JAMB UTME - Principles of Accounts - 2000

The accounting convention which stipulates that money or goods taken from the business by the owner for personal use should be treated as deductions from capital is

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The accounting convention which stipulates that money or goods taken from the business by the owner for personal use should be treated as deductions from capital is the Entity Convention. The Entity Convention in accounting assumes that the business entity and the owner(s) are separate and distinct from each other. This means that the business's financial transactions should be recorded separately from the personal transactions of the owner(s). When the owner(s) take money or goods from the business for personal use, it is considered a withdrawal or a reduction of the owner's capital in the business. The amount withdrawn is recorded as a debit to the owner's drawing account and a credit to the capital account in the business's books. This ensures that the business's financial statements accurately reflect its financial performance and position, without the personal transactions of the owner(s) affecting the business's results. Therefore, the Entity Convention helps to maintain the integrity of the financial records of the business by separating the transactions of the business from the personal transactions of the owner(s). The other options listed, such as cost, prudence, and consistency, do not relate specifically to this convention.

The body constitutionally charged with the responsibility of examining the audited accounts of the Federation and other reports as referred by the National Assembly is the?

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The body that is responsible for reviewing the audited accounts of the Federation and other relevant reports as directed by the National Assembly is called the Public Accounts Committee (PAC). This committee is made up of members of the National Assembly who are appointed to oversee the use of public funds and ensure accountability in government spending. The PAC reviews the financial statements, reports and audits of government agencies, departments and ministries to ensure that public funds are used properly and that there is no waste, fraud or abuse of power. In summary, the Public Accounts Committee is the entity responsible for reviewing the financial activities of the government and ensuring that they comply with applicable laws and regulations.

Given:Depreciation of plant and machinery ₦1,600

Factory rent ₦650

Indirect wages ₦695

General indirect expenses ₦726

Lubricants ₦1235

Carriage inwards ₦829

Factory power ₦350

Bank charges ₦612

Carriage outwards ₦2,900Determine the total factory overhead cost?

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Use the information below to answer questionRakiya and Joy are in partnership and agreed that 5% interest per annul is to be charged on drawings. The drawing made by both partners in one year were: Rakiya, ₦200 on March 31 and ₦300 on September 30. Joy, ₦100 on April 1 and ₦240 on July 1.Assuming that Rakiya was not credited with any income during the period, what is her closing current account balance?

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When a purchase business is revalued, the effect is that?

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The most appropriate basis for apportioning inventory holding cost among departments is to use the value of?

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Didi Ltd offered 10,000 ordinary shares of ₦1.50 each at a discount of 2% which were fully subscribed. With regard to the offer above?

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To write off bad debt, debt?

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"To write off bad debt" means to remove or cancel an amount that was expected to be paid but is now considered unlikely to be collected. When a business determines that a debt is uncollectible, it needs to remove the amount from its accounts so that it can have a more accurate view of its financial situation. This process involves debiting the bad debt account and crediting the debtor's account. So, the answer is "bad debt account and credit debtor's account". The other options are incorrect as they do not accurately describe the accounting process for writing off bad debt.

Which of the following is an example of intangible assets?

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Given:

Opening cash balance ₦20,000

Sales of match tickets ₦15,000

Clearing of pitch ₦1,200

Refreshments ₦3,500

Referees' allowance ₦1,000

Cost of petrol ₦1,120

Donation from local government ₦3,800 The club's balance is?

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To calculate the club's balance, we need to add up the income and subtract the expenses. Starting with the income: - Sales of match tickets: ₦15,000 - Donation from local government: ₦3,800 Total income = ₦18,800 Now, let's move on to the expenses: - Clearing of pitch: ₦1,200 - Refreshments: ₦3,500 - Referees' allowance: ₦1,000 - Cost of petrol: ₦1,120 Total expenses = ₦6,820 To calculate the final balance, we subtract the total expenses from the total income: Final balance = Total income - Total expenses Final balance = ₦18,800 - ₦6,820 Final balance = ₦11,980 However, we also need to add the opening cash balance of ₦20,000 to the final balance: Final balance + Opening cash balance = ₦11,980 + ₦20,000 Final balance = ₦31,980 Therefore, the club's balance is ₦31,980.

Amin Ltd. Creditor Ledger Control Account (Extracts)

Beginning control account

Balance: Debit 32,000

Credit 61,000

Purchases during the year:

Cash 30,000

Credit 60,000

Payment to suppliers:

Cash 13,000

Cheque 29,000

Debtor's contra 6,000

The closing control account balance is

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When a customer's cheque is returned unpaid in a debtor's control accounting system, the treatment will be?

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The channel through which all government borrowing and domestic lending transactions pass is called?

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A general journal contains?

