JAMB UTME - Principles of Accounts - 2018

which of the following  affects the accuracy and authenticity of trial balance? 

The amount paid by the new partner on admission as a compensation for the reputation built up by old partners is a

Answer Details

The amount paid by the new partner on admission as compensation for the reputation built up by old partners is called "Goodwill". Goodwill is an intangible asset that represents the value of a business beyond its tangible assets such as property, equipment, and inventory. It takes into account things like the business's reputation, customer relationships, and brand recognition. When a new partner joins a business, they may pay for a share of the goodwill to compensate the existing partners for the value they've built up in the business. In simpler terms, goodwill is like the good reputation of a business and the new partner pays for a share of this reputation when they join the business.

Profit or loss in a partnership is usually arrived at after deducting from gross profit all expenses including____________

Answer Details

In a partnership, the profit or loss is calculated by subtracting all expenses from the gross profit. These expenses include various costs incurred in running the partnership business, such as rent, utilities, supplies, and wages paid to employees. Additionally, the expenses also include the salaries paid to partners, which is the amount paid to the partners for their work in the business. This is different from the interest on capital, which is the return on the money invested by the partners in the business. Interest on loans is the cost of borrowing money to finance the partnership's operations. This interest expense is deducted from the gross profit to determine the partnership's net profit or loss. Finally, the partners' drawings, which are the amounts taken out of the business by the partners for personal use, are also deducted from the gross profit to determine the partnership's net profit or loss. In summary, the profit or loss in a partnership is calculated by subtracting all expenses, including salaries paid to partners, interest on capital, interest on loans, and partners' drawings, from the gross profit.

Which of the following should not be adjusted for in the profit and loss account?

A partnership deed is used to____________

Answer Details

A partnership deed is used to promote mutual understanding. It is a legal document that outlines the rights, responsibilities, and obligations of each partner in a partnership business. By specifying the roles and expectations of each partner, a partnership deed helps to prevent misunderstandings and conflicts that could arise between partners. The partnership deed typically includes information such as the names of the partners, the nature of the business, the capital contributions of each partner, the profit and loss sharing ratio, the management structure of the partnership, the procedures for adding or removing partners, and the rules for dissolution of the partnership. By having a clear and well-defined partnership deed, all partners can have a shared understanding of how the business will operate and what is expected of each partner. This can help to establish trust and promote a healthy working relationship between partners, which is crucial for the success of any partnership business.

Subscription received during the year N30,000. Subscription owed last year  N4,000. subscription received for next year N6,000. 

Use the details above to answer the following question.

The N6,000 subscription received is?

Answer Details

The N6,000 subscription received is a current liability. A liability is a debt or obligation that a company owes to another party, which must be settled in the future. In this case, the N6,000 subscription received is for next year, which means that the company has not yet provided the goods or services for which the customer has paid. Therefore, the N6,000 subscription is an obligation that the company must fulfill in the future, making it a current liability. The N30,000 subscription received during the year is a revenue or income for the company, while the N4,000 subscription owed last year is a previous liability that was not settled in the past year. Both of these amounts are not related to the current question.

When goodwill is not retained in the business, the entries in the new partners books will be to debit______________

What act generally includes completing unfinished partnership business, collecting and paying debts, collecting partnership assets to be turned into cash and taking inventory?

Branch stock adjustment account is prepared at?

If the purchase price exceeds the net assets of a company, the excess amount is debited to________________

Answer Details

If the purchase price of a company exceeds the net assets, the excess amount is debited to the "goodwill account." Goodwill represents the value of a company's reputation, brand, customer relationships, and other intangible assets that are not included in the net assets of a company. When one company acquires another company for a price that exceeds the net assets of the acquired company, the difference between the purchase price and the net assets is attributed to the value of goodwill. Therefore, the excess amount is debited to the goodwill account to record the value of the intangible assets acquired in the transaction. This helps the acquiring company to reflect the true value of the acquired company's intangible assets on their balance sheet.

Which of the following methods of invoicing goods to branches facilitate easy checks on the activities of branches?

Use the information above to answer the following question;

Calculate the sales ledger balance.

If the scrap value is presently N15,000, what will be the yearly depreciation using the straight line method?

Answer Details

The straight-line method is a commonly used depreciation method for accounting purposes. It assumes that an asset loses an equal amount of its value each year over its useful life. To calculate the yearly depreciation using the straight-line method, you need to subtract the scrap value from the original cost and then divide by the useful life of the machine. Original Cost of the Machine = N35,000 Scrap Value = N15,000 Useful Life = 5 years Depreciable Cost = Original Cost - Scrap Value Depreciable Cost = N35,000 - N15,000 Depreciable Cost = N20,000 Yearly Depreciation = Depreciable Cost / Useful Life Yearly Depreciation = N20,000 / 5 Yearly Depreciation = N4,000 Therefore, the yearly depreciation using the straight-line method for this machine is N4,000. is the correct answer.

