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ICAN Financial Accounting 2022 past questions and answers

This 2022 ICAN Financial Accounting set has 19 practice questions. Try these 5 free sample questions, tap a question to reveal the answer and explanation. Then practise the whole 2022 set with instant marking.

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Sample ICAN Financial Accounting 2022 questions

1. A sole trader pays ₦45,000 cash for goods bought for resale. Which entry records the transaction?
  1. Debit Cash; credit Purchases
  2. Debit Inventory; credit Capital
  3. Debit Purchases; credit Cash
  4. Debit Drawings; credit Cash

Answer: C. Debit Purchases; credit Cash

Purchases is debited to record goods acquired for resale, and cash is credited because it decreases. Debiting cash would incorrectly treat the payment as a receipt.

2. A trial balance has debit totals of ₦840,000 and credit totals of ₦812,000. If the difference is placed temporarily in a suspense account, what balance is required in that account?
  1. A credit balance of ₦28,000
  2. A debit balance of ₦28,000
  3. A credit balance of ₦1,652,000
  4. A debit balance of ₦1,652,000

Answer: A. A credit balance of ₦28,000

Debits exceed credits by ₦28,000, so a credit entry of ₦28,000 in suspense brings the two trial-balance totals into agreement. A debit suspense balance would increase the difference.

3. Which item is deducted from sales revenue to calculate net sales in a sole trader's income statement?
  1. Purchases returns
  2. Discounts received
  3. Carriage inwards
  4. Sales returns

Answer: D. Sales returns

Sales returns are deducted from sales to arrive at net sales. Purchases returns reduce purchases, while carriage inwards and discounts received affect the cost of goods sold.

4. A partnership keeps fixed capital accounts and separate current accounts. Where is a partner's annual share of profit normally credited?
  1. The partner's fixed capital account
  2. The partner's current account
  3. The partnership's bank account
  4. The partner's drawings account

Answer: B. The partner's current account

With fixed capital accounts, periodic profit shares are credited to the partners' current accounts. Fixed capital changes only when additional capital is introduced or capital is withdrawn.

5. A company issues ordinary shares above their nominal value. How is the excess over nominal value generally recorded?
  1. As revenue in the income statement
  2. As a liability to shareholders
  3. In a share premium account within equity
  4. As a reduction of retained earnings

Answer: C. In a share premium account within equity

The amount received above nominal value is credited to share premium, which is part of equity. It is not trading revenue or a liability to the shareholders.

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