NECO Accounting (OBJ & Essay) Questions and Answers 2026
Last updated: 10:34 AM
Objective Answers (OBJ)
Essay & Theory Answers
Verified step-by-step detailed explanations
Number
F/Accounting-Obj 01-10: DADBDDCBBA 11-20: CACAECACED 21-30: ABADEDDECA 31-40: BAACCCDEAC 41-50: AAAEDBDDBE 51-60: EBDDCBBCCB Solved by EXAMGROUP.net Completed!!! *NECO 2026 FINANCIAL ACCOUNTING (PAPER II – ESSAY)* *COMPLETE ANSWERS – SECTIONS A & B* https://whatsapp.com/channel/0029Vb7uxd5F1YlSJpZclt24 =========================================================== SECTION A: THEORY OF ACCOUNTING =========================================================== QUESTION 1 =========================================================== (a) Explain the following accounting terms (7½ marks) (i) Three column cashbook – A three column cashbook is a cash book that has three money columns on both the debit and credit sides: cash column, bank column, and discount column. It is used to record cash transactions, bank transactions, and discounts allowed and received. (ii) Cash discount – A cash discount is a reduction in the amount payable by a customer if payment is made within a specified period. It is given to encourage prompt payment and is recorded in the discount column of the cashbook. (iii) Working capital – Working capital is the difference between a company's current assets and current liabilities. It measures the company's short-term liquidity and its ability to meet its immediate obligations. (iv) Gross profit – Gross profit is the profit made from buying and selling goods before deducting operating expenses. It is calculated as Sales minus Cost of Goods Sold. (v) Net profit – Net profit is the profit remaining after all expenses, including operating expenses, interest, and taxes, have been deducted from gross profit. It represents the actual profit earned by the business. (b) List ten users of accounting information (5 marks) 1. Owners/Shareholders 2. Managers 3. Creditors/Suppliers 4. Customers 5. Employees 6. Government/Regulatory authorities 7. Investors 8. Lenders/Banks 9. Trade unions 10. The general public =========================================================== QUESTION 2 =========================================================== (a) What is partnership? (2½ marks) A partnership is a business relationship between two or more persons who agree to share the profits and losses of a business carried on by all or any of them acting for all. It is governed by a partnership deed or agreement. (b) State six contents of partnership deed (3 marks) 1. The name and address of the firm. 2. The names and addresses of all partners. 3. The capital contribution of each partner. 4. The profit and loss sharing ratio. 5. The salaries and drawings allowed to partners. 6. The procedure for admission, retirement, or death of a partner. (c) Mention three differences and one similarity between receipts and payments account and income and expenditure account (7 marks) Differences: 1. Receipts and payments account is a summary of cash and bank transactions, while income and expenditure account is a summary of income and expenses (accrual basis). 2. Receipts and payments account includes capital and revenue items, while income and expenditure account includes only revenue items. 3. Receipts and payments account shows the opening and closing cash/bank balances, while income and expenditure account shows the surplus or deficit for the period. Similarity: Both accounts are prepared for non-profit making organisations. =========================================================== https://whatsapp.com/channel/0029VbCpC6c5Ejy61HyxKZ0v *To all POLAC RC 13 aspirants 👆👆.* https://t.me/necovipanswer Neco vip 👆👆 *REACT, SHARE AND FORWARD TO EVERYONE ❤️🔥* FOR NECO STATE QUESTIONS, MESSAGE ME ON TELEGRAM👇👇: https://t.me/Officialkingjay1 JOIN OUR VIP CHANNEL 👇🏻👇🏻 https://t.me/freewassceditto QUESTION 3 =========================================================== (a) Define capital market (2½ marks) A capital market is a financial market where long-term debt and equity securities are bought and sold. It includes the primary market (where new securities are issued) and the secondary market (where existing securities are traded). It provides a platform for companies and governments to raise long-term funds. (b) Itemise and explain five reasons for disagreement between cashbook and bank statement (10 marks) 1. Unpresented cheques – These are cheques issued by the business and recorded in the cashbook but have not yet been presented to the bank for payment. They cause the cashbook balance to be lower than the bank statement balance. 