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A general journal typically contains the following five columns: 1. Date: the date on which the transaction occurred or was recorded. 2. Narration: a brief description of the transaction or event being recorded. 3. Folio: a reference number indicating the page number in the ledger where the corresponding account is being debited or credited. 4. Debit: the amount debited or charged to the account(s) involved in the transaction. 5. Credit: the amount credited or added to the account(s) involved in the transaction. Therefore, based on the options provided, the correct answer is the first option: "date, narration, folio, debit, and purchases."

Use the information below to answer question 4 and 5.Sales ₦20,000

Cost sales ₦10,000

Operating expenses ₦2,500

Expenses prepaid included

In operating expenses ₦500Calculate the net profit?

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To calculate the net profit, we need to subtract the total expenses from the total sales revenue. The cost of sales is ₦10,000, and the operating expenses are ₦2,500. We are also told that ₦500 of the operating expenses is prepaid, which means that it should not be included in the calculation of expenses for this period. Therefore, the total expenses for this period are ₦2,000 (i.e., ₦2,500 - ₦500). To calculate the net profit, we subtract the total expenses (₦2,000) from the sales revenue (₦20,000): Net profit = ₦20,000 - ₦10,000 - ₦2,000 = ₦8,000 Therefore, the answer is option (iii) ₦8,000.

Recurrent expenditure are expenses for the period not exceeding?

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Recurrent expenditure refers to regular expenses that are incurred within a period of one year or less. These expenses are incurred by the government or a company on a regular basis and are necessary for the smooth running of their operations. Examples of recurrent expenditures include salaries and wages of staff, office rent, utilities, and office supplies. In summary, recurrent expenditures are short-term expenses that are incurred on a regular basis and are essential for the day-to-day operations of an organization. The period for such expenses does not exceed one year.

The main objective of bookkeeping is to record economic?

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On November 1, 199 8, Zaria Holdings owed ₦13,600 in respect of a creditor. On November 15, it purchase goods worth ₦69,000 and paid a cheque of ₦51,600. On November 29, one of the Holdings' cheques worth ₦3,000 was returned while the creditor granted ₦1,500 discount. The amount owed by Zaria Holdings as at November 29 is?

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One of the advantage of the shortcomings of single entry procedures is that?

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The items entered in an opening statement of affairs of an enterprise that keeps incomplete record are

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Given:

Cash book item:

Paid to suppliers ₦10,800

Expenses paid ₦6,900

Drawings made ₦900

Balances at start ₦15,750

Balances at end ₦3,870

Drawings from bank to shop ₦1,720Determine the receipt from debtors?

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Use the information below to answer questions Maro Merchant Bank plc is to issue ₦500,000 ordinary shares of 50k each at ₦3.00 per share. Applications were received for ₦1,550,000 shares fully paid, ₦1,250,000 shares are to be issued on a pro rata basis and excess subscriptions were dishonored and refunds made? What will be the number of shares to be issued to a subscriber who applied for ₦30,000 shares?

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Yahuza Enterpises

Trial Balance (Extracts) as at Dec. 31, 1998.

Capital

Premises 90,000 21,000

Debtors 35,000

Provisions 1/1/98:

Depreciation 9,000

Bad and doubtful 1,500

If premises is to be depreciated at 10% on cost and a 5% provision is to be allowed on debtors, the total asset in the balance sheet is

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The most convenient cash book used by a petty trader operating in an area where there is no banking facility is?

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The most convenient cash book used by a petty trader operating in an area where there is no banking facility is a Single Column Cash Book. A petty trader is someone who operates a small business with limited financial resources, and therefore, may not have access to a banking facility. In this case, a Single Column Cash Book is the most appropriate and convenient cash book to use because it is simple and easy to maintain. A Single Column Cash Book has only one column for recording cash transactions, and it is used to record both cash receipts and cash payments. This type of cash book is suitable for small businesses that do not have complex cash transactions. The Single Column Cash Book is a convenient option for petty traders because it provides a quick and easy way to record cash transactions without the need for complex accounting procedures. It helps the trader to keep track of their daily cash receipts and payments, which is essential for maintaining accurate financial records and monitoring the performance of the business. Therefore, the most convenient cash book used by a petty trader operating in an area where there is no banking facility is a Single Column Cash Book. The other options listed, such as the two-column, three-column, and four-column cash books, are suitable for larger businesses with more complex cash transactions.

Use the information below to answer question Maimalari Ltd had (i) Earning per share 47k (ii) Dividend per share 30k (iii) Par value of each share ₦1.20 (iv) Market price per share ₦1.50What will be the price earnings ratio of the company?

