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ICAN Financial Accounting 2025 past questions and answers

This 2025 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 2025 set with instant marking.

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Sample ICAN Financial Accounting 2025 questions

1. A sole trader buys an office computer for ₦480,000 and pays immediately by bank transfer. Which journal entry records the transaction?
  1. Debit Bank ₦480,000; credit Computer ₦480,000
  2. Debit Purchases ₦480,000; credit Bank ₦480,000
  3. Debit Computer ₦480,000; credit Bank ₦480,000
  4. Debit Computer ₦480,000; credit Capital ₦480,000

Answer: C. Debit Computer ₦480,000; credit Bank ₦480,000

The computer is a non-current asset, so its cost is debited; the bank balance falls, so Bank is credited. Purchases is used for goods acquired for resale, not office equipment.

2. Which error would not cause a trial balance's debit and credit totals to disagree?
  1. A credit purchase is completely omitted from all books
  2. A cash receipt is debited to Cash but credited to Sales twice
  3. A debit balance is entered in the credit column of the trial balance
  4. A debit entry of ₦9,000 is posted as ₦90,000 while the corresponding credit is posted correctly

Answer: A. A credit purchase is completely omitted from all books

A complete omission removes both the debit and credit, so the trial balance can still agree despite the missing transaction. A one-sided posting or an unequal amount, as in the other options, causes disagreement.

3. A trader reports sales of ₦1,200,000 and returns inward of ₦40,000. Opening inventory is ₦150,000, purchases are ₦700,000, carriage inwards is ₦20,000 and closing inventory is ₦180,000. What is gross profit?
  1. ₦450,000
  2. ₦470,000
  3. ₦490,000
  4. ₦510,000

Answer: B. ₦470,000

Net sales are ₦1,160,000 and cost of sales is ₦150,000 + ₦700,000 + ₦20,000 − ₦180,000 = ₦690,000, giving gross profit of ₦470,000. Omitting returns inward would overstate gross profit by ₦40,000.

4. A trader pays ₦360,000 on 1 October for 12 months of insurance cover. The financial year ends on 31 December. What insurance expense should be charged for that financial year?
  1. ₦270,000
  2. ₦120,000
  3. ₦360,000
  4. ₦90,000

Answer: D. ₦90,000

Three months of cover have expired by 31 December, so the expense is ₦360,000 × 3/12 = ₦90,000. The remaining nine months, ₦270,000, are prepaid rather than an expense of this year.

5. A sole trader takes goods costing ₦25,000 from inventory for personal use. Which entry records the drawings?
  1. Debit Purchases; credit Drawings
  2. Debit Drawings; credit Purchases
  3. Debit Sales; credit Drawings
  4. Debit Drawings; credit Sales

Answer: B. Debit Drawings; credit Purchases

Drawings are debited to reduce the owner's equity, and purchases are credited to remove the goods taken from goods available for sale. Crediting Sales would incorrectly treat a private withdrawal as a sale to a customer.

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