IMPERIAL LEGENDS ACADEMY

FIRST TERM EXAMINATION 2023/2024 ACADEMIC SESSION

CLASS: SS3 SUBJECT: FIN. ACCOUNT DURATION: 2 HRS
OBJECTIVE QUESTIONS
1) The manufacturing account is prepared to determine the cost of (a)trading (b)production (c)factory overhead (d)raw materials used
2) Factory costs excluding prime cost is (a)overhead (b) material cost (c)fixed cost (d)administration cost
3) An example of direct expenses is (a)insurance (b)carriage inwards (c)purchase of raw materials (d)royalty
Use the following information to answer questions 4 to 6 #
Manufacturing cost of finished goods 75000
Selling and distribution expenses 5000
Mark-up is 25%
4) The gross profit for the year is (a)93750 (b)56250 (c)18750 (d)17500
5) The Sales value for the year is (a)93750 (b)56250 (c)18750 (d)17500
6) The net profit for the year is (a)93750 (b)56250 (c)18750 (d)13750
7) The term bad debts means debts (a)recorded in wrong accounts (b)owed by an employee (c)paid with fake currency (d)that cannot be collected
8) Working capital is measured by the excess of (a)current liabilities over current assets (b)fixed assets over current assets (c)current assets over current liabilities
(d)current assets over fixed assets
Use the following information to answer questions 9 to 14 #
Sales 45000
Opening stock 20000
Closing stock 30000
Expenses 15000
Fixed assets 40000
Debtors 10000
Creditors 5000
Purchases 25000
9) The cost of goods sold is (a)45000 (b)30000 (c)25000 (d)15000
10) Net profit is (a)45000 (b)30000 (c)25000 (d)20000
11) Net profit percentage is (a)100% (b)67% (c)50% (d)33%
12) Current ratio is (a)16:1 (b)15:1 (c)8:1 (d)2:1
13) Working capital is (a)60000 (b)45000 (c)40000 (d)35000
14) Gross profit percentage is (a)100% (b)67% (c)50% (d)33%
15) Which of the following does not lead depreciation of fixed assets (a)wear and tear (b)passage of time (c)devaluation of naira (d)obsolence
16) The purpose of a trading account is to ascertain (a)carriage inwards (b)gross profit (c)return outwards (d)cost of goods sold
17) Factory wages are always entered into (a)sales account (b)manufacturing account (c)profit and loss (d)purchases account
18) In manufacturing account, prime cost plus factory overhead is known as (a)conversion cost (b)cost of raw materials consumed (c)total cost (d)production cost
19) Discounts allowed is charged to (a)current account (b)profit and loss appropriation account (c)profit and loss account (d)trading account
20) Discount received is (a)credited to the trading account (b)debited to the profit and loss account (c)credited to the profit and loss account (d)credited to the
appropriation account
21) Carriage outwards is charged to (a)trading account (b)appropriation account (c)purchases account (d)profit and loss account
22) The purpose of trading account is to ascertain (a)carriage outwards (b)gross profit (c)distribution expenses (d)net profit
23) A reserve is an amount (a)to be paid to creditors (b)set out of profit for future use (c)for paying dividends (d)recovered from debts earlier written off
24) A fixed amount of money set aside for petty expenses is (a)imprest (b)float (c)receipt (d)fund
25) Which of the following is not a liability (a)accrued wages (b)rent arrears (c)prepayment (d)insurance due but unpaid
26) Carriage inwards expenses of a business is treated in (a)trading account (b)balance sheet (c)appropriation account (d)profit and loss account
27) Which of the following does not relate to a manufacturing account (a)balance sheet (b)profit and loss account (c)ledger account (d)income and expenditure
account
28) Which of the following is not charged to manufacturing account (a)raw materials (b)factory wages (c)distribution expenses (d)direct expenses
29) Which of the following is not a personal account (a)bolaji account (b)mayowa account (c)partnership account (d)return inward account
Use the following information to answer question 30 and 31
A motor car costing 100,000 was depreciated at 20%per annum by the diminishing balance method.Two years later,it was sold for 60,000
30) The net profit or loss on the sales was (a)40,000 profit (b)4,000 profit (c)4,000 loss (d)40,000 loss
31) The net book value at the time of sales is (a)64,000 (b)60,000 (c)40,000 (d)36,000
32) Which of the following is found in sales ledger account (a)credit purchases (b)bills payable (c)discount received (d)discount allowed
33) Which of the following does not appear in a bank statement (a)dividend received (b)bank charges (c)uncredited cheques (c)dishonoured cheques
34) Which of the following is not part of cost of production.(a)wages of operators (b)factory power (c)advertising (d)cost of raw materials
35) “Financial statements do not disclose all information users need to know about a firm”.This is the concept of (a)consistency (b)money measurement (c)dual
aspect (d)materiality
36) A three column cash book contains column for (a)cash, assets and liabilities (b)bank, cash and assets (c)cash, bank and returns (d)discounts, cash and bank
37) The depreciation on plant acquired by a manufacturing company is treated as (a)prime cost (b)administrative expenses (c)factory overhead (d)selling and
distribution expenses
38) A debenture holder is a (a)creditor (b)promoter (c)debtor (d)shareholder
39) Which of the following is a self-balancing account?(a)trading account (b)appropriation account (c)assets account (d)control account
40) Which of the following is the equivalent of receipts and payment account?(a)income and expenditure account (b)cash book (c)subscriptions account (d)profit
and loss account
41) Where a wrong figure occurs in only one account with the second figure correctly stated, this is an error of (a)transposition (b)compensation (c)omission
(d)commission
42) Which of the following is found in the general ledger (a)capital account (b)sales account (c)loan account (d)drawings account
43) A partner who goes beyond his capital is known as (a)dormant partner (b)limited partner (c)general partner (d)nominal partner
44) Which of the following does not form part of shareholders fund?(a)ordinary shares (b)share premium (c)profit (d)debenture
45) Which of the following is not an external user of accounting information (a)management (b)creditors (c)shareholders (d)government
46) A trial balance is prepared to (a)detect fraud (b)ascertain losses in a trading period (c)determine opening capital (d)test arithmetical accuracy of ledger entries
47) The balance in the sales ledger control account represents (a)total sales (b)total credit sales (c)total creditors (d)total debtors
48) When shares are sold “at par”it means they are issued at (a)the market value (b)the nominal value (c)a discount (d)a premium
49) Which of the following is not a subsidiary book?(a)sales day book (b)purchases day book (c)general journal (d)trial balance
50) Which of the following is an example of subsidiary book (a)cash book (b)bank statement (c)control account (d)trial balance

