Account Third Term Examination Questions 2019/2020 Session – Senior Secondary School Three ( SSS 1, SSS 2)

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EDUDELIGHT SECONDARY SCHOOL

1 BENSON AVENUE, LEKKI PHASE 1, LAGOS.

3RD TERM EXAMINATION FOR 2019/2020 SESSION

SUBJECT: ACCOUNT CLASS: SS1 TIME: 2 HOURS

OBJECTIVES

The main purpose of preparing profit and loss account is to ascertain ——————- (a) cash sales to customers only (b) gross profit (c) net profit (d) both credit and cash sales
The difference between cost of goods available for sales and the closing stock is the ————— (a) commission (b) net profit (c) gross profit (d) cost of goods sold
Increase in provision for bad and doubtful debt is ———— to the profit and loss account (a) debited (b) credited (c) omitted (d) reserved
——— is set aside to strengthen the financial position of a firm (a) general reserves (b) specific reserves (c) cash at bank (d) none of the above
The rent paid in advance is treated in the balance sheet as a ————————- (a) reserve (b) current asset (c) current liability (d) fixed asset
Which of the following shows the stock at the start of an accounting period (a) current assets in the balance sheet (b ) current liabilities in the balance sheet (c) trading account (d) profit and loss account
Discount received will appear on the (a) fixed asset side in the balance sheet (b) debit side of trading account (c) long term liabilities side in the balance sheet (d) credit side of profit and loss account
The difference between gross profit and trading expenses is the (a) reserve (b) goodwill (c) net profit (d) capital
A method that allows the same amount to be written off as yearly depreciation is known as ——- (a) an adjustment method (b) reducing balance method (c) straight line method (d) annuity method
Loan is a good example of ——– (a) assets (b) current liability (c) long term liability (d) capital
Carriage outward expenses of a business is treated in the—– (a) trading account (b) balance sheet (c) appropriation account (d) profit and loss account
A deduction in the invoice price of goods, if payment is made within a specified period is the (a) trade discount (b) cash discount (c) quantity discount (d) rebate
———– is a component of a profit and loss account (a) purchase (b) sales (c) carriage inward (d) carriage outward
Which of the following errors will affect the trial balance? (a) commission (b) omission (c) principle (d) single entry
The addition of purchases, carriage inward and opening stock is ——— (a) net profit (b) cost of goods sold (c) cost of goods available for sales (d) gross profit
Which of the following does not belong to the group? (a) rent (b) sales (c) purchases (d) debtor
Which of the following is a liability? (a) accrued wages (b) rent advance (c) prepayment insurance (d) cash
The balance of the provision for depreciation account is shown in the (a) trial balance as a debit (b) trial balance as a credit (c) balance sheet as a fixed asset (d) balance sheet as a current liabilities
One important reason for charging depreciation is that (a) it is good for business (b) it brings in more customers (c) it increases taxable income (d) it obeys the matching concept.
An amount set aside from the profit of a business in order to meet a known liability is known as (a) reserve (b) provision (c) capital (d) none of the above.
Debts which are doubtful of being recovered are called (a) bad debt (b) doubtful debt (c) recovered debt (d) evil debt.
Depletion is charged on (a) current assets (b) wasting assets (c) fixed assets (d) intangible assets.
One of the following assets appreciates (a) land (b) motor van (c) furniture (d) stock
A discount given in order to encourage a customer to buy more goods is called (a) discount allowed (b) discount received (c) cash discount (d) trade discount.
All the following are determinants of depreciation EXCEPT (a) cost (b) estimated life (c) scrap value (d) net book value.
A trader set aside from his private fund N1500 for business purpose. The N1500 would be referred to as (a) capital (b) loan (c) reserve (d) drawing
Reserves are basically divided into ———- (a) 2 (b) 3 (c) 4 (d) none of the above
An example of a tangible asset is (a) machinery (b) goodwill (c) preliminary expenses (d) copyright
One of the following is not an account (a) trading A/C (b) cash A/C (c) profit &loss A/C (d) balance sheet
The balance sheet is prepared to determine the (a) net profit (b) capital (c) financial position of a company (d) asset

An asset was purchased at the cost of N15, 000 and is expected to last for 4 years at the end of which it will be disposed at N3000

Use the above question to answer questions 31 – 35

The amount charged as depreciation is (a) N2000 (b)N3000 (c) N4,000 (d) N12,000
The accumulated depreciation for year 2 is (a) N6,000 (b) N10,000 (c) N9,000 (d) N6,000
The net book value at the end of the first year is (a) N12,000 (b) N10,000 (c) N11,000(d) 13,000
The net book value at the end of the third year is (a) N12,500 (b) N6,000 (c)N10,000 (d) 5,000
The scrap value is (a) N2000 (b) N3000 (c) N4,500 (d) N12,500
One of the following is not a method of charging depreciation (a) straight line (b) reducing balance (c) revaluation (d) devaluation.
One of the following is not a type of provision (a) provision for bad debt (b) provision for discount (c) provision for losses (d) provision for depreciation
All the following EXCEPT one does not form part of a final account (a) balance sheet (b) control Account (c) profit and loss account (d) trading account
A creditor Control Account would normally have a (a) debit balance (b) credit balance (c) ledger balance (d) account balance.
Wear and tear can result from all of the following EXCEPT (a) rust (b) scratches (c) obsolescence (d) disbursement.

