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Question 1 Report
Answer Details
Question 2 Report
A part of public company's profits belonging to the shareholders is
Answer Details
Dividends are a part of a public company's profits that are distributed among its shareholders. In simple terms, it's like a payment made to the owners of the company (the shareholders) for their investment. It's a way for the company to share its success with its shareholders. The amount of dividends a shareholder receives depends on the number of shares they own.
Question 3 Report
₦Plant and Machinery190000Motor Vehicle170000Stock60000Current Liabilities50000Purchase consideration400000
Determine the amount of goodwill.
Answer Details
To determine the amount of goodwill, we need to first understand what goodwill is. Goodwill is an intangible asset that represents the value of a company's reputation, brand name, customer base, and other intangible factors that contribute to its overall value. In this case, we have been given a balance sheet that includes the purchase consideration, which is the amount paid for the acquisition of another company. The purchase consideration includes the fair market value of the assets and liabilities of the company being acquired. To calculate the goodwill, we need to subtract the fair market value of the net assets acquired from the purchase consideration. The net assets acquired are the total assets acquired minus the total liabilities acquired. The fair market value of the net assets acquired is calculated as follows: Plant and Machinery: ₦190,000 Motor Vehicle: ₦170,000 Stock: ₦60,000 Total Assets: ₦420,000 Current Liabilities: ₦50,000 Net Assets: ₦370,000 Therefore, the fair market value of the net assets acquired is ₦370,000. To calculate the goodwill, we subtract the fair market value of the net assets acquired from the purchase consideration: Goodwill = Purchase Consideration - Fair Market Value of Net Assets Acquired Goodwill = ₦400,000 - ₦370,000 Goodwill = ₦30,000 Therefore, the amount of goodwill in this case is ₦30,000.
Question 4 Report
In manufacturing account, depreciation of office machine is charged to
Answer Details
In a manufacturing account, the depreciation of office machines is charged to the profit and loss account. The profit and loss account is a financial statement that shows a company's revenues, expenses, and net income over a certain period of time, typically a fiscal year or quarter. This statement is used to determine a company's profitability and evaluate its financial performance. Depreciation is an accounting term that refers to the reduction in value of a fixed asset, such as an office machine, due to wear and tear, obsolescence, or other factors. By charging the depreciation of an office machine to the profit and loss account, the company is recognizing the decrease in value of the asset and the impact it has on its financial performance. In summary, in a manufacturing account, the depreciation of office machines is charged to the profit and loss account to accurately reflect the financial impact of the decrease in value of the asset.
Question 5 Report
₦Stock Jan 12000Purchases4000Carriage inwards500Sales9000Carriage outwards500
Carriage outwards
Answer Details
Sales9000Stock Jan 12000Purchases4000Carriage inwards5006500Gross profit2500
Question 6 Report
A double entry for a transaction that offsets one amount against another on both sides of the cashbook is a
Answer Details
The double entry for a transaction that offsets one amount against another on both sides of the cashbook is called a "contra entry". A contra entry is a type of accounting entry where two transactions are recorded simultaneously, but in opposite directions, in order to offset each other. This means that the amount debited in one account is equal to the amount credited in another account, resulting in a net effect of zero on the total balance sheet. For example, if a company pays off a debt using cash from their bank account, a contra entry will be made in the cashbook. The bank account will be credited with the payment amount, while the cash account will be debited with the same amount. This results in a zero net effect on the total balance sheet because the company's assets (cash) have decreased by the same amount that their liabilities (debt) have decreased. In summary, contra entries are used to record transactions that offset each other, resulting in no net effect on the total balance sheet. They are important in maintaining accurate accounting records and ensuring that financial statements are correct.
Question 7 Report
When starting with the cash book balance in preparing the bank reconciliation statement, the followings are added
Answer Details
Uncredited cheque have to be less when starting with balance as per cashbook not add because the cheque are yet to be credited by the bank
Question 8 Report
₦Stock Jan 12600Purchases4000Carriage inwards500Sales9000Carriage outwards500
Determine the net profit.
