Financial Transactions – Page 2

BL – Nov 2020 – L1 – SB – Q2b – Law Relating to Banking

Identify transactions under surveillance per the Money Laundering Act.

Question

The Money Laundering (Prohibition) Act empowers the agency to place surveillance on certain bank account transactions to curb money laundering.

Required:
State FOUR transactions which require special surveillance under the Act.

Answer

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Tags: Banking Regulations, Financial Transactions, Money laundering, Surveillance
Level: Level 1

Topic: Law Relating to Banking
Series: NOV 2020

BL – Nov 2012 – L1 – SA – Q18 – Law Relating to Banking

Identify which situation does not terminate the banker’s authority to honor a customer’s cheque.

Question

Which of the following circumstances will NOT terminate the banker’s authority to honor a customer’s cheque?

A. Notice of lunacy of the customer
B. Notice of presentation of a bankruptcy petition against the customer
C. Notice of an accident in which the customer is involved
D. Assignment of the balance in his account by the customer
E. Where the customer’s credit balance in the bank is insufficient to cover the cheque

Answer

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Tags: Banking, Cheques, Financial Transactions
Level: Level 1

Topic: Law Relating to Banking
Series: NOV 2012

BL – Nov 2012 – L1 – SA – Q17 – Negotiable Instruments

Identify which of the options is not a negotiable instrument.

Question

Which of the following is NOT a negotiable instrument?

A. Credit card
B. Dividend warrants
C. Treasury bills
D. Traveller’s cheques
E. Bearer bonds

Answer

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Tags: Credit Cards, Financial Transactions, Negotiable Instruments
Level: Level 1

Topic: Negotiable Instruments
Series: NOV 2012

BL – May 2013 – L1 – SA – Q12 – Hire Purchase and Consumer Credit Transactions

This question tests knowledge of a transaction with an option to buy goods.

Question

A transaction in which the person in possession of goods has an option to buy the goods or terminate the relationship and return the goods to the owner at any time is called ___________.

Answer

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Tags: Financial Transactions, Hire Purchase
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: MAY 2013

BL – May 2013 – L1 – SA – Q10 – Law Relating to Banking

This question tests the number of days required for a financial institution to report large transfers to the EFCC.

Question

How many days are required for a financial institution to report to the Economic and Financial Crimes Commission the transfer of funds in excess of N10 million by an individual?

A. 5
B. 6
C. 7
D. 10
E. 30

Answer

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Tags: Banking Law, EFCC, Financial Transactions
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2013

FA – May 2014 – L1 – SA – Q12 – Accounting for Inventories (IAS 2)

Identifies the accounting treatment for losses or stolen goods on consignment.

Question

What are the accounting entries on consignment for stolen or lost goods?
A. Debit- Consignment Account; Credit- Profit or Loss or Insurance Account, if insured
B. Debit- Profit or Loss or Insurance Account, if insured; Credit- Consignment Account in the consignor’s ledger
C. Debit- Cash Account; Credit- Consignment Account
D. Debit- Goods in Transit Account; Credit- Consignment Account in consignee’s ledger
E. Debit- Consignment Accounts; Credit- Insurance Accounts

Answer

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Tags: Accounting Entries, Consignment, Financial Transactions, Losses
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: MAY 2014

FA – Nov 2013 – L1 – SA – Q23 – Accounting from Incomplete Records

Understanding the balance in a venturer’s account in a Joint Venture.

Question

In a Joint Venture Account, what does the balance in a venturer’s account represent?

Answer

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Tags: Accounting Balances, Financial Transactions, Joint Ventures
Level: Level 1

Topic: Accounting from Incomplete Records
Series: NOV 2013

FA – Nov 2013 – L1 – SA – Q15 – Recording Financial Transactions

Determining the best definition of "purchases" in accounting.

Question

Which of the following best describes the meaning of “Purchases”?

A. Items bought
B. Goods bought on credit
C. Goods bought for resale
D. Goods paid for
E. Goods returned by customer

Answer

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Tags: Accounting Definitions, Financial Transactions, Purchases
Level: Level 1

BL – May 2022 – L1 – SB – Q5c – Company Law

State two situations that show netting has occurred in a company.

Question

In a company, there may be a reason for netting.

Required:
State TWO situations that show that netting has occurred.

Answer

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Tags: Company Law, Financial Transactions, Netting
Level: Level 1

Topic: Company Law
Series: MAY 2022

BL – May 2021 – L1 – SB – Q3c – Company Law

Explanation of GSM phone evidence and its admissibility in court for financial transactions.

Question

Evidence generated by a Global System for Mobile communication (GSM) phone is admissible by the courts.

