All practice questions

Tariq and Amaka are partners sharing profits and losses in the ratio $3:2$. For the year ended 31 December 2025, the firm recorded a net profit of $\text{₦}680,000$ before taking the following items into account:
- Interest on capital: Tariq $\text{₦}40,000$; Amaka $\text{₦}30,000$
- Annual salary payable to Amaka: $\text{₦}50,000$
- Interest on drawings: Tariq $\text{₦}10,000$; Amaka $\text{₦}10,000$
- Tariq provided a loan of $\text{₦}100,000$ to the partnership on 1 January 2025 at an interest rate of $10\%$ per annum, which has not yet been recorded in the Profit and Loss Account.

What is Tariq's share of the net divisible profit for the year?

Match each scenario or rule regarding the forfeiture and re-issue of shares on the left with its appropriate accounting treatment on the right.

Orion Holdings Plc offered for public subscription $80,000$ ordinary shares of $\text{₦}2.00$ nominal value each at a discount of $5\%$. Payments were structured as follows: $\text{₦}0.70$ on application, $\text{₦}0.80$ on allotment (reflecting the full discount), and the remaining balance on final call. All shares were fully subscribed and all monies were received in full. Which of the following statements correctly states the total amount credited to the Share Capital Account and the accounting treatment of the Discount on Shares Account?

Goldline Enterprises Plc was registered with an authorized share capital of $1,500,000$ ordinary shares of $\text{₦}2.00$ each. The directors issued $900,000$ ordinary shares to the public, all of which were fully called up to $\text{₦}2.00$ per share. At the end of the financial year, all call payments were received except for a final call of $\text{₦}0.50$ per share on $50,000$ shares. What is the value of the paid-up share capital of the company in Naira?

Match each goodwill valuation method or accounting treatment in partnership accounts on the left with its corresponding description or journal entry rule on the right.

The Ministry of Health of a state government recorded the following financial disbursements during the fiscal year:

1. Construction of a specialized maternity clinic: ₦45,000,000
2. Purchase of diagnostic imaging equipment (expected useful lifespan of 8 years): ₦18,000,000
3. Complete engine replacement and structural overhaul of hospital fleet vehicles to extend their operational life by 6 years: ₦7,500,000
4. Monthly payment of medical staff salaries and personnel allowances: ₦14,000,000
5. Routine maintenance, fueling, and minor repairs of hospital vehicles: ₦3,200,000
6. Purchase of consumable office stationery and medical cleaning supplies: ₦1,800,000

What is the total amount to be classified as Capital Expenditure for the fiscal year?

A commercial bank updates customer account balances instantly whenever transactions occur at Automated Teller Machines (ATMs), but calculates and disburses monthly staff salaries in a single periodic run at the end of each month. Which of the following correctly identifies the data processing methods applied to ATM transactions and staff salary payments respectively?

Bisi and Halima are partners in a firm. For the year ended 31 December 2025, the firm recorded a net profit of ₦300,000. According to their partnership agreement, the following provisions apply:
- Annual salary to Bisi: ₦50,000
- Total interest on partners' capital: ₦30,000
- Total interest on drawings charged to partners: ₦10,000

What is the net divisible profit available for distribution between the partners?

Nneka, a wholesale trader who keeps incomplete accounting records, extracted the following information regarding her trade debtors for the financial year:

- Balance of trade debtors at 1 January: $\text{₦}45,000$
- Cash received from trade debtors during the year: $\text{���}120,000$
- Discount allowed to trade debtors: $\text{₦}5,000$
- Bad debts written off: $\text{₦}3,000$
- Balance of trade debtors at 31 December: $\text{₦}52,000$

What was the total value of credit sales for the year?

Adeola dispatched 500 bags of rice on consignment to Babatunde. Under the consignment agreement, Babatunde receives an ordinary commission of 5% on total sales and a del-credere commission of 2.5% on credit sales. During the period, Babatunde sold 50 bags on credit, but the buyer defaulted completely and the debt became irrecoverable. Which of the following statements correctly describes the accounting treatment of this bad debt loss?

Match each accounting document or journal summary on the left with its corresponding book of original entry or ledger posting rule on the right.

Ebuka and Fatima entered into a joint venture to trade in solar energy equipment, maintaining a separate set of books. Ebuka and Fatima paid $₦2,500,000$ and $₦1,500,000$ respectively into a Joint Bank Account. Goods purchased using funds from the Joint Bank Account amounted to $₦3,000,000$. Ebuka paid carriage expenses of $₦200,000$ from his personal funds, while selling expenses of $₦150,000$ were settled from the Joint Bank Account. All goods were sold for $₦4,800,000$ and the proceeds were deposited into the Joint Bank Account. If profits and losses are shared between Ebuka and Fatima in the ratio $3:2$ respectively, what is the final cash amount due to Ebuka upon closing the venture?

In departmental accounting, indirect expenses are apportioned to departments using equitable bases of allocation. Match each overhead expense on the left with the most appropriate basis of apportionment on the right.

Cost accounting systems are subject to the same mandatory statutory regulations and International Financial Reporting Standards (IFRS) as financial accounting, requiring all commercial enterprises to present standardized cost accounting statements to external stakeholders.

In a manufacturing entity, the prime cost for a financial period is $\text{₦}50,000$ and factory overheads total $\text{₦}20,000$. If the opening work-in-progress is valued at $\text{₦}5,000$ and the closing work-in-progress is $\text{₦}3,000$, what is the cost of production?

Due to the Earth's rotation from west to east, local solar time varies with longitude across the globe. Arrange the following longitudes in order of their local solar time at any given moment, from the EARLIEST time of day to the LATEST time of day.

Autotech Dynamics operates three operational units—Car Sales, Spare Parts, and Vehicle Servicing—within a single facility under unified management. Which of the following best describes the primary objective of preparing departmental accounts for this enterprise?

Trade unions and employee representatives utilize a company's accounting information primarily to verify the business entity's tax liabilities and monitor compliance with statutory revenue regulations.

Match each financial item extracted from a sole trader's trial balance to its correct Statement of Financial Position (Balance Sheet) classification.

Ada and Babatunde are existing partners in a firm sharing profits and losses in the ratio of $3:2$. Upon the admission of a new partner, the firm's goodwill is valued at $\text{₦}50,000$ and is to be raised in the accounts. How much goodwill should be credited to the capital accounts of Ada and Babatunde respectively?