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

debit cash book and credit drawer

credit cash book and debit drawer

debit cash book and credit suspense account

credit cash book and debit suspense account

The control account is used in facilitating?

the various location of errors in the various accounts

the payment of debts and liabilities of the firm

assets distribution with respect to income

The major source of document which enables employer to calculate the employee wages is the?

records of number of hours worked

Record of independence per employee

To account for expenses paid by head office on behalf of the branch, the branch should___________

Debit profit and loss account and credit head office account

Debit head office account and credit cash

Credit cash and debit profit and loss account

Credit profit and loss account and debit head office account

The partnership deed normally specifies?

how profits or losses are to be shared

the capital to be contributed annually

how salaries are paid to employees

the profit that should be earned annually

JAMB UTME - Principles of Accounts - 2018

Question 1 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?

1 : 1

3 : 6

2 : 1 Correct answer

2 : 6

Answer Details

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Partnership Accounts

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Question 2 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

N8,800

N6,500

N5,200 Correct answer

N4,400

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.

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Provisions And Reserves

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Question 3 Report

The value of the current assets will be?

N10,361

N10,651 Correct answer

N17,396

N17,848

Answer Details

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Nature And Significance Of Accounting

Principles Of Double Entry

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Question 4 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;

Calculate the sales ledger balance.

N13,000 Correct answer

N10,000

N6,000

N3,000

Answer Details

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Cashbook

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Question 5 Report

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

virement

fund accounting Correct answer

consolidated fund

financial regulation

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.

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Public Sector Accounting

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Question 6 Report

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

Selling price

Fixed percentage on cost

Cost price Correct answer

Invoice price

Answer Details

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Branch Accounts

Nature And Significance Of Accounting

Principles Of Double Entry

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Question 7 Report

Advertising expenses incurred on a product in a business organization should be charged to

Sales department Correct answer

Production department

Purchase department

Administration department

Answer Details

Advertising expenses incurred on a product in a business organization should be charged to the Sales department. The purpose of advertising is to promote a product or service to potential customers, which makes it an important part of the sales process. By generating interest in the product, advertising can help to increase sales and revenue. Therefore, advertising expenses are considered a selling expense and should be charged to the Sales department. This department is responsible for the promotion and sale of the product, and as such, it is appropriate to allocate the cost of advertising to this department. The Production department is responsible for manufacturing the product, while the Purchase department is responsible for acquiring the materials and supplies needed for production. Neither of these departments is directly involved in the sales process, which means that it would not be appropriate to charge advertising expenses to them. Finally, the Administration department is responsible for managing the overall operations of the business, including finance, human resources, and legal affairs. While advertising is an important part of running a successful business, it is not typically considered to be an administrative expense.

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Nature And Significance Of Accounting

Principles Of Double Entry

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Question 8 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?

100%

50% Correct answer

40%

30%

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.

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Nature And Significance Of Accounting

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Question 9 Report

Which of the following is a conversion cost?

Factory overhead Correct answer

purchases

material cost

wages

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.

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Manufacturing Accounts

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Question 10 Report

Lubricating oil and spare parts of machines are example of?

indirect expense

direct expense Correct answer

indirect material

direct material

Answer Details

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Miscellaneous Accounts

Accounting Concepts

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Question 11 Report

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

Call in advance

call in arrears Correct answer

forfeiture

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.

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The Accounting Equation And Double Entry Principle

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Question 12 Report

Transfers from the head office to branches are best carried out at__________

Cost price

Cost plus mark up Correct answer

Selling price

Market price

Answer Details

Transfers from the head office to branches are best carried out at cost plus mark-up. This is because cost plus mark-up allows the head office to recover the cost of producing the goods, and also make a profit to cover its own overheads and expenses. Selling price and market price may not be the best options because they do not take into account the actual cost of producing the goods, which could lead to overcharging or undercharging the branches. In contrast, cost plus mark-up ensures that the branches receive the goods at a fair price, while also allowing the head office to cover its own costs and make a profit. Overall, this method promotes transparency and fairness in the transfer process.

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Branch Accounts

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Question 13 Report

The basic role of accounting is to?

detect fraud

attest to financial statements

measure performance Correct answer

protect shareholders

Answer Details

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Nature And Significance Of Accounting

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Question 14 Report

Departmentalization of accounts is useful because it shows the____________

Over all performance of a division Correct answer

Cost per unit of a profit

Price per unit of a product

Over all performance of a firm

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.

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Departmental And Branch Accounts

Departmental Accounts

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Question 15 Report

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

members equity

share capital

general fund Correct answer

surplus fund

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.

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Partnership Accounts

Accounts Of Not-for-profit Making Organizations

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Question 16 Report

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

Partners salaries

Interest on capital

Interest on loans Correct answer

Partners drawings

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.