Required:
Explain the nature of GSM phone evidence and the duty of a person that seeks to tender it in court in proof of a financial transaction.

Answer

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Tags: Evidence, Financial Transactions, GSM Phone
Level: Level 1

Topic: Company Law
Series: MAY 2021

FA – Nov 2022 – L1 – SA – Q12 – Recording Financial Transactions

Identify the source document for the sales day book.

Question

A source document for the sales day book is
A. Invoice
B. Cheque stub
C. Customer advice
D. Credit advice
E. Requisition form

Answer

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Tags: Financial Transactions, Sales, Source Documents
Level: Level 1

FA – May 2021 – L1 – SB – Q5b – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Outline four uses of source documents in the process of producing financial information.

Question

Outline four uses of source documents in the process of producing financial information.

Answer

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Tags: Accounting Systems, Financial Transactions, Source Documents
Level: Level 1

FA – Nov 2014 – L1 – SA – Q9 – Recording Financial Transactions, Source Documents

Identifying the source document used to record the Returns Inward Book.

Question

The source of data for recording the Returns Inward Book of a business entity is:

A. Credit note
B. Debit note
C. Invoice
D. Payment voucher
E. Receipt

Answer

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Tags: Financial Transactions, Returns Inward, Source Documents
Level: Level 1

FA – Nov 2023 – L1 – SA – Q2 – Recording Financial Transactions

Explain the purpose of a chart of accounts in a business.

Question

What is the purpose of a chart of accounts in a business?

A. To organise financial transactions into identified categories of assets, liabilities, income and expenses
B. To generate instructions and policies for recording information in the financial statements
C. To design a unique code and headings for each personal ledger account
D. To follow the rules of accounting set by the government
E. To ensure consistent posting of transactions

Answer

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Tags: Business Management, Chart of Accounts, Financial Transactions
Level: Level 1

Topic: Recording Financial Transactions
Series: NOV 2023

FA – May 2023 – L1 – SB – Q5 – Recording Financial Transactions

Preparation of a two-column cash book from given transactions and balancing off at month-end.

Question

a. Write up a two-column cash book from the following details and balance off as at the end of the month.

January 1: Started business with capital N1,000,000 cash
January 2: Paid rent of N100,000 cash
January 3: I.K. Opara lent N5,000,000 by cheque
January 4: Ebenezer was paid by cheque N650,000
January 5: Cash sales N980,000
January 7: Ileri paid us cheque, N620,000
Cash sales, N530,000
Received cash of N650,000 from Robert
January 9: Paid George N220,000 cash
January 16: Took N500 out of the cash till and paid into the bank account.
January 19: I.K. Opara was repaid N1,000,000 by cheque
January 22: Cash sales paid directly to the bank N600,000
January 26: Motor expenses of N120,000 was paid by cheque
January 30: N1,000,000 cash was withdrawn from bank for business use
January 31: Paid wages of N970,000 by cash
(10 Marks)

b. i. Explain the uses of the Journal. (4 Marks)
ii. The following transactions took place in the books of Olson Limited in June 2019:

A machine is bought on credit from Sylva Enterprises for N186,000 on June 1.
A motor vehicle is sold to Adefela on credit for N360,000 on June 8.
Wonu, a customer, owed N160,000. She offers a motor in full settlement of the debt on June 16 and the offer was accepted.

Required:
Journalize the transactions. (6 Marks)

Answer

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Tags: Cash Book, Financial Transactions, Two-Column Cash Book
Level: Level 1

BL – March July 2020 – L1 – SB – Q6b – Negotiable Instruments

Explains two types of cheques: bearer and order cheques.

Question

A cheque is an instrument for financial transactions.

Required:
Explain briefly the following types of cheque:
i. Bearer Cheque (4 Marks)
ii. Order Cheque (4 Marks)

Answer

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Tags: Bearer Cheque, Financial Transactions, Negotiable Instruments, Order Cheque
Level: Level 1

Topic: Negotiable Instruments
Series: MAR/JULY 2020

BL – May 2024 – L1 – SB – Q5c – Law Relating to Banking

This question asks candidates to state two types of transactions that require special surveillance under the Money Laundering (Prohibition) Act.

Question

The Money Laundering (Prohibition) Act requires financial institutions to keep special surveillance on some transactions.

Required:
State TWO transactions that require the special surveillance of financial institutions. (4 Marks)

Answer

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Tags: Compliance, Financial Institutions, Financial Transactions, Money laundering, Special Surveillance
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2024

BL – May 2016 – L1 – SA – Q9 – Law Relating to Banking

Identify the maximum amount allowed for cash payment without financial institution involvement.

