JAMB UTME - Principles of Accounts - 2018
Question 1 Report
which of the following affects the accuracy and authenticity of trial balance?
Answer Details
Question 2 Report
Use the information below to answer the question:
Trading account for the year ended 31st December 2009
| ₦ | ₦ |
| Opening Stock 32,000 | Sales 48,000 |
| Purchases 40,000 | Less Return 2,000 |
| Carriage inwards 1,000 | |
| 41,000 | |
| Less Return 2,000 39,000 | |
| Cost of goods available ?? | |
| Less closing stock 9,000 | |
| Cost of goods sold ?? |
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.
Question 3 Report
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.
Question 4 Report
Gross profit in the branch adjustment account is transferred to the branch____________
Answer Details
Question 5 Report
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?
Answer Details
Question 6 Report
Cost of rent as an expense can be apportioned to all department on the basis of:
Answer Details
The cost of rent can be apportioned to all departments on the basis of the space occupied by each department. For example, if a company has three departments and Department A occupies 40% of the total office space, Department B occupies 30%, and Department C occupies 30%, then the cost of rent can be apportioned accordingly. If the total cost of rent is $10,000 per month, then Department A would be responsible for $4,000 (i.e., 40% of $10,000), Department B would be responsible for $3,000 (i.e., 30% of $10,000), and Department C would be responsible for $3,000 (i.e., 30% of $10,000). This method of apportionment is fair because each department is responsible for the amount of space it occupies and therefore the amount of rent it incurs. Using other criteria such as the number of employees, stock value or wages, may not accurately reflect the actual amount of space used by each department and could lead to unfair distribution of rent expenses.
Question 8 Report
| N | |
| Creditors | 7,940 |
| Prepaid expenses | 290 |
| Accrual expenses | 323 |
| Stock | 4,500 |
| Cash balances | 4,956 |
| Debtors | 905 |
Use the information in the above table to answer the question.
Determine the current liabilities.
Question 9 Report
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.
Question 10 Report
Use the information below to answer the question:
| Liabilities ₦ | Assets ₦ |
| Capital 40,000 | Furnishing 10,000 |
| Ceiling Fan 1,500 | |
| Cash in Hand 28,500 | |
| 40,000 | 40,000 |
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
Answer Details
To determine the total value of the assets after the transactions, we need to add up all the values of the assets and also add the values of the transactions that increased the value of the assets, then we will subtract the values of the transactions that reduced the value of the assets. From the information given in the question, the total value of the assets before the transactions is ₦40,000. Now let's calculate the effect of each transaction: (i) Rent for shop ₦12,000 paid for the year: This is a prepaid expense, so we need to deduct ₦12,000 from the cash in hand and add it to the value of furnishing. Therefore, the value of the assets after this transaction is: Cash in hand = ₦28,500 - ₦12,000 = ₦16,500 Furnishing = ₦10,000 + ₦12,000 = ₦22,000 (ii) Total purchases ₦15,000: This is an increase in the value of the stock of goods left. Therefore, the value of the assets after this transaction is: Stock of goods left = ₦10,000 + ₦15,000 = ₦25,000 (iii) Total sales ₦8,200: This is a decrease in the value of the stock of goods left and an increase in the cash in hand. Therefore, the value of the assets after this transaction is: Stock of goods left = ₦25,000 - ₦8,200 = ₦16,800 Cash in hand = ₦16,500 + ₦8,200 = ₦24,700 (iv) Stock of goods left ₦10,000: This is the value of the stock of goods left after the purchases and sales. Therefore, the value of the assets after this transaction is: Stock of goods left = ₦16,800 - ₦10,000 = ₦6,800 (v) Paid sales boy ₦500: This is a decrease in the cash in hand. Therefore, the value of the assets after this transaction is: Cash in hand = ₦24,700 - ₦500 = ₦24,200 Finally, we add up all the values of the assets to get the total value of the assets after the transactions: Total value of assets = ₦22,000 + ₦1,500 + ₦6,800 + ₦24,200 Total value of assets = ₦54,500 Therefore, the option that represents the total value of the assets after the transactions is ₦41,700.
Question 12 Report
The basic role of accounting is to?
Question 13 Report
Mrs. Okoro who lives in the riverine community of Rivers State makes her living through crabbing and fishing. This type of occupation is?
