NOUN TMA Questions and Answers: SMS204 / ACC204 - Introduction to Financial Accounting II

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NOUN TMA Questions and Answers: SMS204 / ACC204 - Introduction to Financial Accounting II

Postby Jed » Sun Jan 27, 2019 8:27 am

NOUN TMA Questions and Answers: SMS204 / ACC204 - Introduction to Financial Accounting II


Email: Solutions2tma@gmail.com
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Q1 On 1 May, A pays a rent bill of N1,800 for the twelve months to 30 April. What is the charge/credit to the income statement for the year ended 30 November?

N1050

Q2 Which ONE of the following attributes is the most important for any code to possess in order to be of use in an accounting system?

B. Each code is a unique number.

Q3 Which of the following are used in a coding system for accounting transactions?

A. Department code.
B. Nominal ledger co de.
C. Product code.
---D. All of the abo ve.

Q4 On 1 May, East owed a supplier N1,200. During the month of May, East:(1)Purchased goods for N1,700 and the supplier offered a 5% discount for payment within the month.(2)Returned goods valued at N100 which had been purchased in April. (3)Sent a cheque to the supplier for payment of the goods delivered in May.What is the balance on the supplier􀳦??s account at the end of May?

N1100

Q5 N operates an imprest system for petty cash. On 1 February, the float was N300. It wasdecided that this should be increasedto N375 at the end of FebruaryDuring February, the cashier paid N20 for window cleaning, N100 for stationery and N145 forcoffee and biscuits. The cashier received N20 from staff for the private use of the photocopier and N60 for a miscellaneous cash sale.What amount was drawn from the bank account for petty cash at the end of February?

N260

Q6 P is a sole proprietor whose accounting records are incomplete. All the sales are cash sales and during the year N50,000 was banked, including N5,000 from the sale of a business car.He paidN12,000 wages in cash from the till and withdrew N2,000 per month as drawings.The cash in the till at the beginning and end of the year was N300 and N400 respectively.What were the sales for the year?

N81100

Q7 The entries in a sales ledger control account are:Sales 250,000; Bank 225,000; Sales returns 2,500; Bad debts (irrecoverable debts?) 3,000; Bad debts (irrecoverable debts?) 3,000;Returned unpaid cheque 3,500; Contra with purchase ledger account 4,000;What is the balance on the sales ledger control accout

N19000

Q8 What is an imprest system?

Helps to control petty cash.

Q9 Z􀳦??s bank statement shows a balance of N825 overdrawn. The bank statement includes bankcharges of N50, which have not been entered in the cash book. There are unpresentedcheques totalling N475 and deposits not yet credited of N600. The bank statement incorrectly shows a direct debit payment of N160, which belongs to another customer.What figure for the bank balance should be shown in the statement of financial position?

N540 overdrawn.

Q10 B operates the imprest system for petty cash. At 1 July there was a float of N150, but it was decided to increase this to N200 from 1 August onwards. During July, the petty cashier received N25 from staff for using the photocopier and a cheque for N90 was cashed for an employee. In July, cheques were drawn for N500 for petty cash.What was the total expense paid from petty cash in July?

385

Q11 The core objective of accounting is

Provide financial information to the us ers of such information

Q12 The objective of financial statements is it enables users to assess the performance ofmanagement and to aid in decision making

STATEMENT NOT VA LID

Q13 Non-current assets can best be defined as Items of machinery which are not moveable and are purchase with an intention of resale

STATEMENT NOT VA LID

Q14 The accounting equation at the start of the month was:Assets N14,000 less liabilities N6,500.During the following month, the business purchased a non-current asset for N6,000, payingby cheque, a profit of N9,000 was made, and payables of N7,500 were paid by cheque.What would the balance on capital be at the end of month?

N16500

Q15 Which ONE of the following best describes the stewardship function?

Ensuring the rec ording, controlling and safeguarding of assets.

