All practice questions

13931 questions

All types13,931 Multiple choice7,139 True / False771 Numeric1,526 Matching2,583 Ordering631 Fill in the blank1,223 Short answer58

Question 11501Question →

A commercial publishing firm producing custom-designed academic textbooks incurred the following expenditures during a financial period:

I. Copyright royalties paid per copy to book authors
II. Cost of paper and printing ink used in production
III. Rental fees for specialized binding machinery hired exclusively for a specific job
IV. Salary of the factory maintenance engineer

Which combination of items strictly represents direct expenses in the calculation of Prime Cost?

Copyright royalties paid per copy to book authors, cost of paper and printing ink, and rental fees for specialized binding machinery

Rental fees for specialized binding machinery hired exclusively for a specific job and salary of the factory maintenance engineer

Copyright royalties paid per copy to book authors and rental fees for specialized binding machinery hired exclusively for a specific job

Cost of paper and printing ink used in production and salary of the factory maintenance engineer

Show answer & explanation

Answer: Copyright royalties paid per copy to book authors and rental fees for specialized binding machinery hired exclusively for a specific job

Answer

Copyright royalties paid per copy to book authors and rental fees for specialized binding machinery hired exclusively for a specific job.

Direct expenses are costs specifically incurred for a particular job or product line, apart from direct materials and direct labour. Copyright royalties paid per copy to authors and rental fees for specialized machinery hired exclusively for a specific contract are directly traceable to specific production runs and are therefore classified as direct expenses.

Step-by-Step Solution

Define Prime Cost and its components

Prime Cost consists of Direct Materials + Direct Labour + Direct Expenses.

Understanding the components of Prime Cost is essential for proper cost classification in manufacturing accounts.

Identify the definition of Direct Expenses

Direct expenses are expenditures incurred directly and exclusively for a specific product, job, or batch, other than raw materials and direct labour.

This isolates direct expenses from direct materials, direct labour, and indirect factory overheads.

Classify each given cost item

Item I (Author Royalties) = Direct Expense; Item II (Paper and Ink) = Direct Material; Item III (Special Machinery Hire for a Specific Job) = Direct Expense; Item IV (Factory Maintenance Engineer Salary) = Factory Overhead (Indirect Labour).

Evaluating each item against cost classification definitions allows accurate categorization.

Select the combination consisting strictly of Direct Expenses

Items I and III constitute direct expenses.

Only author royalties and job-specific machinery rental represent direct expenses.

Key Concept

Classification of Direct Expenses within Manufacturing Accounts

Question 11502Question →

Femi, Gbenga, and Hassan formed a commercial partnership without executing a formal Partnership Deed. Femi contributed $₦1,000,000$ as capital, Gbenga contributed $��600,000$ , and Hassan contributed no capital but managed daily operations full-time, demanding an annual salary of $₦300,000$ . On 1st July 2025, Gbenga advanced a loan of $₦200,000$ to the business. The net profit before adjusting for salaries or loan interest for the year ended 31st December 2025 was $₦410,000$ . In accordance with the Partnership Act 1890, what is Gbenga's share of the divisible profit for the year?

₦135,000

₦35,000

₦151,875

₦133,333

Show answer & explanation

Answer: ₦135,000

Answer

Gbenga's share of the divisible profit is ₦135,000.

Under the Partnership Act 1890, in the absence of a Partnership Deed: (1) profits and losses are shared equally among all partners, (2) no partner is entitled to a salary, and (3) interest on partner loan is allowed at 5% per annum as a charge against profit. Gbenga's loan interest for 6 months (July 1 to Dec 31) equals

₦200,000 \times 5\% \times \frac{6}{12} = ₦5,000

. Subtracting this charge from net profit yields

₦410,000 - ₦5,000 = ₦405,000

divisible profit. Splitting ₦405,000 equally among the three partners yields ₦135,000 for each partner.

Step-by-Step Solution

Calculate the statutory interest on partner loan under the Partnership Act 1890

Interest on Gbenga's loan =

₦200,000 \times 5\% \times \frac{6}{12} = ₦5,000

The Partnership Act 1890 grants 5% per annum interest on loans advanced by partners beyond their capital. Since the loan was advanced on 1st July 2025, interest applies for 6 months.

Determine net profit available for distribution (Divisible Profit)

Divisible Profit =

₦410,000 - ₦5,000 = ₦405,000

Interest on partner loan is a charge against profit (debited in the Profit and Loss Account), not an appropriation of profit. Partner salaries are disallowed in the absence of a deed.

Apportion the divisible profit among partners according to statutory default rules

Share per partner =

\frac{₦405,000}{3} = ₦135,000

Under the Partnership Act 1890, all partners share profits and losses equally regardless of their capital contributions.

Key Concept

Statutory default provisions under the Partnership Act 1890 in the absence of a formal Partnership Deed.

Question 11503Question →

Match each feature or limitation of the single entry bookkeeping system with its corresponding accounting explanation.

Click a left item, then click its matching right item

Show answer & explanation

Answer

Incomplete Record Keeping corresponds to failing to apply the dual aspect concept consistently. Non-extraction of Trial Balance corresponds to the inability to verify arithmetical accuracy. Emphasis on Personal Accounts corresponds to focusing primarily on cash and debtor/creditor balances. Difficulty in Fraud Prevention corresponds to a lack of internal controls and audit trails.

