SSS Two Financial Accounting Objective Examination Questions

1. Which of the following will a supplier send to a customer whose invoice was under cast?
A. invoice
B. debit note
C. credit note
D. payment voucher
2. In which of the following books will trade discount be recorded?
A. cash book
B. general ledger
C. purchases day book
D. journal voucher
The following balances were extracted from the books of XY Z co. Ltd
Use the following information to answer questions 3-5

Goodwill	₦
other fixed assets	20000
Stock	400000
Debtors	10000
Provision for bad debts	30000
Bank balance	5000
Sundry creditors	10000
Accrued expenses	25000
Bills payable	5000
Provision for depreciation	90000

3. The working capital is
A. ₦45000
B. ₦32000
C. ₦25000
D. ₦18000
E. ₦13000
4. The total net assets is
A. ₦465000
B. ₦433000
C. ₦375000
D. ₦348000
E. ₦343000
5. The gradual fall in the value of an assets is called
A. depreciation
B. profit
C. loss
D. account
6. __ result due to constant usage of an item
A. depletion
B. wear and tear
C. passage of time
D. inadequacy
7. ___can become obsolete due to change in technology
A. obsolescence
B. wear and tear
C. passage of time
D. depreciation
8. ___occur in some assets with the efficient of time
A. passage of time
B. depreciation
C. inadequacy
D. profit
9. ___results due to expansion of production of a company assets or inadequacy that may need replacement
A. inadequacy
B. depreciation
C. passage of time
D. wear and tear
10. ___is a method of depreciation that a provision are equal
A. straight line
B. reducing balance
C. depletion units
D. revaluation
11. ___is the method of depreciation that has a fixed percentage
A. reducing balance
B. revaluation
C. straight line
D. depletion units
12. ___is the transforming of raw materials into finish goods
A. manufacturing account
B. profit and loss account
C. suspense account
D. depreciation account
13. ___is the profit that is been enjoyed by the manufacturers
A. manufacturing profit
B. depreciation profit
C. suspense profit
D. depletion profit
14. ___are expenditure incurred and raw materials which can be traced to a particular production unit
A. direct material
B. indirect materials
C. direct expenses
D. direct factory
15. ___are expenditure incurred in running the factory
A. factory over head
B. direct factory
C. prime cost
D. wages and salaries
16. ___can be defined as a relationship which subsists between persons carrying out a business in common in the view of making profit
A. partnership
B. suspense
C. sole-proprietor
D. manufacturing
17. __are guiding rules and regulations governing a partnership business
A. partnership agreement
B. suspense agreement
C. prime agreement
D. cash book
18. ___is the partner who takes the active part in running of the partnership business
A. active partner
B. sleeping partner
C. nominal partner
D. parting partner
19. ___is a partner that does not take part in the day to day running of the business
A. sleeping partner
B. parting partner
C. nominal partner
D. suspense partner
20. ___is the partner that only contribute his name to the formation of a business or company and noting more
A. nominal partner
B. manufacturing partner
C. depletion partner
D. parting partner
21. ___ account is an account that shows the summary of the cash book over a particular period of time
A. receipt and payment account
B. income and expenditure account
C. profit and loss account
D. suspense account
22. ___is the form that correspond to the capital partnership or sole-traders
A. accumulated fund
B. subscription
C. grant
D. fees
23. __is the contribution of members to associations or societies
A. subscriptions
B. grant
C. income and expenditure
D. fees
24. ___is the sum of money paid for future years by the members
A. subscription in advance
B. subscription in arrears
C. donations
D. entrance fee
25. ___can be refer to as gift of money or goods from any member or outside clubs
