TOPIC: CONCEPTS AND CONVENTIONS OF ACCOUNTING
DIRECTION: Choose the correct answers from the lettered options.
1. Which of the following is not an accounting concept?
A.Entity
B. Going-concern
C. Consistency
D.Historical cost
E.Dual aspect
The correct answer is option [C] consistency is not a concept but a convention.The convention of consistency means that same accounting principles should be used for preparing financial statements for different periods. It enables the management to draw important conclusions regarding the working of the concern over a longer period.
2. The accounting concept which allows the use of a particular method for treating a transaction for a reasonable number of years is _________
A. consistency
B. cost
C. accrual
D. conservatism
E. prudency
The correct answer is option [A]
3. The accounting concepts that supports the application of double entry book-keeping is _________
A. going-concern
B.historical cost
C. consistency
D. prudency
E.dual aspect
The correct answer is option [E]
4. “Accountant do not count their chicken before they are hatched,” this is the concept of ________
A. materiality
B. realization
C. materiality
D. going-concern
E. prudence
The correct answer is option [B]
5. Money received from a customer is recorded in the customer’s account and bank account; The accounting concept applied is _________
A.business entity
B.dual aspect
C. going-concern
D. money measurement
The correct answer is option[B].
6. Which of the following is not an accounting concept?
A. Entity
B. Going-concern
C. Consistency
D.Historical cost
E.Dual aspect
The correct answer is option [C]
Topic: CONTROL ACCOUNTS AND SELF – BALANCING LEDGERS
DIRECTION: Choose the correct answers from the lettered options.
1. One of the advantages of Control Account is that ________
A.all errors are localized thus reducing delays in balancing accounts.
B.all errors are generalized thus reducing delays in balancing accounts.
C.book keepers cannot make mistakes.
D.all errors are posted into the accounts.
E.all cash transactions are posted into the accounts.
The correct answer is option [A].
2. Which of these does not constitute share holders fund?
A. Ordinary share capital
B. Debenture
C. Retained profit
D. Share premium
E. Preference share capital
The correct answer is option [B].
Use the following information to answer the question On 1/7/07, a trader owed wages Le 2,000. During the year ended 30/6/08, wages of Le 2,400 were owed and Le 8,000 were paid.
3. The wages of the year ended 30/6/08, is_______
A. Le 12,400
B. Le 8,400
C. Le 8,000
D. Le 3,600
The correct answer is option[D]
5. The principal function of a sales ledger control account is to __________
A. serve as internal check and provide quick information for the preparation of interim financial statements.
B. serve as external check and provide quick information for the preparation of interim financial statements.
C. provide quick information for the preparation of customer’s statements.
D. provide information for the control of salesmen’s activities.
The correct answer is option [C].
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