THEORY
1. What is depreciation of fixed assets and give three causes of depreciation
b) Explain the following methods of depreciation (i)straight line (ii)reducing balance (iii)revaluation
C..What is manufacturing account and list any four classification of cost found in the manufacturing account
D. Explain the following (i)prime cost (ii)work-in-progress (iii)manufacturing account
2.Explain the following (i)ratio (ii)accounting ratio (iii)trading account
 b) Explain the following with their formulars (i)mark-up (ii)margin (iii)rate of turnover
3A.The following information was extracted from the books of Dauda Manufacturing Company for the year ended 31 st December,2012.
Stock of goods-1st January,2012:
Raw materials 8,000
Finished goods 28,000
Work-in-progress 2,000
Purchases of raw materials 40,000
Carriage inwards 1,000
Manufacturing wages 100,000
Sales 390,000
Rent 50,000
Factory expenses 60,000
Royalties 1,500

Stock of goods -31st December, 2012

Raw materials 6,000
Finished goods 26,000
Work-in-progress 1,500
Depreciation
Machinery 7,500
Delivery van 1,280

Selling expenses 3,000

Discount allowed 1,500
Additional information:
(i) Factory expenses prepaid amounted to 5,000
(ii) Selling expenses accrued was 2,500
(iii) Rent is apportioned between factory and selling department in the ratio 5:3 respectively
You are required to prepare:
Manufacturing, Trading, Profit and Loss Account for the year ended 31 st December, 2012
4a. Define depreciation
4b. List 5 method of depreciation
4c.what are the ledger entries to prepare in old method of depreciation
4d.what are the ledger entries to prepare in modern method of depreciation

5.Draw out the format of the following:

A.trading profit and loss account

B.manufacturing, trading profit and loss account

C.three column cash book

D. Two column cah book