Departmentalization of accounts is useful because it shows the____________

Answer Details

Departmentalization of accounts is useful because it shows the overall performance of a division. It allows a company to track the financial performance of individual departments or divisions within the company, providing insight into which areas of the business are performing well and which ones need improvement. By analyzing financial data for each department, managers can make informed decisions about allocating resources and making changes to improve overall company performance. This approach helps to ensure that each department is held accountable for its performance, and that managers have the information they need to make effective decisions about the allocation of resources. Ultimately, this can lead to improved financial performance for the entire company.

Use the information below to answer the question.

Calculate the balance in the bank statement.

Use the information below to answer the question:

Trading account for the year ended 31st December 2009

Calculate the cost of goods sold

Answer Details

To calculate the cost of goods sold, we need to find the cost of goods available and then subtract the closing stock. The cost of goods available is found by adding the opening stock to the cost of purchases: 32,000 + 39,000 = 71,000 The cost of goods sold is found by subtracting the closing stock from the cost of goods available: 71,000 - 9,000 = 62,000 So, the cost of goods sold is ₦62,000.

The accounting entries used to record a cheque issued by a business is to?

Answer Details

The accounting entries used to record a cheque issued by a business are to credit the Cash Book and debit the Drawer's account. When a business issues a cheque, it reduces the balance of cash held by the business, and this reduction in cash is recorded by debiting the Drawer's account. At the same time, the cheque creates a liability for the business, which is recorded by crediting the Cash Book. In other words, when the cheque is issued, the business is reducing its own cash balance and creating a debt or liability that will be paid in the future. Therefore, the Cash Book is credited to reflect the creation of the liability, while the Drawer's account is debited to show the reduction in the business's cash balance.

In government accounting , the method used which records on the basis of financial entity with self balancing books instead of entity of propietorship is?

Answer Details

The method used in government accounting which records on the basis of financial entity with self-balancing books instead of the entity of proprietorship is called fund accounting. Fund accounting is a method of accounting used by organizations, such as governments, non-profit organizations, and universities, that have multiple funds with separate accounting and reporting requirements. Each fund is treated as a separate accounting entity, and financial transactions are recorded in separate self-balancing books for each fund. The purpose of fund accounting is to provide accountability and transparency in the use of public funds. It allows the government to track and report on the use of funds for specific purposes, such as capital projects, debt service, or operating expenses. It also ensures that funds are used only for their intended purposes and that financial reports accurately reflect the financial position of each fund. In summary, fund accounting is a method of accounting used by government entities that records financial transactions on a fund-by-fund basis with self-balancing books. This provides accountability and transparency in the use of public funds and ensures that funds are used only for their intended purposes.

Sule and Ahmed are in partnership sharing profit and losses equally. If Khadija is admitted as a new partner to take 1/5 th as her share. What is the new profit or loss sharing?

Answer Details

Sule and Ahmed have been sharing profits and losses equally, which means they divide the profits and losses 50-50. Now, Khadija is admitted as a new partner, and she takes 1/5 of the share. The new profit and loss sharing ratio will be 3 parts because there are now three partners. To calculate the new profit and loss sharing ratio, we need to divide 3 parts equally among the three partners. So, each part will be 1/3. Therefore, the new profit and loss sharing ratio will be: Sule 1/3, Ahmed 1/3, and Khadija 1/3. Hence, the correct answer is: Sule 1/3, Ahmed 1/3, and Khadija 1/3.

Use the information below to answer the question

If at 31/1/95 the following information was ascertained;

(i) rent for shop ₦12,000 paid for the year

(ii) Total purchases ₦15,000

(iii) Total sales ₦8,200

(iv) Stock of goods left ₦10,000

(v) paid sales boy ₦500

If at 31/1/95 the following information was ascertained;

(i) rent for shop ₦12,000 paid for the year

(ii) Total purchases ₦15,000

(iii) Total sales ₦8,200

(iv) Stock of goods left ₦10,000

(v) paid sales boy ₦500

The value of the current assets will be?

Which of the following is a conversion cost?

Answer Details

A conversion cost is a manufacturing cost that is incurred in the process of converting raw materials into finished goods. It includes the expenses related to the direct labor and factory overhead used in the production process. Out of the options given, wages would be considered a conversion cost. Wages refer to the payment made to workers who are directly involved in the manufacturing process. These workers are typically responsible for transforming the raw materials into finished goods, which makes their wages a necessary part of the conversion process. Factory overhead, which refers to the indirect costs associated with manufacturing, would also be considered a conversion cost. This includes expenses such as rent, utilities, and equipment maintenance, which are necessary to keep the production process running smoothly. On the other hand, purchases and material costs are not considered conversion costs. Purchases refer to the amount paid for raw materials and other items that are used in the production process, while material costs are the costs associated with the raw materials themselves. While both of these costs are necessary for production to occur, they are not directly related to the conversion process itself.

