All practice questions

Match each accounting concept on the left with its correct description on the right.

A business manager receives financial statements at the end of an accounting period to determine whether to expand operations or cut costs. Which primary function of accounting is being demonstrated?

Tayo and Emeka entered into a joint venture to supply construction materials, maintaining a separate set of books. Tayo contributed $\text{₦}400,000$ and Emeka contributed $\text{₦}200,000$ into a Joint Bank Account. Materials purchased using Joint Bank funds cost $\text{₦}350,000$, and direct expenses paid from the Joint Bank totaled $\text{₦}150,000$. Tayo paid additional transport costs of $\text{₦}30,000$ from his personal funds. Total sales proceeds of $\text{₦}750,000$ were deposited into the Joint Bank, while Emeka took over unsold inventory valued at $\text{₦}40,000$. Profits and losses are shared between Tayo and Emeka in the ratio $3:2$. What is the net profit of the joint venture in Naira?

During the financial year ended 31 December 2025, a business received $₦120,000$ cash for rent. At the end of the year, $₦20,000$ of this amount represented rent received in advance for the following year. What amount should be credited to the Profit and Loss Account as rent income for the year?

Match each user of accounting information with their primary information requirement.

At 1 January 2025, a business had commission income accrued of $₦6,000$. During the year ended 31 December 2025, total cash received for commission was $₦85,000$. On 31 December 2025, commission accrued was $₦10,000$ while commission received in advance was $₦4,000$. What is the amount of commission income to be credited to the Profit and Loss Account for the year ended 31 December 2025?

In a consignment arrangement, what is the legal relationship between the consignor who dispatches the goods and the consignee who receives them?

A manufacturing enterprise integrates a digital portal that allows its raw material suppliers to monitor factory stock in real time, generate automated reorders, and receive electronic payments from the firm. Concurrently, the company operates a web store enabling individual retail buyers to order finished goods for personal home delivery. Which of the following accurately categorizes the supplier portal and the retail web store?

An importer in Kano needs to guarantee payment to a foreign supplier prior to shipment, authorize their bank to settle varying monthly electricity bills automatically as billed by the utility company, and obtain immediate cash against an accepted 90-day trade bill. Which combination of commercial banking services directly fulfills these three operational requirements respectively?

Kemi and Tunde are partners sharing profits and losses in the ratio $3:2$. The partnership agreement specifies that capital accounts are fixed. On 1st January 2024, their capital account balances were $\text{₦}500,000$ and $\text{₦}300,000$ respectively, while Tunde's current account had a debit balance of $\text{₦}15,000$.

For the financial year ended 31st December 2024, the following figures were extracted:
- Net profit before deducting loan interest: $\text{₦}250,000$
- Tunde provided a loan of $\text{₦}100,000$ to the firm on 1st January 2024 at $10\%$ interest per annum
- Interest on capital: $10\%$ per annum
- Partners' annual salaries: Kemi $\text{₦}40,000$; Tunde $\text{₦}20,000$
- Drawings during the year: Kemi $\text{₦}30,000$; Tunde $\text{₦}25,000$
- Interest on drawings: Kemi $\text{₦}3,000$; Tunde $\text{₦}2,000$

What is the closing balance of Tunde's Current Account as at 31st December 2024?

Chief Mensah consigned $500$ cases of goods costing $\text{₦}2,000$ per case to Ade. The consignor incurred the following expenses on dispatch: freight of $\text{₦}100,000$ and transit insurance of $\text{₦}50,000$.

Upon taking delivery, Ade paid $\text{₦}30,000$ for clearing and unloading, $\text{₦}40,000$ for godown rent, and $\text{₦}50,000$ for salesman commission and advertising. At the end of the period, Ade reported that $400$ cases were sold.

What is the total value of the unsold consignment stock to be credited to the Consignment Account?

Unity Social Club provides the following information regarding its bar operations for the year ended 31st December 2025:

- Bar takings (sales): ₦150,000
- Bar inventory (1st January 2025): ₦20,000
- Bar inventory (31st December 2025): ₦25,000
- Payments made to bar suppliers: ₦80,000
- Bar creditors (1st January 2025): ₦12,000
- Bar creditors (31st December 2025): ₦15,000
- Bar steward salary paid: ₦10,000
- Bar steward salary accrued (31st December 2025): ₦2,000

What is the net bar profit to be transferred to the Income and Expenditure Account?

On a topographic map extract, V-shaped contour lines crossing a river valley point towards the north-east. In which direction is the river flowing?

A sole trader operating an incomplete accounting record system provided the following summary of cash transactions for the year ended 31 December 2025:

- Opening cash balance: $\text{N}1,500$
- Cash received from trade debtors: $\text{N}12,000$
- Cash paid to trade creditors: $\text{N}6,500$
- Business expenses paid in cash: $\text{N}2,200$
- Closing cash balance: $\text{N}1,800$

Assuming there were no other cash transactions except cash drawings by the proprietor, what was the total amount of cash drawn by the proprietor during the year?

Which of the following commercial activities is primarily designed to build a positive corporate image and foster mutual understanding between a business organization and the public?

A publicly listed telecommunications company publishes its audited financial results, prospectus for a new bond issuance, and notice of its upcoming Annual General Meeting in national daily newspapers. Which type of advertising is demonstrated in this scenario?

Match each commercial banking function or payment instrument with the specific operational requirement it fulfills for business traders.

A retail merchant displays a designer wristwatch in a window exhibition with a price label of ₦50,000. A customer enters the store, presents ₦50,000 in cash, and demands the item. The merchant refuses to sell, explaining that the price label was a typographical error and the actual price is ₦80,000. The customer insists that a binding contract was formed upon tendering the requested cash. Under the legal principles governing the law of contract, which of the following statements correctly evaluates the legal standing of the parties?

When the Federal Inland Revenue Service (FIRS) requests and analyzes the audited financial statements of a limited liability company, which of the following represents their primary interest?

In public sector accounting, revenue generated from personal income tax is classified as non-tax revenue.