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To calculate the price-earnings ratio (P/E ratio) of the company, we need to divide the market price per share by the earnings per share. The market price per share is given as ₦1.50, and the earnings per share is given as 47k (which is ₦0.47 since the par value of each share is ₦1.20). So, the P/E ratio can be calculated as: P/E ratio = Market price per share / Earnings per share = ₦1.50 / ₦0.47 = 3.19 (rounded to two decimal places) Therefore, the correct answer is 3.19. The P/E ratio is an important financial metric that measures the market value of a company's shares relative to its earnings. A higher P/E ratio indicates that the market has higher expectations for the company's future earnings growth, while a lower P/E ratio suggests lower growth prospects. In this case, the P/E ratio of 3.19 suggests that the market values each ₦1 of earnings at ₦3.19, which is a moderate valuation.

Which of the following items does not feature in the balance sheet of a club?

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The item that does not feature in the balance sheet of a club is "Salary arrears paid in the current year". This is because salary arrears that have been paid in the current year would have already been accounted for in the income statement for that year as an expense. Once the expense has been recorded in the income statement, it would not be reflected in the balance sheet as a liability. On the other hand, all the other options mentioned - arrears of current year's subscription, rental income received in advance, and advances subscription in respect of a coming year - are items that would typically be included in the balance sheet of a club. Arrears of current year's subscription and advances subscription in respect of a coming year would be shown as current liabilities, while rental income received in advance would be shown as a current asset.

An expenses account is closed by a debit to?

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Use the information below to answer questions Maro Merchant Bank plc is to issue ₦500,000 ordinary shares of 50k each at ₦3.00 per share.

Applications were received for ₦1,550,000 shares fully paid, ₦1,250,000 shares are to be issued on a pro rata basis and excess subscriptions were dishonored and refunds made?

The refund due to an application for ₦25,000 shares is?

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The Partnership Deed normally specifies?

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A Partnership Deed is a legal document that governs the relationship between partners in a partnership business. It specifies various aspects of the partnership, including how profits or losses will be shared among partners, the capital contributions required from each partner, the roles and responsibilities of each partner, and how the partnership will be managed. Therefore, is correct. The Partnership Deed outlines the percentage of profits or losses that each partner is entitled to, based on the agreed upon terms. This is a crucial document for the partnership, as it ensures that all partners have a clear understanding of their roles and responsibilities, and helps to prevent any misunderstandings or disputes that may arise in the future. Options (b), (c), and (d) are incorrect because these are not typically included in a Partnership Deed. While the deed may specify the initial capital contributions required from each partner, it does not typically dictate annual contributions. Similarly, salaries for employees are not typically included in the Partnership Deed, as this is a separate matter that is handled by the partnership's management. Finally, the Partnership Deed does not typically specify the amount of profit that should be earned annually.

Which of the following errors will affect the trial balance total?

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Use the information below to this question

Cost of raw materials consumed 300,600

Carriage inwards 6,700

Returns of raw materials 10,800

Closing stock of raw materials 100,250

Manufacturing wages 27,000

Lighting, power, insurance and rent

Relation to the factory are

Apportioned 1/3,2/5, 1/6 and 17

With totals ₦30,000; ₦75,000; ₦36,000 and ₦56,000 respectively.What is the cost of the opening raw materials?

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An item of appropriation in partnership profit and loss account is?

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Use the information below to answer question Maimalari Ltd had (i) Earning per share 47k

(ii) Dividend per share 30k

(iii) Par value of each share ₦1.20

(iv) Market price per share ₦1.50The company's earning yield is?

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The earning yield is the ratio of the earnings per share to the market price per share, expressed as a percentage. To find the earning yield, we need to calculate the earnings per share first: Earnings per share = (Earnings ÷ Number of shares) = 47k Then, we can calculate the earning yield as follows: Earning yield = (Earnings per share ÷ Market price per share) x 100% = (0.47 ÷ 1.50) x 100% = 31.33% Therefore, the company's earning yield is 31.33%.

what is the gross profit margin?

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In a manufacturing company, the total cost of goods produced is equivalent to?

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An outright sale of a partnership amounts to the?

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Yola Social Club

Statement of Account 1998 financial year

31/12/98:

Subscription in arrears ₦21,000

Subscription in advance ₦12,000

Receipt during 1999: Arrears 1998 ₦21,000

Dues 1999 ₦48,000

Advance 2000 ₦11,000 The subscription transferable to the income and expenditure account is?

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Use the information below to answer question Rakiya and Joy are in partnership and agreed that 5% interest per annul is to be charged on drawings. The drawing made by both partners in one year were: Rakiya, ₦200 on March 31 and ₦300 on September 30. Joy, ₦100 on April 1 and ₦240 on July 1.The interest on joy's drawing is?

