Meritplace College

42, Ronke Street Itire Surulere Lagos.

First Term Examination 2025/2026 Financial Account SS1

TIME: 1 HOUR 30 MINUTES 6. Which of the following is NOT a benefit

SECTION A: MULTIPLE CHOICE QUESTIONS of keeping accounting records?
INSTRUCTION: ANSWER ALL QUESTIONS (a) Determining profit or loss
(b) Preventing all fraud
1. The systematic recording of a business's (c) Assessing financial position
financial transactions is known as: (d) Aiding decision-making
(a) Auditing 7. The double-entry system of
(b) Book-Keeping bookkeeping was developed by:
(c) Debiting (a) Frank Wood
(d) Crediting (b) Akintola Williams
2. Which of the following best explains (c) Luca Pacioli
Accounting? (d) William Pickles
(a) The routine recording of transactions 8. A transaction where payment is made
only. immediately is called a:
(b) Recording, classifying, and (a) Credit Transaction
interpreting financial information. (b) Deferred Transaction
(c) Preparing only the trial balance. (c) Cash Transaction
(d) The history of business. (d) Future Transaction
3. A key difference between Book-Keeping 9. Buying office furniture on credit from a
and Accounting is that: supplier is an example of a:
(a) Book-Keeping has a wider scope than (a) Cash Transaction
Accounting. (b) Credit Transaction
(b) Book-Keeping is an integral part of (c) Barter Transaction
Accounting. (d) Personal Transaction
(c) Accounting requires less training than 10. The principal book of account that
Book-Keeping. contains all accounts in a classified form is
(d) Accounting records are only for the:
internal use. (a) Journal
4. Which user of accounting information is (b) Cash Book
primarily interested in the business's (c) Ledger
ability to repay loans and interest? (d) Trial Balance
(a) Owners 11. The book of original entry used for
(b) Employees recording credit purchases is the:
(c) Loan Creditors (a) Sales Journal
(d) Customers (b) Purchases Journal
5. The government uses accounting (c) Returns Inwards Journal
information for all of the following (d) General Journal
EXCEPT: 12. The rule of double entry states that:
(a) To determine the profit for (a) Only one account is affected by a
shareholders. transaction.
(b) To compute national statistics. (b) For every debit entry, there must be
(c) To formulate industrial policies. a corresponding credit entry.
(d) To regulate business activities.
 (c) Transactions are recorded only in the (a) Invoice
journal. (b) Receipt
(d) Cash transactions do not need to be (c) Order
recorded. (d) Cheque
13. When a business owner invests cash 20. If a seller undercharges a customer,
into the business, the account to be they will send a ____ to correct the error.
credited is: (a) Credit Note
(a) Cash Account (b) Debit Note
(b) Bank Account (c) Statement of Account
(c) Capital Account (d) Voucher
(d) Drawings Account 21. A written order instructing a bank to
14. If you sold goods for cash, which pay a specific amount of money to a
account would you debit? person or business is a:
(a) Sales Account (a) Receipt
(b) Customer's Account (b) Cheque
(c) Cash Account (c) Paying-in Slip
(d) Capital Account (d) Debit Note
15. The process of finding the difference 22. The subsidiary book used to record
between the two sides of a ledger account goods returned to suppliers by the
is called: business is the:
(a) Posting (a) Returns Inwards Journal
(b) Journalizing (b) Returns Outwards Journal
(c) Balancing (c) Purchases Journal
(d) Invoicing (d) General Journal
16. The ledger that contains the accounts 23. Which book of prime entry is also part
of all credit customers is the: of the double-entry system?
(a) Purchases Ledger (a) Sales Journal
(b) General Ledger (b) Purchases Journal
(c) Sales Ledger (c) Cash Book
(d) Cash Ledger (d) Returns Inwards Journal
17. What is a 'Transaction' in accounting? 24. Which of the following is a key benefit
(a) Only the selling of goods for cash. of keeping proper accounting records?
(b) A discussion between a buyer and a (a) It guarantees the business will make
seller. a profit.
(c) The transfer of goods, services, or (b) It helps to prevent fraud within the
money to and from a business. business.
(d) Only the payment of business (c) It eliminates the need for a bank
expenses. account.
18. A key feature of a transaction that (d) It allows the business to avoid paying
must be recorded in the books is that it taxes.
must be: 25. The source document for recording a
(a) Verbally agreed upon. payment into a bank account is the:
(b) Quantifiable in monetary terms. (a) Cheque counterfoil
(c) A very large amount of money. (b) Receipt
(d) Done with a registered company. (c) Bank Paying-in Slip
19. A document issued by a seller to a (d) Debit Note
buyer for goods sold on credit is called an:
26. "Carriage Inwards" costs are incurred (d) Loan
on goods that have been: 29. If a business buys computers from a
(a) Sold supplier and promises to pay in 30 days,
(b) Returned by customers this is classified as a:
(c) Purchased (a) Cash Transaction
(d) Taken by the owner (b) Barter Transaction
27. When a customer returns goods, the (c) Credit Transaction
seller records this in: (d) Personal Transaction
(a) Returns Outwards Journal 30. The main purpose of subsidiary books
(b) Purchases Journal is to:
(c) Returns Inwards Journal (a) Replace the ledger
(d) Sales Journal (b) Serve as the first place to record
28. The owner taking cash from the transactions in detail
business for personal use is referred to as: (c) Prepare the final accounts
(a) Capital (d) Calculate profit and loss
(b) Profit
(c) Drawings
SECTION B: THEORY QUESTIONS INSTRUCTION: ANSWER ANY THREE QUESTIONS

