All practice questions

On 31st December 2025, Folake Enterprises extracted a trial balance showing Trade Receivables of $\text{��}145,000$ and an existing Provision for Doubtful Debts of $\text{₦}4,800$. During the year-end audit, it was discovered that a bad debt recovery of $\text{₦}2,500$ was erroneously credited to the Trade Receivables account. Additionally, further bad debts of $\text{₦}5,000$ are to be written off. A specific provision of $\text{₦}4,000$ is required for a customer in liquidation, while a general provision of $5\%$ is to be maintained on the remaining trade receivables. Calculate the net amount in Naira ($\text{₦}$) to be charged as Provision for Doubtful Debts in the Income Statement for the year ended 31st December 2025.

At 31st December 2025, the ledger of Oluwaseun & Co. showed Trade Debtors of $₦180,000$ and an existing Provision for Doubtful Debts of $₦4,000$. An additional bad debt of $₦10,000$ is to be written off, and the provision for doubtful debts is to be adjusted to $5\%$ of the remaining trade debtors. What is the net amount of Trade Debtors (in $₦$) to be presented in the Balance Sheet as at 31st December 2025?

Oasis Beverages Plc issued $5,000$ units of $12\%$ debentures of $\text{₦}100$ each at a discount of $6\%$, redeemable at a premium of $4\%$. What is the total loss on issue of debentures (in naira) to be recognized in the books of the company?

At the end of the financial year, Kalu Traders has Trade Debtors of $\text{₦}75,000$ and an existing Provision for Doubtful Debts of $\text{₦}1,500$. If bad debts of $\text{₦}5,000$ are written off and the provision for doubtful debts is to be adjusted to $5\%$ of the remaining debtors, what amount (in $\text{₦}$) will be charged to the Profit and Loss Account for provision for doubtful debts?

On 1st January, Chief Chukwuma commenced business by incorporating the following assets and liabilities into his accounting records via the General Journal: Premises worth $\text{₦}1,800,000$, Motor Vehicles valued at $\text{₦}750,000$, Trading Stock of $\text{₦}320,000$, Trade Debtors of $\text{₦}140,000$, Prepaid Rent of $\text{₦}30,000$, Trade Creditors of $\text{₦}210,000$, Bank Overdraft of $\text{₦}85,000$, Accrued Electricity Bill of $\text{₦}15,000$, and a 10% Bank Loan of $\text{₦}400,000$. What is the exact amount of Capital to be credited in the opening journal entry?

Highland Social Club operates a bar to generate additional revenue for its social activities. For the financial year ended 31 December 2025, the following information was extracted from its records:

- Bar inventory on 1 January 2025: ₦45,000
- Bar inventory on 31 December 2025: ₦58,000
- Total cash paid to bar suppliers: ₦320,000
- Bar creditors on 1 January 2025: ₦28,000
- Bar creditors on 31 December 2025: ₦34,000
- Bar wages paid: ₦65,000
- Accrued bar wages as at 31 December 2025: ₦12,000
- Bar takings (sales): ₦540,000

Calculate the net profit from bar operations to be transferred to the Income and Expenditure Account for the year ended 31 December 2025.

Crestline Ventures Plc has an issued share capital of $800,000$ ordinary shares of $\text{₦}0.50$ nominal value each. The company's reserves stand at: Share Premium $\text{₦}85,000$, General Reserve $\text{₦}120,000$, and Retained Earnings $\text{₦}95,000$. The board of directors resolves to make a bonus issue of $1$ new ordinary share for every $4$ ordinary shares held, fully capitalizing the Share Premium account first and using the General Reserve for any remaining balance. What is the remaining balance in the General Reserve account after the capitalization for the bonus issue?

A coastal lagoon covers a rectangular section measuring $12\text{ cm}$ by $15\text{ cm}$ on Map A, which is drawn to a scale of $1 : 20,000$. If Map A is reduced to create Map B with a scale of $1 : 60,000$, what is the area of the lagoon on Map B in square centimeters?

Chidi, Ngozi, and Ibrahim are partners sharing profits and losses in the ratio $2:2:1$ respectively. Upon Chidi's retirement, the firm's assets and liabilities are revalued, resulting in a net revaluation profit of $\text{₦}15,000$. What amount in Naira ($\text{₦}$) will be credited to Chidi's capital account as his share of the revaluation profit?