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Partnership Accounts

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Question 17 Report

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

Error of ommission

Error of commission

Error of transposition Correct answer

Error of original entry

Answer Details

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Principles Of Double Entry

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Question 18 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?

Sule1/3, Ahmed1/3, Khadija 1/3

Sule1/3, Ahmed1/3, Khadija 1/3. Correct answer

Sule1/5, Ahmed1/5, Khadija3/5

Sule2/5, Ahmed1/5, Khadija2/5

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.

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Question 19 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.

Calculate the net profit.

N12,500

N10,000

N8,000

N7,500 Correct answer

Answer Details

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Nature And Significance Of Accounting

Principles Of Double Entry

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Question 20 Report

Bala ltd acquired the business of bello ltd and caused the separate existence of the latter company to terminate.

conversion

dissolution

merger Correct answer

absorption

Answer Details

Based on the given information, the term that best describes the scenario is "merger". A merger is a business consolidation that involves the combination of two or more companies into a single new entity. In this case, Bala Ltd acquired the business of Bello Ltd, which means that Bello Ltd is no longer operating as a separate company. Instead, Bello Ltd's assets, liabilities, and operations have been merged with those of Bala Ltd to form a single new entity. It's important to note that a merger can take many forms, and the specific legal and financial details of the transaction can vary. However, the key idea is that two or more companies combine to form a new, larger entity.

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Company Accounts

The Final Accounts Of A Sole Trader

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Question 21 Report

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

Bonus

Good will Correct answer

Premium

Commission

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.

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Partnership Accounts

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Question 22 Report


Tanko Ltd had Earnings per share 47k
Dividends per share 30k
Per value of each share N1.20
market price per share NM1.50

What will be the price earnings ratio of the company?

N3.91

N3.19 Correct answer

N2.95

N2.55

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.

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Question 23 Report

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

Goodwill account and credit partners capital account

Cash account and credit goodwill account

Goodwill account and credit cash account

Partners capital account and credit goodwill account Correct answer

Answer Details

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Partnership Accounts

Provisions And Reserves

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Question 24 Report

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

Accruals

inventory

subscription Correct answer

depreciation

Answer Details

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Departmental And Branch Accounts

Nature And Significance Of Accounting

Principles Of Double Entry

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Question 25 Report

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

Profit and loss account as brought forward figure

Closing balance sheet as carried forward figure

Closing balance sheet as brought forward figure Correct answer

Profit and loss as carried forward figure

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.

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Incomplete Records And Single Entry

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Question 26 Report

In departmental accounting, which is not a transfer pricing_________

cost based transfer price

market based transfer pricing

Dual pricing system

peak pricing Correct answer

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.

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Departmental And Branch Accounts

Departmental Accounts

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Question 27 Report

In the head office ledger, the value of goods sent to the branch are____________

Debited to the branch current account

Debited to the head office current account Correct answer

Credited to the head office current account

Credited to the branch current account

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.

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Branch Accounts

Introduction To Company Accounts

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Question 28 Report

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?

₦705 Correct answer

₦500

₦1000

₦10000

Answer Details

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Partnership Accounts

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Question 29 Report

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

Price above or below the stipulated price Correct answer

Any price but not below the transfer price

Cost price

A price that is equal to the mark up

Answer Details

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Branch Accounts

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Question 30 Report

Kakaku limited with three departments has a total of N7,200,000 as net debtors for the year ended 31/12/2106. The company's policy, provides for 15%bad debt annually. Which of the following represents the total balance of debtors before adjustment?

N6,120,000 Correct answer

N6,120,300

N8,820,000

Answer Details

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Departmental Accounts

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Question 31 Report

Calls in advance are treated in the balance sheet as_______

Current asset

Fixed asset

Current liability Correct answer

Fixed liability

Answer Details

Calls in advance are treated in the balance sheet as a current liability. Calls in advance refer to the money paid by shareholders in advance for shares that they have subscribed for, but not yet fully paid for. The company is therefore indebted to the shareholders for this amount until the shares are fully paid for. In the balance sheet, current liabilities are short-term debts or obligations that are due within a year, and calls in advance typically fall under this category. This is because the shareholders have the right to demand a refund of the money they paid in advance if the shares are not allotted to them or if they choose not to take up the shares. Therefore, calls in advance will be listed as a liability in the balance sheet, typically under the "current liabilities" section, until the shares are fully paid for and the liability is discharged.

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Nature And Significance Of Accounting

Principles Of Double Entry

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Question 32 Report

Balance sheet (extract)
	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.

