ACC204 EXAM PRACTICE QUESTIONS AND ANSWERS 

When an entity withdraws more cash from its bank account than it actually has with the bank is known as

a.overdraft

b.cash withdrawal

c.income

d.credit balance

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The Unsold portion of goods held for resale is generally referred to as

a.assets

b.inventories

c.goods in store

d.stock

Which among the following errors can affect the balancing of the trial balance

a.commission

b.casting error

c.principle

d.ommission

The assumption in which the last batches of goods are considered to be sold first before earlier purchases is known as

a.straight line

b.LIFO

c.FIFO method

d.Valuation

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Goods bought by an entity for resale is referred to

a.goods for resale

b.purchases

c.stocks

d.sales

One of the following errors cannot affect the balancing of trial balance

a.casting

b.transposition

c.ommission on one side of the transaction

d.error of principle

One of the following is not a method of stock valuation

a.revenue

b.LIFO method

c.FIFO method

d.weighted average

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A profit and loss account is prepared to ascertain

a.gross profit

b.net value

c.gross loss

d.net profit

Goods bought by an entity for resale is refer to as

a.purchases

b.stock

c.inventory

d.cost of goods

Accounting software is “computer programs that assist bookkeepers and accountants in recording and reporting on a firm’s financial transactions. Whose idea is this

a.investopedia

b.ANAN

c.IASB

d.IFRS

The indices for measuring trade performance in an entity is

a.interest

b.gross profit

c.net profit

d.dividend

A present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow is called

a.stock

b.inventory

c.liability

d.assets

A sale of goods to Amaka was not posted. This is an error called

a.principle

b.ommission

c.commission

d.casting

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A cheque issued by the entity to a third party and has been credited to the cash book but not yet debited by the bank in the bank statement but has not presented to the bank for payment is known

a.uncredited cheque

b.unpresented cheque

c.dishonoured cheque

d.standing order

Accounting policies are specific principles, bases, conventions, rules, and practices an entity applies in preparing financial statements. This definition was given by

a.IFRS

b.ANAN

c.IASB

d.ICAN

Which of the following is not an asset

a.trademark

b.land

c.rent

d.patent right

the term irrecoverable debts means

a.dividend

b.bad debt

c.goods in store

d.loan

The distinction between current assets and current liability is called

a.residual value

b.net book value

c.working capital

d.stock at close

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Cash in hand is a charge to

a.investment asset

b.current asset

c.tangible asset

d.fixed asset

Insurance due but not paid is a charge to the balance sheet under

a.liability

b.fixed asset

c.tangible assets

d.current asset

The use of suspense account arises when

a.there is gross profit

b.goods are bad

c.trial balance sides are equal

d.the trial balance fails to balance

Total accounts are sometimes referred to as

a.suspense account

b.control account

c.journal proper

d.ledgers

A transaction between cash and a bank is called

a.contra entry

b.bank statement

c.balancing

d.bank overdraft

The distinction between the sales revenue and cost of sales is referred to as

a.gross profit

b.goods for resale

c.cost of goods

d.net value

A sale of goods to Amaka was not posted. This is an error called

a.principle

b.casting

c.omission

d.commission

The method of valuing assets which assumes that earlier purchases of goods for resale are considered sold before subsequent purchases is called

a.FIFO method

b.LIFO method

c.reducing method

d.average

The process of allocating the cost of a wasting asset to the different accounting periods is referred to as…

a.amortization

b.net value

c.depletion

d.net book value

If one non-current asset is used to offset the price of the new asset an organization wants to buy is called

a.trade in

b.trade out

c.dividend

d.discount

Journals are broadly classified into Specific and

a.general

b.nominal

c.personal

d.impersonal

The situation in which intangible assets are allocated over their estimated useful life is called

a.matching concept

b.principle

c.dual concept

d.amortization

The method of depreciation that allocates the depreciable value of a non-current asset equally over its useful life is called

a.valuation

b.matching concept

c.straight line

d.machine hour

In the course of business activities, the amount an entity owes its suppliers and others is called

a.subscription

b.account payable

c.account receivable

d.donation

The assumption in which the last batches of goods are considered to be sold first before earlier purchases is known as

a.FIFO method

b.LIFO

c.straight line

d.Valuation

The advantage of computerized accounting system that makes it less time to process accounting information is

a.complete

b.reliable

c.speed

d.accuracy

Goods bought by an entity for resale is referring to

a.sales

b.goods for resale

c.purchases

d.stocks

The full meaning of IFRS is

a.International Financial Reporting Standards

b.Internal Financial Reporting Standard

c.Internal Financial Reporting Standard

d.International Funds Regulatory Service

The accounting concept that recognizes an entity to last for a long period is known as

a.dual concept

b.going concern

c.consistency

d.matching concept

The Unsold portion of goods held for resale is generally referred to as

a.assets

b.stock

c.goods in store

d.inventories

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When an entity withdraws more cash from its bank account than it has from the bank is known as

a.overdraft

b.cash withdrawal

c.income

d.credit balance

Which among the following errors can affect the balancing of the trial balance

a.commission

b.casting error

c.principle

d.ommission

Goods bought by an entity for resale is referred to

a.goods for resale

b.purchases

c.stocks

d.sales

One of the following errors cannot affect the balancing of trial balance

a.casting

b.transposition

c.ommission on one side of the transaction

d.error of principle

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