ACC 101 QUESTIONS AND ANSWERS BY MBGENIUS

1. The following are not non current assets except ______a. Inventory b. Investment c.
Cash d. Prepayments

2. The type or branch of accounting that generates reports for the use of external parties
such as creditors, investors and government agencies is known as: a. Financial
accounting b. Managerial accounting c. External accounting d. Tax accounting.

3. Which of the following is not an external user of accounting information?

a. Creditor b. Customer c. Investor d. Manager.

4. We bought goods of N12000 by cash. How should this transaction be posted? a. Dr

bought a/c and cr cash a/c b. Dr purchases-N12000 a/c and cr Cash a/c-N1200 c. Dr
bought a/c-N12000 and cr cash a/c- N12000 d. Dr purchase a/c-N12000 and cr cash
a/c-N12000

5. Given the following:

1/1/2012 started business with cash of N120000
3/1/2012 bought goods of N30000(N25000 on cash, N5000 on credit)
14/1/2012 credit sales of N40500
what is the balance of the cash a/c at the end of the month? a. N90000 dr b. N95000
dr c. N135500 dr d. N135500 cr

6. Trial balance is a/an _____ of balances extracted from the ledger. a. Account b.
Double entry c. Both list and account d. List

7. _______ are those owing the business a. Debtors b. Creditors c. Owers d.

Suppliers

8. Amount of sales in the sales ledger control account is of which category of sales? a.
Cash sales b. Bank sales c. Debit sales d. Credit sales

9. Statement of comprehensive income reveals _________ a. Net profit/loss b. Total

equity c. Total assets d. Total liabilities

10. The appropriate accounting equation is____

a. Asset= Liabilities - capital b. Liabilities =Assets + capital c. Capital=
Assets-liabilities d. Asset= equity +capital

11. The following are the causes of disagreement between bank statement and cash
book balance except _________ a. Credit transfer b. Bank error c. Direct debit d.
Contra entry

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12. The Pioneer of Accounting is: a. Peretomode b. Luca Pacioli c. Omah d. Taylor.

13. A sale of goods to Okoro had been correctly recorded in the sales day book as N240
but had been debited to his account as N24. How would this error be corrected? a. Dr
Okoro a/c N216, Cr sales ledger N216 b. Dr Okoro a/c N24, Cr Suspense account N24
c. Dr Okoro a/c N216, Cr Suspense a/c N216 d. Dr Suspense a/c N216, Cr Okoro a/c
N216.

14. Return outwards N50 to Ayoade was entered in Ayodele. How do we correct the
error? a. Dr Ayodele N50, Cr Ayoade N50 b. Dr Ayoade N50, Cr Ayodele N50 c.
Dr Ayoade N100, Cr Ayodele N100 d. Dr Ayoade N50, Cr Suspense N50.

15. Returns outwards are recorded on the debit side of the _________ a. Trial balance
b. Receivables control account c. Payables control account d. Sales account.

16. Given that the closing balance of the cash book of Mr. Tolani did not coincide with
his bank balance. Due to these discrepancies:
Unpresented Cheque-N1480
Uncredited Cheque-N1160
Bank charges-N200
Standing order-N200
Credit transfer-N520
If the balance as per cash book is N6340, What is the balance as per bank statement
balance?

a. N6580 b. N6850 c. N6140 d. None of the above

17. The opening balance of the debtors control account is N50000
Credit sales for the period -N61200
cash paid to suppliers-N12000
Cash refund-??
Returns inwards-N120
Find the absolute amount of cash refund if the closing balance of debtors was N110525.
a. N555 b. N11445 c. N61200 d. N445

18. Cash sales banked. How will this transaction be recorded? a. Dr cash, Cr sales b.
Dr cash & Cr sales, Dr Bank& Cr Cash c. Dr Bank, Cr Sales d. Dr bank, Cr cash.

19. Cash book is a book that records all cash ________ a. Lent and borrowed b.
Received and paid c. Going in and going out d. Accrued and prepaid .

20. Capital account would always have a_______ a. Debit balance b. Credit balance
c. A liability balance d. Asset balance.

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21. A business organization should operate as if it will exist persistently. This is
_____________ concept. a. Entity b. Persistent c. Going-concern d. Accrual

22. Mr. TJ purchased a truck of N20000. This transaction is a/an ___________

expenditure. a. Capital b. Revenue c. Deferred revenue d. Income

23. Balance sheet is a/an ____________ which shows the balances of assets and
liabilities of a firm. a. Pictorial representation b. List c. Account d. Standard

24. All are users of Accounting information except ________________ a. Creditor b.

Tax authority c. Public d. None of the above

25. Given: sales-N35000, Rent- N600, purchases-N14000, opening stock-N3500,

commissions received-N50, closing stock-N3000.
What is the net profit?
a. N14500 b. N20500. c. 19950 d. 19850

26. If the amount of total assets is N120000, total liabilities N99500, Net profit is N2500,
drawings of goods N1000. How much is the opening capital? a. N22000 b. N20500 c.
N190000 d. N3500

27. _________ is used to check the arithmetical accuracy of the ledger. a. Ledger b.
Balance sheet c. Income statement d. Trial balance

