Accounting questions and answers

Accounting Questions and Answers

If you are preparing for an accounting aptitude test or even a job interview, these accounting questions and answers will help you master the principles of accounting. This test covers accounting past questions from WAEC, JAMB, Post UTME exams and many more.

1.

A crane hired by a building construction company would be classified as

A.

A financial cost

B.

 An administration cost

C.

A direct manufacturing cost

D.

An overhead cost

Correct answer is D

Overhead costs, also known as indirect costs, are expenses that cannot be directly attributed to a specific product or service. Instead, they are costs incurred to support the overall operations of a business. Examples of overhead costs include rent, utilities, insurance, administrative salaries, and equipment rental fees.

In the case of a building construction company, the cost of hiring a crane would be considered an overhead cost because it is not directly associated with the manufacturing or production of a specific building. Instead, the crane is utilized to support various construction activities and is used across multiple projects.

While the crane's rental cost is necessary for the construction company's operations, it does not fall under the category of a direct manufacturing cost because it is not directly involved in the transformation of raw materials into finished products. It is also not an administration cost because it is not related to the general administrative expenses of the company, such as office supplies or salaries of administrative staff.

 

2.

The two column cash book records

A.

All receipts in cash only and payments by cheque

B.

Receipts and payments in cash only

C.

All receipts and payments both in cash and by cheque

D.

Receipts and payments by cheque only

Correct answer is C

The two column cash book is a combination of cash account and bank account in one book. It shows the total particulars of all the money received and paid by the firm either in cash or cheque.

3.

Which of the following rules is applicable in the absence of a partnership agreement? Interest is payable

A.

On drawings at the rate of 5% per annum

B.

On any contribution in excess of agreed capital at 5% per annum

C.

At 5% per annum on the current account balances

D.

On agreed capital contributed at 5% per annum

Correct answer is B

If no specific agreement is made by the partners, 5% interest a year on loans made by partners in excess of the agreed capitals.

4.

Use the following information to answer the question

Taurus Ltd was incorporated with the legal right to issue five million ordinary shares. The company has issued three million of the shares at GH⊄ 0.60 per share. To date, the company has made calls of GH⊄ 0.40 per share. All calls have been paid by shareholders except for GH⊄ 100,000 owing from one shareholder.

The authorized number of shares is

A.

3,000,000

B.

8,000,000

C.

5,000,000

D.

100,000

Correct answer is C

The authorized number of shares refers to the maximum number of shares a company is legally allowed to issue.

According to the information provided, Taurus Ltd was incorporated with the legal right to issue five million ordinary shares.

Therefore, the authorized number of shares for Taurus Ltd is 5,000,000.

Hence, the correct answer is 5,000,000.

 

5.

Use the following information to answer the question

Taurus Ltd was incorporated with the legal right to issue five million ordinary shares. The company has issued three million of the shares at GH⊄ 0.60 per share. To date, the company has made calls of GH⊄ 0.40 per share. All calls have been paid by shareholders except for GH⊄ 100,000 owing from one shareholder.

The paid up share capital is

A.

GH⊄ 300,000

B.

GH⊄ 250,000

C.

GH⊄ 500,000

D.

GH⊄ 600,000

Correct answer is D

The paid-up share capital is the portion of the share capital that has been paid by the shareholders.

In this case, Taurus Ltd has issued three million ordinary shares at GH⊄ 0.60 per share. This means that the total value of the issued shares is:

3,000,000 shares * GH⊄ 0.60 per share = GH⊄ 1,800,000

The company has made calls of GH⊄ 0.40 per share, and all calls have been paid by shareholders except for GH⊄ 100,000 owing from one shareholder.

So the total amount of calls that have been paid is:

3,000,000 shares * GH⊄ 0.40 per share = GH⊄ 1,200,000

Therefore, the paid-up share capital is the total value of the issued shares minus the total amount of calls paid, which is:

GH⊄ 1,800,000 - GH⊄ 1,200,000 = GH⊄ 600,000

Therefore, the correct answer is GH⊄ 600,000.