N8,553

N8,263 Correct answer

N7,940

N1,228

Answer Details

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Nature And Significance Of Accounting

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Question 33 Report

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

Price above or below the stipulated price Correct answer

Any price but not below the transfer price

Cost price

A price that is equal to the mark up

Answer Details

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Branch Accounts

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Question 34 Report

Cost of rent as an expense can be apportioned to all department on the basis of:

No of employees

stock value

space occupied Correct answer

wages

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.

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Departmental Accounts

Introduction To Company Accounts

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Question 35 Report

Gross profit in the branch adjustment account is transferred to the branch____________

Income and expenditure account

profit and loss account Correct answer

receipt and payment account

trading account

Answer Details

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Branch Accounts

Accounts Of Not-for-profit-making Organizations

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Question 36 Report

	₦
Stock at branch 1st January at cost	400
Goods sent to branch at cost	8000
Returns to head office	340
Cash sales	9160
Stock at branch 31st December at cost	720

Use the information below to answer the question.

Adex Ltd. Issues stock to its retail branches at cost price. The following particulars relate to Ede branch.

₦1870

₦1530

₦1640

₦1820 Correct answer

Answer Details

To find the cost of goods sold (COGS) for the Ede branch, we need to calculate the cost of goods available for sale and then subtract the ending inventory. The cost of goods available for sale is the sum of the stock at the beginning of the year and the goods sent to the branch during the year: 400 (stock at the beginning of the year) + 8000 (goods sent to the branch) = 8400 To calculate the COGS, we need to subtract the ending inventory from the cost of goods available for sale. The ending inventory is the stock at the end of the year: 8400 - 720 (stock at the end of the year) = 7680 Next, we need to adjust the COGS for any returns to the head office. The returns are given as 340, so we subtract this from the calculated COGS: 7680 - 340 = 7340 Finally, we need to calculate the gross profit by subtracting the COGS from the cash sales: 9160 - 7340 = 1820 Therefore, the answer is ₦1820, which represents the gross profit for the Ede branch.

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Branch Accounts

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Question 37 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?

N210,000

N844,400 Correct answer

N840,000

N500,000

Answer Details

Read lesson note on Provisions And Reserves (WAEC)

Provisions And Reserves

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Question 38 Report

In the absence of a partnership deed, the act stipulates that____________

An amount should be fixed as salaries for partners

Profits and losses should not be shared equally

Interest on partner’s loan should be 25%

Interest should not be allowed on partners drawings Correct answer

Answer Details

Read lesson note on Partnership Accounts (WAEC)

Partnership Accounts

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Question 39 Report

In order to make the cash book balance equal to the bank statement, it is usually to add?

uncredited cheques

direct payments by bank

bank charged

unpresented cheques Correct answer

Answer Details

In order to make the cash book balance equal to the bank statement, it is usually necessary to add the amount of "unpresented cheques". This is because unpresented cheques represent the cheques that have been issued by the organization, but have not yet been presented to the bank for payment. As a result, these cheques are not reflected in the bank statement, but are recorded in the organization's cash book as a deduction from its cash balance. To reconcile the cash book balance with the bank statement, the organization needs to identify the unpresented cheques and add them to the cash book balance. This adjustment will increase the cash book balance to reflect the total amount of funds the organization actually has, even if they haven't yet been withdrawn from the bank. The other answer options, such as uncredited cheques, direct payments by bank, and bank charges, would typically require adjustments to be made to the cash book balance, but these adjustments would not necessarily involve adding amounts to the balance. For example, uncredited cheques may need to be deducted from the cash book balance, while bank charges may need to be added as a deduction. Direct payments by bank may also require adjustments to both the cash book and bank statement balances.

Read lesson note on Cashbook (JAMB)

Cashbook

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Question 40 Report

The rent expense for Trendy store is ₦3500. Trendy store has three departments; jewelry, hair dressing, and clothing. The floor spaces occupied by the departments are 3:2:5 respectively. What is the rent allocated to clothing department?

₦700

₦1050

₦1750 Correct answer

₦3500

Answer Details

To allocate the rent expense to the clothing department, we need to use the ratio of the floor spaces occupied by each department. Let's first add up the ratio of the floor spaces: 3 + 2 + 5 = 10 This means that the clothing department occupies 5/10 (or 1/2) of the total floor space. To allocate the rent expense to the clothing department, we need to multiply the total rent expense by the proportion of the floor space that the clothing department occupies: ₦3500 x 1/2 = ₦1750 Therefore, the rent allocated to the clothing department is ₦1750. So, the correct answer is option (C) ₦1750.

Read lesson note on Departmental And Branch Accounts (WAEC)

Read lesson note on Departmental Accounts (JAMB)

Departmental And Branch Accounts

Departmental Accounts

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