28. Plant and machinery, furniture and fittings, and motor van are examples of
___________ a. Non current assets b. Current assets c. Capital account d. Fixed
liabilities

29. A company who sells motor vehicles bought three brand new motor vehicles . This
transaction is a ____________ expenditure. a. Capital b. Revenue c. Partly capital
and partly revenue d. Stock

30. Given the following transaction:

Furnitures and fittings-N21000, inventory-N1200, Investment-N30000, Cash-N12000,
creditors-N6000, accrued expenses-N300. What is the value of capital? a. N57900 b.
N64200 c. N6300 d. N51000

31. If the amount of total assets is N120000, total liabilities N99500, Net profit is N2500,
drawings of goods N1000. How much is the closing capital? a. N22000 b. N20500 c.
N190000 d. N3500

32. Given: sales-N35000, Rent- N600, purchases-N14000, opening stock-N3500,

commissions received-N50, closing stock-N3000.

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What is the gross profit?
a. N14500 b. N20500. c. 19950 d. 19850

33. Given the following transactions:

Payables(1/1/2012)-N120000
credit purchases-N100500
Returns outwards-N1000
Discount received-N5000
Bills payable-N12000
What is the balance of payables at the end of the period? a. N202500 b. N 226500 c.
N100500 d. No answer

34. ___________ is the recording of transactions into the appropriate book of account.
a. Management Accounting b. Cost accounting c. Record accounting d. Book keeping

35. Given the following transaction:

Furnitures and fittings-N21000, inventory-N1200, Investment-N30000, Cash-N12000,
creditors-N6000, accrued expenses-N300. What is the value of assets? a. N57900 b.
N64200 c. N6300 d. N51000

36.Given the following transaction:

Furnitures and fittings-N21000, inventory-N1200, Investment-N30000, Cash-N12000,
creditors-N6000, accrued expenses-N300. What is the value of non current assets? a.
N57900 b. N64200 c. N21000 d. N51000

37. Drawings of goods worth N5000. What are the accounts involved? a. Drawings and
cash ac b. Cash and goods a/c c. Drawings and stock a/c d. Drawings and goods
a/c

38. Errors made by posting a transaction into the wrong classes of account is termed
______ a. Error of principles b. Error of original entry c. Error of omission d. Error
of classes

39. The following is not one of the reasons the bank statement balance will not tally
with the cash book balance except ____________ a. Capital receipts b. Revenue
expenditure c. Standing order d. All of the above.

40. Ade started business with:

Cash-N50000
Bank-N10000
Land and building-N120000
Furnitures and fittings-N80000
How much is Ade's capital? a. N60000 b. N260000 c. N200000 d. N50000

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41. Francis has the following items in his income statement:
Gross profit-N18000
Net profit-N8000
Other expenses-??
Increase in bad debt-N2500
discount received-N500
What is the value of other expenses? a. N8000 b. N13000 c. N16000 d. None of
the above

42. Which of these is an intangible asset? a. Goodwill b. Investment c. Inventory

d. Prepayment and accrual

43. Prepare rent account from the following:

Rent in arrears(1/1/2009)-N600
Rent in advance (1/1/2009)-N250
Rent paid for the year-N12000
Rent in advance(31/1/2009)-N20
What amount will be taken to p&l a/c? a. N11360 b. N11630 c. N12370 d. N13270.

44. Purchases of N2300 paid by cheque, was not recorded in either of the books. How
can this error be corrected? a. Dr purchases, Cr suspense b. Dr purchases Cr Bank c.
Dr Suspense, Cr purchases d. Dr bank purchases, Cr suspense.

45. Cash sales of N23000, was not recorded in either of the books. This error is an error
of ___________. a. One-sided omission b. Error of commission c. Omission d.
Recording

46. Patent is a/an ________ asset. a. Non-current b. Tangible c. Fictitious d.

Current

47. _________ are those debts that are irrecoverable. a. provisions for bad debts b.
Provisions for depreciation c. Total debtors d. bad debts

48. The following will be found in the adjusted cash book except_______ a. Credit
transfer b. Direct debit c. Bank charges d. Uncredited cheque

49. The amount of Motor van at the beginning of the year is N23000, purchases of
motor van during the year is N150000. You're required to calculate the total amount of
motor van at the end of the year, if the depreciation rate is 10 percent and 15 percent
respectively. a. N173000 b. N127000 c. N148200 d. N24800
50. A suspense account is a temporary account which is utilized to correct the errors
that _______________ the trial balance. a. Do not affect b. Affect c. Both affect and
do not affect d. Is seen

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ANSWERS TO THE ABOVE QUESTIONS:

1. B 26. A
2. A 27. D
3. D 28. A
4. D 29. B
5. B 30. A
6. D 31. C
7. A 32. B
8. D 33. A
9. A 34. D
10. C 35. B
11. D 36. D
12. B 37. C
13. C 38. A
14. B. 39. C
15. C. 40. B
16. D 41. A
17. A 42. A
18. C 43. B
19. B 44. B
20. B 45. C
21. C 46. C
22. A 47. D
23. B 48. A
24. D 49. C
25. C 50. B

Orthographically compiled by MBGENIUS