Answer Details
Question 9 Report
Given:
I. Cash refunds
II. Debit note issued
III. Dishonored cheque
IV. Purchases
The item on the credit side of purchases ledger control account includes
Answer Details
The item on the credit side of the purchases ledger control account is purchases. This is because the purchases ledger control account is used to keep track of the total amount of purchases made on credit by a business. When a purchase is made, the supplier's account is debited and the purchases ledger control account is credited for the same amount. Out of the given options, none of them specifies anything related to the credit side of purchases ledger control account except option (D) - I, III, and IV only. However, option (D) includes all the options except II which is not directly related to the purchases ledger control account. Cash refunds, dishonored cheques, and purchases are all transactions that affect the purchases ledger control account. Therefore, the correct answer is option (D) - I, III, and IV only.
Question 10 Report
An advantage of FIFO method of stock valuation is that
Answer Details
The first in first out(FIFO) method of stock valuation, major advantage 1 it is very easy to apply 2 no manipulation of income is possible 3 the balance sheet amount for inventory is likely to approximate the current market value
its flow of cost is in sequence with the flow of stock: since the first stock will be considered for sale before other stock. the cost is always in sequence with the flow of stock because it correspondence with the normal physical flow of goods
Question 11 Report
The current growth in the volume of trading and financial dealings in Nigeria is helped by?
Answer Details
Question 12 Report
The movement of goods from head office to a branch is treated in the in the head office accounts as?
Answer Details
Question 13 Report
What is the effect of transaction when cash is paid into the bank
Answer Details
When cash is paid into the bank, the effect on the bank balance and cash balance depends on the perspective you are looking from. From the customer's perspective, the cash balance decreases because they have physically handed over cash to the bank. However, their bank balance will increase because the bank now owes them that amount of money. From the bank's perspective, the bank balance decreases because they have received the cash and now owe the customer that amount of money. However, their cash balance will increase because they physically have more cash in their possession. Therefore, the effect of a transaction when cash is paid into the bank is that the cash balance for one party decreases while the other party's bank balance increases, and vice versa.
Question 14 Report
One of the options below have the same features as the profit and loss account in non-profit organization
Answer Details
The option that has the same features as the profit and loss account in a non-profit organization is the income and expenditure account. Both the profit and loss account and the income and expenditure account are financial statements that are used to report the financial performance of an organization over a specific period of time. However, the profit and loss account is used by for-profit organizations, while the income and expenditure account is used by non-profit organizations. The income and expenditure account records all the revenues earned and the expenses incurred by a non-profit organization during a particular period, just like how a profit and loss account records revenues and expenses for a for-profit organization. The difference is that in a non-profit organization, there is no concept of profit, and any surplus is reinvested back into the organization rather than being distributed to shareholders. In summary, the income and expenditure account is the equivalent of the profit and loss account in a non-profit organization, as it records the organization's financial performance during a specific period by tracking all the revenues earned and expenses incurred.
Question 15 Report
one of the options below is not the source of income for non- profit organization
Answer Details
The option that is not a source of income for a non-profit organization is "ordinary shares." Non-profit organizations are established to serve a particular purpose or mission, such as social welfare, charity, education, religion, or scientific research. These organizations operate on a non-profit basis, which means that their primary objective is not to generate profits for their owners or shareholders, but to fulfill their mission and provide benefits to the community they serve. Non-profit organizations rely on various sources of income to support their operations and programs. Some of the common sources of income for non-profit organizations include entrance fees, subscription/dues, and donations. Entrance fees and subscription/dues are fees charged to members of the organization or the public for the privilege of accessing the organization's services, programs, or events. Donations, on the other hand, are voluntary contributions made by individuals, foundations, corporations, or government agencies to support the organization's mission and activities. However, ordinary shares are not a source of income for non-profit organizations because non-profit organizations do not issue shares or have shareholders. Ordinary shares represent ownership in a for-profit corporation, and the dividends paid on those shares are a return on investment to the shareholders. Since non-profit organizations are not established for the purpose of generating profits for their owners or shareholders, they do not issue shares or distribute dividends.
Question 16 Report
Salaries in arrears is treated in the balance sheet as a
Answer Details
Salaries in arrears is treated as a current liability in the balance sheet. This means that it represents a debt or an obligation that a company owes to its employees for work that has already been done but not yet paid for. When a company has salaries in arrears, it means that they have not paid their employees their full salary for the current accounting period. This could be due to a delay in payment processing, an error in calculation, or other reasons. Since the payment of the outstanding salaries is expected to happen within a short period of time (usually within the next accounting period), it is considered a current liability. It is listed on the balance sheet under the current liabilities section, along with other short-term debts that the company owes, such as accounts payable, taxes payable, and other accrued expenses. It's important to note that once the company pays the outstanding salaries, the amount of the liability will be reduced and it will no longer appear on the balance sheet.
