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.
Share Answer Realization account: the cash realized from sales of asset is credited to it

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

Correct Option:
B
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Question 3
A
trading account 
B
appropriation account 
C
balance sheet 
D
profit and loss account 
Explanation.
Share Answer 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

Correct Option:
B
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Question 4
A
trading account 
B
appropriation account 
C
balance street 
D
profit and loss account 
Explanation.
Share Answer 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

Correct Option:
D
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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.
Share Answer 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

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

Correct Option:
C
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Question 7
A
?4,350 
B
?6,000 
C
?5,150 
D
?4,000 
Explanation.
Share Answer 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

Correct Option:
C
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Question 8
A
General reserve fund 
B
Consolidated Reserve Fund 
C
contingencies fund 
D
special fund 
Explanation.
Share Answer 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

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

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

Correct Option:
B
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