# SECTION A – OBJECTIVES

INSTRUCTION – CHOOSE THE CORRECT ANSWER FROM THE OPTIONS A – D.

1. Another name for residual value is ______.

(A) net book value

(B) scrap value

(C) depreciation value

(D) Development value

(A) Opening stock

(B) Closing stock

(C) Returns outward

(D) Returns inwards

3. One of the following is not a fixed asset on the balance sheet of a business ______.

(A) land and building

(B) freehold premises

(C) debtors

(D) motor van

4. One of the following is an income ______.

(A) discount allowed

(B) returns inward

(C) returns outwards

(D) Insurance

5. The method of depreciation that allows for an amount to be charged as depreciation for each year of expected useful life of the asset is called ______.

(A) straight line method

(B) annuity method

(C) reducing balance

(D) amortisation method

6. Another name for reducing balance method of depreciation is ______.

(A) straight line method

(B) diminishing balance method

(C) annuity method

7. If a machine cost ₦30, 000 with a residual value of ₦10, 000. If it is expected to last for 5 years . What will be the depreciation value using straight line method?

(A) ₦4,000

(B) ₦5,000

(C) ₦6,000

(D) ₦ 20,000

8. What is 2 ½ percent of ₦25,000?

(A) ₦665

(B) ₦624

(C) ₦625

(D) ₦265

9. One of the following is not a method of depreciating asset.

(A) annuity

(B) amortisation

(C) reducing balance

(D) long term method

10. One of the following items does not benefit the bank statement under the bank reconciliation statement ______.

(A) standing order

(B) bank charges

(C) dividend

(D) bank error

Get more exam questions –  Third Term Examination Financial Accounting Senior Secondary Schools (SS 1) Exam Questions Volume 1

11. One of the following is not a debit side item on the balance sheet of a business.

(A) capital

(B) net profit

(C) drawings

(D) Debtors

12. When a return inward is deducted from sales, the answer is called ______.

(A) net loss

(B) net sale

(C) net profit

(D) gross profit

13. What is the formula for getting gross profit of a business ______.

(A) cost of goods sold minus net profit

(B) cost of goods sold minus sales

(C) sales minus cost of goods sold

(D) goods sold minus cost of goods

14. To determine the cost of goods sold ______.

(A) purchases will be added to the gross profit

(B) returns inwards will be deducted from sales

(C) closing stock will be deducted from the calculation

(D) debtors will be added to creditors

15. The trading account of a business is prepared to obtain ______.

(A) the gross profit

(B) net profit

(C) cost of goods sold

(D) net loss

16. The profit and loss account is prepare to ascertain ______.

(A) gross profit

(B) cost of goods sole

(C) sales

(D) net profit

17. One of the following is not the reason for the disagreement between the cash book and the bank statement balances ______.

(A) cash balance

(B) dividend

(C) standing order

(D) bank error

18. One of the following items does not benefit the cash book of a business ______.

(A) dividend (B) standing order

(C) credit transfer (D) unpresented cheque

19. The amount of money used to start a business is called ………………..

(A) capital

(B) cash book

(C) debtors

(D) creditors

20. One of the following is not an item under end of year adjustment?

(A) prepaid income

(C) accrued expenses

(D) owing on expenses

21. A business is in existence basically to ______.

(A) maximize profit

(B) employ people

(C) produce goods and services

(D) distribute goods to every place in the world

22. All the following are balance sheet items except ______.

(A) land and building

(B) creditors

(C) sales

(D) bank overdraft

23. ______ is not one of the items prepared under the depreciation of fixed asset.

(A) Asset account

(B) Profit and loss account

(C) Ledger account

(D) Balance sheet extract

24. How is depreciation of an asset treated in the profit and loss account?

(A) As an expense

(B) As an asset

(C) As a liability

(D) As an income

25. What are the items that constitute the final accounts of a business?

(A) Cash book, asset account and balance sheet.

(B) Trading account, asset account and debtors account.

(C) Trading account, profit and loss account and balance sheet.

(D) Bank statement, cash book and trading account.

26. One of the following is not an account.

(A) Balance sheet

(B) Ledger

(C) Cash book

(D) Trial balance

27. In which of the following two places under final accounts is depreciation of fixed assets treated?

(A) trading account and the profit and loss account.

(B) trading account and the balance sheet.

(C) profit and loss account and balance sheet.

(D) Profit and loss account and trial balance account.

28. If a business has ₦ 1000 as opening stock ₦10, 000 as purchases, and ₦5,000 as closing stock. What is the cost of goods sold of the business?

(A) ₦5,500

(B) ₦15,000

(C) ₦6,000

(D) ₦4,000

29. The name given to the profit gotten from the preparation of profit and loss account is called ______.

(A) Net profit

(B) Gross profit

(C) Net loss

(D) Net sales

30. The profit gotten from trading account is called ______.

(A) Gross profit

(B) Net sales

(C) Cost of goods sold

(D) Expenses

# SECTION B – THEORY QUESTIONS

INSTRUCTION – ATTEMPT ONLY THREE (3) QUESTIONS FROM THIS SECTION. QUESTION ONE IS COMPULSORY.

QUESTION 1

A machine cost 12,500. It will be kept for 4 years and then sold at a scrap value of 5,120. Show the necessary accounts using:

A. reducing balance method and

B. straight line method

QUESTION 2

### CASH BOOK

Debit Credit
Aug 1 bal b/f 4 950 Aug 9 Oguns 470
Aug 8 Olu 760 Aug 26 Adeoba 1 060
Aug 15 Abbey 540 Aug 28 Gemi 4 20
Aug 26 cash 880 ___ ___
Aug 30 Charles 1 160 Aug 30 Bal c/d 6 340
Total 8 290 Total 8 290

Note – Best view – landscape if you are using mobile device.

### BANK STATEMENT

Date Details Debit ₦ Credit ₦Balance ₦
Aug 1 Bal b/f ---- ---- 4 950
Aug 8 Cheque - Olu ---- 760 5 710
Aug 9 Oguns 470 ---- 5 240
Aug 15 Cheque - Abbey ---- 540 5 780
Aug 26 Cash ---- 880 6 660
Aug 29 Credit transfer ---- 520 7180
Aug 30 Bank charges 200 ---- 6 980
Standing order 200 ---- 6 780

Note – Best view – landscape if you are using mobile device.

(a) Prepare an adjusted cash book.

(b) Draw a bank reconciliation statement.

QUESTION 3

A. Define a bank reconciliation statement.

B. State at least 5 reasons for the disagreement between a cash book and a bank statement balances with explanations.

QUESTION 4

A. State 5 methods of depreciation.

B. List and explain the 4 elements of depreciation.