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ICAN Financial Accounting 2026 past questions and answers

This 2026 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 2026 set with instant marking.

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Sample ICAN Financial Accounting 2026 questions

1. A sole trader contributes a personally owned laptop, valued at ₦450,000, for use in the business. Which journal entry records the contribution?
  1. Debit computer equipment ₦450,000; credit capital ₦450,000
  2. Debit capital ₦450,000; credit computer equipment ₦450,000
  3. Debit purchases ₦450,000; credit capital ₦450,000
  4. Debit drawings ₦450,000; credit computer equipment ₦450,000

Answer: A. Debit computer equipment ₦450,000; credit capital ₦450,000

The laptop becomes a business asset, so equipment is debited, while the owner's contribution increases capital, which is credited. Crediting equipment would incorrectly reduce the asset.

2. Which error would not cause the trial balance totals to disagree?
  1. A cash purchase is debited to purchases but not credited to cash
  2. A credit sale is omitted completely from the books
  3. A debit entry of ₦8,000 is posted as ₦800 while the credit is correct
  4. A supplier payment is debited to payables but credited to cash twice

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

A complete omission leaves both sides of the double entry unrecorded, so the trial balance can still agree. The other errors create unequal debit and credit totals.

3. Which account normally has a debit balance in a sole trader's trial balance?
  1. Trade payables
  2. Sales revenue
  3. Purchases
  4. Owner's capital

Answer: C. Purchases

Purchases are an expense/cost account and normally carry a debit balance. Sales, payables and capital normally carry credit balances.

4. At year end, a trader has closing inventory of ₦180,000. What is the effect of the closing-inventory adjustment on the financial statements?
  1. Increase cost of sales and report a current liability
  2. Reduce sales revenue and report a current asset
  3. Increase purchases and report a non-current asset
  4. Reduce cost of sales and report a current asset

Answer: D. Reduce cost of sales and report a current asset

Closing inventory is deducted in arriving at cost of sales and shown as a current asset in the statement of financial position. Treating it as a liability or increasing cost of sales reverses its effect.

5. A partnership charges interest on a partner's drawings. Which entry records the interest in the partnership books?
  1. Debit the partner's current account; credit the appropriation account
  2. Debit interest expense; credit the partner's capital account
  3. Debit the appropriation account; credit the partner's current account
  4. Debit drawings; credit cash

Answer: A. Debit the partner's current account; credit the appropriation account

Interest on drawings is charged to the partner, reducing their current-account balance, and is credited as income in the appropriation account. Debiting the appropriation account would treat the charge as a deduction from profit.

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