Q16 When there is inflation, the historical cost convention has the effect of

Overstating profits and understating statement of financial position values.

Q17 A company includes in inventory goods received before the year end, but for which invoices are not received until after the year end. This is in accordance with

The accruals concept.

Q18 Which one of the following should be accounted for as capital expenditure?

Legal fees incurred on the purchase of a buil ding.

Q19 Which one of the following sentences does NOT explain the distinction between financial accounts and management accounts?

Financial accounts are audited by management where as managem ent accounts are audited by external auditors

Q20 The difference between an income statement and an income and expenditure account is that

An income statement is prepared for a business and an income and expenditure accou nt is prepared for a not for profit making organisation.



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Jed
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Re: NOUN TMA Questions and Answers: SMS204 / ACC204 - Introduction to Financial Accounting II

Postby Jed » Sun Jan 27, 2019 8:31 am

Email: Solutions2tma@gmail.com
Whatsapp: 08155572788



Q21 During year 2016, Victor paid rent amounting to 500,000. He owed 50,000 at the beginning of the year and by 31 December 2016, he had paid rent in advance of 100,000. His rent charge for 2016 was?

350000

Q22 Use the following details to answer.Trade receivables control account balance 500,000.00 Allowance for doubtful debts 50,000.00Allowance for discount allowed on receivables 5%.The receivables figure to be shown under current assets in the Statement of Financial position is

427500

Q23 Which of the following would result from an increase in the allowance for doubtful debts?

A decrease in net profit

Q24 One of the following is a disadvantage of Application Packages.

There may be inclusion of featu res that are not particularly relevant in the packages

Q25 The following are application packages EXCEPT.

Re-writable

Q26 The process of locating and eliminating errors from a program is known as􀳦?􀳦􀳦?􀳦.

Debugg ing

Q27 The following are optical Disks EXCEPT

Floppy disk

Q28 The data storage hierarchy is as follows:

Bits, Bytes, Field, Records, Files, Database

Q29 An error of commission occurs where the entries required for a transaction are partially omitted.

Statement not va lid

Q30 Which of the following errors will cause the trial balance totals to be unequal?

A. Errors of transposition.

Q31 An increase in inventories of N500 and a decrease in the bank balance of N600 and an increase in payables of N1,400 results in:

A. A decrease in working ca pital of N1,500

Q32 On 1 June year 1, H paid an insurance invoice of N2,400 for the year to 31 May year 2. What is the charge to the income statement and the entry in the financial statement for the year ended 31 December year 1?

C. N1,400 income statement and prepayment of N1, 000.

Q33 The profit of a business may be calculated by using which one of the following formulae?

C. Opening capital + drawings - capital introduced - closing capital

Q34 H began trading on 1 July. The company is now preparing its accounts for the accounting year ended 30 June year 1. Rent is charged for the year from 1 April to 31 March, and was N1,800 for the year ended 31 March year 1 and N2,000 for the year ended 31 March year 2. Rent is payable quarterly in advance, plus any arrears, on 1 March, 1 June, 1 September and 1 December.The charge to H 􀳦??S income statement for rent for the year ended 30 June year 2 is

B. 1,700

Q35 S purchased equipment for 80,000 on 1 July year 1. The company􀳦??s accounting year end is 31 December. It is S􀳦??s policy to charge a full year􀳦??s depreciation in the year of purchase. S depreciates its equipment on the reducing balance basis at 25% per annum.What is the net book value of the equipment at 31 December year 4?

B. 25,3 12

Q36 SSG bought a machine for N40,000 in January year 1. The machine had an expected useful life of six years and an expected residual value of N10,000. The machine was depreciated on the straight-line basis where a full year􀳦??s charge in made in the year of purchase and none in the year of sale. In December year 4, the machine was sold for N15,000. The company has a policy in its internal accounts of combining the depreciation charge with the profit or loss on disposal of assets. Its year end is 31 December.What is
the total amount of profit/loss charged to the income statement over the life of the machine?