PART B

Answer only one question from this part

The following trial balance was extracted from the books of Taiwo enterprise on 31^st December 2017

	Dr	Cr
Stock 1^st January 2017	N 6225
Purchases and sales	N 8,625	N21,450
Return inwards	N 338
Return outwards		N 225
Discount received		N 608
Discount allowed	N 555
Land and building (cost)	N 22500
Provision for depreciation
Land and building		N 4,500
Debtors	N 10,80
Creditors		N 600
Bad debts	N 97
Provision for bad debts 1^st Jan		N 225
Rent	N 4,500
Electricity	N 1,373
Wages and salaries	N 3,563
Drawings	N 1,550
Cash on hand	N 10,382
Capital		N 33,150
	N 60,788	N 60,788

Additional information

Stock on hand at 31^st December 2017 was N5,288
Wages owing amounted to N488
Provision for bad debts to be reduced to N112
Provision for depreciation on land and building, 10% on cost.

You are required to prepare trading profit and loss account for the year ended. (20 Marks)

The cost of a Machine is N10, 000, the residual value is N4, 000,it is expected to last for 5 years using the Straight Line Method, You are required to:

I. prepare the depreciation schedule for the five years (10 marks)

ii. Profit and loss extract and (5 marks)

iii. The balance sheet extract. (5 marks)

PART C: Answer 2 questions only from this part

(a) What is depreciation (b) list and explain two methods of depreciation ( 10 marks)
1. Draw up a comprehensive format of a Trading and Profit and Loss account as well as a Balance Sheet ( 10 marks)

Write short notes on the following:

a. Revenue Reserves (2 ½ marks)

b. Capital Reserves (2 ½ marks)

c. Provision for bad debts (2 ½ marks)

d. Discount allowed and Discount received (2 ½ marks)

4. (a) What is Reserve? (b) Differentiate between Reserves and Provisions. (10 marks)

EDUDELIGHT SECONDARY SCHOOL

1 BENSON AVENUE, LEKKI PHASE 1, LAGOS.

3RD TERM EXAMINATION FOR 2019/2020 SESSION

SUBJECT: Account CLASS: SS1 TIME: 40 minutes

OBJECTIVES

——— is set aside to strengthen the financial position of a firm (a) general reserves (b) specific reserves (c) cash at bank (d) none of the above
The rent paid in advance is treated in the balance sheet as a (a) reserve (b) current asset (c) current liability (d) fixed asset
Discount received will appear on the (a) fixed asset side in the balance sheet (b) debit side of trading account (c) long term liabilities side in the balance sheet (d) credit side of profit and loss account
Loan is a good example of ——– (a) assets (b) current liability (c) long term liability (d) capital
A deduction in the invoice price of goods, if payment is made within a specified period is the (a) trade discount (b) cash discount (c) quantity discount (d) rebate
The addition of purchases, carriage inward and opening stock is ——— (a) net profit (b) cost of goods sold (c) cost of goods available for sales (d) gross profit
Which of the following does not belong to the group? (a) rent (b) sales (c) purchases (d) debtor
Which of the following is a liability? (a) accrued wages (b) rent advance (c) prepayment insurance (d) cash
The balance of the provision for depreciation account is shown in the (a) trial balance as a debit (b) trial balance as a credit (c) balance sheet as a fixed asset (d) balance sheet as a current liabilities
An amount set aside from the profit of a business in order to meet a known liability is known as (a) reserve (b) provision (c) capital (d) none of the above.
Debts which are doubtful of being recovered are called (a) bad debt (b) doubtful debt (c) recovered debt (d) evil debt
A discount given in order to encourage a customer to buy more goods is called (a) discount allowed (b) discount received (c) cash discount (d) trade discount.
The balance sheet is prepared to determine the (a) net profit (b) capital (c) financial position of a company (d) asset
One of the following is not a method of charging depreciation (a) straight line (b) reducing balance (c) revaluation (d) devaluation.
Partnership whose liabilities are limited to the financial contribution to the partnership in the event of winding up are (a) ordinary partners (b) limited partners (c) sleeping partners (d) dormant partners

THEORY: ANSWER ALL QUESTIONS

1. (a) What is provision (2 marks)