Under a single entry bookkeeping system, dual entry rules are not strictly followed for every transaction. Consequently, real and nominal accounts are generally omitted, emphasizing mostly cash and personal accounts. This lack of complete records prevents the extraction of a Trial Balance to check arithmetical accuracy and severely hampers fraud prevention and auditability.

Step-by-Step Solution

Identify the core definition of incomplete record keeping in single entry accounting.

Single entry omits double-entry records for nominal (expenses/income) and real (asset) accounts.

This relates to the dual aspect rule violation.

Evaluate the structural limitation regarding ledger balancing.

Because double entry is incomplete, credit balances cannot be checked against debit balances in a Trial Balance.

Trial Balance preparation requires dual aspect entries.

Analyze which accounts are typically kept under single entry systems.

Sole traders keeping single entry records mostly track cash transactions and personal accounts of customers and suppliers.

Real and nominal accounts are usually omitted.

Examine the control and auditing limitations of single entry records.

Without detailed ledger accounts, verifying business performance or preventing fraud becomes very difficult.

Audits require complete records and verifiable source documents.

Key Concept

Features and Limitations of Single Entry Bookkeeping

Question 11504Question →

The following financial records relate to Apex Professional Forum for the year ended 31st December 2025:

Transaction / Item	Amount (₦)
Cash balance at 1st January 2025	45,000
Bank overdraft at 1st January 2025	12,000
Subscriptions received (including ₦20,000 for 2024 and ₦15,000 for 2026)	280,000
Life membership fees received	60,000
Building fund donation received	150,000
Proceeds from sale of old office equipment	25,000
Rent paid (including ₦10,000 prepaid for 2026)	90,000
Salaries paid	140,000
Purchase of new office furniture	80,000
General administrative expenses paid	35,000

Additional Information:
- Depreciation on office equipment for the year was ₦18,000.
- Salaries accrued and unpaid at 31st December 2025 amounted to ₦15,000.
- Subscriptions in arrears at 31st December 2025 were ₦25,000.

What is the closing cash and bank balance to be presented in the Receipts and Payments Account as at 31st December 2025?

₦203,000

₦185,000

₦193,000

₦53,000

Show answer & explanation

Answer: ₦203,000

Answer

The closing cash and bank balance is ₦203,000.

The correct answer is calculated by taking the net opening balance (₦45,000 cash minus ₦12,000 overdraft = ₦33,000 debit), adding all cash receipts (₦280,000 subscriptions + ₦60,000 life membership + ₦150,000 building donation + ₦25,000 equipment sale = ₦515,000), and deducting all cash payments (₦90,000 rent + ₦140,000 salaries + ₦80,000 furniture + ₦35,000 general expenses = ₦345,000), giving a final balance of ₦203,000. Non-cash expenses like depreciation (₦18,000) and accrual adjustments are strictly excluded.

Step-by-Step Solution

Calculate the net opening cash balance.

Net opening balance = ₦45,000 (Cash balance) - ₦12,000 (Bank overdraft) = ₦33,000 (Debit).

Bank overdraft represents a credit balance that reduces the total initial cash position.

Sum all total actual cash receipts during the year.

Total Receipts = ₦280,000 (Subscriptions) + ₦60,000 (Life membership) + ₦150,000 (Building fund donation) + ₦25,000 (Proceeds from sale of equipment) = ₦515,000.

The Receipts and Payments Account records all cash received during the period, including capital receipts and advance/arrears payments, while ignoring non-cash accrued income.

Sum all total actual cash payments made during the year.

Total Payments = ₦90,000 (Rent paid) + ₦140,000 (Salaries paid) + ₦80,000 (Furniture purchased) + ₦35,000 (General expenses paid) = ₦345,000.

The account records total cash disbursed for both capital expenditure and revenue expenses without adjusting for prepayments, accruals, or depreciation.

Compute the closing cash and bank balance.

Closing Balance = Net Opening Balance (₦33,000) + Total Receipts (₦515,000) - Total Payments (₦345,000) = ₦203,000.

The Receipts and Payments Account functions as a summarized cash book, where Closing Balance = Total Debit (Opening Balance + Receipts) - Total Credit (Payments).

Key Concept

Scope and preparation of the Receipts and Payments Account in non-profit organizations

Estimated Time:2m 0s

Question 11505Question →

In the operations of a commercial bakery, raw flour and sugar are directly converted into finished loaves of bread. Which of the following expenditure items constitutes a direct cost that forms part of prime cost?

Cost of raw flour and baking ingredients consumed

Salary paid to the factory supervisor

Electricity charges for factory lighting

Depreciation of flour delivery vans

Show answer & explanation

Answer: Cost of raw flour and baking ingredients consumed

Answer

Cost of raw flour and baking ingredients consumed

Prime cost is the sum of direct materials, direct labor, and direct expenses. The cost of raw flour and baking ingredients represents direct raw materials directly traceable to the manufactured loaves of bread.

Step-by-Step Solution

Identify the total direct costs involved in the production process.

Prime cost consists of Direct Materials + Direct Labor + Direct Expenses.

Prime cost represents all expenses directly traceable to the physical creation of the finished unit.

Classify raw flour and baking ingredients.

Raw flour forms the basic direct material input of bread.

It forms a direct part of the manufactured product and is therefore classified under direct material cost.