Question 14 Report
For an incomplete record to provide necessary information, it must be converted to?
Question 15 Report
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.
Question 16 Report
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.
What is the subscription to be charged to income and expenditure account?
Answer Details
The subscription to be charged to the income and expenditure account is N36,000. This is because the subscription received during the year is N30,000, the subscription owed from the previous year is N4,000 and the subscription received for the next year is N6,000. Adding up these three amounts gives us N30,000 + N4,000 + N6,000 = N36,000. So, the total subscription to be charged to the income and expenditure account is N36,000.
Question 17 Report
In the absence of a partnership deed, the act stipulates that____________
Answer Details
Question 18 Report
| N | |
| Purchase ledger opening balance | 4,000 |
| sales ledger opening balance | 6,000 |
| credit purchase | 25,000 |
| Discounts allowed | 1,000 |
| Returns inwards | 2,000 |
| Credit sales during the year | 10,000 |
| Return outwards | 6,000 |
Use the information above to answer the following question;
What is the purchase ledger balance?
Answer Details
Question 19 Report
The fixed amount of money given to a petty cashier at the beginning of a period is called?
Answer Details
The fixed amount of money given to a petty cashier at the beginning of a period is called the "imprest". An imprest system is a way of managing petty cash, which is a small amount of cash kept on hand for minor expenses such as office supplies, postage, and travel expenses. In this system, a fixed amount of money is provided to the petty cashier at the beginning of a period, and they are responsible for managing and recording all the petty cash transactions during that period. The purpose of the imprest system is to ensure that the petty cash fund is always at a fixed amount, which is called the "imprest amount". At the end of the period, the petty cashier submits the petty cash vouchers to the main cashier for reimbursement, and the main cashier provides the petty cashier with the exact amount required to bring the petty cash fund back to the imprest amount. This way, the petty cash fund is always replenished to the fixed amount, which helps in keeping track of the petty cash transactions and preventing fraud. In summary, the imprest is the fixed amount of money provided to a petty cashier at the beginning of a period to manage the petty cash transactions, and it is a part of the imprest system of managing petty cash.
Question 20 Report
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.
Question 22 Report
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.
Question 23 Report
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.
Question 24 Report
The major source of document which enables employer to calculate the employee wages is the?
Question 25 Report
A machine bought for N35,000 was estimated to have a life span of 5 years with a scrap value of N9,000.
The yearly depreciation using the straight line method would be
Answer Details
The straight-line method of depreciation assumes that an asset decreases in value evenly over its useful life. To calculate the yearly depreciation using the straight-line method, we need to subtract the scrap value from the original cost and then divide the result by the number of years of the asset's useful life. The original cost of the machine is N35,000, and the scrap value is N9,000. Therefore, the depreciable value of the machine is: Depreciable value = Original cost - Scrap value = N35,000 - N9,000 = N26,000 The useful life of the machine is 5 years. Therefore, the yearly depreciation is: Yearly depreciation = Depreciable value / Useful life = N26,000 / 5 = N5,200 So the yearly depreciation using the straight-line method for this machine is N5,200. Therefore, option C is the correct answer.
Question 26 Report
The total credit sales for a period can be extracted from the?
Answer Details
The total credit sales for a period can be extracted from the Sales Day Book. The Sales Day Book is a book of prime entry used to record all credit sales made by a business during a particular period. It typically contains information such as the date of the sale, the name of the customer, the amount of the sale, and any relevant invoice or reference numbers. Since credit sales involve selling goods or services on credit, they are not immediately paid for at the time of sale. Instead, the customer is given a certain amount of time, usually 30 to 90 days, to pay for the goods or services. As a result, credit sales do not result in an immediate inflow of cash, but they do represent revenue earned by the business. Therefore, to determine the total credit sales for a given period, we can simply add up all the credit sales recorded in the Sales Day Book for that period. This figure represents the total amount of revenue earned by the business from credit sales during that period, and is an important indicator of the business's financial performance. In summary, the Sales Day Book is used to record all credit sales made by a business, and the total credit sales for a period can be extracted from this book by adding up all the credit sales recorded during that period.
Question 27 Report
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.
Question 29 Report
A cash book had a opening balance of N15,200, closing balance of N18,400 and total cash received during the period of N36,000. What was the amount of cash paid out during the same period?
