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ICAN Financial Accounting 2023 past questions and answers

This 2023 ICAN Financial Accounting set has 20 practice questions. Try these 5 free sample questions, tap a question to reveal the answer and explanation. Then practise the whole 2023 set with instant marking.

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Sample ICAN Financial Accounting 2023 questions

1. A sole trader deposits ₦25,000 of personal cash into the business bank account as capital. Which entry records this transaction?
  1. Debit capital; credit bank
  2. Debit cash; credit sales
  3. Debit bank; credit capital
  4. Debit purchases; credit bank

Answer: C. Debit bank; credit capital

The business bank asset increases, so bank is debited; the owner's capital increases, so capital is credited.

2. A credit sale of ₦4,800 was correctly credited to sales but the debit to the customer's receivable account was omitted. Before correction, what is the effect on the trial balance totals?
  1. Credit total exceeds debit total by ₦4,800
  2. Debit total exceeds credit total by ₦4,800
  3. Both totals are understated by ₦4,800
  4. The trial balance still agrees

Answer: A. Credit total exceeds debit total by ₦4,800

The credit entry is present but its matching debit is missing, so credits exceed debits by ₦4,800.

3. For the year, a trader had sales of ₦140,000, sales returns of ₦10,000, opening inventory of ₦24,000, purchases of ₦90,000 and closing inventory of ₦19,000. What was gross profit?
  1. ₦30,000
  2. ₦35,000
  3. ₦45,000
  4. ₦55,000

Answer: B. ₦35,000

Net sales are ₦130,000 and cost of sales is ₦24,000 + ₦90,000 − ₦19,000 = ₦95,000; gross profit is ₦35,000.

4. A trader paid ₦12,000 on 1 October 2023 for insurance covering 1 October 2023 to 30 September 2024. What insurance expense should be charged for the year ended 31 December 2023?
  1. ₦1,000
  2. ₦2,000
  3. ₦12,000
  4. ₦3,000

Answer: D. ₦3,000

Three months of the 12-month policy fall in the year, so the expense is ₦12,000 × 3/12 = ₦3,000; the remaining ₦9,000 is prepaid.

5. A company issues 5,000 ordinary shares of ₦2 each at ₦2.40 per share, all paid in cash. What amount is credited to the share premium account?
  1. ₦2,400
  2. ₦2,000
  3. ₦10,000
  4. ₦12,000

Answer: B. ₦2,000

The premium is ₦0.40 per share, so 5,000 × ₦0.40 = ₦2,000 is credited to share premium; nominal value goes to share capital.

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