Key Concept

Prime Cost and Direct Cost Classification in Manufacturing Accounts

Question 11506Question →

Kalu and Morenike established a commercial enterprise without executing a written partnership deed. Kalu contributed ₦4,000,000 as capital, while Morenike contributed ₦2,000,000. On 1st January 2025, Morenike provided an additional advance of ₦600,000 as a loan to the firm. During the year, Morenike managed daily operations and claimed a salary of ₦400,000. For the year ended 31st December 2025, the business reported a net profit of ₦1,830,000 before taking any interest or partner allowances into account. Under the statutory provisions of the Partnership Act 1890, what is Kalu's final share of profit?

₦900,000

₦915,000

₦1,200,000

₦700,000

Show answer & explanation

Answer: ₦900,000

Answer

₦900,000

Under the Partnership Act 1890, in the absence of a written partnership agreement: (1) interest on loan is allowed at 5% per annum as a charge against profit in the Profit and Loss Account, reducing profit to ₦1,800,000; (2) no salary is allowed to any partner; and (3) profits must be shared equally. Therefore, Kalu receives half of ₦1,800,000, which equals ₦900,000.

Step-by-Step Solution

Calculate interest on partner's loan under the Partnership Act 1890

Interest on Morenike's loan =

5\% \times ₦600,000 = ₦30,000

When no partnership deed exists, partners are entitled to 5% per annum interest on loans advanced to the firm.

Determine the adjusted net profit for appropriation

Adjusted Net Profit =

₦1,830,000 - ₦30,000 = ₦1,800,000

Interest on a partner's loan is a financial charge against profit (debited to the Profit and Loss Account), not an appropriation of profit.

Apply statutory rules regarding partner salary and profit sharing ratio

Partner salary = ₦0; Profit sharing ratio = Equal (1:1)

Under the Partnership Act 1890, partners are not entitled to remuneration/salary, and profits/losses must be shared equally regardless of capital contributions.

Compute Kalu's share of divisible profit

Kalu's share =

\frac{₦1,800,000}{2} = ₦900,000

Divisible profit of ₦1,800,000 is shared equally between Kalu and Morenike.

Key Concept

Statutory default rules under the Partnership Act 1890 when no partnership deed exists

Question 11507Question →

Dayo and Nkechi are partners in a firm. For the year ended 31 December 2025, the business recorded a net profit of ₦500,000 before considering the following financial items:

- Interest on Nkechi's loan to the firm: ₦20,000
- Interest on partners' drawings: ₦15,000
- Partners' salaries: ₦40,000
- Interest on capital: ₦30,000

What is the net divisible profit to be shared between the partners?

₦425,000

₦445,000

₦395,000

₦465,000

Show answer & explanation

Answer: ₦425,000

Answer

The net divisible profit to be shared between the partners is ₦425,000.

The correct figure of ₦425,000 is derived by first deducting interest on Nkechi's loan (₦20,000) from the reported net profit (₦500,000) to get an adjusted net profit of ₦480,000. Next, adding interest on drawings (₦15,000) yields ₦495,000 available profit. Finally, deducting the total appropriations of ₦70,000 (salaries of ₦40,000 plus interest on capital of ₦30,000) results in ₦425,000.

Step-by-Step Solution

Calculate the adjusted Net Profit after deducting loan interest

₦500,000 - ₦20,000 = ₦480,000

Interest on a partner's loan is an expense charged to the Profit and Loss Account, not an appropriation of profit.

Add interest on drawings to the adjusted net profit

₦480,000 + ₦15,000 = ₦495,000

Interest charged on partner drawings increases total profits available for distribution.

Deduct appropriations (partner salaries and interest on capital)

₦495,000 - (₦40,000 + ₦30,000) = ₦425,000

Salaries and interest on capital are appropriations paid out to partners from available profits.

Key Concept

Profit and Loss Appropriation Account

Estimated Time:1m 30s

Question 11508Question →

Yakubu, a wholesale grain distributor, maintains single-entry records for his business. On 1 January 2025, his financial records showed Motor Vehicle valued at $\text{₦400,000}$ , Inventory of $\text{₦150,000}$ , Trade Debtors of $\text{₦100,000}$ , Cash at Bank of $\text{₦70,000}$ , Prepaid Insurance of $\text{₦10,000}$ , Trade Creditors of $\text{₦120,000}$ , and Accrued Rent of $\text{₦10,000}$ .

On 31 December 2025, his assets and liabilities before adjustments were Motor Vehicle $\text{₦400,000}$ , Inventory $\text{₦180,000}$ , Trade Debtors $\text{₦120,000}$ , Cash at Bank $\text{₦110,000}$ , Prepaid Insurance $\text{₦16,000}$ , Trade Creditors $\text{₦90,000}$ , and Accrued Salaries $\text{₦15,000}$ .

Additional adjustments required at year-end:
- Provide $10\%$ depreciation per annum on Motor Vehicle.
- Create a $5\%$ provision for doubtful debts on Trade Debtors.

During the year, Yakubu withdrew $\text{₦4,000}$ cash per month and taken goods worth $\text{₦12,000}$ for personal use. He also introduced additional capital of $\text{₦50,000}$ from personal funds into the business.

What is the net profit of the business for the year ended 31 December 2025?

₦85,000

₦65,000

₦73,000

₦131,000

Show answer & explanation

Answer: ₦85,000

Answer

The net profit for the year ended 31 December 2025 is ₦85,000.