Question 17 Report
?Balance as per cashbook5467Uncredited cheques4410Unpresented cheques19404Cheques wrongly debited by bank1404
The balance as per bank statement is
Answer Details
Bank reconciliation statement helps to reconcile the cashbook and bank statement if there are disagreement
A is correct: 21,901 is correct because the cheque wrongly debited by the bank will have increase the bank balance therefore to get the value of the bank statement needed to first of all add back the cashbook
Question 18 Report
The authority warrant issued prior to the approval of the appropriate bill at the beginning of the year
Answer Details
Provisional general warrant is issued by minister to enable money to be released for expenditure for the early of the year before the appropriation Act is passed
Question 19 Report
The following appears in trading account except
Answer Details
carriage outward: it is the cost of transporting goods from the company to the buyer. it is on debit side of the profit and loss account because it is an expenses incurred on distributing the goods to customer.
Question 20 Report
Capital for a profit making organization is generated through
Answer Details
Share: profit making organizations use different shares such as ordinary and preference shares to source for money from the public
Question 21 Report
Which of these is the main source document for recording cash paid into bank?
Answer Details
The main source document for recording cash paid into a bank is a pay-in-slip. Explanation: When a business or an individual deposits cash into a bank account, a pay-in-slip is filled out to record the transaction. A pay-in-slip is a document provided by the bank that contains information about the account holder, account number, and the amount of cash being deposited. The pay-in-slip also includes a section where the account holder can list the currency denominations of the cash being deposited. The pay-in-slip serves as a source document for recording the cash deposit in the accounting records of the business. It contains information that is used to create a journal entry to record the cash deposit. The journal entry would typically include a debit to the bank account and a credit to the cash account. In contrast, an invoice is a document used to request payment from a customer, while a credit note is a document used to provide a refund or credit to a customer. A cheque book contains blank cheques that are used to make payments from a bank account. These documents are not used to record cash paid into a bank, and thus, are not the main source document for such transactions. Therefore, the correct answer is pay-in-slip.
Question 22 Report
Subscription in advance is treated in the balance sheet as a
Answer Details
Subscription in advance is treated as a current liability in the balance sheet. A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It lists the assets, liabilities, and equity of the company. Assets are resources owned by a company that have value, such as cash, investments, property, and inventory. Liabilities are obligations or debts that the company owes to others, such as loans, mortgages, and accounts payable. Current liabilities are obligations that are due within one year or the company's operating cycle, whichever is longer. Subscription in advance is money received by a company for a service or product that will be delivered in the future. Since the company has a legal obligation to provide the service or product, the money received is considered a liability until the service is provided or the product is delivered. Therefore, subscription in advance is recorded as a current liability on the balance sheet, because the company is expected to fulfill its obligation within one year.
Question 23 Report
Which of these is a content of a master file?
Answer Details
A master file is a collection of organized and structured data that serves as the primary source of data for an organization's operational and transactional systems. It typically contains data that is considered permanent or long-lasting, such as employee data, customer data, or inventory data. Out of the options listed, the content of a master file would be "all records relevant to the organization." This includes any data that is critical to the organization's operations, such as customer information, transactional data, financial data, and inventory data. Records of assets of the organization may be part of a master file if they are critical to the organization's operations, such as inventory data or fixed asset data. A collection of data items may be part of a master file if the data items are critical to the organization's operations, such as customer data or transactional data. Similarly, all records relating to employees may be part of a master file if employee data is critical to the organization's operations, such as payroll data or HR data. However, it is important to note that a master file can contain many types of data, not just data related to employees. In summary, a master file is a collection of critical data that serves as the primary source of data for an organization's operational and transactional systems, and it can include a variety of data types depending on the organization's needs.
Question 24 Report
Given:
I. Settlement of debts
II. Cessation of business
III. Introduction of assets
IV. Disposal of assets
Which of these constitutes dissolution of partnership?
