1. Customers use the financial statement of a company to

A. assess the financial position of the business

B. regulate their activities

C. ascertain the taxable profit of the business

D. be sure of the extent of job security


2.  The claim on the assets of a business by outsides is

A. capital

B. liabilities

C. reserves

D. provisions


3. A document sent by a bank to its current account customers detailing their transaction over a given period is

A. bank reconciliation statement

B. bank statement

C. credit transfer

D. banker's advice


4. Which of the following items will not be entered  in the adjusted cash  book?

A.  Dishonoured cheques

B. Direct payment to bank

C. Uncredited cheques

D. Standing order payment


5.  If a petty cashier  has a cash  float of Le 39,000 and Le 37,500 is spent , he will be reimbursed  with

A. Le 40,500

B. Le 39,000

C. Le 37, 500

D. Le 1,500


6.  A suspense account is used in the

A.  prevention of errors

B. correction of errors

C. detection of errors

D. creation of errors


7. A credit purchase of GH¢200 from P. Osae was posted to the account of P. Osei. This is an error of

A. principle

B. commission

C. omission

D. original entry


8.  A credit purchase of GH¢100,000 was calculated at the rate of 20% instead of 10%. The error is corrected by debited

A. customer account with GH¢ 20,000; crediting discount allowed by GH¢10,000

B. discount allowed with GH¢10,000, crediting customer with GH¢20,000

C. customer account with GH¢ 10,000; crediting discount allowed by GH¢10,000

D. discount allowed with GH¢20,000, crediting cash with GH¢10,000


9.  The balance sheet equation shows  

A. current assets minus liabilities

B. the difference between fixed assets and current liabilities

C. assets and sources of financing them

D. sources of funding owner's equity


10. The effect on profit  when the closing stock is understated is

A. increase in profit

B. decrease in profit

C.  no change in profit

D. appropriation of profit


11. Which of the following describes a trial balance?

A. It shows all the entries in the books

B. it reveals the financial position of a business

C. it is a list of accounting balances on the books

D. it is a special account


12. The account of Jute Enterprises in the books of a supplier, will be a

A. nominal account in the general ledger

B. personal account in the sales ledger

C.  personal account in purchases ledgers

D.  real account in the general ledger


13.Which of the following accounts are found in the nominal ledger?

I. Advertising

II. Motor repairs

III. Additions to motor vehicle

A. I and II only

B. I and III only

C. II and III only

D. I, II and III


14.  Acounts payable is classified as a

A. prepayment

B. provision

C. current liability

D. long term liability  

15. Accounts concepts  that provides that accounting statements should not  be influenced by personal opinion is

A. materiality

B. periodicity

C.. objectivity

D. conservatism


16.  The prudence concept demands that

A.  care is exercised in recognition of profit

B. loss should not be anticipated

C.  profit should be reported

D. income should be recognized and disclosed


17. Carriage outward expenses of a business are treated in the

A. Balance sheet

B. Income Surplus Account

C. Profit and loss account

D. Income Surplus Account


18.  The cost of transporting purchased goods to the warehouse is charged to the

A. Profit and Loss Account

B. Appropriation Account

C. Trading Account

D. Income Surplus Account


19.An organisation purchased an equipment for GH¢112,000. It is expected to be used for 6 years then sold for GH¢16,000. What is the annual  amount of depreciation, if the straight line method is used?