The correct answer of ₦85,000 is obtained by first calculating Opening Capital (₦730,000 assets minus ₦130,000 liabilities = ₦600,000) and adjusted Closing Capital (₦780,000 assets after 10% motor vehicle depreciation and 5% doubtful debts provision minus ₦105,000 liabilities = ₦675,000). Adding total drawings of ₦60,000 (₦48,000 cash plus ₦12,000 goods) and deducting additional capital of ₦50,000 yields adjusted closing capital of ₦685,000. Subtracting opening capital of ₦600,000 gives a net profit of ₦85,000.

Step-by-Step Solution

Calculate Opening Capital as of 1 January 2025

Opening Capital = ₦600,000

Total Opening Assets =

\text{₦400,000} + \text{₦150,000} + \text{₦100,000} + \text{₦70,000} + \text{₦10,000} = \text{₦730,000}

. Total Opening Liabilities =

\text{₦120,000} + \text{₦10,000} = \text{₦130,000}

. Opening Capital =

\text{₦730,000} - \text{₦130,000} = \text{₦600,000}

Apply year-end adjustments to closing assets and calculate Closing Capital as of 31 December 2025

Closing Capital = ₦675,000

Adjusted Motor Vehicle =

\text{₦400,000} - (10\% \times \text{₦400,000}) = \text{₦360,000}

. Adjusted Trade Debtors =

\text{₦120,000} - (5\% \times \text{₦120,000}) = \text{₦114,000}

. Total Closing Assets =

\text{₦360,000} + \text{₦180,000} + \text{₦114,000} + \text{₦110,000} + \text{₦16,000} = \text{₦780,000}

. Total Closing Liabilities =

\text{₦90,000} + \text{₦15,000} = \text{₦105,000}

. Closing Capital =

\text{₦780,000} - \text{₦105,000} = \text{₦675,000}

Calculate Total Drawings during the year

Total Drawings = ₦60,000

Cash drawings =

12 \times \text{₦4,000} = \text{₦48,000}

. Goods drawn =

\text{₦12,000}

. Total drawings =

\text{₦48,000} + \text{₦12,000} = \text{₦60,000}

Apply the Statement of Affairs profit determination formula

Net Profit = ₦85,000

\text{Net Profit} = \text{Closing Capital} + \text{Drawings} - \text{Capital Introduced} - \text{Opening Capital} = \text{₦675,000} + \text{₦60,000} - \text{₦50,000} - \text{₦600,000} = \text{₦85,000}

Key Concept

Statement of Affairs Method for Capital and Profit Determination

Question 11509Question →

Arrange the following key historical milestones in the development of accounting in chronological order, from the earliest to the most recent:

Drag items to arrange them in the correct order

Show answer & explanation

Answer

The correct chronological sequence is: (1) Use of clay tablets in ancient Mesopotamia, (2) Publication of double-entry bookkeeping by Fra Luca Pacioli in Venice (1494), (3) Expansion of accounting driven by the Industrial Revolution, and (4) Integration of computerized accounting systems.

The correct chronological arrangement places ancient Mesopotamian clay tablets first (~3000 BC), followed by Luca Pacioli's 1494 publication of double-entry bookkeeping in Venice, then the Industrial Revolution's expansion into cost accounting (18th–19th century), and finally the adoption of computerized accounting systems in the late 20th century.

Step-by-Step Solution

Identify the historical era of ancient record-keeping

Ancient Mesopotamian clay tablets date back to approximately 3000 BC.

Primitive custodial record-keeping preceded formal accounting systems.

Identify the formalization of double-entry bookkeeping

Luca Pacioli's publication in Venice occurred in 1494.

This milestone documented the double-entry method developed by Italian merchants.

Identify the industrial transformation stage

The Industrial Revolution expanded accounting scope during the 18th and 19th centuries.

Large-scale manufacturing created the need for cost accounting and capital stewardship.

Identify modern technological adoption

Computerized accounting systems emerged in the 20th century.

Automation transformed manual ledgers into digital accounting software.

Key Concept

Chronological evolution of accounting from ancient record-keeping to double-entry documentation, industrial expansion, and computerization.

Question 11510Question →

In physical geography, weathering and mass wasting operate through distinct chemical reactions and mechanical failure modes governed by specific climatic and geological conditions. Which option correctly pairs each weathering or mass wasting process on the left with its corresponding environmental mechanism and landform result on the right?

Click a left item, then click its matching right item

Show answer & explanation

Answer

Carbonation-Solution pairs with the dissolution of limestone by carbonic acid forming karst landforms; Hydrolysis pairs with hydrogen ion substitution altering feldspar into kaolinite clay; Solifluction pairs with slow flowage of thawed saturated soil over permafrost; Slumping pairs with downslope displacement along a curved concave shear plane forming backward-tilted terraces.

Carbonation dissolves limestone via carbonic acid to produce karst landforms; Hydrolysis alters silicate minerals like feldspar to clay through hydrogen ion substitution; Solifluction is the slow downslope flow of saturated soil over permafrost; Slumping is rotational displacement along a concave surface forming step-like terraces.

Step-by-Step Solution

Analyze the chemical mechanism of Carbonation-Solution.

Carbonation requires carbon dioxide dissolved in water (

H_2CO_3

) dissolving calcium carbonate in limestone to form underground karst topography.

Calcium carbonate is insoluble in pure water but dissolves readily in carbonated groundwater.

Examine the process of Hydrolysis.

Hydrolysis involves reactive

H^+

ions replacing cations in silicate minerals such as feldspar, converting them into kaolinite clay.

Hydrolysis changes the fundamental chemical composition of rock minerals to produce soft hydrous clays.

Differentiate between Solifluction and Slumping mass wasting movements.

