Some Financial Accounting Multiple Choice Questions And Answers

ATTEMPT THE FOLLOWING QUESTIONS

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 ________________

ESSAY SECTION B

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