DEEPER LIFE HIGH SCHOOL

FIRST TERM EXAMINATION 2018/2019 SESSION

SUBJECT: FINANCIAL ACCOUNTING CLASS: SS2 Time: 2½ HRS
Instruction: Answer all questions in section A and THREE in B.
SECTION A (Objective Test: Choose the correct option from a – d)
1. Wages paid to factory workers increase the value of
A. Gross profit B. Net profit C. Overhead cost D. Prime cost
2. Production cost is equal to A. Direct cost+ prime cost B. Opening stock of goods+ general expenses C. Prime
cost +cost of goods sold D. Prime cost + production overhead
Use the following information to answer questions 3 to 5.

Raw materials: ₦
Stock 1/1/2002 4,500
Purchases 30,000
Stock 31/1/2002 6,000
Wages –direct 34,200
Indirect 10,800
Factory expenses:
Rent 18,000
Insurances 6,750
Work-in-progress
1/1/2002 3,750
31/1/2002 3,000
3. What was the cost of raw materials consumed A.₦34,500 B.₦31,500 C.30,000 D.28,500
1. The prime cost A.₦68,700 B. ₦ 65,700 C.₦62,700 D.₦58,700
2. The cost of goods manufactured was A.₦102,000 B.₦99,000C.₦94,500D.₦91,500
Use the following information to answer question 6 to 8.
Opening entries closing entries
₦ ₦
Stock of raw materials 5,000 6,000
Work-in-progress 8,000 9,000
Stock of finished goods 7,600 8,100
Other information are:
Factory rent ₦4,000 machinery repair ₦1,340 work manager’s salary ₦ 10,600 , factory wages ₦2,600 and purchases
of raw materials is ₦34,000
1. The cost of raw materials used is A.₦40,000 B. ₦39,000 C.₦33,000 D.₦28,000
2. The cost of goods manufactured is A.₦45,940 B.₦60,000 C.₦50,500 D.₦23,100
1. The amount of factory overhead is A.₦15,940 B.₦14,600 C.₦11,940 D.₦5,340
2. Factory cost consists of A. direct material and factory overhead B. direct labour and direct expenses C.
direct labour and factory overhead D. direct materials, direct labour, direct expenses and factory overhead.
Use the following accounts to answer questions 10 to 16
Manufacturing and trading Accounts

N N
Opening Raw Material 10,000 Manufacturing cost 114,000
Purchases 60,000
70,000
Less closing stock RM 8,000
62,000
Direct labour 20,000
Direct expenses 20,000
Factory overhead 12,000
114,000 114,000
Stock b/d 10,000 Sales XX
Purchases XX Less sales returns 5,000
Manufacturing cost 114,000
144,000
Stock c/d 12,000
132,000
Gross profit 20% on sales XX
XX XX

