Financial Accounting Practice Exam Quiz!
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The 'Financial Accounting Practice Exam Quiz!' assesses key skills in financial accounting, covering topics like ledger balances, profit calculations, and accounting for raw materials. This quiz is designed to test understanding of fundamental accounting principles, making it ideal for learners and professionals.
- 1.
……… ratio checks the liquidity level of the assets of the business.
- A.
Acid Test Ratio
- B.
Current Ratio
- C.
Leverage ratio
- D.
Debtor ratio
Correct Answer
B. Current RatioExplanation
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- 2.
Use the following to answer questions 60 - 62 N Sales 35,000 Purchases 20,000 Closing stock 10,050 Carriage outwards 650.00 Carriage inwards 400.00 Returns outwards 100.00 Returns inwards 200.00 Salaries 600.00 Wages 400.00 The cost of goods sold is ____________.
- A.
N10,650.00
- B.
N10,250.00
- C.
N11,850
- D.
N12,850
Correct Answer
A. N10,650.00Explanation
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- 3.
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:
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- 4.
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 JournalExplanation
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- 5.
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 noteExplanation
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- 6.
The following assets can be revalued except
- A.
Building
- B.
Goodwill
- C.
Furniture
- D.
Fittings
Correct Answer
B. GoodwillExplanation
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- 7.
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 FirmExplanation
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- 8.
The reduction in the value of goodwill is
- A.
Amortization
- B.
Appreciation
- C.
Depletion
- D.
Depreciation
Correct Answer
A. AmortizationExplanation
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- 9.
“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
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- 10.
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 BookExplanation
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- 11.
…………. 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 MarketExplanation
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- 12.
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 gainExplanation
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- 13.
……. is a memorandum account for all debtors or creditors in an organization.
- A.
Jaiz account
- B.
Control Account
- C.
Unity account
- D.
Liability account
Correct Answer
B. Control AccountExplanation
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- 14.
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 accountingExplanation
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- 15.
What is the depreciation charged for the 2nd year at 20% per annum using reducing balance method?
- A.
N17,280
- B.
N12,000
- C.
N11,600
- D.
N6,400
Correct Answer
D. N6,400Explanation
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- 16.
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 ledgerExplanation
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- 17.
Transfer pricing is a term used in
- A.
Company account
- B.
Partnership account
- C.
Manufacturing account
- D.
Cash account
Correct Answer
C. Manufacturing accountExplanation
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- 18.
The method of depreciation used above was __________.
- A.
Evaluation
- B.
Devaluation
- C.
Revaluation
- D.
Accumulation
Correct Answer
C. RevaluationExplanation
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- 19.
What is the value of the opening capital?
- A.
N1,500.00
- B.
N1,000.00
- C.
N2,800.00
- D.
N2,000.00
Correct Answer
A. N1,500.00Explanation
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- 20.
Use the following to answer questions 60 - 62 N Sales 35,000 Purchases 20,000 Closing stock 10,050 Carriage outwards 650.00 Carriage inwards 400.00 Returns outwards 100.00 Returns inwards 200.00 Salaries 600.00 Wages 400.00 Calculate the gross profit.
- A.
N24,550.00
- B.
N24,150.00
- C.
N24,350.00
- D.
N23,950.00
Correct Answer
B. N24,150.00Explanation
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- 21.
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 liabilityExplanation
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- 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. N1,500.00Explanation
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- 23.
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. RevaluationExplanation
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- 24.
……………..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 DocumentsExplanation
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- 25.
Depreciation of asset is provided for in consideration of ------ .
- A.
Disposal
- B.
Loss of fire
- C.
Lost in transit
- D.
Wear and tear
Correct Answer
D. Wear and tearExplanation
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- 26.
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 EducationExplanation
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- 27.
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. N8,400Explanation
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- 28.
Using straight line method what is the depreciation to be charged annually.
- A.
N8,750
- B.
N12,000
- C.
N11,600.00
- D.
N5,800.00
Correct Answer
A. N8,750Explanation
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- 29.
………... 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 SystemExplanation
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- 30.
What is the net book value of the asset after 2nd year using reducing balance method?
- A.
N41,920
- B.
N40,320
- C.
N25,600
- D.
N30,720.
Correct Answer
C. N25,600Explanation
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- 31.
………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 transactionExplanation
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- 32.
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 recordsExplanation
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- 33.
A machine which was bought on 1st January 2015 for N40,000.00 It was expected to spend four yrs. It was revalued at the end of 2015 at N35,000.00 the value of depreciation is -------.
- A.
N6,000.00
- B.
N5,000.00
- C.
N4,000.00
- D.
N3,000.00
Correct Answer
B. N5,000.00Explanation
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- 34.
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 paidExplanation
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- 35.
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 MoneyExplanation
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- 36.
The asset referred to in the above information is __________.
- A.
Current
- B.
Fixed
- C.
Fictitious
- D.
Intangible
Correct Answer
B. FixedExplanation
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- 37.
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. N2,400Explanation
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- 38.
Which of the following is a prime cost
- A.
Royalty
- B.
Salary
- C.
Commission
- D.
Discount allowed
Correct Answer
A. RoyaltyExplanation
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- 39.
In manufacturing account, prime cost consists of direct material, direct labour and
- A.
Direct Wages
- B.
Direct Overheads
- C.
Direct Expense
- D.
Direct Royalty
Correct Answer
C. Direct ExpenseExplanation
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- 40.
Use the following to answer questions 60 - 62 N Sales 35,000 Purchases 20,000 Closing stock 10,050 Carriage outwards 650.00 Carriage inwards 400.00 Returns outwards 100.00 Returns inwards 200.00 Salaries 600.00 Wages 400.00 Calculate the net profit.
- A.
N22,900.00
- B.
N21,700.00
- C.
N20,000.00
- D.
N19,700.00
Correct Answer
A. N22,900.00Explanation
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- 41.
What is the accumulated depreciation at the end of 3rdyear. Using straight line method?
- A.
N17,400
- B.
N24,000
- C.
N26, 250
- D.
N34,800
Correct Answer
C. N26, 250Explanation
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- 42.
……….. are usually stated in the invoice?
- A.
Payment Terms
- B.
Destination of goods
- C.
Name of shipper
- D.
Amount paid
Correct Answer
D. Amount paidExplanation
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- 43.
The total current liabilities is ____________
- A.
N300.00
- B.
N1,000.00
- C.
N1,300.00
- D.
N1,500.00
Correct Answer
C. N1,300.00Explanation
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- 44.
Depreciation of Plant and Machinery is treated in manufacturing account as
- A.
Direct expenses
- B.
Overheads
- C.
Indirect labour
- D.
Profit and Loss item
Correct Answer
B. OverheadsExplanation
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- 45.
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 assetsExplanation
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- 46.
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. N101,190Explanation
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- 47.
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 AccountExplanation
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- 48.
Set off is a ……. item in sales ledger control account.
- A.
Credit
- B.
Expenses
- C.
Debit
- D.
Minor
Correct Answer
A. CreditExplanation
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- 49.
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 lossExplanation
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- 50.
……… 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. ReceiptExplanation
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Aug 14, 2024Quiz Edited by
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Sep 23, 2020Quiz Created by
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