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ICAN Financial Accounting 2024 past questions and answers

This 2024 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 2024 set with instant marking.

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Sample ICAN Financial Accounting 2024 questions

1. A sole trader pays ₦80,000 cash for office equipment. Which entry records the transaction?
  1. Debit cash ₦80,000; credit equipment ₦80,000
  2. Debit equipment ₦80,000; credit capital ₦80,000
  3. Debit equipment ₦80,000; credit cash ₦80,000
  4. Debit purchases ₦80,000; credit cash ₦80,000

Answer: C. Debit equipment ₦80,000; credit cash ₦80,000

Equipment, an asset, increases and is debited; cash, another asset, decreases and is credited. Capital is not involved because the trader paid from business cash.

2. Which error would not cause a trial balance to disagree?
  1. A credit sale is completely omitted from the books
  2. A debit entry is posted as a credit entry
  3. A debit balance is added incorrectly
  4. A transaction is posted to the correct side of one account but omitted from the other account

Answer: A. A credit sale is completely omitted from the books

A complete omission leaves both the debit and credit sides understated by the same amount, so the trial balance still agrees. The other errors disturb equality of debit and credit totals.

3. A trader has sales of ₦360,000, sales returns of ₦10,000, cost of goods sold of ₦210,000 and carriage inwards of ₦5,000 not yet included in that cost. What is gross profit?
  1. ₦130,000
  2. ₦135,000
  3. ₦140,000
  4. ₦155,000

Answer: B. ₦135,000

Net sales are ₦360,000 − ₦10,000 = ₦350,000; adjusted cost of sales is ₦210,000 + ₦5,000 = ₦215,000. Gross profit is ₦350,000 − ₦215,000 = ₦135,000; omitting carriage inwards would give the distractor ₦140,000.

4. Electricity expense for the year is ₦48,000. Only ₦42,000 was paid by year-end. Which amount is charged as the year's expense, and what liability is recognised?
  1. Expense ₦42,000; liability nil
  2. Expense ₦48,000; liability ₦42,000
  3. Expense ₦6,000; liability ₦6,000
  4. Expense ₦48,000; liability ₦6,000

Answer: D. Expense ₦48,000; liability ₦6,000

Accrual accounting charges the full ₦48,000 incurred in the year. The unpaid balance, ₦48,000 − ₦42,000 = ₦6,000, is an accrued expense liability.

5. A partnership agreement provides for partners' salaries and interest on capital. After these appropriations are made, how is the remaining divisible profit shared?
  1. Equally in all cases
  2. In the partners' profit-sharing ratio
  3. In proportion to partners' drawings
  4. In proportion to partners' closing capital balances

Answer: B. In the partners' profit-sharing ratio

The residual profit is shared in the agreed profit-sharing ratio (or equally if no ratio is specified). Drawings and closing capital balances do not determine the ratio unless the agreement says so.

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