3. What is the total of raw materials consumed? A.N144,000 B.N114,000 C.N70,000 D.N62,000
4. What is the prime cost? A.N70,000 B.N78,000 C.N102,000 D.62,000
5. What is the factory cost of production? A.N114,000 B.N102,000 C.N78,000 D.N62,000
6. What is the cost of finished goods purchased? A.N60,000 B.N50,000 C.N40,000 D.N20,000
7. What is the net sales for the period? A.N175,000 B.N170,000 C.N165,000 D.N132,000
8. What is the average stock of finished goods? A.N8,000 B.N9,000 C.N10,000 D.N11,000
9. What is the gross profit? A.N33,000 B.N28,800 C.N28,500 D.N26,400
Use the following information to answer question 17 to 19.
N
Capital accounts: Ojo 40,000
Aina 20,000
Drawings: Ojo 10,000
Aina 6,000
Interest on capital -5%
Interest on drawing -10%
Net profit for the year 30,000
Profit sharing ratio Ojo-2/3 Aina -1/3
17 The divisible profit for the year A.N31,600 B.N31,400 C.N904,000 D.N28,600
18 Ojo’s share of profit A.N21,067 B.N20933 C.N20,000 D.N19,067
19 Aina’s Current account balance is A.N9,933 B.N9,533 C.N6,600 D.N3,933
20. In the absence of an agreement, partners share profits A. based on activeness of a partner B. based on capital
contribution C. on patronage basis D. on equal basis
21. Subscriptions prepaid by members is recorded in the balance sheet for a club as a
A. Current liability B. current asset C. fixed asset D. long term liability
22. Which of the following is not part of the cost of production
A. wages of operators B. factory power C. advertising D. cost of raw materials
Use the following information to answer questions 23 to 25.
D
Purchase of raw materials 236,500
Returns of raw materials 4,750
Carriage on raw materials 34,000
Stock of raw materials at close 39,500
Factory fuel 150,000
Direct wages 205,000
Indirect wages 31,250
Factory power 105,000
Work in progress at start 32,500
23. What is the value of raw materials used? A. D 270,000 B. D 286,250 C. D 255,000 D. D 226,250
24. What is the prime cost? A. D 717,500 B. D 431,250 C. D 286,250 D. D270,500
25. The total factory overhead is A. D 318,750 B. D 286,250 C. D 255,000 D. D 236,250.
26. Which of the following is not part of factory overhead? A. factory salaries B. factory lighting and heating C.
depreciation of plant and machinery D. depreciation of fixtures and fittings
27. In a not for profit making organization, the excess of income over expenditure is
A. added to capital B. added to accumulated fund C. deducted from capital D. deducted from accumulated fund
28. Which of the following is debited to partner’s current account?
A. capital B. interest on capital C. drawings D. share of profit
29. In not for profit making organization, accumulated fund is the name for
A. profit B. loss C. capital D. current assets.
Use the following information to answer questions 30 to 32.
J. Chike B. Balla
N N
Current accounts balance (1/4/98) 4,000 6,000
Current accounts balance (1/4/99) 7,000 ?
Drawings 1,500 1,500
Share of net profit ? 2,500
30. What is Chike’s share of profit from the partnership for the year ended 31/3/99?
A. N8,500 B. N7,000 C. N5,500 D. N4,500
31. What is Balla’s current account balance as at 31/3/99?
A. N11,000 B. N7,000 C. N5,500 D. N4,500
32. Their profit sharing ratio is A. 1.8:1 B. 1.5:1 C. 1.25:1 D. 1:1.
33. The equivalent of a club’s profit and loss account is prepared as A. receipt and payment account B. revenue
account C. club’s trading account D. income and expenditure account
Use the following information to answer questions 34 to 37.
Abid and Onik were in partnership sharing profit in the ratio 3:[Link] respective capitals were N4,000 and N2,000
and their drawings N1,800 and N1,200. Profit during the year was N5,400 before 5% interest on capital. No
interest was chargeable on drawings.
34. What was Onik’s share of the profit for the year?
A.N1,200 B.N1,800 C.N2,040 D.N3,060
35. What was Abid’s share of profit?
A.N3,240 B.N3,060 C.N2,040 D.N1,800
36. What was the balance carried down on Abid’s current account?
A.N940 B.N1,460 C.N2,040 D.N3,060
37. What was the balance carried down on Onik’s current account?
A.N940 B.N1,460 C.N2,040 D.N3,060
38. The sum of money paid for future years by members is treated as ………….
A. asset B. liability C. current liability D. current asset
39. Which of the following is the sum of money due from members but remained unpaid and are treated as debtors in
the balance sheet.
A. Subscription in arrears B. Subscription in advance C. rent in advance D. prepayment
40. The addition of prime cost and factory overheads is
A. total factory overhead B. market value of goods produced C. cost of goods produced D. work in
progress
Use the following information to answer questions 41-43.
Assurance and Success are partners, sharing profit and losses equally.
Assurance Success
Capital Account 1s Jan, 2016 40,000 50,000
Current Accounts 1st Jan, 2016 20,000 15,000
Drawings for the year 4,000 5,000
