New Curriculum Second Term Financial Accounting examination for SS 1

Class: SSS 1
Term: Second Term
Subject: Financial Accounting
Time: 1 hour 30 minutes
Total Marks: 70

SECTION A: OBJECTIVES (40 MARKS)
Instruction: Answer ALL questions. Each question carries 1 mark.

1. A petty-cash count differs from the float and vouchers. The first responsible action is to (a) recount cash, inspect vouchers and investigate the variance   (b) insert a made-up voucher matching the difference   (c) charge the full float to revenue   (d) destroy the record and start again
2. A credit sale of ₦27,000 belongs in which ledger account as a debit? (a) The bank loan account   (b) The supplier's account in the payables ledger   (c) The individual customer's account in the receivables ledger   (d) The owner's drawings account
3. The bank credits interest of ₦1,200 not yet recorded by the firm. The adjustment should be (a) debit Purchases by ₦1,200   (b) credit Bank in the adjusted cash book by ₦1,200   (c) debit Bank in the adjusted cash book by ₦1,200   (d) credit Capital and ignore Bank
4. A supplier's ledger account has credits totalling ₦75,000 and debits of ₦20,000. It closes with (a) ₦55,000 credit   (b) ₦55,000 debit   (c) ₦95,000 debit   (d) ₦20,000 credit
5. A supplier account showing a credit balance of ₦36,000 means the business ________. (a) has bank cash of exactly ₦36,000   (b) has earned ₦36,000 profit   (c) is owed ₦36,000 by the supplier   (d) owes the supplier ₦36,000
6. The main reason a receipt banked immediately is debited to the bank column is that ________. (a) all receipts must appear in the cash column only   (b) bank balance, an asset, has increased   (c) it is always a credit purchase   (d) the trader's drawings have increased
7. A customer pays ₦30,000 directly into the business bank account. Which treatment is correct? (a) Credit bank column of cash book   (b) Debit bank column of cash book   (c) Debit drawings account only   (d) Credit cash column as a cash withdrawal
8. A bank statement shows ₦84,000 credit. Deposits not yet credited are ₦15,000 and unpresented cheques are ₦9,000. The adjusted cash-book balance should be (a) ₦108,000 debit   (b) ₦78,000 debit   (c) ₦60,000 debit   (d) ₦90,000 debit
9. The unadjusted cash-book bank balance is ₦62,000 debit. Bank charges ₦1,500 and interest received ₦800 are omitted. The adjusted balance is (a) ₦61,300 debit   (b) ₦63,300 debit   (c) ₦64,300 debit   (d) ₦60,500 debit
10. When a purchases day book total is posted, the correct double entry includes ________. (a) debit Purchases and credit the respective supplier accounts   (b) debit Sales and credit Capital   (c) credit Purchases and debit all suppliers   (d) debit Bank and credit Sales returns
11. A cheque of ₦45,000 is recorded in the cash book but has not cleared the bank. It is best described as (a) a dishonoured receipt already reversed   (b) cash lodged in the till   (c) an uncredited deposit   (d) an unpresented cheque
12. Moving ₦12,000 from the cash till into the business bank account requires a ________ entry. (a) depreciation   (b) contra   (c) bad debts   (d) sales returns
13. All the following are credit entries in cash or bank columns EXCEPT (a) Bank transfer made to a supplier   (b) Cash paid for transport   (c) Cash received from a customer   (d) Cheque paid for rent
14. A trader sells goods on credit for ₦48,000 to Kemi. The corresponding entries are (a) Debit Sales ₦48,000; credit Kemi ₦48,000   (b) Debit Cash ₦48,000; credit Kemi ₦48,000   (c) Debit Kemi ₦48,000; credit Sales ₦48,000   (d) Debit Purchases ₦48,000; credit Kemi ₦48,000
15. A cash book records ₦74,000 receipts and ₦28,000 payments. If opening cash was ₦13,000, closing cash is (a) ₦46,000   (b) ₦59,000   (c) ₦33,000   (d) ₦115,000
16. ________ is indicated by a ₦12,000 debit balance on the Cash account. (a) a cash liability of ₦12,000   (b) sales revenue of ₦12,000   (c) a bank overdraft necessarily   (d) cash owned by the business
17. Under the imprest system, a petty cashier begins with ₦20,000 and spends ₦7,300. The reimbursement needed to restore the float is (a) ₦7,300   (b) ₦12,700   (c) ₦27,300   (d) ₦20,000
18. A cheque paid to a supplier should ordinarily appear on the ________ of the bank column. (a) sales returns side   (b) credit side   (c) both sides at the same time   (d) debit side
19. A petty cashier presents receipts for ₦3,400 and ₦2,700. The required reimbursement under imprest is ________. (a) ₦3,400   (b) ₦12,200   (c) ₦6,100   (d) ₦900
20. Which item does NOT belong in the personal ledger classification? (a) An individual creditor account   (b) Supplier's account   (c) Debtor customer's account   (d) Motor Vehicles account
21. When petty-cash expenses are analysed into columns, the benefit is that (a) original supporting receipts are no longer needed   (b) the petty-cash balance must be zero each week   (c) ledger postings can be made from categorised expense totals   (d) cash payments become sales automatically