A sole trader paid $\text{N}640,000$ for advertising during the year ended 31 December 2025. On 1 January 2025, advertising paid in advance was $\text{N}50,000$. At the end of the financial year on 31 December 2025, accrued advertising amounted to $\text{N}75,000$, while prepaid advertising was $\text{N}30,000$. What is the total advertising expense to be charged to the Profit and Loss Account for the year ended 31 December 2025?

Suleiman Merchants consigned $500$ crates of goods to Danjuma Traders to sell on their behalf. The agreed commission structure was: an ordinary commission of $5\%$ on total sales, an overriding commission of $15\%$ on any excess sales proceeds realized above the target price of ₦$4,000$ per crate, and a del-credere commission of $2.5\%$ on credit sales. During the consignment period, Danjuma Traders sold $300$ crates for cash at ₦$4,500$ per crate and $150$ crates on credit at ₦$4,800$ per crate. A credit customer subsequently defaulted, creating a bad debt of ₦$96,000$. What is the total commission in Naira (₦) earned by Danjuma Traders?

The following information relates to the bar operations of Harmony Social Club for the year ended 31 December 2025:

Additional information:
1. Bar steward's salary owing at 31 December 2025 was ₦3,000.
2. Bar license fee paid includes ₦2,000 prepaid for the 2026 financial year.

Calculate the net profit from bar trading operations (in ₦) to be transferred to the Income and Expenditure Account for the year ended 31 December 2025.

A sole trader keeping incomplete records provides the following financial details for the year ended 31 December 2025:

- Cash received from debtors: ₦45,000
- Opening debtors balance: ₦8,000
- Closing debtors balance: ₦12,000
- Discount allowed: ₦1,500
- Returns inwards: ₦2,500
- Bad debts written off: ₦1,000
- Cash sales for the year: ₦15,000

What is the total sales figure (in ₦) to be credited to the Trading Account for the year?

Kemi, a retail trader who keeps incomplete accounting records, recorded total sales of $\text{₦}75,000$ for the trading period. She fixes her selling prices using a mark-up of $25\%$ on cost. What is the Cost of Goods Sold in Naira?

Segun, Tari, and Danladi are partners sharing profits and losses in the ratio $5:3:2$ respectively. Danladi dies on March 31, 2025. At the date of his death, Danladi's capital account balance was $\text{₦}120,000$ (credit) and his current account balance was $\text{��}15,000$ (credit). The firm's goodwill was valued at $\text{₦}100,000$, and the revaluation of assets yielded a net profit of $\text{₦}30,000$. Danladi's share of profit up to the date of death was calculated as $\text{₦}12,000$, and his drawings during the period were $\text{₦}8,000$. What is the total net amount due to Danladi's estate?

Victor and Raymond are partners in a business sharing profits and losses in the ratio of $3:2$. They admit Kenneth as a new partner, and the new profit-sharing ratio among Victor, Raymond, and Kenneth is agreed at $5:3:2$. Kenneth pays $\text{₦}24,000$ in cash as premium for goodwill. What amount of the goodwill premium (in Naira) should be credited to Victor's capital account?

Sunset Recreational Centre operates a bar for its members. During the year ended 31 December 2025, the centre recorded opening bar inventory of ₦8,000, purchases of bar drinks amounting to ₦45,000, and closing bar inventory of ₦12,000. What is the cost of goods sold for the bar operations in Naira (₦)?

During the financial year ended 31 December 2025, United Teachers Social Welfare Association received $\text{N}520,000$ in cash as subscription fees from its members. At the beginning of the year (1 January 2025), subscriptions accrued were $\text{N}35,000$, while subscriptions prepaid were $\text{N}22,000$. At the end of the year (31 December 2025), subscriptions accrued amounted to $\text{N}48,000$ and subscriptions prepaid amounted to $\text{N}18,000$. Calculate the subscription income to be credited to the Income and Expenditure Account for the year ended 31 December 2025.

Coastal Officers' Club operates a bar to support its social activities. For the financial year ended 31 December 2025, the following details were extracted from the club's records:

What is the net profit from the bar trading operations to be transferred to the Income and Expenditure Account for the year ended 31 December 2025?

At 31st December 2025, the trial balance of Adebayo Trading Store showed Trade Receivables of $\text{₦}180,000$ and an existing Provision for Doubtful Debts credit balance of $\text{₦}11,000$. At year end, an additional bad debt of $\text{₦}20,000$ is to be written off. A specific provision of $\text{₦}10,000$ is required for an insolvent debtor, and a general provision of $5\%$ is to be maintained on the remaining trade receivables. What is the net amount to be charged to the Profit and Loss Account as an increase in the provision for doubtful debts for the year?