Salaries 5,000 5,000
Interest on capital 10% 10%
Profit for the year 100,000
Share of profit 4:5
41. The interest on Success capital is A. N10,000 B. N5,000 C. N4,000 D. N1,500
42. The share of profit of Assurance is A. N20,500 B. N25,500 C. N36,000 D. N45,000
43. The interest on Assurance capital is A. N3,000 B. N4,000 C. N9,000 D. N2,000
Use the following information to answer the questions that follow:
Dr. Receipts and payment account Cr.
D D
Balance 1st January 2002 200 Bar supplies 2,850
Subscriptions received: Wages 350
2002 3,600 General expenses 400
2003 250 Printing expenses 120
4,500 Equipment 650
500 Repairs 200
400 Balance 31st December 4,880
9,450 9,450
Additional information:
1/01/02 31/12/02
D D
Equipment 4,500 5,150
Stock – Bar 1,200 3,200
Bar supplies 2,400 5,600
44. Accumulated fund as at 1st January, 2002 is A. D6,900 B. D5,900 C. D4,500 D. D3,500
45. Gross profit from bar trading is A. D4,500 B. D1,350 C. D450 D. D400
46. Amount owing to Bar creditors is A. D8,450 B. D6,050 C. D5,600 D. D2,850
Use the following information to answer question 47 and 48.
Club house N375,000
Furniture N250,000
Sport kit N400,000
Subscription prepaid N10,000
Bar creditors N156,000
Subscription owing N45,000
47. What is the club’s Accumulated Fund? A. N924,000 B. N914,000 C. N904,000 D. N834,000
48. What is the value of capital expenditure of the club?
A.N1,025,000 B.N625,000 C.N400,000 D.N650,000
A charitable club has the following figures:
N
Subscriptions received in 1991 2,800
Subscriptions unpaid in 1990 300
Subscriptions paid for 1992 150
Subscriptions due 1991 180
49. How much should be charged to the income and expenditure of this club as subscription for 1991? A.N2,530
B.N2,680 C.N2,830 D.N2,980
50. Which of the following is a strong feature of partnership? A. The life of the partnership is generally assumed to be
indefinite B. The owners are liable personally for all debts of the business C. The transfer of ownership interest is
frequent and easy to accomplish
D. The partnership is complex to form because of many legal and reporting requirements
51. Interest on a partner’s drawings is debited to the A. partner’s current account and credited to the profit and loss
appropriation account B. profit and loss appropriation account and credited to the partner’s current account C.
profit and loss account and credited to the partner’s current account D. partner’s current account and credited to
the profit and loss account
52. A partnership on admitting a new member ,revalued the business’ land and building from N30,000 to N70,[Link]
difference of N40,000 should be A. credited to land and building account B. debited to asset revaluation account
C. credited to asset revaluation account D. credited to profit and loss appropriation account
53. Subscriptions in arrears are A. credited to the income and expenditure account and shown as a liability in the
balance sheet B. debited to income and expenditure account and shown as an asset in the balance sheet C.
credited to the income and expenditure account and shown as an asset in the balance sheet D. debited to the
income and expenditure account and shown as a liability in the balance sheet
54. Where a non profit making organization prepares the accounts using accruals basis of reporting, the statement
showing how well the organization is doing is the A. appropriation account B. balance sheet C. income and
expenditure account D. receipts and payments account
Use the following information to answer question 55.
N
Capital at the beginning 20,000
Drawings 3,000
Capital at end 30,000
New capital introduced 8,000
55. What is the profit for the period? A.N4,000 B.N5,000 C.N6,000 D.N8,000
56. In analyzing incomplete records, which of the following should be investigated?
A. the general ledger B. the purchases day book and sales day book C. the nature of trading activities and the
basis on which goods are sold D. the asset register together with depreciation schedule
57. The main features of the single system are that A. books of accounts are not maintained and business relies only
on bank statement B. the journal records are absent and only the main ledger is kept C. there are incomplete
classifications and recording procedures D. only credit sales transactions and credit purchases are recorded
Given : N
Club debtors at start 150
Cash sales 4,850
Club debtors at close 900
Cash received from debtors 550
58. What is the amount of club sales? A.N6,150 B.N4,850 C.N4,650 D.N1,300
59. Goodwill is recognized in partnership accounts when A. the business makes a huge profit B. the
business has good customer relationship C. a partner is dormant D. a new partner is admitted
60. In partnership business, the net profit serves as opening figures for A. trading account B. profit and loss account
C. separate cash and bank balance D. analyze amounts due from debtors