Question

The Money Laundering (Prohibition) Act provides that no individual person shall make or accept cash payment, EXCEPT through a financial institution, of an amount of money exceeding the sum of
A. ₦1,500.00
B. ₦2,000.00
C. ₦4,000.00
D. ₦3,000.00
E. ₦5,000.00

Answer

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Tags: Financial Transactions, Legal Limits, Money laundering
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2016

FA – May 2016 – L1 – SA – Q17 – Accounting Treatment for Bad and Doubtful Debts

Identifying the effect of a reduction in the allowance for doubtful debts.

Question

Which of the following reflects the effect of a reduction in the allowance for doubtful debts?
A. Reduction in net profit
B. Reduction in cash balance
C. Reduction in gross profit
D. Increase in gross profit
E. Increase in net profit

Answer

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Tags: Allowances, Doubtful Debts, Financial Transactions, Net Profit
Level: Level 1

Topic: Bad and Doubtful Debts
Series: MAY 2016

FA – May 2016 – L1 – SA – Q16 – Correction of Errors

Identifying the error committed when N120,000 wages were not recorded.

Question

Olojuede limited failed to record N120,000 wages. The error committed is that of
A. Omission
B. Commission
C. Principle
D. Compensation
E. Original entry

Answer

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Tags: Errors, Financial Transactions, Omission
Level: Level 1

Topic: Correction of errors
Series: MAY 2016

Question Tag: Financial Transactions

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BL – Nov 2020 – L1 – SB – Q2b – Law Relating to Banking

Identify transactions under surveillance per the Money Laundering Act.

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BL – Nov 2012 – L1 – SA – Q18 – Law Relating to Banking

Identify which situation does not terminate the banker’s authority to honor a customer’s cheque.

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BL – Nov 2012 – L1 – SA – Q17 – Negotiable Instruments

Identify which of the options is not a negotiable instrument.

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BL – May 2013 – L1 – SA – Q12 – Hire Purchase and Consumer Credit Transactions

This question tests knowledge of a transaction with an option to buy goods.

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BL – May 2013 – L1 – SA – Q10 – Law Relating to Banking

This question tests the number of days required for a financial institution to report large transfers to the EFCC.

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FA – May 2014 – L1 – SA – Q12 – Accounting for Inventories (IAS 2)

Identifies the accounting treatment for losses or stolen goods on consignment.

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FA – Nov 2013 – L1 – SA – Q23 – Accounting from Incomplete Records

Understanding the balance in a venturer’s account in a Joint Venture.

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FA – Nov 2013 – L1 – SA – Q15 – Recording Financial Transactions

Determining the best definition of "purchases" in accounting.

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BL – May 2022 – L1 – SB – Q5c – Company Law

State two situations that show netting has occurred in a company.

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BL – May 2021 – L1 – SB – Q3c – Company Law

Explanation of GSM phone evidence and its admissibility in court for financial transactions.

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FA – Nov 2022 – L1 – SA – Q12 – Recording Financial Transactions

Identify the source document for the sales day book.

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FA – May 2021 – L1 – SB – Q5b – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Outline four uses of source documents in the process of producing financial information.

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FA – Nov 2014 – L1 – SA – Q9 – Recording Financial Transactions, Source Documents

Identifying the source document used to record the Returns Inward Book.

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FA – Nov 2023 – L1 – SA – Q2 – Recording Financial Transactions

Explain the purpose of a chart of accounts in a business.

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FA – May 2023 – L1 – SB – Q5 – Recording Financial Transactions

Preparation of a two-column cash book from given transactions and balancing off at month-end.

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BL – March July 2020 – L1 – SB – Q6b – Negotiable Instruments

Explains two types of cheques: bearer and order cheques.

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BL – May 2024 – L1 – SB – Q5c – Law Relating to Banking

This question asks candidates to state two types of transactions that require special surveillance under the Money Laundering (Prohibition) Act.

You're reporting an error for "BL – May 2024 – L1 – SB – Q5c – Law Relating to Banking"

BL – May 2016 – L1 – SA – Q9 – Law Relating to Banking

Identify the maximum amount allowed for cash payment without financial institution involvement.

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FA – May 2016 – L1 – SA – Q17 – Accounting Treatment for Bad and Doubtful Debts

Identifying the effect of a reduction in the allowance for doubtful debts.

You're reporting an error for "FA – May 2016 – L1 – SA – Q17 – Accounting Treatment for Bad and Doubtful Debts"

FA – May 2016 – L1 – SA – Q16 – Correction of Errors

Identifying the error committed when N120,000 wages were not recorded.

You're reporting an error for "FA – May 2016 – L1 – SA – Q16 – Correction of Errors"

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