A. donations
B. entrance fee
C. subscription in arrears
D. cash book
26. ___is money paid on application for membership of an association of clubs
A. entrance fee
B. salaries and wages
C. suspense fee
D. profit and loss account
27. ___account is prepared to show a gross profit or gross loss
A. trading account
B. profit and loss account
C. manufacturing account
D. suspense account
28. ___account is prepared to show a net profit or net loss
A. manufacturing account
B. suspense account
C. trading account
D. profit and loss account
29. ___is the profit arrived after the deduction of all expenses
A. net profit
B. gross profit
C. net loss
D. gross loss
30. ___ is the excess of sales over the cost of goods sold
A. gross profit
B. gloss profit
C. net loss
D. profit and loss account
31. The principle of double entry Book keeping states that for every
A. credit purchase, double the entry
B. debit entry there must be a corresponding credit entry
C. debit entry there must not be a corresponding credit entry
D. transaction there must be a record in the book of accounts
32. The fixed amount of money set aside for petty expenses is called ……..
A. budget
B. imprest
C. capital
D. float
33. The art of recording transactions in the book of account is known as ……..
A. auditing
B. marketing
C. book keeping
D. accounting
34. The only book that combines the functions of the subsidiary and the principal books is called ……..
A. cash book
B. journal
C. cheque
D. bank statement
35. A system where a separate cash book is maintain for small payment is ……..
A. saving
B. imprest
C. petty cash
D. float
36. When debit and credit entries of a transaction are shown in the cash book, it is described as ……..
A. double
B. single
C. contra
D. debit
37. A business which converts raw materials into finished goods prepares a …….
A. trading account
B. profit and loss account
C. balance sheet
D. manufacturing account
38. Depreciation is …….
A. the increase in the value of fixed assets
B. reduction in the value of fixed assets
C. cost of repairs on fixed assets
D. cost of purchase of fixed assets
39. The balance in the purchase ledger control account is tagged …….
A. the total credit purchase
B. the total sales
C. total purchases
D. total creditors
40. Goodwill is grouped under which of the following classes of assets?
A. fixed
B. current
C. liquid
D. fictitious
41. The excess of current assets over current liabilities is called …….
A. paid up capital
B. nominal capital
C. working capital
D. registered capital
42. A list of balances extracted from the ledger is known as …….
A. trail balance
B. balance sheet
C. trading account
D. profit and loss account
43. Returns inward is also called …….
A. purchases returns
B. mark-up
C. sales returns
D. goods in transit
44. In a partnership business, the net profit serves as opening balances for ……..
A. trading account
B. appropriation account
C. current account
D. balance sheet
45. Which of the following is not an item in the appropriation account of a company?
A. debenture interest
B. company tax
C. general reserve
D. preliminary expenses
46. A sales day book is used for recording …….
A. sales return
B. sales of goods
C. credit sales
D. hire purchase
47. Which of the following is not a subsidiary book?
A. general ledger
B. sales journal
C. cash book
D. return outward journal
48. Which of the following is an example of personal account?
A. stock
B. rent
C. debtors
D. machinery
49. The book which the bank prepares showing the transactions between it and the customer is known as …….
A. pay-in-slip
B. bank statement
C. cheque
D. pass book
50. Which of the following is an internal user of book-keeping information?
A. the public
B. government
C. shareholders
D. management
51. Which of the following is not true about partnership business without written agreement?
A. interest on drawings is to be at the rate of 5% per annum
B. interest not to be paid on capital
C. salaries are not allowed to partners
D. profit and loss will be shared equally
52. Carriage outwards are …….
A. debited to trading account
B. credited to profit and loss account
C. debited to profit and loss account
D. credited to trading account
53. Payment in advance is shown in the balance sheet as……
A. current assets
B. tangible assets
C. fixed assets
D. current liabilities
54. A trial balance is a proof of accuracy of a……
A. trading account
B. balance sheet
C. double entry in the ledger
D. final accounts
55. An instrument of power given to bank by consumer to make regular payments on their behalf at appropriate date and to debit their account is known as ……
A. legal agreement
B. standing order
C. bank draft
D. transfer statement
56. Cash discount is given for …….
A. being a regular customer
B. introducing other customers
C. daily purchases
D. prompt payment of account
57. The purchases day book is used for recording …..
A. cash and credit purchases
B. cash purchases
C. credit purchases
D. invoices
58. Which of the following is not a petty cash book item?
A. machinery
B. stamps
C. stationery
D. travelling expenses
59. A ledger is a …….
A. book of original entry
B. summary of entries
C. double entry posting
D. principal book of account
60. A document that set out the full detail of goods sent to the buyer by the supplier stating the quantity, price, discount given and terms of payment is called …….
A. invoice
B. cheque
C. journal
D. receipt
61. External users of accounting information include
A. employees
B. management
C. bankers
D. directors
62. Every asset should have
A. a non- monetary value
B. tangible and intangible qualities
C. monetary cost and future benefit
D. an inadequate monetary value
63. Which of the following are impersonal accounts? I. investment II. Creditors III. Premises IV. Debtor s V. salaries
A. I, III and IV
B. I, III and IV
C. II and IV
D. III and V
64. Nwoye buys stock and pays by cheque. The entries in the book of nwoye is debit
A. purchases; credit cheque
B. purchases; credit bank
C. bank; credit purchases
D. cheque; credit purchases
65. A bank statement shows an overdraft of GHc190,000. Kofi, a debtor, paid GHc 400,000 in to the account. The new bank balance is
A. GHc590,000
B. GHc590,000 overdrawn
C. GHc210,000
D. GHc210,000 overdrawn.
66. Which of the following errors are errors of commission? I. A cheque paid to adom debited to Adam’s account II. Credit sales to Eva credited to sales account but debited to eve’s account III. Furniture repairs debited to furniture account IV. Credit purchases from Manu credited to Manu’s account.