ESSAY QUESTIONS
INSTRUCTION: QUESTION ONE (1) IS COMPULSORY AND ANY OTHER TWO
1. Jerome Limited is a manufacturing company. The following information were made available concerning
its operations:
Stocks as at 1st March, 2010: D
Raw materials 50,000
Work in progress 18,000
Finished goods 25,000
Purchases of raw materials 650,000
Carriage inwards 15,000
Returns outwards 30,000
Direct factory wages 160,000
Depreciation of plant 20,000
Repairs of factory 12,000
Other factory wages 200,000
Factory power 60,000
Administrative salary 120,000
Sales 1,500,000
Office expenses 36,000
Stocks at 28th Feb, 2011:
Raw materials 70,000
Work in progress 20,000
Finished goods 27,000

Additional information:
(a) Finished goods are transferred to the trading section at cost plus 10%
(b) One –third of office expenses and administrative salary is charged against production.
You are required to prepare:
(i) Manufacturing Account for the year ended 28th February , 2011.
(ii) Trading Account for the year ended 28th February, 2011.

2. Michael and Mary had been in partnership for several years sharing profits and losses equally.
They decided to dissolve the partnership on 31st December, 1998 on which date their Balance
Sheet was as follows:
Balance Sheet as at 31st December, 1998

Capital Accounts: N N N
Michael 40,000 Goodwill 10,000
Mary 30,000 70,000 Equipment 50,000
Current Accounts: 60,000
Michael 7,935 Stock 17,140
Mary (1,345) 6,590 Debtors 18,960
Creditors 13,110 Prepaid Expenses 400
Bank Overdraft 6,800
96,500 96,500
Additional information:
a) Assets realized as follows:
Equipment N62,000
Stock N14,500
Debtors N16,800
b) Creditors were settled for N12,900
c) Dissolution expenses amounted to N1,300.
You are required to prepare:
(i) Realization account
(ii) Partners capital account
(iii) Bank account (showing how final settlement was made).

3. Odum Ltd keeps his books on single entry basis and the following information relates to his business for the year 2014.
Assets and Liabilities: 1st January,2014 31st December ,2014
GHc GHc
Investment - 1,000
Bills payable - 300
Creditor 1,750 1,900
Debtors 2,100 3,400
Cash 150 200
Stock 1,000 1,250
Motor car 2,000 2,000
Loan from Nyadu - 500
In addition, Odum withdrew an amount of GHc 500 and introduced GHc 200 additional capital.

You are required to ascertain:

(i) Opening capital (ii) Closing capital (iii) Net profit
(b) Prepare the balance sheet as at 31st December, 2014.

4. Write short notes on the following:

(i) Subscription in arrears
(ii) Subscription in advance
(iii) Stock of work in progress
(iv) Prime cost
(v) Goodwill
MARKING GUIDE
Objective Test
1.D 2.D 3.D 4.C 5.B 6.C
7.A 8.D 9.D 10.D 11.C 12.A
13.D 14.C 15.D 16.A 17.D 18.D
19.B 20.D 21.A 22.C 23.D 24.B
25.B 26.D 27.B 28.C 29.C 30.D
31.B 32.A 33.D 34.C 35.B 36.B
37.A 38.C 39.A 40.B 41.B 42.C
43.B 44.D 45.C 46.C 47.A 48.C
49.A 50.A 51.B 52.A 53.C 54.C
55.C 56.B 57.C 58.C 59.A 60.B
(@ ½ MARK EACH)=30 MARKS

ESSAY TEST

1. JEROME LIMITED

Manufacturing Accounts for the year ended 28th February, 2011.

D D
Opening stock R/M 50,000 Finished goods transferred 1,228,700
Add purchases R/M 650,000
Add carriage inward 15,000
715,000
Less return outward 30,000
Cost of raw materials available 685,000
Less closing stock raw materials 70,000
Cost of raw materials used 615,000
Add:
Direct wages 160,000
Prime cost 775,000
Add overheads:
Depreciation of plant 20,000
Repairs of factory 12,000
Factory wages 200,000
Factory power 60,000
Administrative salary 40,000
Office expenses 12,000 344,000
1,119,000
Add work in opening WIP 18,000
1,137,000
Less WIP at close 20,000
Production cost 1,117,000
Manufacturing profit 111,700
1,228,700 1,228,700

(ii) Trading Account for the year ended 28th February,2011

D D
Opening stock F/Gs 25,000 Sales 1,500,000
Add transfer cost 1,228,700
Cost of goods available 1,253,700
Less closing stock 27,000
Cost of goods sold 1,226,700
Gross profit 273,300
1,500,000
1,500,000

Marks analyses: (NOTE THE ANALYSES WELL AND FOLLOW IT STRICTLY) The total mark is 10.
Correct heading = 2 ticks
All the postings and all the totals = 35 ticks 37 ticks in all.