1.(a) Define Book-keeping. (2 marks)

(b) Define Accounting. (2 marks)
(c) State two differences between Book-keeping and Accounting. (4 marks)
(d) List two users of accounting information. (2 marks)
(Total 10 Marks)

2.(a) What is a transaction? (2 marks)

(b) Mention the two main types of transactions. (2 marks)
(c)Identify whether the transactions below are cash transactions or credit transactions
[Link] 2: Started business with N10, 000 cash
[Link] 3: Paid N7, 000 of the business money into the bank
[Link] 7: Paid rent of shop by cash N600
[Link] 12: Bought goods for cash N1, 200
[Link] 14: Bought goods on credit from Ayodele N30, 000
[Link] 15: Sold goods and received cheque in payment N14, 000
[Link] 20: Bought Motor vehicle paying by cheque N9, 000
[Link] 25: Paid salary of shop assistants by cheque N1, 000
[Link] 28: Sold goods to Akinyemi N7, 000
[Link] 31: Bought furniture for cash N3, 000

3.(a) What are source documents? (2 marks)

(b) List four examples of source documents. (4 marks)
(c) State two importance of source documents. (4 marks)
(Total 10 Marks)

4.(a) What are Subsidiary Books? (2 marks)

(b) List four types of Subsidiary Books. (4 marks)
(c) State the use of any two Subsidiary Books you listed. (4 marks)
(Total 10 Marks)

5.(a) What is a Ledger? (2 marks)

(b) What is the Double Entry Principle? (3 marks)
(c) For the following transactions, name the two accounts affected:

· Started business with cash (2 marks)

· Sold goods for cash (2 marks)
· Bought furniture by cheque (1 mark)
(Total 10 Marks)

6.(a) What are Returns Inwards? (2 marks)

(b) K. Laolu, a trader undertook the following transactions in the month of April 2016.
April 1 Started business with N25, 000 cash
“ 2 Put N18, 000 of the cash into a bank account

“ 12 Paid Co-operative Stores N65, 700 cheque on account

“ 15 T. Okediran returned 3 drums of groundnut oil bought on the 8th of April,
2016.
“ 18 Sold 320 yams at N550 each for cash

“ 21 Returned to Ayodele & Co –

8 cartons of Gino Tomato Paste and 5 drums of palm oil bought on the 19th April, 2016.
“ 22 Sold to Adjei Balama –
16 drums of palm oil at N4, 500 per drum,
20 bags of onions at N14, 000 each,
120 yams at N600 each,
Invoice subject to 5% trade discount
“ 25 Paid sundry expenses N8, 400 by cheque
“ 26 Paid rent of shop N15, 000 cash
“ 27 Adjei Balama returned 5 drums of palm oil to us because they were damaged
“ 29 T. Okediran paid by cheque for all the sales made to him.
“ 30 Bought weighing machine from Standard Tools Ltd on credit N62, 000

You are required to prepare the Cash book for K. Laulo.