NABTEB Financial Accounting Questions 2022 Objective and Theory Update

Filed in Exam by on February 10, 2022

– NABTEB Financial Accounting Questions –

NABTEB Financial Accounting NABTEB Expo Questions is out now on our website. In this article, I will show you past NABTEB Financial Accounting random repeated questions for free. All you need to do is to stay focused and follow this guide.


NABTEB Financial Accounting Questions 2022 Objective and Theory Update


The National Business and Technical Examinations Board were founded in 1992 to domesticate craft level examinations previously conducted by City & Guilds, Pittman’s, and the Royal Society of Arts throughout the United Kingdom in conformity with the principles of the National Policy on Education.

Its formation was the culmination of a 15-year evolutionary process in which FOUR Government Panels were established at various periods to assess the place and structure of public examinations in our educational system.


Develop as a globally recognized assessment body for Craftsmen and Technicians.


NABTEB is a vision-led, mission-driven public institution with the following vision: To be a Globally Recognised Assessment and Certification Body Preparing Candidates for the Workplace and Academic/Professional Excellence.

The management of the National Business and Technical Examinations Board (NABTEB) is yet to release the 2022 November/December NBC/NTC and ANBC/ANTC examinations results.

Candidates who intend to take part in the 2022 NABTEB GCE can learn how to check their results online.

NABTEB is one of the examination bodies set up by the Federal Government in 1992 to reduce the burden of conducting examinations, which involves a lot of technical and trade-related practicals.

The board conducts the National Technical Examination (NTC), National Business Certificate (NBC) and their respective advance level examinations (ANBC and ANTC).

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NABTEB Financial Accounting Questions and Answers


a. Differentiate between authorized capital and issued capital.

b. List any FIVE items that can be found in the memorandum of association of a public

c. Classify the following items into Personal, Real and Nominal accounts

i. Plant and machinery

ii. Motor lorries

iii. Rent and rates

iv. Insurances

v. Speed post-delivery

vi. Glo calls

vii. Debtors

viii. Creditors

ix. Leased hold premises

x. M. bala and company limited.


1a. Authorised capital: is the highest amount of capital stated in the memorandum of association and approved by the registrar of the company considered as enough to run a company.

It is also known as registered or nominal capital. While Issued capital is part of the authorized capital given out to members of the public for subscription.

1b. Items in the memorandum of association of the public company.

i. Name of the company

ii. Registered office of the company

iii. The objectives of the company

iv. The amount of authorized capital

v. A statement to the effect that the liability of the company is limited

vi. The names of the company promoters, their respective business and the number of shares taken by each of them

vii. The life span of the company that is, if the company is formed to last for a limited.
time or as an ongoing concern.

viii. Conditions under which the memorandum of association can be amended.


Explain the following terms in relation to a company.

i. Memorandum of association

ii. Articles of association

iii. prospectus

b. Mention six items that are usually found in the Appropriation account of a limited liability


I. A Memorandum of association is a document forming the constitution of a company and defining its objective and power in regard to its dealing with the outside world.

It is a document containing the rules and regulations which govern the external relationship of a company with outsiders.

ii. Articles of Association is a document in which the regulation which governs the internal management of the company affairs the duties, rights and power of the shareholders are stated.

iii. Prospectus is a document issued by the public limited companies inviting the public to subscribe for shares of the company

2b. Items in the appropriation account of a company.

i. Net profit b/d

ii. General reserve

iii. Preferences dividend

iv. Corporation tax

v. Ordinary dividend

vi. Retain profit carried forward

vii. Balance /d (profit for last year)


State the account to be debited (DR) the ones to be credited (CR) in each of the following cases.

3b. List Ten items found in the Balance Sheet of a Sole trader.

i. Capital

ii. Net profit

iii. Net loss

iv. Drawing

v. Creditors

vi. Debtors

vii. Cash at hand

viii. Cash at bank

ix. Motor vehicle

x. Stock

xi. Furniture & fittings

xii. Computer/typewriter


Explain the purpose of the income and expenditure account

b. State FOUR features of capital expenditure

c. Differentiate the terms deficit and surplus in the account of non-profit-making concerns.


a. Income and expenditure accounts are aimed at determining the surplus of income over expenditure or deficit or expenditure over income of a non-profit making organisation.

b. Features of capital A/C

i. They are expenditure on fixed assets

ii. Benefits of capital expenditure are not fully derived within the accounting period. They are long term expenditure

iii. It results in increased figures for fixed assets in the balance sheet.

iv. Capital expenditure is used to earn income for the business.


