Accounts - Principles of Accounts Past Questions and Answers

A business transaction is recorded in the books of account when the?

A Owner of the business invests his N10,000 in another company
B Business retains part of ofits profits for future expansion purposes
C Business invest applies for overdraft facilities from its bankers
D Owner of the business collects N5,000 from the accountant

Question 7:

When a transaction causes an assets account to increase, there is?

A A decrease of equal amount inthe owner's equity account
B An increase in a liability account
C An increase of equal amonut in another assets account
D A decrease of equal amount in a liability account

Question 8:

N
Bank account 59,410
Capital account 50,000
Purchase account 20,000
Rent 2,500
Stationery 90
typewriter 6,500
Sales 38,000
In preparing a trial from the list of balances given above, what is the total in debit and credit columns?

A N147,910
B N138,500
C N88,500
D N85,800

Question 9:

The purchase of two generators by Hassan Electronics Enterprises should be recorded as?

A An acquistion of fixed assets
B An expenses in its general office expenses account
C An acquistion of stock
D A part of capital in the capital account

Question 10:

If the inventory at the end of the current year is understated and the error is not caught during the following year, the effect is to?

A Overstate income this year and understate in next year
B Understate income this year and overstate in next year
C Understate this year's income with no effect on the next year's
D Overstate the income for the two-year period