Solifluction requires permafrost acting as an impermeable layer for saturated soil flow in tundra regions, whereas Slumping involves rotational slip along a concave failure plane creating backward-tilted step terraces.

Solifluction is thermal-climatic and flow-based, while slumping is structural shear failure along a curved surface.

Key Concept

Chemical weathering mechanisms and mass wasting failure modes

Estimated Time:2m 0s

Question 11511Question →

While manual accounting systems rely on handwritten ledgers and physical books of original entry, computerized accounting systems process accounting data electronically. Which of the following represents a primary operational advantage of a computerized accounting system over a manual accounting system?

Immediate and automatic updating of ledger accounts and financial statement generation upon transaction input

Complete elimination of internal control policies and security checks

Total replacement of human professional judgment and financial data interpretation

Automatic correction of incorrect source data entered into the system by data entry operators

Show answer & explanation

Answer: Immediate and automatic updating of ledger accounts and financial statement generation upon transaction input

Answer

Immediate and automatic updating of ledger accounts and financial statement generation upon transaction input

The correct answer highlights the major efficiency gain of computerized accounting systems: transaction inputs instantly update subsidiary ledgers, general ledgers, and final financial reports without needing manual double-entry posting steps.

Step-by-Step Solution

Identify the key functional difference between manual and computerized accounting systems.

Manual systems require multi-step human effort to record, post, sum, and balance accounts, whereas computerized systems automate posting and report generation.

Understanding data flow in software vs physical books reveals the primary speed and efficiency benefit of computerized systems.

Evaluate the choices to distinguish genuine system benefits from common misconceptions.

Automatic ledger updating and real-time report compilation upon entering source data is the primary operational advantage of computerized accounting.

Computerization accelerates routine bookkeeping processes while maintaining double-entry accuracy across linked accounts.

Key Concept

Operational Speed and Automation in Computerized Accounting Systems

Question 11512Question →

Zaria General Stores, a food retail business, engaged in the following transactions during August 2026:

• Aug 8: Purchased $40$ bags of rice for resale on credit from Usman Ltd at a list price of $₦400,000$ , subject to a $10\%$ trade discount.
• Aug 12: Purchased an office computer on credit from Tech Solutions Ltd for $₦250,000$ .
• Aug 15: Purchased $10$ cartons of cooking oil for resale for $₦100,000$ cash.

What is the total amount to be recorded in the Purchases Journal for August 2026?

₦360,000

₦610,000

₦400,000

₦460,000

Show answer & explanation

Answer: ₦360,000

Answer

The total amount to be recorded in the Purchases Journal is ₦360,000.

The Purchases Journal is used exclusively for recording credit purchases of goods intended for resale. The transaction on Aug 8 (

40

bags of rice for resale at

₦400,000

list price) is subject to a

10\%

trade discount (

₦40,000

), yielding a net figure of

₦360,000

. The computer purchase on Aug 12 is a capital expenditure recorded in the General Journal, and the cash purchase on Aug 15 is recorded in the Cash Book.

Step-by-Step Solution

Identify transactions eligible for the Purchases Journal

Only the credit purchase of rice for resale on Aug 8 (

₦400,000

list price) qualifies.

The Purchases Journal strictly records credit purchases of goods intended for resale. Fixed assets bought on credit (Aug 12) go to the General Journal, and cash purchases (Aug 15) go to the Cash Book.

Calculate net invoice price after trade discount

₦400,000 - (10\% \times ₦400,000) = ₦400,000 - ₦40,000 = ₦360,000

Trade discounts are deducted on the invoice before recording in the book of prime entry.

Key Concept

Purchases Journal Scope and Trade Discount Deduction

Estimated Time:1m 30s

Question 11513Question →

Match each operational term or account header of a non-profit organization on the left with its corresponding financial description or accounting treatment on the right.

Click a left item, then click its matching right item

Show answer & explanation

Answer

Accumulated Fund matches with 'The capital equivalent in a non-profit entity, computed as total assets minus total liabilities'; Surplus matches with 'Excess of recurrent income over revenue expenditure, credited to increase the accumulated fund'; Honorarium matches with 'Ex-gratia payment made to an individual for voluntary professional services rendered to the organization'; Subscriptions Received in Advance matches with 'Current liability representing membership fees collected in the current period for a future financial year'.

Each non-profit accounting term is matched to its true accounting definition: Accumulated Fund is the excess of assets over liabilities (capital equivalent); Surplus is the net excess of income over expenditure added to accumulated fund; Honorarium is an ex-gratia payment for voluntary services; and Subscriptions Received in Advance are deferred income classified as a current liability.

Step-by-Step Solution

Analyze the nature of Accumulated Fund in non-profit accounting.

Identify that non-profit entities do not have equity share capital; their net capital base is the Accumulated Fund (Total Assets - Total Liabilities).

Establishes the correct match for the capital structure of an NPO.

Evaluate the financial term 'Surplus'.

Determine that surplus represents excess revenue over revenue expenditure in the Income and Expenditure account.

Differentiates NPO surplus from commercial net profit.

Classify the payment known as 'Honorarium'.

Recognize it as an ex-gratia payment made to guest speakers or volunteers as a token of appreciation.

Distinguishes honoraria from regular salaries or formal service fees.

Determine the accounting treatment of Subscriptions Received in Advance.

Confirm that income received prior to its due period is a liability under accrual accounting.

Ensures proper period matching on the Statement of Financial Position.