State FIVE steps of converting incomplete records and single-entry accounts to double-entry accounts.


Five steps for converting incomplete records and single-entry accounts to double entry system are:

i. Preparation of total debtors accounts to get the credit sales figure

ii. Preparation of total creditor’s accounts so as to get the credit purchases figure

iii. Preparation of total sales figures by adding both credit sales and cash sales
figures together.

iv. Preparation of total purchase figure by adding the credit purchase figure missing
and the cash purchase together.

v. Computation of trading account from the calculation above.


(a) Give FOUR steps to be followed if a trial balance failed to balance.

(b) Differentiate between Receipts and Payments Accounts.


2(a) Steps to be followed if a trial balance failed to balance are:

i. Check whether both the debit and credit entries of all transactions have been posted.

ii. Check the additions on both sides of the trial balance.

iii. Check the figure posted to each of the accounts to ensure the correct amount is posted.

iv. Check whether the balances are correctly transferred to the correct side of the trial balance.

v. If all the steps stated above are being taken care of, then transfer the difference to the suspense account.

B. Receipts Accounts These are those items that a business received on a cash basis rather than on a credit basis. They include subscriptions, donations due and cash sales.

They have always recorded on the debit side of receipts and payment accounts, whereas payment accounts are those items that a club has paid for and they are always written on the credit side of the receipt and payment accounts.

The difference between them is the balance, which may be debit or credit.


Write briefly on these account terms:

a) Authorized capital.

b) Issued capital.

c) Working capital.


3(a) Authorized Capital:- This is the amount that a public company is allowed to raise from the public for its business operations.

It is also called registered or nominal capital, it is stated in the memorandum of association of the company and approved by the registrar of companies.

3(b) Issuing Capital: It is that part of the Authorized Capital which a public company has decided to issue out to the public for subscription.

3(c) Working Capital: It is the amount that a business has set aside for its day-to-day operations. It is the difference between current assets current liabilities.


a) Differentiate between bank statements and bank reconciliation statements.

b) State FIVE clauses contained in the memorandum of association of the company.

c) State FIVE features that are supposed to be contained by an invoice.


4(a) Bank Statement: It is a periodic statement of account that a commercial bank gives to its customers either monthly or quarterly which has shown the amount deposited and amount withdrawn including the balance whether credit or debit balance.

Whereas a bank reconciliation statement is the bringing of the activities of the bank and that of the office into the agreement. It is prepared by the Cashier/Bursar or Account Clerk at regular intervals e.g. yearly or half-yearly.

Explain briefly the following terms

i. Bank statement

ii. Bank reconciliation statement

iii. Uncredited cheques

iv. unpresented cheques

v. Dishonoured cheques.


i. Bank statement: This is the periodic statement of account that a commercial bank sends to its customers.

It states the various deposits and withdrawals including the balances in customers’ accounts. It is usually sent to current account holders.

ii. Bank Reconciliation statement: This is the method used by the cashier in an organisation to make both the operations of the bank and that of the office come into an agreement.

It is usually headed “Bank Reconciliation Statement as on 31st Dec………..

iii. Uncredited cheques: These are cheques that have been received by the bank which have not been entered into the customers’ accounts. This caused disagreement between Cash Book Balance and Bank Balance.

vi. unpresented cheques: these are cheques drawn in favour of some people who have not been taken to the bank for collection by those who have received such cheques. They cause disagreement between Cash Bank and Bank.

v. Dishonoured cheques:- These are cheques which, when are presented to the bank for collection, the bank refuses to pay the amount written on such cheques.

This may be due to lack of funds in the account, irregular signature, alteration on the cheque, notice to stop payment, lack of a date on the cheque and differences between the amount in words and that written in figures.


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(a) Differentiate between preference shares and ordinary shares of a company.

(b) Explain the following terms in relation to issuing of shares.