A. I and II
B. I and IV
C. II and IV
D. III and IV
67. A petty cash account has an imprest of GHc6, 000. If GHc2, 000 were left. How much will be re-imbursed at the end of the period?
A. GHc8,000
B. GHc6,000
C. GHc4,000
D. GHc2,000
68. Cash paid to Jake, N2, 500, was entered on the credit side of his account and debited to cash account. This is an error of
A. principle
B. commission
C. complete reversal of entries
D. original entry
69. One of the purchases invoices of Mr. Dauda showed D96,240 less 〖12〗^(1/2)% trade discount and cash discount of 20%. Since Mr. Daudu paid the amount due within the credit period, the amount paid is
A. D77,368
B. D73,157
C. D67,368
D. D63,157
70. Bank reconciliation statement is prepared to reconcile the differences between
A. bank statement and credit transfer
B. cash book and bank transfers
C. bank statement and cash transfer
D. cash book and bank statement
71. Which of the following items of expense involves actual cash payment?
A. discount allowed
B. provision for depreciation
C. carriage outwards
D. allowance for doubtful debts
72. In the preparation of the trading account of omuya Ltd, the company include credit sales of N18,000 made during the year. The concept guiding this treatment is the
A. materiality concept
B. dual aspect concept
C. matching concept
D. money measurement concept
73. In accounting context, purchases refer to
A. goods bought and paid for only
B. goods bought for sales only
C. goods bought on credit only
D. goods bought to be use in the firm on
74. Which of the following items is a current liability?
A. stock of raw materials
B. cash in hand
C. bills payable
D. cash in bank
75. The balance sheet is prepared to reveal
A. the result of the operation for the period under review
B. the financial position of the business
C. the arithmetical accuracy of the ledger accounts.
D. the accruals and payments
76. The entries for credit sales at branch were the head office keeps all record are: debit
A. branch stock account; credit branch debtors account
B. branch debtors account; credit branch stock account
C. branch debtors account; credit branch adjustment account
D. branch adjustment account; credit branch debtors account
77. The cost of goods returned by branch to head office is debited to
A. branch stock adjustment account
B. goods sent to branch account
C. branch stock account
D. branch profit and loss account
78. Which of the following is a source of local government revenue?
A. excise duties
B. market dues
C. import duties
D. loans and grants
79. The transfer of money from one sub-head in the public sector is
A. budgeting
B. allocation
C. virement
D. vote
80. The total of the discount received column in the three column cash book is
A. debited to discounts received account
B. credited to discount received account
C. debited to discount allowed account
D. credited to discount allowed account
81. Which of the following expenses is apportioned between departments based on sales?
A. discount received
B. electricity
C. carriage inwards
D. carriage outwards
82. In the purchase of a business, a buyer has paid more than the value of the net assets of the business. The excess payment is referred to as
A. bonus
B. goodwill
C. net profit
D. premium
83. Assets which are readily convertible into cash are termed as
A. liquid assets
B. fixed assets
C. intangible assets
D. tangible assets
84. A loan to a company under the company’s seal is
A. fixed deposit
B. mortgage
C. bond
D. debenture
85. Debts that a firm is unable to recover are debited to bad debts account and credited to
A. suppliers account
B. sales account
C. customer’s account
D. cash account
86. When a fixed asset is disposed off, the accounting entries to write off the asset are debit
A. profit and loss account, credit asset disposal account
B. asset disposal account, credit profit and loss account
C. asset disposal account, credit asset account
D. profit and loss account, credit provision for depreciation account
87. The financial statement which is an expression of the accounting equation is the
A. trading account
B. profit and loss account
C. balance sheet
D. statement of cash flow
88. Which of the following errors will affect the agreement of the trial balance?
A. error of original entry
B. error of commission
C. error of transportation
D. error of omission
89. In the absence of a partnership agreement, additional capital contribution by partners attract interest of
A. 5%
B. 10%
C. 12%
D. 15%
90. In preparing partnership account, interest on drawings debited to current accounts and credited to
A. capital account
B. appropriation account
C. drawings account
D. profit and loss account.