A.  GH¢16,000

B.  GH¢15,000

C.  GH¢12,800

D.  GH¢12,000


Use the following information to answer 20 and 21




Sales ledger balance






Total for the month: Cash sales



Returns inwards



Cheque dishonoured



20. The credit sales for the month is

A.  D36,000

B. D31,000

C. D20,000

D.  D10,000


21. The total sales for the month  is

A.  D36,000

B. D31,000

C. D30,000

D.  D20,000


22. The excess of the market value of goods produced over the cost of  production is

A.  profit on manufacturing

B. net profit

C. goodwill

D.  gross profit


23.  Factory wages form part of

A. administration cost

B. selling and distribution cost

C. overhead cost

D. prime cost


24. Production cost of a manufacturing firm is made up of

A. Indirect material and prime cost

B. factory overheads and prime cost

C. direct materials and wages

D.  factory overheads and direct materials


25. In a manufacturing enterprise, depreciation of plant is treated in the

A. Trading Account

B. Profit and Loss Account

C. Manufacturing Account

D. Appropriation Account


26.The purpose of keeping Sales and Purchase Ledger Control Account is to

A. match credit sales and credit purchases

B. equate debtors' balance to creditors balance

C. verify total debtor and total creditors balances

D. determine each sales and cash purchases


27.  Which of the following  items  will appear in the Total Creditor Account?

A. Discount  allowed

B. Credit sales

C. Discount received

D. Cash purchases


28. A disadvantages of single  entry system of book-keeping is that

A. the profit for the period is reduced

B. it is difficulty to determine  profit for the period

C. total sales for the period is reduced

D. the owner of the firm withdraws money from the enterprise


29.  Which of the following accounts or statement is used to determine credit purchases figure in an Incomplete Records?

A.  Bank Account

B. Control Account

C. Profit and Loss Account

D. Statement of Affairs


30.  A trader sell goods at an average margin of 20%. His cost of sales for the month amounted to N720,000. What is his profit figure?

A. N900,000

B. N864,000

C. N840,000



31.Donations to a club are

A. credited to the Income and Expenditure Account

B. credited to the Receipts and Payment Account

C. debited to the Income and Expenditure Account

D. debited to Donation Account


32. A statement of affairs shows

A. receipts and payments

B. revenue and expenditure

C. financial position

D. profit or loss


33. In a not-for-profit making organization, the Receipts and Payments Accounts is the equivalent of
A. Profit and Loss Accounts

B. Income and expenditure Accounts

C.  Cash book

D. Balance sheet


34.Where there is no agreement between the partners, the Partnership Act states that

A. 5%interest is to be paid on capital

B. Profit and losses are to be shared in proportion to their capital

C. 50% interest is to charged on drawings

D. no salary is to be paid to partners


35. Interest on partners drawings are debited in the

A. partners current accounts and credited to the appropriation account

B. drawings accounts and credited to the profit and loss account

C. profit and loss account and credited to the partners current account

D. profit and loss account and credited to the partners drawing account.

36.  Goodwill may be brought into the books when

A. no partner retires

B. assets are more than liabilities

C. profit for the period is high

D.  a new partner is admitted


37.  Working capital is the excess of

A.  current asset over fixed assets

B. current liabilities over current assets

C. fixed assets over current liabilities

D. current assets over current liabilites


38. Share premium is classified in the balance sheet as

A. fixed capital

B. capital reserve

C. revenue reserve

D. short term capital


Use the following information to answer 39 and 40



Opening stock






Closing stock


Cost of goods sold



39. The percentage of gross profit to sales is

A. 61.82%

B. 38.17%

C.  28.49%

D.  14.35%


40.  What is the rate of stock turnover ?

A.  7 times

B. 6 times

C.  5 times

D.4 times


41.  When allotment of share is made applicant for shares for a company becomes

A. promoters

B. creditors

C. debtors

D. shareholders


42.  The objective of a department accounts is to ascertain the

A. number of staff in the department

B. department performance

C. stock held by the department

D. department labour turnover


43. In department accounting , when goods are sent from one department  to another for sale, the transaction is treated as

A.  inter department transfer

B. inter department sales

C. intra department purchases

D. intra department sales


44. A branch that keeps its own records prepares the records of transaction with the head office in the

A.  Branch Current Account

B. Branch stock Account

C.  Head Office Current Account

D. Profit and Loss Accounts


45.The accounting entries when goods  are sold on credit at the branch are debit

A.  Branch Debtors Account, credit Sales Accounts

B. Branch Current Account; credit Sales Accounts

C. Branch Debtors Account, Credit Head office Current Account

D.  Head office Current Account, credit Sales Accounts.


46.  Which of the following is not a method of charging goods to branch by its head office?

A. Net realizable value

B. Cost price

C. cost plus profit

D. Selling price


Use the following information to answer question 47 and 48

Nzemnman Local Government incurred the following expenditure in the year 2015



Construction of market stall


Staff salaries


Purchase of stationery


Sinking of boreholes


Building of classrooms


Maintenance of vehicles


Purchase of equipments


47.  Recurrent expenditure for the year is

 A. D112,000

B.  D84,000

C. D77,000

D.  D49,000

48. Capital expenditure for the local government is

A. D473,000

B. D438,000

C. D422,000

D.  D410,000


49.  A reserve is an amount

A. set aside from profit for unknown liability

B. of loss from trading activities

C. of profit from trading activities

D. set aside from profit for specific purpose


50. An amount set aside to meet expenses whose value is not certain is a

A. reserve

B. liability

C.  provision

D.  prepayment