Some Financial Accounting Multiple Choice Questions And Answers

1. The process of recording, classifying, secretary, measuring, interpreting and communicating financial data of an organization to enable users make assessments and decisions is known as _________________ (a) concepts (b) subsidiary books (c) book keeping (d) accounting
2. The concept that states that the owners and the business are treated as separate entities in the preparation of account statements is referred to as __________ (a) accrual concept (b) realization concept (c) business entity concept (d) money measurement concept
3. The double entry principle was introduced by (a) Dutchmen, Simeon Steve (b) Lucy Paciolo (c) association of public accountants (d) the institution of charted accountants of Nigeria
4. The following are source documents except (a) statement of account (b) ledger (c) credit note (d) petty cash vouchers
5. The subsidiary book is divided into (a) ten (b) five (c) six (d) eight
6. The double entry principle states that (a) four every debit entry there must be a corresponding debit entry (b) all transactions must be recorded in two accounts, one account the creditor and another the creditor (c) for every credit entry there must be a corresponding debit entry (d) for every credit entry there must be a corresponding credit entry
7. What book performs the functions of a subsidiary book and ledger account (a) ledger (b) cash book (c) return inwards book (d) convention
8. Contra entries can be seen as (a) withdrawal of cost from the office and been deposited into the bank (b) drawing of money for personal use (c) putting more money into your business (d) lending out money
9. The allowance made by manufacturer or wholesalers to retailers inform of deduction from catalogue prices of goods is known as (a) discount received (b) trade discount (c) discount allowed (d) cash discount
10. The discount allowed by a firm to its customers when they pay their accounts quickly or promptly is called (a) discount allowed (b) discount received (c) discount forgone (d) discount paid
11. Paid wages by cheque can be entered into the ledger as (a) debit cheque account, credit cash account (b) credit wages account debit bank account (c) debit payment account credit capital account (d) debit wages account, credit bank account
12. Personal ledger is divided into (a) general ledger and private ledger (b) normal and real account (c) sales and purchases ledger (d) returns inwards and return outwards account
13. The journal shows (a) account to be debited, account to be created and narration (b) account to be debited, account to be debited (c) simple entry and compound entry (d) discount received and discount allowed
14. When too much cash is in the office and the whole or part of it is deposited into the bank the action required will be (a) credit cheque column, debit bank column (b) credit bank column, debit cash column (c) debit cash column, credit bank column (d) debit bank column, credit cash column
15. Withdrew cash from bank for personal use will be recorded on what column of the cash book (a) bank column (b) cash column and bank column (c) cash column (d) folio
16. Banked cash can be recorded on what column the cash book (a) debit and credit of the  bank and cash column as contra entries (b) debit side of the bank column only (c) credit side of the cash column only (d) particulars
17. The total money provided by the owner to start a business is called (a) assets (b) liabilities (c) properties (d) capital
18. Assets formula can be expressed as (a) assets - liabilities (b) assets – capital (c) liabilities – capital (d) liabilities – capital
19. The indebtedness of a firm to its outsiders is known as (a) accounting (b) book – keeping (c) wealth (d) liabilities
20. Solve the following to get the correct answer from the option A
Bought from Page limited 140 bags of flour at N10 each
400 soap at N2 each
Trade discount of 10% (a)N1,980 (b) N5000 (c) 1,890 (d) 1560
21.  _____________ introduced the double entry principle entry book system
22. The cash book is the book for recording _________ and __________ of money in cash or cheques
23. The two types of discount are ________ and ________
24. Cash discount can be classified into ____________ and __________
25. The entries in the cash book and other original books are posted to the ____________
26. The ledger is the most ____________ and ___________ book of account
27. The journal can be referred to as ______________
28. Before any entry can be made in the ledger. It must first be recorded in the ____________ book
29. ________________ sets out the full details of goods sent by the seller to the buyer stating the quantity, quality price, discount given and terms of payment
30. The main purpose of preparing the trading accounting is ________________

Define the following terms
1a. Accounting concepts and conventions
b. Money measurement concept
c. Marching concept
d. Accruals concept

2a. Ledger
b. Personal Ledger
c. General Ledger
d. Private Ledger

3a. Control account

b. Sales ledger control account
c. State and explain three types of partners
d. Prime cost and factory overhead cost

4a. outline six advantages of control account
 b. explain suspense account and contra entries
 c. Write briefly on error of commission and compensating error with examples on each of them

5. Enter the following in a two column cash book balance off at the end of the month by also entering the transactions in the ledgers
June 1, Started business with cash N3,200
June 2, The following paid us by cheque, Okon N500 Abbey N600
June 3, Cash sales paid directly into the bank N700
June 5, Paid rent by cash N180
June 6, We paid the following accounts by cheque Michael  N520, Samuel N300
June 7, Withdrew cash from the bank for business use N10
June 8, Commission received by cheque N450
June 10 Banked cash n150
June 12, Withdrew cash from bank for personal use N30
June 15, Paid wages by cash N250
June 16, Bought motor van by cheque N20
June 18, Cash sales N1000
June 20, Bought stationery paying by cash N170
June 22, Receive N200 cheque from Okete
June 23, Cash purchases N120
June 25, Bought goods by cheque N115
June 27, Yinka lend us N1020 cash
June 28 Paid motor expenses by cheque N18
June 30 The proprietor put further cash N1320 into the business as capital