Key Concept

Nature and Financial Features of Non-Profit Organizations

Question 11514Question →

Efe and Danjuma are partners in a business operating a fixed capital account system. On 1st January 2025, Efe's current account had a credit balance of $\text{₦}150,000$ . During the year ended 31st December 2025, Efe was entitled to a partner salary of $\text{₦}200,000$ , interest on capital of $\text{₦}60,000$ , and a share of profit of $\text{₦}340,000$ . Efe's drawings for the year amounted to $\text{₦}180,000$ , and interest charged on drawings was $\text{₦}10,000$ . What is the closing balance of Efe's current account as at 31st December 2025 in Naira?

Show answer & explanation

Answer: 560000

Answer

The closing balance of Efe's current account as at 31st December 2025 is ₦560,000.

Under the fixed capital account system, partner capital remains fixed while operational adjustments are made through the current account. Adding opening balance (₦150,000), salary (₦200,000), interest on capital (₦60,000), and profit share (₦340,000) gives total credits of ₦750,000. Deducting drawings (₦180,000) and interest on drawings (₦10,000) gives a net closing credit balance of ₦560,000.

Step-by-Step Solution

Calculate the total credit entries to Efe's current account by adding the opening credit balance, salary, interest on capital, and share of profit.

Total Credits = ₦150,000 + ₦200,000 + ₦60,000 + ₦340,000 = ₦750,000

Under the fixed capital account method, all partner entitlements and profit allocations are credited to their current account.

Calculate the total debit entries to Efe's current account by adding drawings and interest on drawings.

Total Debits = ₦180,000 + ₦10,000 = ₦190,000

Drawings and interest charged on drawings reduce the partner's claim against the partnership and are debited to the current account.

Deduct total debits from total credits to determine the net closing current account balance.

Closing Balance = ₦750,000 - ₦190,000 = ₦560,000

Subtracting debit items from total credit allocations leaves a net credit balance of ₦560,000.

Key Concept

Computation of partner current account balance under the fixed capital account system.

Question 11515Question →

A biogeographer mapping ecological transitions across Nigeria compiles data on four distinct vegetation belts based on their key morphological adaptations and climatic controls:

- Zone W: High concentration of stilt roots and pneumatophores (breathing roots), adapted to anaerobic, saline muds under continuous daily tidal inundation.
- Zone X: Multi-storied closed canopy with buttressed roots, broad evergreen leaves, and abundant woody lianas under annual rainfall exceeding $2000\text{ mm}$ .
- Zone Y: Open tree canopy dominated by fire-adapted species such as *Isoberlinia doka*, with an understory of tall perennial grasses subjected to a $4\text{ to }6\text{ month}$ dry period.
- Zone Z: Short tussock grasses interspersed with thorny acacias and baobabs exhibiting microphyllous foliage and deep taproot systems under a dry season exceeding $8\text{ months}$ .

Based on these structural characteristics and climatic parameters, which sequence correctly arranges these vegetation zones in order of increasing latitude from south to north across Nigeria?

Zone W → Zone X → Zone Y → Zone Z

Zone X → Zone W → Zone Y → Zone Z

Zone Z → Zone Y → Zone X → Zone W

Zone W → Zone Y → Zone X → Zone Z

Show answer & explanation

Answer: Zone W → Zone X → Zone Y → Zone Z

Answer

Zone W → Zone X �� Zone Y → Zone Z

The correct sequence (Zone W → Zone X → Zone Y → Zone Z) accurately follows the latitudinal gradient across Nigeria from south to north. Zone W represents the coastal Mangrove Swamp Forest (4°N–6°N), Zone X represents the humid Tropical High Rainforest (6°N–7°30'N), Zone Y represents the sub-humid Guinea Savanna (7°30'N–11°N), and Zone Z represents the semi-arid Sudan/Sahel Savanna (11°N–14°N). As latitude increases northwards, annual rainfall decreases and dry season duration lengthens, governing this spatial succession.

Step-by-Step Solution

Identify each vegetation zone based on its structural adaptations and climatic parameters.

Zone W corresponds to Mangrove Swamp Forest (coastal tidal muds, stilt roots, pneumatophores). Zone X corresponds to Tropical High Rainforest (dense multi-layered canopy, buttress roots, heavy rainfall >2000 mm). Zone Y corresponds to Guinea Savanna (open woodland, Isoberlinia doka, tall grasses, 4-6 month dry season). Zone Z corresponds to Sudan/Sahel Savanna (stunted thorny trees, microphyllous foliage, baobab, dry season >8 months).

Matching structural adaptations with climatic parameters defines the precise vegetation belt.

Determine the spatial latitudinal distribution of these identified vegetation zones in Nigeria.

Mangrove Swamp Forest occupies the extreme southern coast (approx. 4°N–6°N). Tropical Rainforest occupies the humid belt immediately north of the swamps (approx. 6°N–7°30'N). Guinea Savanna occupies the central region (approx. 7°30'N–11°N). Sudan/Sahel Savanna occupies the extreme north (approx. 11°N–14°N).

Nigeria's vegetation belts strictly reflect the decrease in annual precipitation and lengthening of the dry season from south to north.

Order the vegetation zones by increasing latitude (South to North).

Increasing latitude corresponds to moving from 4°N to 14°N (south to north), yielding the sequence: Zone W (Mangrove Swamp) → Zone X (Rainforest) → Zone Y (Guinea Savanna) → Zone Z (Sudan/Sahel Savanna).