In reconciling the branch and head office accounts, remittance in transit in the branch books is treated as a_____________

Answer Details

In reconciling the branch and head office accounts, remittance in transit in the branch books is treated as a debit entry. Remittance in transit refers to funds that have been sent from the branch to the head office, but have not yet been recorded in the head office's books. When reconciling the accounts, this amount is recorded as a debit in the branch's books because the branch has already sent the funds, but they have not yet been received and recorded by the head office. The debit entry in the branch's books serves to reduce the branch's cash balance, while the corresponding credit entry in the head office's books, when it is eventually recorded, will increase the head office's cash balance. This treatment of remittance in transit as a debit entry is a common practice in accounting and helps to ensure that the accounts are reconciled accurately and that the cash balances in both the branch and head office are correctly reflected.

The current growth in the volume of trading and financial dealings in nigerian is helped by?

Answer Details

The current growth in the volume of trading and financial dealings in Nigeria is mainly helped by increased financial activities. Over the past few years, there has been a significant increase in the number of financial institutions, such as banks and mobile money operators, offering various financial products and services. This has made it easier for businesses and individuals to access credit, make payments, and conduct other financial transactions. Moreover, the rise of digital technologies has further facilitated financial activities, allowing people to conduct transactions online and in real-time. This has also helped to reduce the cost and time required to conduct financial transactions, making it more convenient for businesses and individuals to engage in trade. While government intervention may have played a role in creating an enabling environment for financial activities, such as through the introduction of policies and regulations, it is ultimately the increased availability and accessibility of financial services that have driven the growth of trading and financial dealings in Nigeria.

The accumulated fund of a non-trading concern can equally be referred to as?

Answer Details

The accumulated fund of a non-trading concern can equally be referred to as the "surplus fund". This is because the surplus fund represents the excess of the organization's total assets over its total liabilities and any other committed funds. Non-trading concerns, such as non-profit organizations, do not operate for the purpose of making a profit for its members or shareholders. Instead, any surplus generated is used to further the organization's objectives or to invest in its activities in the future. The surplus fund can be seen as a reserve that the organization can draw on when needed. The other answer options, such as members equity, share capital, and general fund, are not necessarily applicable to non-trading concerns, and do not specifically refer to the accumulated fund. For example, share capital typically refers to the funds raised by a company through the sale of shares, while members equity typically refers to the ownership interest of the members in a company.

Answer Details

The price-earnings (P/E) ratio of the company can be calculated by dividing the market price per share by the earnings per share (EPS). The P/E ratio shows how much investors are willing to pay for each Naira of the company's earnings. In this case, to calculate the P/E ratio for Tanko Ltd: Market price per share / Earnings per share = P/E ratio N1.50 / N0.47 = N3.19 So, the P/E ratio for Tanko Ltd is N3.19. This means that investors are willing to pay N3.19 for every Naira of the company's earnings. In simple terms, the P/E ratio is a measure of how much investors are willing to pay for every Naira of the company's earnings and in this case, the P/E ratio for Tanko Ltd is N3.19.

A provision for bad debt account had N33,800 at the beginning of the year and N4,220 at the close of the year. If bad debts are calculated at the rate of 1/20% of annual credit sales, what was the credit sales for the period?

The partnership deed normally specifies?

Answer Details

A partnership deed is a legal document that outlines the terms and conditions agreed upon by partners in a partnership. It is designed to provide clarity and prevent disputes between partners. The partnership deed typically specifies how profits or losses are to be shared between the partners. This includes the percentage of profits or losses that each partner is entitled to receive, and how they are to be distributed. The deed may also specify the capital that each partner is required to contribute annually, as well as any conditions that must be met in order for additional capital to be contributed. While the partnership deed may address how salaries are paid to partners, it typically does not specify how salaries are paid to employees. This is because employees are not typically considered partners in a partnership. Finally, the partnership deed may outline the profit that the partnership aims to earn annually, but this is not always the case. Some partnerships may not have a specific profit goal, while others may have more ambitious targets. In summary, the partnership deed typically specifies how profits or losses are to be shared and the capital to be contributed annually. It may also include other provisions that are important to the partners, such as how the partnership will be managed and what happens in the event of a partner's death or retirement.