22. The key feature of an imprest petty-cash arrangement is ________. (a) replenishment returns the float to an agreed amount   (b) payments recorded solely in the general sales account   (c) an imprest amount that changes with every payment without replenishment   (d) reimbursement made without examining petty-cash vouchers
23. A customer's cheque of ₦5,000 is dishonoured and the business has not recorded the event. The correct cash-book adjustment is ________. (a) credit Bank by ₦5,000   (b) credit Cash purchases by ₦5,000   (c) debit Sales by ₦5,000   (d) debit Bank by ₦5,000
24. A trader discovers that the cash book includes the same ₦9,000 payment twice. Correcting the duplicate should (a) decrease the reported cash balance by ₦9,000   (b) leave the cash balance unchanged   (c) increase the reported cash balance by ₦9,000   (d) increase sales by ₦18,000
25. When a firm withdraws ₦6,000 from bank for office cash, the cash book records ________. (a) debit Purchases ₦6,000 and credit Sales ₦6,000   (b) debit Cash ₦6,000 and credit Bank ₦6,000   (c) credit both Cash and Bank ₦6,000   (d) debit Bank ₦6,000 and credit Cash ₦6,000
26. A clerk identifies a contra entry when it ________; this avoids recording internal cash transfers as income. (a) creates a new customer account   (b) changes the physical quantity of inventory   (c) involves a supplier's invoice   (d) moves money between the firm's own cash and bank accounts
27. Which sequence correctly prepares a bank reconciliation? (a) Post bank charges to the reconciliation only and never adjust the cash book   (b) Treat omitted bank interest as an outstanding deposit   (c) Update cash book for bank-originated entries; then reconcile timing differences   (d) Add all outstanding cheques to the statement balance without checking direction
28. A customer settles a ₦14,000 debt by bank transfer. The entry in the customer's ledger account is a (a) credit of ₦14,000   (b) debit of ₦14,000   (c) credit to Purchases only   (d) debit to Drawings only
29. An expense account shows debits ₦32,000 and credits ₦7,000. The resulting balance is ________. (a) ₦25,000 credit   (b) ₦7,000 debit   (c) ₦39,000 credit   (d) ₦25,000 debit
30. A cheque issued for ₦28,000 appears in the cash book but not on the bank statement. For a reconciliation beginning with the bank statement balance, it should be ________. (a) added as an uncredited deposit   (b) treated as bank interest earned   (c) debited to petty cash   (d) deducted as an unpresented cheque
31. Cash account has debits ₦85,000 and credits ₦31,000 for a period. Its balance carried down is (a) ₦54,000 credit   (b) ₦54,000 debit   (c) ₦31,000 debit   (d) ₦116,000 debit
32. Which procedure prevents an omission while transferring journal totals to ledger accounts? (a) Remove account titles during posting   (b) Post only credits and assume debits are immaterial   (c) Cross-reference source entries and verify both sides of each posting   (d) Add every transaction to Capital without explanation
33. A ledger account's totals do not agree after balancing. The first appropriate step is to (a) transfer the difference to Sales automatically   (b) recheck individual postings and arithmetic on both sides   (c) add a fictitious cash receipt   (d) alter a recorded transaction without evidence
34. A supplier sends a ₦600 invoice for office stationery. If it is within petty-cash limits, it would ordinarily be placed under the ________ analysis column. (a) carriage outwards   (b) fixed assets disposal   (c) stationery   (d) sales revenue
35. Which of the following is NOT normally a timing difference in reconciliation? (a) A lodgement recorded but not yet credited   (b) A cheque issued but not yet presented   (c) A cheque awaiting bank clearance   (d) An arithmetic error in the cash book requiring correction
36. A petty-cash float starts at ₦15,000. Vouchers show fares ₦2,100, stationery ₦1,900 and postage ₦500. Cash remaining is (a) ₦4,500   (b) ₦9,500   (c) ₦15,500   (d) ₦10,500
37. A two-column cash book ordinarily records ________. (a) cash and bank movements   (b) inventory units and selling prices only   (c) supplier invoices and credit notes only   (d) depreciation and gross profit only
38. The main purpose of a bank reconciliation is to (a) replace the cash book after any difference is observed   (b) explain differences between the bank statement and cash-book balances   (c) make ledger debit and credit totals agree without comparing the bank statement   (d) determine the cash sales margin directly from the passbook
39. Which payment is least suitable for petty cash? (a) ₦350 photocopying expense   (b) ₦250 minor postage   (c) Purchase of a ₦450,000 industrial generator   (d) ₦800 local transport
40. A shop starts with ₦25,000 cash, receives ₦40,000 and spends ₦18,500. Closing cash is (a) ₦21,500   (b) ₦46,500   (c) ₦83,500   (d) ₦3,500

SECTION B: THEORY (30 MARKS)
Instruction: Answer Question 1 and any other TWO questions. Each question carries 10 marks.

