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SCHOOL:-
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NAME:- 12)
CLASS: SENIOR THREE (3) S.S. 3 12)
SUBJECT: FINANCIAL – ACCOUNTING 12)
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FIRST TERM EXAMINATION 2023 12)
OBJECTIVE PARTS: SECTION A: Under profit and loss account of a partnership. The
1) Where there is no partnership agreement the total drawings is ___ to the cash book (a)
Partnership Act 1890 section _______ should be amounted (b) credited (c) debited
applied (a) 20 (b) 25 (c) 24 (d) 34 13) Under profit and loss account of a partnership.
2) Which of the following is NOT true where there is The total drawings is ___ to current account (a)
no laid down agreement for the partnership? (a) amounted (b) credited (c) debited
Profits and losses to be shared equally (b) No 14) ____ is calculated from the date the amount is
interest on drawings (c) No interest in capital (d) withdrawn to the end of the financial year. (a)
Members of the public can invest in the shares of interest (b) drawing (c) capitals (d) salary
the business. 15) The agreement made provision for salary to be
3) Which of the following increases the profit of a paid to ___partners (a) non-active (b) active (c)
partnership? (a) Drawings (b) Interest on capital dominant
(c) Interest on drawings (d) Partnership salary 16) The only significant difference between balance
4) Which of the following statements is NOT true? sheet of a sole trader is on the display of capital
(a) When we keep fixed capital accounts for accounts and ___ accounts (a) current (b)
partners we open their current accounts (b) savings (c) dominant
When losses are made they are to be shared by 17) The reasons for such admission of new partners
the partners (c) When we keep floating capital are the following except____ (a) expiration of old
account no current account is kept (d) A partnership agreement (b) to inject in more fund
partnership can exist forever. (c) death of a new partner
5) Which of the following can represent capital 18) The compensations given to an old partner is
contributed by a partner to a partnership? (a) called____(a) goodwill (b) bad-will (c) kind-will
Cash only (b) Cheques only (c) Cash and 19) ____ is the benefit and advantage attached to an
cheques only (d) Cash, cheque and other assets. old established business as a result of its good
6) The _____ accounts of partners are usually name, efficient management good connection (a)
regarded as fixed so as to provide a permanent good-power (b) power-will (c) goodwill
evidence of the initial amount with which the 20) The value of goodwill is ____ to goodwill account
partnership is commenced (a) capital account (b) (a) credited (b) debited (c) amounted
partners current (c) partnership deed 21) The value of goodwill is ____ to the capital
7) The _____ account of each partner is prepared accounts in the partners old profit and loss
to show what such a partner is entitled to sharing ratio (a) credited (b) debited (c)
withdraw from the business at any point in time. amounted
(a) capital account (b) partners current (c) 22) Goodwill is (a) Fixed Asset (b) Current Asset (c)
partnership deed Current Liability (d) Intangible Asset
8) Capital is regarded as ___account (a) fixed (b) 23) Goodwill can be classified into (a) Liquid (b) tangible
current (c) capital
9) ____ can be defined as the relationship which (c) intangible (d) Inherent and purchased
exists between two or more persons who are 24) _________ A/c is credited with increase in values
carrying on business in common with a view to of assets (a) goodwill (b) capital (c) revaluation (d)
making profit (a) profitable (b) sole proprietorship current
(c) partnership 25) For a reduction in the value of an asset ___ the
10) The rules governing the conduct of a partnership
business is contained in the document known asset A/c and debit Revaluation A/c (a) debit (b)
as__(a) Deed of membership (b) Deed of credit (c) deduct (d) Add
partnership agreement (c) Deed of agreement 26) To dissolve a partnership means to bring an
11) The profit and loss appropriation account marks existing partnership business to an end. (a) true
the beginning of the difference between the final (b) false (c) maybe
accounts of a sole trader and that of a 27) ____ means To record book value and sales
partnership (a) true (b) false (c) maybe proceeds of assets sold, dissolution expenses,
assets taken over by partner and the share of
profit or loss on dissolution (a) dissolution (b) memorandum of association (b) prospectus (c)
realization (c) revaluation articles of association
28) The double entry for discount received from 41) ____ is a document which interacts the company
creditors on dissolution is (a) Cr. creditor A/c Dr. with outside world (a) memorandum of
Cash A/c (b) Cr. Creditors A/c, Dr. Cash (c) Cr. association (b) prospectus (c) articles of
association
realization A/c; Dr. Creditors (d) Dr. Bank, Cr. 42) ____ is a document issued by limited companies,
Capital A/c inviting the public to subscribe to it shares. (a)
29) Loss on an asset realized is debited to realization certificate of incorporation (b) prospectus (c)
A/c and credited to ________ A/c (a) Cash (b) articles of association
Asset (c) Realization (d) Revaluation 43) ______ is a document which gives legal authority
to the company to operate as a legal entity (a)
