Principles of Accounts 2015 | Study Mode

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Question 1
A
adds or contributes to the operating income of the business
B
necessitates the introduction of additional capital
C
reduces the capital of the business
D
adds to or improves the value of fixed assets
Explanation
This is a very correct option to the question asked. Preliminary or preoperative expenses is a good example. They are expended and have a very great contribution to the income generated.

Correct option: A
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Question 2
A
contra entry
B
single entry
C
journal entry
D
memorandum entry
Explanation
A memorandum entry is not a complete journal entry because it does not contain debit and credit amounts e.g. stock split which does not affect the common stock account.

Correct option: D
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Question 3
A
N16,000
B
N17,000
C
N13,000
D
N14,000
Explanation

Explanation not provided, please join discuss, your contributions are welcomed


Correct option: B
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Question 4
A
Market price
B
Average method
C
FIFO
D
Standard price
Explanation
An average method which accommodate all the prices and then divide (inform of mean) is well acceptable in either of the two situation.

Correct option: B
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Question 5
A
5 : 1
B
6 : 1
C
6 : 1 : 1
D
4 : 1
Explanation
given that acid test ratio is:

\(\frac {\text{Current assets stock}}{\text{Current liabilities}}\)

Current assets:\(\frac {\text{stock + Debtors + bank stock}}{\text{Current liabilities}}\)

\(\frac{11250 + 18750 + 4000 11250}{3750}\)

= 34000 11250 = 22750 = 6:1:1

Correct option: C
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Question 6
A
N699, 000
B
N641, 000
C
N402, 000
D
N605, 000
Explanation
Total asset less current liabilities

400000 + 205000 + 150,000 + 32000 85000 3000 = 699000

Correct option: A
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Question 7
A
20,000
B
18,000
C
15,000
D
12,000
Explanation
Allotment = 500,000 = 0.4 or 40%

Each subscriber would get 40% shares of what they applied for.

50,000 x 0.4 = 20,000 units

Correct option: A
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Question 8
A
N19, 800
B
N49, 500
C
N48, 000
D
N29, 700
Explanation

Explanation not provided, please join discuss, your contributions are welcomed


Correct option: D
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Question 9
A
drawing A/C
B
capital A/C
C
Creditor A/C
D
Appropriation A/C
Explanation

Explanation not provided, please join discuss, your contributions are welcomed


Correct option: D
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Question 10
A
114 days
B
68 days
C
37 days
D
41 days
Explanation

Explanation not provided, please join discuss, your contributions are welcomed


Correct option: A

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