Answer Details
Dissolution of partnership business simply means the break up of partnership business and which are caused by many factors
II,III and IV: disposal of asset does not constitute dissolution
Question 25 Report
The account where the profit are distributed to the partner in their profit sharing ratio in partnership
Answer Details
The profit in a partnership is usually distributed to the partners in their profit sharing ratio through an appropriation account. This account is used to track the allocation of profits and losses among the partners and ensure that each partner receives their fair share of the profits. The appropriation account is a temporary account that is closed at the end of the accounting period and the amounts are transferred to the partners' capital accounts. The partners' capital accounts show the partners' individual ownership interests in the partnership and their share of the profits and losses.
Question 26 Report
₦Debtors opening4000Debtors clsoing1500Cash received from debtors8500Bad debts written off350Discount allowed500Discount Received1000
What is the amount of sales of sales for the year?
Answer Details
Dr Total Debtors Control A/c Cr
bal b/f.....4,000Cash received..... 8,500Credit sales.....6,850Bad debt written off.....50Dr. Allowed.....500bal c/d.....1,50010,85010,850bal b/d.....1,500
D is correct ₦6850 as the sales for the year accordingly to the above calculations
The total debtors account is meant to control the transactions with customers whether in cash or credits and to know the remaining cash receivables from customers.
Question 27 Report
When expenses are paid on behalf of the venture, the accounting entries is to debit
Answer Details
Joint venture account is an account that all expenditure incurred for the venture is debited and all income is credited to.
Debit joint venture and credit bank account because expenses incurred on behalf of the venture has to be debited to the joint venture account and since the money is joint out the bank must be credited to balance the account
Question 28 Report
₦Debtors opening4000Debtors closing1500Cash received from debtors8500Bad debts written off350Discount allowed500Discount received1000
If the gross profit is ₦5 000, what is the net profit?
Answer Details
If the gross profit is ₦5,000, then the net profit is calculated below;
The item that will appear in the profit and loss account are;
Bad debt written off ₦350, Discount allowed ₦500 and Discount received ₦1,000
Gross Profit5000Discount Received10006000ExpensesBad debt.350Discout Allowed500850Net profit5,150
Net profit is the profit made after all the expenses incurred are deducted from the gross profit
₦5150 is the net profit calculated i.e bad debt 350 &nplus; discount allowed 500 &nplus; net profit 5,150 less gross profit 5,000 + discount received 1,000
Question 29 Report
₦Balance as per cashbook5467Uncredited cheques4410Unpresented cheques19404Cheques wrongly debited by bank1404
The balance as per bank statement is
Answer Details
The balance as per bank statement can be calculated by subtracting the uncredited cheques, unpresented cheques, and cheques wrongly debited by the bank from the balance as per cashbook. So, the balance as per bank statement = ₦5467 (balance as per cashbook) - ₦4410 (uncredited cheques) - ₦19404 (unpresented cheques) - ₦1404 (cheques wrongly debited by bank) = ₦21,091. Therefore, the balance as per bank statement is ₦21,091.
Question 30 Report
Discount allowed is enjoyed by
Answer Details
Discount allowed is enjoyed by customers. A discount is a reduction in the regular price of a product or service. When a company allows a discount, it means that the customer can purchase the product or service at a lower price. This can be used as a marketing strategy to attract more customers or to clear out inventory. In simple terms, the customer gets a price break or savings on the purchase they make.
Question 31 Report
Calculate the discount received in Department B:
Dept ADept BNSales250000500000Purchases150000250000Discount received24000Discount allowed15000
Answer Details
Before calculating the discount received in Dep. B
We need to calculate the percentage of purchases for Dep B
Out of the total purchases
Dep. A purchases 150,000
Dep. B purchases 250,000
400,000 - Total purchases
there4; 250,000×24,000(Total discount received) x 400,000
= 15,000
Question 32 Report
The correct expression of accounting equation is
Answer Details
The correct expression of the accounting equation is: Assets = Liabilities + Equity. The accounting equation is the foundation of double-entry accounting and is used to describe the relationship between a company's assets, liabilities, and equity. Assets are the resources a company owns and uses to generate revenue, such as cash, equipment, and inventory. Liabilities are the debts a company owes to others, such as loans or accounts payable. Equity represents the ownership interest in the company and includes items like common stock and retained earnings. The equation states that the total value of a company's assets must equal the sum of its liabilities and equity. This makes sense because a company's assets are either financed by debt (liabilities) or by the owners' investments (equity). In other words, the accounting equation is a snapshot of a company's financial position at a specific moment in time, showing how its resources are being used to finance its operations.
