A material overstatement in ending inventory was discovered after the year-end financial statements of a company were issued to the public. What effect did this error have on the year-end financial statements?

• A) Current assets: Understated; Gross profit: Overstated
• B) Current assets: Overstated; Gross profit: Overstated
• C) Current assets: Understated; Gross profit: Understated
• D) Current assets: Overstated; Gross profit: Understated

The normal accounting entry to record the dishonor of a businessman is to?

• A. debit cash book and credit suspense account
• B. debit cash book and credit drawer
• C. credit caah book and debit suspense account
• D. credit cash book and debit drawer

The balance of unpaid calls must be transferred to the

• A) debit of share capital amount
• B) credit of share capital account
• C) debit forfeited shares account
• D) credit of forfeited share account

Cash received from the subscribed shares is recorded by debting?

• A. application, allotment and crediting cash
• B. allotment and crediting cash
• C. cash and crediting subscribed shares
• D. cash, crediting application and allotment account

Given: Sales Ledger Control Account (Extracts) Balance b/f N10,600 Total cash payments by debtors N32,275 Total credit sales N59,193 Discount received N9,700 Balance c/f N20,751 Discount allowed N2,890 Determine the sales returns?

• A. N24,577
• B. N13,877
• C. N7,067
• D. N2,890

Kakaku limited with three departments has a total of N7,200,000 as net debtors for the year ended 31/12/2106. The company's policy, provides for 15%bad debt annually. Which of the following represents the total balance of debtors before adjustment?

• A. N6,120,000
• B. N8,280,000
• C. N6,120,300
• D. N8,820,000

Apart from the common control accounts, a control account can also be opened for?

• A. sales account
• B. purchases account
• C. cash account
• D. wages account

The accounting method that reports incomes when earned and expenses when incurred is called?

• A. cash accounting
• B. commitment accounting
• C. fund accounting
• D. accrual accounting

Given: Rates paid during the year amounted to N2,250 at N125 per month and 1,035 was paid for electricity in the same period at N115 per month. Determine the amount of prepaid rates?

• A. N345
• B. N750
• C. N1,380
• D. N1,500

Transactions are recorded or posted to the ledger in line with

• A. Accounting Concept
• B. Source document
• C. Double Entry Principle
• D. Data collection