(b) List and explain two types of provision (3marks)

2. Write short notes on the following:

What is reserves (2 marks)
Explain the following (i). capital reserve (ii) revenue reserves (3marks)

EDUDELIGHT SECONDARY SCHOOL

1 BENSON AVENUE, LEKKI PHASE 1, LAGOS.

3RD TERM EXAMINATION FOR 2019/2020 SESSION

SUBJECT: Account CLASS: SS2 TIME: 2 Hours 40minutes

OBJECTIVES

When shares are issued to existing shareholders it is called (a) premium issue (b) public issue (c) right issue (d) private placement
Shares issued above the nominal value is said to be issued at (a) par (b) discount (c) allotment (d) premium
The method of ascertaining capital from incomplete records is by preparing the (a) cash book (b) statement of affairs (c) suspense account (d) control account
A petty cashier operates with an imprest of N2, 000 per week. At the end of the week he had disbursed N1320. How much is needed to restore the imprest? (a) N1,320 (b) N2,000 (c) N680 (d) N80
Accumulated fund is also referred to as (a) surplus (b) profit (c) deficit (d) capital
Subscriptions owed by member of a club is a/an (a) asset (b) liability (c) profit (d) surplus
Prime cost is derived by adding (i) cost of raw material consumed (ii) indirect expenses (iii) direct labour (iv) factory expenses (v) work in progress (vi) direct expenses (a) ii and iv only (b) iii and iv only (c) iv, v and vi only (d) ii, iii and v only
A book keeper debit motor vehicle account instead of motor van account. This is an error of (a) commission (b) original entry (c) complete reversal of entry (d) principle
Which of these is a Nominal Account? (a) Goodwill Account (b) Machinery Account (c) Account of the supplier (d) None of the above
Which of the following is a Real Account? (a) Land Account (b) Building Account (c) All of the above (d) None of the above
Accounting System used by the organizations not earning any profit is called? (a) Accrual System (b) Cash System (c) Mercantile System (d) Non-profit making System
A market where only existing shares are sold is known as the (a) primary market (b) secondary market (c) tertiary market (d) share
ABC Ltd. offer for sale 200,000 ordinary share of N1.00 each, while the public actually subscribe for 250,000 ordinary share this is a case of (a) under subscription (b) normal subscription (c) over subscription (d) premium
Debenture capital is an example of (a) equity (b) assets (c) loaned capital (d) share capital
The excess of the value of assets over purchase consideration on acquisition of a business is credited to (a) share capital account (b) capital reserve account (c) goodwill account (d) general reserve account.
Shares of N3 nominal value were issued at price of N4. The difference of N1 is a (a) commission (b) discount (c) premium (d) bonus
When a business is purchased from a sole trader, the excess of the purchase price over the net assets is (a) goodwill (b) reserve (c) freehold (d) valuation price
Ordinary shares are also known as (a) loan (b) equity (c) reserve (d) net worth
One of the following is not a characteristic of ordinary share capital (a) risk bearing (b) voting right (c) redeemable (d) received dividend last
The share capital account normally has a ——————– balance (a) Credit (b) debit (c) equal (d) negative
The class of share to which dividend depends on profit is (a) forfeited shares (b) ordinary shares (c) preference shares (d) bonus shares

Use the following to answer question 22 – 24

Learning field PLC issues 120,000 0rdinary share of N10 each at N12 to the public, the shares are fully subscribed and paid for as follows, at application, N4, at allotment, N3

How much was paid on calls? (a) N2 (b) N3 (c) N4 (d) N5
How much was realized on application? (a) N360,000 (b) N1,200,000 (c) N480,000 (d) N700,000
What is the total value of the share capital? (a) N360,000 (b) N1,200,000 (c) N480,000 (d) N700,000
The double entry record to record the proceeds on the disposal of fixed assets is debit (a) Bank account, credit assets account (b) Assets disposal account ,credit bank account (c) provision for depreciation account, Credit assets disposal account (d) Asset disposal account, credit provision for depreciation account
An underwriter for a company’s share is paid (a) interest (b) commission (c) dividend (d) salary
Which of the following is found in a Memorandum of Association? (a) names of directors (b) appointment of directors (c) object of the business (d) payment of dividend
Administrative, selling and distributive expenses in a manufacturing firm are recorded in (a) trading account (b) manufacturing account (c) profit and loss account (d) balance sheet
The document which acknowledges borrowing under the company seal and has fixed rate of interest is called (a) investment (b share (c) debenture (d) loan
Assets that are easily converted to cash are called ————– assets. (a) current (b) liquid (c) fixed (d) floating
Authorized share capital is also known as ———— capital (a) called –up (b) issued (c) nominal (d) paid up
Which one out of the following has the ultimate control of a company? (a) employee (b) Board of directors (c) management (d) shareholder