Question 33 Report
An evidence of payment issued to a government ministry by a revenue collector is
Answer Details
Receipt voucher is raised as evidence by revenue collector when government funds and property or received
Receipt voucher: these are vouchers raised as evidence for the receipt of government funds and property. The revenue collected is prepared for the government ministry as a means that revenue has been collected
Question 34 Report
Given:
I. It records subscription in arrears
II. Payments of liabilities is effected
III. The account does not show if cash payment is revenue or capital expenditure
IV. It performs the same function as cashbook
The features of receipts and payment account includes
Answer Details
The receipts and payments account is a summary of cash transactions made by a non-profit organization over a particular period of time. It shows the total amount of cash received and spent during the period, and is usually prepared at the end of the financial year. Based on the given features, we can identify the following characteristics of the receipts and payments account: I. It records subscription in arrears: This means that the account includes any unpaid subscription fees from previous periods. These are considered as outstanding liabilities and are recorded as such. II. Payments of liabilities is effected: The receipts and payments account records any payments made by the organization to settle its liabilities, such as loans, rent, or bills. III. The account does not show if cash payment is revenue or capital expenditure: The receipts and payments account does not provide information about the nature of the payment. It simply shows the cash transaction and does not differentiate between revenue or capital expenditures. IV. It performs the same function as cashbook: The receipts and payments account serves the same purpose as a cashbook, as it records all cash receipts and payments during a particular period. Based on these features, the correct option is (I, II, and IV). The receipts and payments account records outstanding subscription fees (I), tracks payments made to settle liabilities (II), and performs the same function as a cashbook (IV). Option (II, III, and IV) is incorrect because it does not include the feature of recording subscription fees in arrears. Option (III and IV) is also incorrect because it does not include the feature of recording payments made to settle liabilities. Option (I, II, and III) is incorrect because it does not include the feature of performing the same function as a cashbook.
Question 35 Report
Which of these accounts is dissolution expenses credited?
Answer Details
When a partnership firm is dissolved, all the assets are sold and liabilities are paid off. The remaining amount is distributed among the partners. However, there may be some expenses that need to be paid for winding up the business, such as legal fees, accounting fees, etc. These expenses are known as dissolution expenses. To record the dissolution expenses, we need to credit an account. The account that is credited for dissolution expenses is the realization account. The realization account is a nominal account that is used to record the sale of assets, payment of liabilities, and any other adjustments related to the dissolution of the partnership. Option D: Realization account is the correct answer. Partners capital account is a personal account used to record the capital contributed by each partner and their share of profits/losses. Revaluation account is a nominal account that is used to record the revaluation of assets and liabilities during the dissolution of the partnership. Partners current account is a personal account that is used to record the transactions between the partnership and each partner, such as drawings, interest on capital, and salary. Therefore, the correct answer is option D: Realization account.
Question 36 Report
Goodwill can be created in the books of a partnership firm when
Answer Details
The partnership experiences super profit: super profit is the profit that is generated by intangible asset or the profit that is attributed by the tangible asset when such profit is capitalized we get intangible asset or goodwill
Question 37 Report
You add the following when starting with the balance as per cash book when preparing the bank reconciliation statement except
Answer Details
Uncredited cheque: This have to be deducted when starting balance as per cash book
Question 38 Report
Which fund is used to meet unforeseen or urgent expenditure
Answer Details
The fund used to meet unforeseen or urgent expenditures is called the contingencies fund. This fund is created by the government to provide immediate financial assistance in case of emergencies, where the expenditure could not have been foreseen or planned in advance, and for which no other provision has been made. The contingencies fund is kept at the disposal of the President or the Governor, depending on the level of government, who can authorize its use for urgent expenditures. These expenditures may include natural disasters, calamities, unexpected defense requirements, and other unforeseen events that require immediate attention and expenditure. The contingencies fund is a temporary measure to deal with urgent situations and is usually replenished in the subsequent budget. Its purpose is to ensure that the government has the necessary resources to deal with unforeseen emergencies without disrupting the regular budgetary process.
Question 40 Report
Answer Details
Liabilities + Equity = Asset is given as the fundamental equation
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