Increasing latitude specifies a south-to-north transect.

Key Concept

Latitudinal Zonation of Vegetation Belts in Nigeria

Estimated Time:2m 0s

Question 11516Question →

On 1st April 2025, Taraba, Keffi, and Zaria formed a partnership business without executing a formal partnership deed, contributing capital of $₦5,000,000$ , $₦3,000,000$ , and $₦2,000,000$ respectively. On 1st July 2025, Taraba advanced a loan of $₦1,200,000$ to the firm. For the 9-month financial period ended 31st December 2025, Zaria managed daily operations claiming a total salary of $₦900,000$ , while Keffi withdrew $₦400,000$ for personal use. The draft net profit before accounting for any partner claims or loan interest was $₦4,830,000$ . Under the provisions of the Partnership Act 1890, what is the amount in Naira ( $₦$ ) creditable to Taraba as his share of profit for the period?

Show answer & explanation

Answer: 1600000

Answer

The amount creditable to Taraba as his share of profit for the period is ₦1,600,000.

Under the statutory default rules of the Partnership Act 1890, when no partnership deed exists: (1) No salary is payable to any partner, so Zaria's ₦900,000 claim is ignored. (2) Interest on a partner's loan is allowed at 5% per annum and treated as a charge against profit. For 6 months (1st July to 31st December 2025), loan interest is ₦1,200,000 × 5% × (6/12) = ₦30,000. (3) The net profit available for distribution becomes ₦4,830,000 - ₦30,000 = ₦4,800,000. (4) Profits are shared equally among the three partners, giving Taraba a share of ₦4,800,000 ÷ 3 = ₦1,600,000.

Step-by-Step Solution

Identify applicable statutory provisions under the Partnership Act 1890

Disallow Zaria's salary claim of ₦900,000, disallow interest on capital and drawings, allow 5% p.a. interest on Taraba's loan advance, and share remaining profit equally among all three partners.

In the absence of a written partnership agreement, statutory provisions of the Partnership Act 1890 govern partner entitlements.

Calculate time-apportioned interest on Taraba's loan advance

₦1,200,000 × 0.05 × (6 / 12) = ₦30,000

Taraba provided the loan on 1st July 2025, so interest runs for 6 months until 31st December 2025. Loan interest is a charge against profit.

Calculate net distributable profit

₦4,830,000 - ₦30,000 = ₦4,800,000

Interest on a partner loan must be debited to the Profit and Loss Account before arriving at the net profit available for appropriation.

Compute Taraba's share of net profit

₦4,800,000 / 3 = ₦1,600,000

Under statutory provisions, profits and losses are shared equally regardless of initial capital contributions.

Key Concept

Statutory default provisions of the Partnership Act 1890 regarding loan interest and equal profit allocation

Estimated Time:2m 30s

Question 11517Question →

Match each of the following financial items extracted from the trial balance of a sole trader to its correct balance sheet classification.

Click a left item, then click its matching right item

Show answer & explanation

Answer

Patents and Trademarks match with Intangible Non-Current Asset; Bank Overdraft matches with Current Liability; Office Furniture and Fittings match with Tangible Non-Current Asset; Accrued Rent Income matches with Current Asset; 10-Year Debenture matches with Non-Current Liability.

Each item is matched according to standard balance sheet accounting principles: non-physical long-term assets are intangible non-current assets, physical long-term assets are tangible non-current assets, short-term receivables are current assets, short-term bank obligations are current liabilities, and long-term borrowings are non-current liabilities.

Step-by-Step Solution

Identify non-physical assets held for long-term operational use.

Patents and Trademarks are non-physical long-term assets, classified as Intangible Non-Current Assets.

Intangible assets possess long-term economic value but lack physical substance.

Distinguish between short-term and long-term liabilities based on settlement period.

Bank Overdraft is due on demand (Current Liability), while 10-Year Debenture matures after multiple financial years (Non-Current Liability).

Current liabilities are expected to be settled within one year, whereas non-current liabilities mature beyond twelve months.

Classify physical long-term resources and short-term receivables.

Office Furniture and Fittings are physical long-term operational assets (Tangible Non-Current Assets), and Accrued Rent Income is uncollected earned income expected within the short term (Current Asset).

Physical operational assets held beyond one year are tangible non-current assets, while short-term receivables boost current asset position.

Key Concept

Classification of balance sheet items into Non-Current Assets (Tangible/Intangible), Current Assets, Non-Current Liabilities, and Current Liabilities based on liquidity, permanence, and physical substance.

Question 11518Question →

Match each transaction or financial item of a youth sports club with its correct accounting treatment in the Receipts and Payments Account.

Click a left item, then click its matching right item

Show answer & explanation

Answer

Life membership fees received in cash is debited as a cash receipt; Depreciation of clubhouse equipment is excluded because it is a non-cash item; Outstanding wages at the end of the year is excluded because it is an unpaid accrued item; Purchase of new sports equipment paid by cheque is credited as a cash payment.

The Receipts and Payments Account is prepared strictly on a cash basis. All actual cash receipts (whether capital or revenue, such as life membership fees) are debited, while all cash payments (whether capital or revenue, such as purchasing sports equipment) are credited. Non-cash expenses (such as depreciation) and unpaid accruals (such as outstanding wages) are completely excluded.

Step-by-Step Solution

Determine the basic principle of the Receipts and Payments Account

The Receipts and Payments Account operates strictly on a cash basis, recording all actual cash receipts on the debit side and actual cash payments on the credit side.