A tick is 1 mark, therefore, 37 ticks = 37 marks in all. The number of ticks a student obtains will be divided by 37 and
multiplied by 10. That is : Number of ticks obtained × 10
37

2. MICHAEL AND MARY

Dr REALIZATION ACCOUNT Cr
N N
Good will 10,000 Equipment 62,000
Equipment 50,000 Stock
Stock 17,140 14,500
Debtors 18,960 Debtors
Prepaid expenses 400 16,800
Dissolution expenses 1,300 Discount received(13,110-12,900) 210
Share of loss:
97,800 Michael ½ 2,145
Mary ½ 2,145
97,800

Dr PARTNERS’ CAPITAL ACCOUNT Cr

DETAILS MICHAEL MARY DETAILS MICHAEL MARY

Current account - 1,345 Balance b/d 40,000 30,000
Realization loss 2,145 2,145 Current account 7,935 -
Bank balance 43,790 26,510
47,935 30,000 47,935 30,000

Dr PARTNERS’ CURRENT ACCOUNT Cr

DETAILS MICHAEL MARY DETAILS MICHAEL MARY

N N N N
Balance b/d - 1,345 Balance b/d 7,935 -
Capital a/c 7,935 Capital a/c - 1,345
7,935 1,345 7,935 1,345

Dr Bank Account Cr
N N
Realization a/c: Balance b/d (O/D) 6,800
Equipment 62,000 Creditors 12,900
Stock 14,500 Dissolution expenses 1,300
Debtors 16,800 Partners’ capital a/c
Michael 45,790
Mary 26,510
93,300
93,300
Marks analyses: (NOTE THE ANALYSES WELL AND FOLLOW IT STRICTLY) The total mark is 10.
Correct heading = 4 ticks
All the postings and all the totals = 46 ticks 50 ticks in all.

A tick is 1 mark, therefore, 50 ticks = 50 marks in all. The number of ticks a student obtains will be divided by 50 and
multiplied by 10. That is : Number of ticks obtained × 10
50

3. (a). ODUM LTD

(i) Statement of Affairs as at 1st January ,2014

Capital 1/1/14 3,500 Fixed Assets :

Motor car 2,000

Current Assets:
Current liabilities: Stock 1,000
Creditors 1,750 Debtors 2,000
Cash 150

5,250 5,250

ii. Statement of affairs as at 31st December,2014

GHc GHc
Capital 31/12/14 5,150 Fixed Assets
Motor car 2,000
Investments
Current liabilities: 1,000
Creditors 1,900 Current Assets:
Bills payable 300 Stock
Loan from Nyadu 500 1,250
Debtors
3,400
7,850 Cash
200

7,850

iii. Statement of Net profit for the year ended 31st December, 2014
Closing capital 5,150
Add drawings 500
5,650
Less: Opening capital 3,500
Additional capital 200 3,700
1,950

ODUM LTD
Balance Sheet as at 31st December,2014
GHc
Capital 3,500 GHc
Additional capital 200 Fixed assets :
Add net profit 1,950 Motor car 2,000
5,650 Investment 1,000
Less:drawings 500 3,000
5,150
Loan from Nyadu 500 Current Assets
Current Liabilities Stock 1,250
Creditors 1,900 Debtors 3,400
Bills payable 300 2,200 Cash 200 4,850

7,850
7,850

Marks analyses: (NOTE THE ANALYSES WELL AND FOLLOW IT STRICTLY) The total mark is 10.
Correct heading = 4 ticks
All the postings and all the totals = 45 ticks 49 ticks in all.

A tick is 1 mark, therefore, 49 ticks = 49 marks in all. The number of ticks a student obtains will be divided by 49 and
multiplied by 10. That is : Number of ticks obtained × 10
49
4. (i) Subscription in arrears: This is the sum of money due from members but remained unpaid. Subscriptions in
arrears are treated as debtors in the balance sheet.
(ii). Subscription in advance: This is the sum of money paid for future years by the members. It is treated as current
liabilities item.
(iii). Work in progress: This can be defined as the partly finished goods or incomplete work.
(iv). Prime cost: These are costs that can be traced to a particular production unit. They are directly related to the
manufacturing process. These are:
i. Indirect materials
ii. Indirect labour
iii. Direct expenses
iv. Other direct expenditure
(v) Goodwill: It can be defined as the excess of the purchases consideration over the total value of assets less liabilities.
It is not a tangible asset and cannot be realized until the business is to be sold.
(@ 2 marks each)
ILUYEMI OLUWOLE OLUSEGUN
LAGOS CAMPUS
08032434527
updan94@[Link]