C. 25,000

Q37 Which ONE of the following expenses should be included in prime cost in a manufacturing account?

B. Direct production wages.

Q38 N purchased a machine for N15,000. The transportation costs were N1,500 and installation costs were N750. The machine broke down at the end of the first month in use and cost N400 to repair. N depreciates machinery at 10% each year on cost, assuming no residual value.What is the net book value of the machine after one year?

C. 15,525

Q39 A company bought a machine on 1 October year 1 for N52,000. The machine had an expected life of eight years and an estimated residual value of N4,000. On 31 March year 6, the machine was sold for N35,000. The company􀳦??s yearend is 31 December. The company uses the straight-line method for depreciation and it charges a full year􀳦??s depreciation in the year of purchase and none in the year of sale. What is the profit or loss on disposal of the machine?

D. Profit 13,000

Q40 A car was purchased for N12,000 on 1 April in year 1 and has been depreciated at 20% each year straight line, assuming no residual value. The company policy is to charge a full year􀳦??s depreciation in the year of purchase and no depreciation in the year of sale. The car was traded in for a replacement vehicle on 1 August in year 4 for an agreed figure of N5,000. What was the profit or loss on the disposal of the vehicle in year 4?

N200




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Jed
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Re: NOUN TMA Questions and Answers: SMS204 / ACC204 - Introduction to Financial Accounting II

Postby Jed » Sun Jan 27, 2019 8:35 am

Email: Solutions2tma@gmail.com
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Q41 Which of these books of account could be classified as a subsidiary book as well as a ledger

Cash book

Q42 Which of these statements CANNOT be defined as income?

Decrease in economic benefits during the accounting period

Q43 Which of the following is NOT correct in differentiating between sole trader and limited liability companies?

A sole trader􀳦??s financial statem ents are private and never made available to any other equity holder

Q44 A vehicle was purchased on 1 January 2011 at a cost of N2,000,000 and was depreciated at 25% on cost. It was sold on 31 December 2013 for N1,400,000. Full-year depreciation 25% on cost. It was sold on 31 December 2013 for N1,400,000. Full-year depreciation was charged in the years of purchase and disposal. Determine the profit or loss on the disposal

N900,000 prof it

Q45 The source of data for the recording of sales day book of a business enterprise is

Invoice

Q46 On 1 January 2013 a motor vehicle, with the expected useful life span of 5 years and residual value of N100,000, was acquired for N1,600,000. Using sum-of-the-years digit method, what is the second year depreciation provision of the motor vehicle?

N400,000

Q47 Depreciation of an asset with fixed period of legal life is often referred to as?

Amortization

Q48 The fall in value of non-current intangible assets as a result of passage of time is referred to as?

Amortization

Q49 The cash book of a trader shows an overdrawn account. Which of the following will reduce the balance when the necessary recordings are completed?

Dividend received b y bank on behalf of customer.

Q50 Which of the following reconciliation items will affect the cash book balance?(I)Bank error overstating the bank balance(II)Cash book error, overstating the bank balance (III)Income received through the bank (IV) Imprest cheques

II and I II

Q51 Using straight line method, what would be the annual depreciation charge for the second year of usage?

48000

Q52 What is the depreciable amount of the machine?

240000

Q53 Annual rent payable is 500,000. Rent prepaid at 1 January, 2016 was 80,000 and rent accrued at 31December 2016 was 60,000. How much was paid in respect of rent in 2016

360000

Q54 A customer owing 200,000 was allowed to pay 180,000 in full settlement of his indebtedness. This results in a

Decrease Receivables, increase cash and decrease capital􀳦??

Q55 Which accounting concept does not agree with making allowance for discount receivable?