Use the following information to answer question 33 and 35

Cash in hand 1,440

Cash at bank 2,440

Stock 2,500

Furniture and fittings 2,200

Creditors 1,000

The capital is? (a) N7,580 (b) N6,580 (c) N5,380 (d) N1,000
The liability is? (a) N7,580 (b) N6,580 (c) N5,380 (d) N1,000
What is the balance sheet total?
Which of the following is not an item in the profit and loss account? (a)drawings (b) interest (c) salaries (d) Bad debts
A loss made on the disposal of fixed assets is debited to (a) sales account (b) purchases account (c) profit and loss account (d) Capital account.
The process of distributing shares to successful applicants is (a) allocation (b) appointment (c) allotment (d) application
The claim of a proprietor of a business entity on its assets is (a) liabilities (b) capital (c) drawings (d) appreciation
Which of the following is not a subsidiary book? (a) sales day book (b)purchase day book (c) general journal (d) trial balance

Answer only one question from this part

Mr. Oche issued out 10,000 ordinary shares at N1 each at N1:20 payable as follows
10k on application
40k on allotment ( including premium)
40k on 1^st call
30k on 2^nd call

If all shares are subscribed and paid for.

You are required to prepare

(a). all ledgers entries for the transaction

(b). a journal for the entries.

Mr. Ajetunmobi had taken over the business of Mr. Dotunn on 31^st January 2017 on the basis of the last balance sheet which is as follows: ( 20 marks )

Capital 190,000 premises 120,000

Creditors 70,000 fixtures 45,000

Accruals 15,000 motor van 55,000

Debtors 15,000

Stock 10,000

Bank 30,000

275,000 275,000

Additional information: All assets and liabilities are taken over at the book values except Fixtures at N50, 000 and Motor van at N35, 000. The purchase consideration was N200, 000.

You are required to prepare:

The business purchase account
The balance sheet after taken over. ( 20 marks )

PART 2 answer only two questions from this part.

Write short note on the following

Participating Preference Shares
Quoted company
Unquoted company
Deferred Shares ( 10 marks )
Allotment.
List four terminologies used in the purchase of business and explain three of them. (10 marks )
List and explain five functions of the capital market ( 10 marks )
List five features of the primary market ( 10 marks )

EDUDELIGHT SECONDARY SCHOOL

1 BENSON AVENUE, LEKKI PHASE 1, LAGOS.

3RD TERM EXAMINATION FOR 2019/2020 SESSION

SUBJECT: Account CLASS: SS2 TIME: 40 minutes

OBJECTIVES

The excess of the value of assets over purchase consideration on acquisition of a business is credited to (a) share capital account (b) capital reserve account (c) goodwill account (d) general reserve account.
Reserves account is kept in the (a) debtors ledger (b) creditors ledger (c) nominal ledgers (d) private ledger
When shares are issued to existing shareholders it is called (a) premium issue (b) public issue (c) right issue (d) private placement
Shares issued above the nominal value is said to be issued at (a) par (b) discount (c) allotment (d) premium
Accumulated fund is also referred to as (a) surplus (b) profit (c) deficit (d) capital
Subscriptions owed by member of a club is a/an (a) asset (b) liability (c) profit (d) surplus
Prime cost is derived by adding (i) cost of raw material consumed (ii) indirect expenses (iii) direct labour (iv) factory expenses (v) work in progress (vi) direct expenses (a) ii and iv only (b) iii and iv only (c) iv, v and vi only (d) ii, iii and v only
Accounting System used by the organizations not earning any profit is called? (a) Accrual System (b) Cash System (c) Mercantile System (d) Non-profit making System
A market where only existing shares are sold is known as the (a) primary market (b) secondary market (c) tertiary market (d) share
The excess of the value of assets over purchase consideration on acquisition of a business is credited to (a) share capital account (b) capital reserve account (c) goodwill account (d) general reserve account.
Shares of N3 nominal value were issued at price of N4. The difference of N1 is a (a) commission (b) discount (c) premium (d) bonus
When a business is purchased from a sole trader, the excess of the purchase price over the net assets is (a) goodwill (b) reserve (c) freehold (d) valuation price
Ordinary shares are also known as (a) loan (b) equity (c) reserve (d) net worth
The class of share to which dividend depends on profit is (a) forfeited shares (b) ordinary shares (c) preference shares (d) bonus shares
Which of the following is found in a Memorandum of Association? (a) names of directors (b) appointment of directors (c) object of the business (d) payment of dividend

PART 2: answer all questions

Write short note on the following
Participating Preference Shares
Quoted company
Unquoted company
Deferred Shares ( 5 marks )
Allotment.)
List four terminologies used in the purchase of business and explain three of them. (5 marks )

14 minutes read