(I) At par.

(II) At a premium.

(III) At a discount.


(a) Preference shares: These are units of a company’s capital that have a fixed rate of dividend.
Holders of this class of shares are first when declaring dividends.

These classes of shares are of four types namely; participating preference shares, cumulative preferences shares, redeemable and unredeemable preference shares.

Whereas ordinary shares are otherwise known as “Equity shares”. It does not have a fixed rate of dividends, holders of this class of shares usually receive dividends after the preference shareholders have been paid fully.

There are many types of ordinary shares namely, deferred ordinary shares, preferred ordinary shares, founder shares e.t.c. holders of ordinary shares are usually referred to as “Risk bearers” of the company.

(b) (i) Issuing shares on par: This means that the amount a shareholder pays for a share will actually appear on the share certificate. Share used at the normal value.

(ii) Issuing share at a premium: This means that a shareholder will pay more than what appears on the share certificate. This means the face value of the share is lower than what a shareholder pays. Selling of shares above the par value.

(iii) issuing share at discount: This means that the amount written on the share certificate is higher than what the shareholder pay. Selling of shares below the par value.


(a) (i) Define cash book.

(ii) State THREE features of a cash book.

(b) Mention THREE documents that are needed by a company before it can be registered.

(c) Explain briefly each of these document


(a) (I) A cash book is an account in which all cash transactions are recorded. It is also a ledger and does not record credit transactions.

(ii) The feature of a cash book are:

(a) It records only cash or bank transactions.

(b) No credit transactions are recorded

(c) It has debit and credit sides represented as Dr on the left and Cr. on the right-hand side.

(d) All receipts or incomes are recorded on the debit side while all payments are recorded on the credit side.

(e) The data, particulars, folio and amount columns are stated on both sides of the cash book.

(f) The difference between the debit and the credit sides is the balance.

(b) (I) The memorandum of association.

(ii) The articles of association.

(iii) The prospectus.

(c) The memorandum of association is the document that manages the external affairs of a company, e.g. the name of the company, the objectives clause, etc.

The article of association is a document that takes care of the internal affairs of a company. E.g. issue and transfer of shares, procedures for calling meetings.

The prospectus: This is an invitation to the general public to subscribe to the shares of the company. This is done through commercial and merchant banks.


(a) List TWO errors that a trial balance will reveal and THREE errors that will not affect the trial balance.

(b) State FIVE subsidiary books of account.

(c) Differentiate Gross profit from Net profit.


(a) Errors that a trial balance will reveal are

(i) Errors undercast.

(ii) Errors of omission of one entry or aspect of the account.

(iii) Reversal of an entry.

(iv) Error of overcast.

(v) Single entry

Three errors that will not affect the trial balance are

(i) Compensating error

(ii) Error of principle.

(iii) Errors in the books of original entry.

(iv) Error of commission.

(v) Complete reversal of entries.

(vi) Error of omission.

(b) The subsidiary books of account are

(i) Sales journal.

(ii) Purchases journal.

(iii) Return inward journals.

(iv) Return outward journals.

(v) The petty cash book.

(vi) The cash book.

(vii) Journal proper.

(c) Gross profit: This is the excess of sales over the cost of goods sold, whereas Net profit is the
excess of gross profit over the expenses of a business.


(a) List FOUR sources of income to a non-profit making concern.

(b) Explain any two of the sources mentioned above.

(c) Give THREE limitations of Receipt and payment account.


(a) Sources of income to a Non-profit making concern are:

(i) Subscriptions.

(ii) Donations.

(iii) Sale of tickets.

(iv) Loan from banks.

(v) Dance proceeds.

(b) Subscriptions: These are the amount that a club asks its members to pay for a specific period. Donations: This refers to the money received from different people by a club.

Sales of Tickets: This is the amount collected as entrance fees from people who attend social engagements
organised by the club.

Sale of Drinks: This refers to the profit that a club realises from the sales of drinks during a concert party.
Loan: This refers to the amount which a club borrows from banks for a specific purpose.

DISCLAIMER! These are not real NABTEB Financial Accounting Questions, but likely repeated questions over the years to help candidates understand the nature of their examinations. Ensure to note every question provided on this page.

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