Tea and Cup are into a partnership business. Interests on drawings made by partners are at 10% per annum. Tea’s capital is ₦70000 and current balance is ₦50000. He withdrew the following amounts during the year : 3000 on 31st January ,2000 on 31st March, 4000 on 1st July, 1500 on the 30th September, 2500 on 1st November. Cup’s capital is ₦100000 and current balance is ₦40000. He made no drawings during the period. What is the interest on the drawings of Tea?

When goods are sent to branch at cost plus mark up, it means that the branch should sell at_____________

Mrs. Okoro who lives in the riverine community of Rivers State makes her living through crabbing and fishing. This type of occupation is? 

Why should a new partner contribute towards goodwill on his admission?

Use the information below to answer the question.

Goods worth ₦300 was transferred from department Q to P. Similarly, P’s total expenses for the period was ₦200.

Department P’s net profit was

In departmental accounting, which is not a transfer pricing_________

Answer Details

Peak pricing is not a transfer pricing method in departmental accounting. Transfer pricing is the process of determining the price at which goods or services are exchanged between different departments or divisions within a company. Cost based transfer price is a method where the transfer price is set based on the cost of producing the goods or services being transferred. Market based transfer pricing is a method where the transfer price is set based on the market price for the goods or services being transferred. Dual pricing system is a method where two different transfer prices are set for the same goods or services, depending on the context in which they are being transferred. Peak pricing is a pricing strategy where prices are increased during periods of high demand, such as holidays or special events. It is not a transfer pricing method.

The office responsible for ascertaining whether all public expenditures and appropriations are in line with approved guidelines is the________

Answer Details

The office responsible for ascertaining whether all public expenditures and appropriations are in line with approved guidelines is the Auditor General. The Auditor General is an independent body that audits and reports on the government's financial statements, ensuring that public expenditures are legal and authorized, and are within budgeted amounts. The Auditor General is responsible for reviewing and examining all financial records of the government, ensuring that financial transactions are recorded accurately, and that financial reporting is transparent and in compliance with the applicable laws and regulations. The Auditor General is usually appointed by the government, and the office is independent of any particular government department. This independence ensures that the Auditor General can operate impartially and without undue influence from any particular government agency. The Auditor General is a vital part of ensuring the accountability and transparency of government finances and plays a critical role in maintaining public trust in government institutions.

When a bill is negotiated to a bank , it is said to be?

Answer Details

When a bill is negotiated to a bank, it is said to be "discounted". Negotiating a bill means transferring ownership of the bill from the original holder to the bank. In exchange for this transfer, the bank pays the holder an amount that is less than the face value of the bill, usually with a fee for providing this service. This process is known as "discounting the bill" because the holder receives a discounted value for the bill. So, when a bill is negotiated to a bank, it is said to be "discounted" because the holder receives a discounted value for the bill in exchange for transferring ownership to the bank.

Use the information below to answer the question.

Adex Ltd. Issues stock to its retail branches at cost price.

Calculate the cost of goods credited to the head office trading account.

The amount called in respect of a share but not paid before or on the date fixed for payment is referred to as:

Answer Details

The amount called in respect of a share but not paid before or on the date fixed for payment is referred to as a "call in arrears". When a company issues shares, it may require shareholders to pay for them in installments. These installments are known as "calls" and the amount that is due but not paid on the due date is called a "call in arrears". For example, let's say a company issues 100 shares with a nominal value of $10 per share. The company may require shareholders to pay for the shares in two installments, with $5 due on the issue of the share and $5 due in six months' time. If a shareholder pays only $4 on the due date of the second installment, they would have a call in arrears of $1. It is important for companies to keep track of calls in arrears because they represent unpaid capital that the company is entitled to collect. The company can take legal action to recover the amount owed, or it may declare the shares forfeited if the shareholder fails to pay the amount due within a specified period of time. In summary, a call in arrears is the amount that a shareholder owes to a company for a share that has been issued but not fully paid for on the due date. It represents unpaid capital that the company is entitled to collect, and the company may take legal action or declare the shares forfeited if the shareholder fails to pay the amount due.

In dealing with incomplete record, fixed assets are posted to___________-

Answer Details

In dealing with incomplete records, fixed assets are typically posted to the closing balance sheet as a brought forward figure. This means that the fixed asset is recorded as an asset at the beginning of the accounting period and is carried forward until the end of the period. The asset is then included in the closing balance sheet, which provides a snapshot of the company's financial position at the end of the period. Since incomplete records do not provide a complete picture of the company's financial transactions, it can be difficult to determine the exact value of fixed assets. Posting fixed assets to the closing balance sheet as a brought forward figure provides a way to include the assets in the company's financial statements without the need for extensive record-keeping or complicated calculations. By posting fixed assets to the closing balance sheet, it is easier to calculate the net worth of the company, which is an important indicator of financial health. This information can be used by investors, creditors, and other stakeholders to make informed decisions about the company.

The main objective of accounting report is to provide information about?