers.Rate this question:
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- 9.
Responsibility according is particularly concerned with
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Historical accounting
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Controllable costs
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Storekeeping
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Valuation of stocks.
Correct Answer
A. Controllable costsExplanation
Responsibility accounting is a system that assigns responsibility for certain costs to specific individuals or departments within an organization. It focuses on controllable costs, which are costs that can be influenced or controlled by the individuals or departments responsible for them. This means that those individuals or departments are accountable for managing and controlling these costs effectively. Historical accounting, storekeeping, and valuation of stocks may be important aspects of accounting, but they are not the primary focus of responsibility accounting.Rate this question:
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- 10.
An advantage of the use of the voucher system is that it
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Reduces the number of cheques that will be written during any giving period
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Provides a highly flexible system for handling unusual transactions
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Provides a comprehensive record of business done with particular suppliers
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Ensures that every expenditure is reviewed and verified before payment is made.
Correct Answer
A. Provides a highly flexible system for handling unusual transactionsExplanation
The use of a voucher system provides a highly flexible system for handling unusual transactions. This means that the voucher system allows for easy and efficient processing of transactions that may not fit into the standard payment methods or require special handling. It offers the necessary flexibility to accommodate unique or irregular transactions, ensuring that they can be properly recorded and processed without disrupting the normal payment procedures.Rate this question:
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Nov 09, 2023Quiz Edited by
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May 14, 2009Quiz Created by
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