Principles of Accounting (2017 Study Mode

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Question 1
A
partners capital account
B
revaluation account
C
partners current account
D
Realization account
Explanation.
Realization account: the cash realized from sales of asset is credited to it

Question 2
A
Subscription
B
shares
C
donation
D
Explanation.
Share: profit making organizations use different shares such as ordinary and preference shares to source for money from the public

Question 3
A
B
appropriation account
C
balance sheet
D
profit and loss account
Explanation.
Appropriation account is the account into which the net profit found in the profit and loss account of the partner will be carried down to and will be shared according to their sharing ratio

Question 4
A
B
appropriation account
C
balance street
D
profit and loss account
Explanation.
profit and loss account: the depreciation of the office machine is considered as part of administrative expense which must be charged against the profit of the company

Question 5
A
I,II and III only
B
I and II only
C
III and IV only
D
I, III and IV only
Explanation.
Purchases control account it is also called total creditor control account
I,II & IV : some of the items that appear on the credit side of purchases ledger are cash refund to supplier, dishonored cheque by banks and credit purchases

Question 6
A
Unpresented
B
Dividend
C
Uncredited cheque
D
credit transfer
Explanation.
Uncredited cheque: This have to be deducted when starting balance as per cash book

Question 7
A
?4,350
B
?6,000
C
?5,150
D
?4,000
Explanation.
If the gross profit is ?5,000, then the net profit is calculated below;
The item that will appear in the profit and loss account are;
Bad debt written off ?350, Discount allowed ?500 and Discount received ?1,000

$$\begin{array}{c|c} \text{Gross Profit} & 5000 & \\ \hline \text{Discount Received} & 1000 & 6000 \\ \hline \text{Expenses} & & \\ \hline \text{Bad debt.} & 350 & \\ \hline \text{Discout Allowed} & 500 & 850 \\ \hline \text{Net profit} & & 5,150 \end{array}$$

Net profit is the profit made after all the expenses incurred are deducted from the gross profit
?5150 is the net profit calculated i.e bad debt 350 &nplus; discount allowed 500 &nplus; net profit 5,150 less gross profit 5,000 + discount received 1,000

Question 8
A
General reserve fund
B
Consolidated Reserve Fund
C
contingencies fund
D
special fund
Explanation.
contingencies fund: if there is an urgent and unforeseen need for expenditure for which no other provision exist, such expenses shall be deducted from the contingencies fund

Question 9
A
Last in First Out
B
weighted average
C
First in First Out
D
Simple average
Explanation.
Last in first out:when price rise it results to lower bet income because the leftover inventory might be extremely old and perhaps obsolete

Question 10
A
Sales day book
B
Sales return journal
C
Purchases day journal
D
Cash book
Explanation.
Sales return journal otherwise called return inward book is meant for recording of all good returned by customer