2. Uncredited cheques – These are cheques received by the business and paid into the bank but not yet credited by the bank. They cause the cashbook balance to be higher than the bank statement balance. 3. Bank charges – The bank may deduct charges for services such as commissions, interest, or maintenance. These are recorded in the bank statement but not in the cashbook. 4. Direct credits – The bank may receive money directly on behalf of the business (e.g., from customers). These are recorded in the bank statement but not yet in the cashbook. 5. Standing orders and direct debits – The bank may make payments on behalf of the business through standing orders or direct debits. These are recorded in the bank statement but not yet in the cashbook. =========================================================== QUESTION 4 =========================================================== (a) Give four similarities between joint venture and partnership (4 marks) 1. Both involve an agreement between two or more persons. 2. Both involve sharing of profits and losses among the parties. 3. Both require a mutual understanding and trust between parties. 4. Both involve a common goal of making profit from a business activity. (b) Define trade discount (2½ marks) A trade discount is a reduction in the list price of goods given by a seller to a buyer, usually for bulk purchases or to encourage trade. It is not recorded in the accounting books; only the net amount is entered. (c) Classify the following items into assets and liabilities (6 marks) Assets: · Land · Premises · Debtors · Cash in hand · Subscription in arrears · Stock · Motor van Liabilities: · Creditors · Bank overdraft · Subscription advance · Debenture · Loan =========================================================== SECTION B: ACCOUNTING PRACTICE =========================================================== QUESTION 5: CLUB ACCOUNTS =========================================================== (i) Accumulated Fund as at 1/1/2019 Particulars N Balance b/f (Receipts & Payments) 3,201 Add: Bar stock 873 Bar debtors 693 Rent prepaid 204 Furniture 41,094 Less: Bar creditors (1,281) Loan (1,194) Receipts in advance (3,240) Accruals: Water (39) Electricity (390) Miscellaneous (55) Loan interest (99) Owing by users of facilities (1,275) Accumulated Fund = 41,094 + 873 + 693 + 204 + 3,201 - 1,281 - 1,194 - 3,240 - 39 - 390 - 55 - 99 - 1,275 = 38,692 Answer: N38,692 (ii) Bar Trading Account for the year ended 31/12/2019 Particulars N N Particulars N N Bar purchases 8,811 Bar sales 12,090 Add: Creditors c/d 2,703 Less: Debtors c/d (150) Add: Cash purchases? - Add: Debtors b/f 693 Less: Creditors b/f (1,281) Cash sales - Adjusted purchases 10,233 Opening stock 873 Closing stock (1,182) Cost of goods sold 9,924 Gross profit 2,166 Total 12,090 12,090 12,090 12,090 Answer: Gross Profit = N2,166 (iii) Income and Expenditure Account for the year ended 31/12/2019 Expenditure N Income N Water 114 + 69 - 39 = 144 Bar gross profit 2,166 Electricity 1,518 + 105 - 390 = 1,233 Donations 102 Rent 237 + 16 - 204 = 49 Socials 699 Insurance 663 Telephone 309 Repairs 978 Expenses on socials 201 Maintenance of facilities 399 Wages of ground men 420 Bar sundry expenses 432 + 195 = 627 Loan interest 291 - 99 = 192 Miscellaneous 489 - 55 = 434 Receipts from users 5,340 - 1,971 = 3,369 Depreciation 1,494 Surplus (balancing figure) 1,548 Total 12,063 Total 12,063 Answer: Surplus = N1,548 =========================================================== QUESTION 6: PARTNERSHIP ACCOUNTS =========================================================== (i) Profit and Loss Appropriation Account Particulars N Particulars N Salary (Babatunde) 17,600 Net profit b/d 144,000 Interest on capital: Babatunde (5% of 180,000) 9,000 Chibuzor (5% of 80,000) 4,000 Yakubu (5% of 120,000) 6,000 Total Interest 19,000 Profit shared equally: Babatunde 35,800 Chibuzor 35,800 Yakubu 35,800 Total 144,000 Answer: Each partner receives N35,800 (ii) Current Accounts Babatunde N Chibuzor N Yakubu N Balance b/f - Balance b/f 2,800 Balance b/f - Drawings 30,000 Drawings 24,000 Drawings 16,000 Interest on drawings 3,000 Interest on drawings 2,400 Interest on drawings 1,600 Balance c/d 35,400 Balance c/d 17,400 Balance c/d 42,400 Total 68,400 Total 46,600 Total 60,000 Babatunde N Chibuzor N Yakubu N Balance b/f 6,000 Balance b/f - Balance b/f 1,600 Salary 17,600 Profit share 35,800 Profit share 35,800 Profit share 35,800 Interest on capital 9,000 Total 68,400 Total 46,600 Total 60,000 =========================================================== QUESTION 7: SOLE TRADER ACCOUNTS =========================================================== (i) Statement of Affairs as at 1/4/2016 Assets N Liabilities N Stock 16,800 Creditors 29,400 Debtors 36,060 Accrued salaries 12,600 Cash (balance) 70,290 Prepaid rent 1,320 Total Assets 124,470 Total Liabilities 42,000 Capital (balancing figure) 82,470 Total 124,470 Total 124,470 Answer: Capital = N82,470 (ii) Trading, Profit and Loss Account for the year ended 31/3/2017 Trading Account N N Opening stock 16,800 Sales (balancing) Purchases (balancing) 300,000 Closing stock (10,200) Cost of goods sold 306,600 Gross profit 183,400 Total 490,000 490,000 Profit and Loss Account N N Salaries (32,400+2,250-12,600) 22,050 Gross profit Postage 7,200 General expenses 37,020 Rent (17,100+2,010-1,320) 17,790 Drawings 75,000 Net Profit 24,340 Total 183,400 183,400 (iii) Balance Sheet as at 31/3/2017 Liabilities N Assets N Capital 82,470 Stock 10,200 Add: Net profit 24,340 Debtors 29,640 Less: Drawings (75,000) Cash balance 296,940 31,810 Prepaid rent 2,010 Creditors 31,530 Accrued salaries 2,250 Total 65,590 Total 338,790 Check: 338,790 = 10,200 + 29,640 + 296,940 + 2,010 = 338,790 =========================================================== QUESTION 8: THREE COLUMN CASHBOOK =========================================================== Mr. Akindeko – Three Column Cashbook for June 2018 Date Particulars Discount Cash Bank Date Particulars Discount Cash Bank June 1 Balance b/f - 36,000 50,000 June 1 Tolu - - 10,000 Cash sales - 16,000 - Bank - 20,000 - Bank (contra) - - - Ali 500 9,000 - Etubi 4,000 - 40,000 Bank (contra) - - 20,000 Cash sales - 24,000 - Expenses - 6,000 - Bank (contra) - 20,000 - Rent - - 7,000 Bank (contra) - - 20,000 Salaries - 15,000 - Drawings? - - 30,000 Balance c/d - 23,000 43,000 Total 96,000 110,000 Total 500 96,000 110,000 Note: Contra entries (bank to cash and cash to bank) are recorded on both sides. =========================================================== QUESTION 9: LOCAL GOVERNMENT ACCOUNTS =========================================================== (i) Departmental Votes Revenue and Expenditure Account Revenue Heads N Expenditure Heads N Registration fees 75,000 Building of classrooms 725,000 Subvention - Federal 1,250,000 Purchase of drugs 25,000 Federal account 500,000 Salaries 50,000 Grants - WHO 250,000 Sinking of boreholes 15,000 Market stalls 10,000 Maintenance of vehicles 7,500 Customary court fines 5,000 Purchase of refuse van 25,000 Subvention - State 150,000 Repairs of roads 50,000 Poll tax 10,000 Repair of public buildings 30,000 Motor park fees 6,500 Stationery 2,500 Launching of medical fund 60,000 Social parties fees 4,000 Total Revenue 2,320,500 Total Expenditure 930,000 (ii) Statement of Capital and Revenue Expenditure Revenue Expenditure (Recurring): · Salaries: N50,000 · Maintenance of vehicles: N7,500 · Stationery: N2,500 · Total Revenue Expenditure: N60,000 Capital Expenditure (Development): · Building of classrooms: N725,000 · Purchase of drugs: N25,000 · Sinking of boreholes: N15,000 · Purchase of refuse disposal van: N25,000 · Repairs of roads: N50,000 · Repair of public buildings: N30,000 · Total Capital Expenditure: N870,000 =========================================================== *END OF ANSWERS – SECTIONS A & B* ============================================
Number
