All practice questions

Ibadan Head Office operates a dependent branch in Oyo, invoicing all goods at cost price. For the year ended 31 December 2025, the branch transactions showed:

What is the net profit earned by the branch for the year ended 31 December 2025?

Kofi operates a retail store with single-entry records. For the year ended 31 December 2025, his cash records revealed the following information:

- Cash in hand (1 January 2025): $\text{₦}15,000$
- Cash banked during the year: $\text{₦}120,000$
- Cash paid for business expenses: $\text{₦}35,000$
- Cash drawings by Kofi: $\text{₦}18,000$
- Cash paid to trade creditors: $\text{₦}42,000$
- Cash in hand (31 December 2025): $\text{₦}8,000$

Assuming all cash received originated exclusively from cash sales, what was the total cash sales for the year?

Ade Trading Store extracted the following balances for the financial year ended 31 December 2025:

- Gross profit: $\text{N}150,000$
- Rent paid: $\text{N}18,000$ (including a prepayment of $\text{N}3,000$)
- Carriage outwards: $\text{N}5,000$
- Discount received: $\text{N}4,000$
- Existing provision for doubtful debts: $\text{N}4,000$
- New provision for doubtful debts required: $\text{N}6,000$
- Office furniture purchased: $\text{N}10,000$

What is the Net Profit for the year?

The trial balance of Bello Traders as at 31 December 2024 showed Trade Debtors of $₦340,000$ and an existing Provision for Doubtful Debts of $₦12,000$. At the end of the financial year, an additional bad debt of $₦40,000$ is to be written off, and the provision for doubtful debts is to be adjusted to $5\%$ of trade debtors. What is the total net charge (in $₦$) to the Profit and Loss Account for bad and doubtful debts for the year?

Chief Adeleke consigned goods to Kalu to sell on commission. Kalu sold goods worth ₦750,000 for cash and ₦560,000 on credit. Under the agreement, Kalu receives a 5% ordinary commission on total sales and a 2.5% del-credere commission on credit sales. Kalu paid ₦25,000 for handling expenses and sustained a bad debt loss of ₦15,000 from a credit customer. What is the net amount remitted by Kalu to Chief Adeleke?

Match each accounting scenario described on the left with its corresponding governing accounting concept or convention listed on the right.

On 1 January 2023, Ibadan Logistics Enterprise acquired plant machinery costing $₦10,000,000$. The policy of the enterprise is to provide for depreciation at a rate of $20\%$ per annum using the reducing balance method. Calculate the credit balance of the Provision for Depreciation Account as at 31 December 2024.

Which of the following operational practices distinguishes an independent branch from a dependent branch?

Match each depreciation method with its corresponding operational description or formula basis.

The trial balance of Tunde Traders at 31st December 2025 showed Trade Debtors of $₦60,000$ and an existing Provision for Doubtful Debts of $₦2,500$. At year end, an additional bad debt of $₦5,000$ is to be written off, and the provision for doubtful debts is to be maintained at $5\%$ of net trade debtors. What amount will be debited to the Profit and Loss Account as the adjustment for provision for doubtful debts?

Zaria Enterprises operates two departments: Hardware and Softlines. For the year ended 31 December 2025, total administrative salaries of ₦120,000 are to be apportioned based on floor space occupied. Hardware occupies $800\text{ m}^2$ and Softlines occupies $400\text{ m}^2$. If the Softlines department recorded a gross profit of ₦250,000 and direct departmental expenses of ₦45,000, what is the net profit of the Softlines department in Naira?

Tunde operates a retail store using an incomplete records system. For the accounting year ended 31 December 2025, the following cash summary details were extracted:

- Cash in hand (1 January 2025): $\text{₦}24,000$
- Cash received from trade debtors: $\text{₦}415,000$
- Cash sales: $\text{₦}310,000$
- Business operating expenses paid in cash: $\text{₦}96,000$
- Proprietor's cash drawings: $\text{₦}55,000$
- Cash lodged into bank account: $\text{₦}380,000$
- Cash in hand (31 December 2025): $\text{₦}18,000$

Assuming all cash receipts were fully accounted for and no cash was stolen, what was the total cash paid to trade suppliers during the year?

In an automated Electronic Data Interchange (EDI) environment, when an integrated accounting system automatically generates and transmits an electronic purchase order to a vendor upon reaching a reorder point, an immediate double-entry accounting record is posted debiting Purchases and crediting Accounts Payable.

Sterling Heights Plc has an issued share capital of $2,000,000$ ordinary shares of $\text{₦}0.50$ each. The company makes a rights issue of $1$ new share for every $4$ ordinary shares held at an issue price of $\text{₦}0.75$ per share. If all rights are fully subscribed and paid for, what is the total cash proceeds raised from the rights issue in Naira?

During an external audit of a commercial enterprise, an auditor inspects physical source documents such as purchase invoices, receipts, and payment vouchers to confirm that financial statement values can be independently duplicated and substantiated by evidence. Which qualitative characteristic of accounting information is primarily demonstrated by this practice?

A business maintains a weekly imprest system for its petty cash transactions. On 6 July 2026, the petty cashier held an initial float of $\text{₦}50,000$. During the week, disbursements were made for stationery ($\text{₦}14,200$), office cleaning ($\text{₦}9,800$), and travelling expenses ($\text{₦}11,500$). Additionally, a staff member refunded $\text{₦}2,500$ in cash for an unspent portion of a travelling advance. At the weekend, management decided to permanently increase the weekly imprest float to $\text{₦}60,000$. What total amount of cash must the chief cashier issue to top up the petty cash balance to the new float level?

Kano Logistics Plc issued $\text{₦}100,000$, $8\%$ debentures at par on 1st January 2025. What is the total annual debenture interest payable by the company for the year ended 31st December 2025?

Enugu Textile Company operates two departments: Weaving Department and Tailoring Department. During the year ended 31 December 2025, the Weaving Department transferred fabric to the Tailoring Department at a transfer price based on cost plus a $25\%$ mark-up. At the end of the year, the Tailoring Department had a closing stock valued at $\text{N}20,000$, of which $60\%$ comprised fabric transferred from the Weaving Department. What is the provision for unrealized profit required on the closing stock at the end of the year?

Maclean Commercial Hub operates two departments, Department A and Department B. For the financial year ended 31 December 2025, the following information is extracted from their financial records:

- Gross Profit: Department A = ₦180,000; Department B = ₦120,000
- Floor area occupied: Department A = 100 sq. m; Department B = 400 sq. m
- Sales turnover: Department A = ₦600,000; Department B = ₦400,000
- Total Rent and Rates paid: ₦100,000
- Total Selling Expenses paid: ₦50,000

What is the Net Profit for Department A?

The following financial information was extracted from the records of Golden Star Recreation Club regarding its bar trading operations for the year ended 31st December 2025:

What is the net profit from the bar trading activity to be transferred to the Income and Expenditure Account for the year?