30) Assets taken over by partners on dissolution are certificate of incorporation (b) prospectus (c)
credited to realization A/c and debited to articles of association
__________ (a) asset A/c (b) cash A/c (c) 44) When a company can sue in its own name and
Capital A/c (d) all of the above right, we say it possesses (a) legal entity (b) legal
31) Discount allowed is debited to ____ A/c (a) jargons (c) legal portfolio (d) legal value
capital (b) realization (c) current (d) P & L 45) The company whose liabilities of its owners are
32) For goodwill on dissolution debit _________ A/c limited to the value of share bought in the company
and credit _________ A/c respectively (a) cash is called (a) limited by share (b) limited by
and capital (b) goodwill and realization (c) guarantee (c) unlimited by share (d) limited by
realization and goodwill (d) capitals and cash decree
33) ____ is a business owned, managed, controlled 46) The amount of capital a company is allowed to
and financed by association of people which raised in the capital market is ___(a) authorized
possess legal entity with the usual motive of capital (b) issue capital (c) called up capital (d) un-
maximizing owners’ wealth (a) business (b)
company (c) banks issued capital
34) _____ is a company whose owners liabilities is 47) The name of private limited company ends with
limited to the value of share subscribed in the (a) Ltd (b) Plc (c) & co (d) Ent.
company (a) company limited by share (b) 48) The name of public limited company ends with (a)
company limited by guarantee (c) unlimited Corporation (b) Ltd (c) Plc (d) Authority
company
35) _____ are companies whose owners liabilities is 49) Net purchase in trading account is ----------------
limited to the value of share subscribed in the (a)purchases –return outwards (b) purchases –
company plus additional fund they undertake to return inward (c)purchases – carriage inwards (d)
pay into the company in case of liquidation (a) purchases – sales
company limited by share (b) company limited by 50) Net sales in trading account is --------------
guarantee (c) unlimited company
36) ____ is a company whose liabilities of the owner (a)purchases – sales (b)sales – return inwards
are unlimited (a) company limited by share (b) (c)sales – return outwards (d) sales + purchases
company limited by guarantee (c) unlimited 51) Working capital is --------------- (a)current assets –
company current liabilities ( b) current liabilities – current
37) The minimum number of shareholders to form assets (c) total current assets (d) current assets +
the business is___ (a) 6 (b) 7 (c) 5
38) ____is a company that Restricts the right to stock
transfer its shares and Limits the number of its 52) Capital owned is --------------- (a)current assets –
members to fifty (a) public limited (b) private total liabilities (b) total assets – total liabilities (c)
limited (c) tertiary limited total assets + total capital (d) current assets +
39) ____is a company where there is no restriction stock
on the maximum number of shareholders. The
name of the company ends with the word “PLC” 53) Capital employed is ----------- (a)total assets –
(a) public limited (b) private limited (c) tertiary current liabilities (b)total assets – total liabilities
limited (c ) total liabilities + all assets (d) current assets +
40) ___ states the regulations which govern the current liabilities
internal management of the company affairs (a)
54) ____ can be defined as units of capital of 13) What is interest on capital?
ownership of a limited company (a) capital (b) 14) Explain the term Goodwill.
bond (c) shares 15) List five circumstances that can give rise to the
55) During the period of prosperity, the shareholders valuation of goodwill in partnership accounts.
they receive more dividends known as ___ (a)
16) Define Partnership
bond (b) shares (c) equities
56) ____________are also called deferred shares (a) 17) Write short notes on (a) Interest
issue shares (b) founder’s share (c) preference on capital (b) Interest on drawing
shares 18) Give the double entries for the
57) Share can be issued at a premium and paid in
following in the final account of a
full application. (a) false (b) maybe (c) true
58) When a company received application for shares partnership. (i) Interest on drawings N500
fewer than available for sale, the share is said to (ii) Partnership salary N3,000 (iii) Interest
be a) oversubscribed b) under-subscribed on capital N5,000 (iv) Share of profit
c)subscription at par (d) forfeited
59) When a company received application for more N10,000
than available shares for sales, the share is said 19) List seven items that should be contained in a
to be (a) ever-subscribed (b) under- subscribed partnership deed.
(c) over- subscribed (d) cancelled 20) Prepare the capital and current accounts of the
60) A share issued below the nominal value is said to following partners:-
be issued at (a) discount (b) premium (c) at par N
(d) loss Capital accounts Obi 50, 000 cr.
Oba 20, 000 cr.
MARKING GUIDE (ANSWERS) Interest in capital 5% p.a.
1.C 2.D 3.B 4.B 5.D 6.A 7.B 8.A 9.C Salaries Obi 5, 000
10.B 11.A 12.B 13.C 14.A 15.B 16.A 17.C Oba 6, 000
18.A 19.C 20.B 21.A 22.A 23.C 24.C 25.A Interest on drawings 5%
26.A 27.B 28.C 29.B 30.C 31.A 32.D 33.B Drawings Obi 2, 000
34.A 35.B 36.C 37.B 38.B 39.A 40.C 41.A Oba 1, 500
42.B 43.A 44.A 45.A 46.A 47.A 48.B 49.A
50.B 51.A 52.A 53.A 54.C 55.C 56.B 57.C Current accounts balances b/f
58.B 59.C 60.A Obi 3, 000 cr.
Oba 500 dr.