Prudence

Q56 The fact that allowances are made against doubtful debts upholds the concept of

Prudence

Q57 From the following information, calculate the cash paid by trade receivables during the year. Receivables at the beginning of the year 350,000; Receivables at close of the year 500,000; Credit sales for the year 510,000

360000

Q58 When a debt thought to be irrecoverable and written off is subsequently recovered, which additional entry is required to complete the two entries given below? I. Debit Personal Account/Credit Irrecoverable Debts Recovered Account II. Debit Cash/Bank Account/Credit Personal Account

Debit irrecoverable debts recovered account/Credit Statemen t of Profit or Loss account

Q59 A trader had trade receivables of 50,000 at the end of his accounting period. Trade receivables at the beginning of the period was 60,000. His policy is to make allowance for doubtful debts at the rate of 5%. State the change in value of the allowance for doubtful debts at the end of the current accounting period.

500 decrease in allowance

Q60 At the end of the first year of trading, a trader􀳦??s receivables amounted to 5,000. This excludes 180 debts found to be irrecoverable. At the same date, it was estimated that 70 of the 5,000 would still turn out to be irrecoverable debts. Determine the net realisable value of receivables at the end of the first year of trading.

4930



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Jed
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Re: NOUN TMA Questions and Answers: SMS204 / ACC204 - Introduction to Financial Accounting II

Postby Jed » Sun Jan 27, 2019 8:38 am

Email: Solutions2tma@gmail.com
Whatsapp: 08155572788

Q61 Which of the following should NOT be included in cost of inventory?

Administrative overhead

Q62 The Depreciation methods that ensure that the depreciation charged against income reduces as the year of usage of the non- current assets increases is known as?

Reducing Balance Me thod

Q63 The opening inventory of a firm at the beginning of the financial year isN30,0000 and at the end of the financial year it isN20,000 while the sales and purchases are N350,000 and N250,000 respectively.What is the Gross Profit or Loss?

N90,000 Profi t

Q64 The Agreement of a trial balance will not disclose ONE of the following fundamental errors in the accounting books.

Errors of principle

Q65 A sole proprietor paid his personal Income Tax by withdrawing cash for the payment from his business. The double entry posting in ledger with respect to the above transaction is:

DR Drawings A/C; CR Cash A/C

Q66 Accrued Salaries of N18,000 due to employees for December 31 2015 was omitted and not included in the financial statements prepared for the year ended 31 December 2015 Which of the following will be correct?

Liabilities of the company would be under-stated byN18,00 0

Q67 Which of the following accounting records is used to determine the arithmetical accuracy of ledger posting

Trial balance

Q68 The source of data for recording the Returns Inward Book of a business entity is

Credit note

Q69 An item of property, plant and equipment costing N600,000 was bought on 1 January, 2011. Depreciation was provided at 20% annually on straight-line basis and computed up to the point of sale. It was sold on 30 June, 2014 for N157,500. In the year of sale, profit is

Reduced by N22,500

Q70 Which of the following would NOT be posted to the credit of payables control account

Set-off contra

Q71 In preparing financial statements, the bad debts account is closed by a transfer TO

Statement of profit or loss

Q72 A present obligation of an entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying is expected to result in an outflow from the entity of resources embodying economic benefits, is known as

A liability

Q73 A company􀳦??s net profit for the year ended 30 June, 2014 was N6,500,000. It was found that N1,800,000 paid for maintenance of motor vehicles had been debited to motor vehicle account and depreciated at 25% on cost (full year charge) in line with the company􀳦??s policy. What would be the net profit after adjusting for the error?

N5,150,000

Q74 The balance as per bank statement is

N39,500

Q75 The adjusted cash book balance is

N109,500

Q76 When recognising income under the accrual basis, which of the following statements is correct

Income is recognised when earned and not necess arily when cash is received

Q77 Which of the following is NOT an accounting concept?

Information

Q78 Which of the following errors does NOT affect the balancing of a trial balance?

Error of principle

Q79 Which of the following provides the origin of accounting information?

Source documents

Q80 The effect of the error on the financial statements, if not detected, would include the following except

The inventory of the outfit will be understated




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