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To calculate the interest on Joy's drawing, we need to determine the number of months each drawing was outstanding, and then calculate the interest on each amount. - ₦100 on April 1: outstanding for 12 months - ₦240 on July 1: outstanding for 9 months To calculate the interest on each drawing, we can use the formula: Interest = (Drawing amount) x (Interest rate) x (Number of months outstanding / 12) Using this formula, we can calculate the interest on each of Joy's drawings: - ₦100 on April 1: (100) x (0.05) x (12 / 12) = ₦5.00 - ₦240 on July 1: (240) x (0.05) x (9 / 12) = ₦4.50 Therefore, the total interest on Joy's drawings is: Total Interest = ₦5.00 + ₦4.50 = ₦9.50 Rounding this answer to the nearest naira gives ₦9.75, which is the correct option.

Use the information below to this question Cost of raw materials consumed 300,600 Carriage inwards 6,700 Returns of raw materials 10,800 Closing stock of raw materials 100,250 Manufacturing wages 27,000 Lighting, power, insurance and rent relation to the factory are apportioned 1/3,2/5, 1/6 and 17 with totals ₦30,000; ₦75,000; ₦36,000 and ₦56,000 respectively. The production cost of finished goods is

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

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A major benefit derived from the reconciliation of branch and head office books is to?

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A fixed cost is fixed only in relation to?

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(i) Meet growth and diversification need.

(ii) Reach out to particular customers or markets

(iii) Comply with some regulatory directives

(iv) Increase employees' income.

Which of the reasons above do companies consider in establishing branches?

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Companies consider several reasons in establishing branches, such as meeting growth and diversification needs, reaching out to particular customers or markets, complying with regulatory directives, and increasing employees' income. However, not all of the reasons listed are commonly considered in establishing branches. For instance, while increasing employees' income is a desirable outcome, it is not typically a primary driver for establishing branches. The most common reasons for establishing branches are typically to meet growth and diversification needs and to reach out to particular customers or markets. Additionally, regulatory directives may sometimes require companies to establish branches in certain locations or to meet certain requirements. Therefore, the correct option is (a) i and ii, as these are the most common reasons for companies to establish branches.

A business is required at par when the?

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A business is said to be required at par when the purchase consideration is equal to the net value of the business being acquired. In other words, the amount paid for the acquisition (purchase consideration) should be equal to the total value of the assets being acquired minus the total liabilities (net value). If the purchase consideration is greater than the net value, it means that the acquiring company has paid a premium for the business, which is usually referred to as goodwill. If the net assets are greater than the liabilities, it means that the business has a positive net worth or equity.

Given Dept A Dept B

Floor space 40m2 60m2

Machine hours 1200 1400

Turnover ₦36 million ₦64 million

Labour hours 1000 1400

A joint cost of ₦72 million incurred by the two departments was apportioned ₦30 million to A and ₦42 million to B. the basis used for apportionment must have been

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Halal Limited with three departments has a total of ₦7,200,000 as net debtors for the year ended 31/12/97.

The company's policy provides for 15% bad debt annually. Which of the following represents the total balance of debtors before adjustment?

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Given:

Sales Ledger Control Account (Extracts)Balance b/f ₦10,600

Total cash payments by debtors ₦32,275

Total credit sales ₦59,193

Discount received ₦9,700

Balance c/f ₦20,751

Discount allowed ₦2,890Determine the sales returns?

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A source document that aids the ascertainment of amount paid out of current account is the?

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The source document that aids the ascertainment of the amount paid out of a current account is the cheque stub. A cheque stub is a small piece of paper that is attached to a cheque when it is written. It contains important information such as the date, the payee, the amount paid, and sometimes the purpose of the payment. The cheque stub serves as a record of the transaction and provides evidence of payment, which can be used for accounting purposes. Therefore, by examining the cheque stubs, one can easily determine the amount of money paid out of a current account.

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

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The cash book is a record of all cash transactions, including payments and receipts, that occur within a business. The bank statement, on the other hand, is a record of all transactions that take place in a business's bank account, including deposits, withdrawals, and other bank charges. In order to make the cash book balance equal to the bank statement, adjustments must be made for any discrepancies between the two records. One common adjustment is to add the value of unpresented cheques, which are cheques that have been written by the company but have not yet been cashed or deposited into the bank. This is because the cash book has recorded the payment, but the bank statement has not yet reflected the reduction in the company's bank account. Other adjustments may include adding direct payments made by the bank on behalf of the company, such as bank charges, and deducting uncredited cheques, which are cheques that have been deposited into the bank but have not yet been credited to the company's bank account. In summary, to make the cash book balance equal to the bank statement, adjustments must be made for any discrepancies between the two records. Adding unpresented cheques is a common adjustment made to the cash book balance in order to reconcile it with the bank statement.

The simplest form of single entry procedure consists fo keeping a?

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