THEORY
1) List the rules approved by the Partnership Act
1890 to be applied where there is no partnership
agreement. 5. Obi and Oba are partners in a firm of chartered
2) What is bonus issue? accountants with initial capital contributions of N50,000
3) Define the term shares. and N40,000 respectively which are to be kept fixed in
4) Explain the following: Cummulative and non the partnership books. You are required to show the
cumulative preference share. cash account, partners’ capital accounts and balance
5) Enumerate five features of private limited sheet extracts.
company. SOLUTION
6) Mention four documents that must be sent to CASH ACCOUNT (EXTRACTS)
Corporate Affairs Commission before a company N
can be register. Capital: Obi 50, 000
Oba 40, 000
7) What is a prospectus.
PARTNERS CAPITAL ACCOUNT
8) Explain (a) appropriation account (b) Balance
sheet Obi Oba
9) What is a revaluation account? N N
Cash A/c 50, 000 40, 000
10) What is a Company?
11) Mention and explain three types BALANCE SHEET (EXTRACTS)
Capital A/c N N
of companies.
Obi 50, 000
12) List five assets that may be Oba 40, 000 Cash in hand 90, 000
revalued in partnership accounts.
19) On the 1st January 1980 XYZ plc made an
issue of 13,000 ordinary shares of ₦2 each at
par Application together with total amount
received for exactly 13,000 shares and the
shares were allotted to the applicants. Show
the journal entries and ledger accounts

Solution:
JOURNAL
Bank Account Dr Cr
Application Account 26,000
26,000
Being money collected
on application

Application Account 26,000

Allotment 13,000
ordinary shares at ₦2
Ledger accounts:
Bank account

₦
Application
26,000

Application Account

₦ ₦
Share capital Bank
26,000 26,000

Ordinary Share Capital Account

₦
Application
26,000