These Financial Accounting questions and answers were pulled from our book (Financial Accounting questions for ss2); Compiled to serve as a reference material to help teachers draw up test and exam questions faster. It could also help students assess their level of exam preparation. Each sample question includes correct answers.
Sample Financial Accounting Exam Questions and Answers
ACCOUNTING FOR DEPRECIATION
DIRECTION: Choose the correct answer from the lettered options.
1. Which of the following causes depreciation?
(i) wear and tear
(ii) obsolescence and passage of time
(iii) fluctuation on prices
A. i, ii and iii only
B. i and ii only
C. ii and iii only
D. i and iii only
E. iii only
Bird and Egg ventures decides to dispose off one of its motor vehicle which had originally cost N900,000. The asset was sold after 6 years for N140,000. The partners had estimated a useful life of 8 years for the assets and depreciation is on straight line.
2. What is the total depreciation (accumulated depreciation) at the end of the fourth (4th) year using the straight line method?
A. ₦100,000
B. ₦450,000
C. ₦112,500
D. ₦400,000
E. ₦650,000
Bird and Egg ventures decides to dispose off one of its motor vehicle which had originally costN900,000. The asset was sold after 6 years for N140,000. The partners had estimated a useful life of 8 years for the assets and depreciation is on straight line.
3. What is the total (accumulated) depreciation at the end of the sixth(6th) year?
A. ₦600, 000
B. ₦450,000
C. ₦650,000
D. ₦670,000
E. ₦675,000
4. A machine cost ₦12,000 and has a useful life of 4 years, and an expected disposal value of ₦400. Using the straight line method, what is the annual depreciation?
A. ₦3,100
B. ₦3,000
C. ₦2,900
D. ₦2,300
E. ₦2,000
5. The straight line depreciation is _______
A. a fixed sum set aside for the replacement of the assets
B. a fixed percentage of the balance of the assets at the end of the year
C. an estimated amount each year
D. an increase in the value of the assets
E. a percentages of the cost of the asset is written off each year
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ACCOUNTS FOR NON PROFIT MAKING ORGANISATIONS
DIRECTION: Choose the correct answer from the lettered options.
1. The accumulated fund account represents ______ in a profit making organization.
A. capital account
B. fixed assets account
C. shareholders fund
D. share premium account
E. long term liabilities
2. When the receipt exceeds payment in the receipts and payment account, which of the following is an appropriate treatment for it?
A. The excess is taken to the expenditure account as income
B. The excess is taken to the balance sheet as current assets
C. The excess is taken to the balance sheet as fixed assets
D. The excess is taken to profit and loss account and added to gross profit
E. The excess is taken to the balance sheet as current liabilities
3. Limitations of the receipts and payments account arise mainly because of the reliance on _________
A. cash movement as evidence of transaction.
B. the accounting officer to report.
C. the capital account of the organization.
D. the transaction papers as evidence of transaction.
4. The purchase of a typewriter for office use for N 2,000 is debited to _________
A. creditors
B. bank account
C. purchases account
D. Office equipment account
5. Which of the following items does NOT feature in the balance sheet of a club?
A. Arrears of current year’s subscription.
B. Salary arrears paid in the current year.
C. Rental income received in advance.
D. Advance subscription in respect of a coming year.