Question 1
(a) A Cash ledger account shows debit entries ₦125,000 and credit entries ₦78,000. Calculate and identify the closing balance. (4 marks)
(b) Show the double entry when a customer pays ₦18,000 by bank transfer to settle a debt. (6 marks)

Question 2
(a) A cash book begins with ₦19,500, receives ₦46,000 and pays ₦22,700. Find the closing cash. (4 marks)
(b) Explain a contra entry using an example involving ₦10,000 withdrawn from bank for cash office use. (6 marks)

Question 3
(a) A petty-cash imprest is ₦25,000; transport ₦2,800, stationery ₦1,200 and postage ₦600 were paid. Find closing cash and reimbursement. (6 marks)
(b) State two controls to prevent the misuse of petty cash. (4 marks)

Question 4
(a) Bank statement shows a favourable ₦95,000. A deposit of ₦18,000 is outstanding; cheques of ₦11,000 have not been presented. Find the corresponding adjusted cash-book balance. (6 marks)
(b) Bank charges ₦1,500 are found on the statement but not the cash book. State the correct adjustment and why it is not a timing difference. (4 marks)

Objective Marking Scheme
Question 1 – ✅ (a) recount cash, inspect vouchers and investigate the variance
Question 2 – ✅ (c) The individual customer's account in the receivables ledger
Question 3 – ✅ (c) debit Bank in the adjusted cash book by ₦1,200
Question 4 – ✅ (a) ₦55,000 credit
Question 5 – ✅ (d) owes the supplier ₦36,000
Question 6 – ✅ (b) bank balance, an asset, has increased
Question 7 – ✅ (b) Debit bank column of cash book
Question 8 – ✅ (d) ₦90,000 debit
Question 9 – ✅ (a) ₦61,300 debit
Question 10 – ✅ (a) debit Purchases and credit the respective supplier accounts
Question 11 – ✅ (d) an unpresented cheque
Question 12 – ✅ (b) contra
Question 13 – ✅ (c) Cash received from a customer
Question 14 – ✅ (c) Debit Kemi ₦48,000; credit Sales ₦48,000
Question 15 – ✅ (b) ₦59,000
Question 16 – ✅ (d) cash owned by the business
Question 17 – ✅ (a) ₦7,300
Question 18 – ✅ (b) credit side
Question 19 – ✅ (c) ₦6,100
Question 20 – ✅ (d) Motor Vehicles account
Question 21 – ✅ (c) ledger postings can be made from categorised expense totals
Question 22 – ✅ (a) replenishment returns the float to an agreed amount
Question 23 – ✅ (a) credit Bank by ₦5,000
Question 24 – ✅ (c) increase the reported cash balance by ₦9,000
Question 25 – ✅ (b) debit Cash ₦6,000 and credit Bank ₦6,000
Question 26 – ✅ (d) moves money between the firm's own cash and bank accounts
Question 27 – ✅ (c) Update cash book for bank-originated entries; then reconcile timing differences
Question 28 – ✅ (a) credit of ₦14,000
Question 29 – ✅ (d) ₦25,000 debit
Question 30 – ✅ (d) deducted as an unpresented cheque
Question 31 – ✅ (b) ₦54,000 debit
Question 32 – ✅ (c) Cross-reference source entries and verify both sides of each posting
Question 33 – ✅ (b) recheck individual postings and arithmetic on both sides
Question 34 – ✅ (c) stationery
Question 35 – ✅ (d) An arithmetic error in the cash book requiring correction
Question 36 – ✅ (d) ₦10,500
Question 37 – ✅ (a) cash and bank movements
Question 38 – ✅ (b) explain differences between the bank statement and cash-book balances
Question 39 – ✅ (c) Purchase of a ₦450,000 industrial generator
Question 40 – ✅ (b) ₦46,500

Theory Marking Scheme
Question 1
(a) ₦47,000 debit (3), because debits exceed credits (1). [4 marks]
(b) Dr Bank ₦18,000 (3); Cr Customer/Trade receivable ₦18,000 (3). [6 marks]
Question 2
(a) 19,500+46,000−22,700=₦42,800 (4). [4 marks]
(b) Contra movement within the business cash/bank (2); Dr Cash 10,000 (2), Cr Bank 10,000 (2). [6 marks]
Question 3
(a) Expenditure 4,600 (2); remaining ₦20,400 (2); reimbursement ₦4,600 (2). [6 marks]
(b) Receipts/vouchers approved (2); independent reconciliation/cash count and spending limits (2). [4 marks]
Question 4
(a) 95,000+18,000−11,000=₦102,000 (correct treatment 4, arithmetic 2). [6 marks]
(b) Credit Bank ₦1,500 in adjusted cash book (2); bank already charged, so cash-book omission needs correction (2). [4 marks]