It functions as a summarized cash book for non-profit organizations.

Classify actual cash inflows and outflows

Cash received for life membership is a cash inflow (debited). Cheque payment for sports equipment is a cash outflow (credited).

Capital items involving actual cash movements are fully included in the Receipts and Payments Account.

Identify non-cash items and accruals for exclusion

Depreciation (a non-cash provision) and outstanding wages (unpaid expense accrual) are both omitted.

Items that do not involve an immediate movement of cash or bank funds cannot be entered into a cash summary account.

Key Concept

Receipts and Payments Account Scope and Cash Basis Accounting

Question 11519Question →

The following transactions and balances were extracted from the accounting records of Folake Enterprises for the financial year ended 31st December 2025:

Transaction / Balance Item	Amount (₦)
Opening balance (1st Jan 2025): Debit	45,000
Opening balance (1st Jan 2025): Credit	1,200
Total sales (including cash sales of ₦65,000)	280,000
Cash received from credit customers	178,000
Cheques received from credit customers	24,000
Discount allowed	4,500
Returns inwards	6,800
Bad debts written off	3,200
Dishonoured cheques from customers	2,500
Cash refunds to credit customers for overpayment	1,800
Contra entry set-off with Purchases Ledger	5,400
Provision for doubtful debts	2,000
Discount received	1,500
Closing balance (31st Dec 2025): Credit	800

What is the debit balance carried down of the Sales Ledger Control Account at 31st December 2025?

Show answer & explanation

Answer: 42000

Answer

The debit balance carried down of the Sales Ledger Control Account at 31st December 2025 is ₦42,000.

To calculate the closing debit balance carried down, first compute credit sales by deducting cash sales (₦65,000) from total sales (₦280,000), giving ₦215,000. Next, assemble the debit side entries: Opening debit balance (₦45,000), Credit sales (₦215,000), Dishonoured cheques (₦2,500), Cash refunds (₦1,800), and the Closing credit balance c/d (₦800), which total ₦265,100. Then assemble the credit side entries: Opening credit balance (₦1,200), Cash received (₦178,000), Cheques received (₦24,000), Discount allowed (₦4,500), Returns inwards (₦6,800), Bad debts written off (₦3,200), and Contra set-off (₦5,400), totaling ₦223,100. Subtracting ₦223,100 from ₦265,100 yields the correct closing debit balance of ₦42,000. Note that provision for doubtful debts (₦2,000) and discount received (₦1,500) are non-control account items and must be completely ignored.

Step-by-Step Solution

Isolate credit sales from total sales

Credit Sales = ₦280,000 - ₦65,000 = ₦215,000

Only credit sales increase trade debtors and are entered in the Sales Ledger Control Account. Cash sales are entered in the cash book.

Filter out non-relevant transactions

Ignore Provision for Doubtful Debts (₦2,000) and Discount Received (₦1,500)

Provision for doubtful debts is not posted to control accounts, and discount received affects creditors in the Purchases Ledger Control Account.

Sum all debit side items including closing credit balance

Total Debit Side = ₦45,000 + ₦215,000 + ₦2,500 + ₦1,800 + ₦800 = ₦265,100

Opening debit balance, credit sales, dishonoured cheques, cash refunds to customers, and closing credit balance increase the debit total.

Sum all credit side items prior to balancing

Total Credit Side = ₦1,200 + ₦178,000 + ₦24,000 + ₦4,500 + ₦6,800 + ₦3,200 + ₦5,400 = ₦223,100

Opening credit balance, cash/cheques received, discounts allowed, returns inwards, bad debts, and set-offs reduce customer indebtedness.

Calculate the closing debit balance carried down

Debit Balance c/d = ₦265,100 - ₦223,100 = ₦42,000

The difference between total debit entries and total credit entries gives the closing debit balance.

Key Concept

Reconstruction of Sales Ledger Control Account with extraneous items

Estimated Time:2m 0s

Question 11520Question →

Graceful Fashions operates two departments: Clothing and Footwear. For the year ended 31 December 2025, the total rent expense incurred by the business was $\text{N} 120,000$ . Rent expense is apportioned between departments based on floor area occupied. If the Clothing Department occupies $600\text{ m}^2$ and the Footwear Department occupies $400\text{ m}^2$ , what is the amount of rent (in Naira) apportioned to the Clothing Department?

Show answer & explanation

Answer: 72000

Answer

The amount of rent apportioned to the Clothing Department is 72,000 Naira.

Total floor area is

600\text{ m}^2 + 400\text{ m}^2 = 1,000\text{ m}^2

. The Clothing Department occupies

\frac{600}{1,000} = 60\%

of the space. Apportioned rent for Clothing is

60\% \times \text{N} 120,000 = \text{N} 72,000

Step-by-Step Solution

Calculate total floor area occupied by both departments.

Total floor area = 1,000 square meters.

The total area forms the denominator for the apportionment ratio.

Calculate the proportion of total floor area used by the Clothing Department.

Proportion = 600 / 1,000 = 3/5 or 0.60.

Rent is allocated according to the ratio of space occupied.

Multiply total rent by the Clothing Department's proportion.

Apportioned Rent = 0.60 x 120,000 = 72,000 Naira.

This calculates the specific rent expense attributable to the Clothing Department.

Key Concept

Apportionment of departmental expenses using floor area as a basis.

PreviousPage 576 / 697Next

All practice questions

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Answer

Step-by-Step Solution

Key Concept