Answer Details
Question 30 Report
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.
Question 31 Report
The main objective of accounting report is to provide information about?
Answer Details
Question 32 Report
What is the amount of capital employed?
Question 33 Report
Ade, Tony, Rose share profit and losses in the ratio of 3 : 2 : 1 respectively. Ade retires and the remaining partners decide to take Ade’s share in the existing ratio. What is the new ratio?
Answer Details
Question 34 Report
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.
Question 35 Report
Using the following:
Balance as par overdraft of the cashbook is ₦4000, uncredited cheque is ₦2300, bank charges ₦300, unpresented cheque ₦5000.
What is the adjusted cashbook balance?
Answer Details
Question 36 Report
To account for expenses paid by head office on behalf of the branch, the branch should___________
Answer Details
Question 37 Report
In the head office ledger, the value of goods sent to the branch are____________
Answer Details
In the head office ledger, the value of goods sent to the branch are debited to the branch current account. When a company sends goods from the head office to the branch, this is known as a branch transfer. The value of these goods should be recorded in the head office ledger as a debit to the branch current account. This is because the head office is effectively lending the goods to the branch, and the branch will need to repay the head office for these goods at a later date. The branch current account is a type of account in the head office ledger that is used to track the transactions between the head office and the branch. All transactions relating to the branch, such as branch transfers, expenses paid by the head office on behalf of the branch, and cash sent to the branch, are recorded in the branch current account. Therefore, when the head office sends goods to the branch, the value of these goods is recorded as a debit to the branch current account in the head office ledger. This means that the branch owes the head office for the goods received, and the head office can use this information to track the balance owed by the branch. In summary, the value of goods sent to the branch from the head office is debited to the branch current account in the head office ledger, as this account is used to track all transactions between the head office and the branch.
Question 38 Report
Which of the following methods of invoicing goods to branches facilitate easy checks on the activities of branches?
Answer Details
Question 39 Report
| N | |
| sales | 20,000 |
| cost of sales | 10,000 |
| operating expenses | 2,500 |
| expenses prepaid included in operating expenses | 500 |
Use the information above to answer the following question.
What is the gross profit margin?
Answer Details
The gross profit margin is a measure of the profitability of a business, and it is calculated by dividing the gross profit by the revenue and expressing the result as a percentage. The gross profit is the difference between the revenue and the cost of goods sold, which is the direct cost of producing the goods or services that the business sells. In the information provided, the revenue or sales is N20,000, and the cost of sales is N10,000. Therefore, the gross profit can be calculated as follows: Gross profit = Revenue - Cost of sales = N20,000 - N10,000 = N10,000 The gross profit margin can be calculated by dividing the gross profit by the revenue and expressing the result as a percentage: Gross profit margin = (Gross profit / Revenue) x 100% = (N10,000 / N20,000) x 100% = 50% Therefore, the gross profit margin is 50%, which means that for every Naira of revenue generated, the business earns 50 kobo in gross profit. This indicates that the business has a healthy gross profit margin and is able to cover its direct costs of production while making a reasonable profit.
Question 40 Report
Which of the following is a common cause of a discrepancy between head office and branch trial office________
Answer Details
Stock and cash in transit is a common cause of a discrepancy between head office and branch trial office. This is because stock and cash in transit are two types of assets that are often not recorded accurately in the accounts. Stock can be difficult to value and count accurately, especially if it is in transit between the head office and the branch. Cash in transit refers to cash that is in the process of being transferred between the head office and the branch, and may not be recorded in either account until it has arrived at its destination. If the stock or cash in transit is not recorded accurately, it can result in a discrepancy between the head office and branch trial balance. For example, if the branch has recorded the stock as received, but the head office has not yet recorded it as sent, the branch will have a higher stock value than the head office. Similarly, if the branch has recorded cash in transit as received, but the head office has not yet recorded it as sent, the branch will have a higher cash balance than the head office. , which suggests stock and repayment, is incorrect because repayment is not directly related to a discrepancy between head office and branch trial balance. , which suggests creditors and cash in transit, is also incorrect because creditors are liabilities and not directly related to the assets that are in transit between head office and branch. , which suggests debtors and cash in transit, is also incorrect because debtors are not assets that are in transit between head office and branch, and therefore not a common cause of discrepancy between head office and branch trial balance.
