JAMB UTME - Principles of Accounts - 2003

Provision for discount allowed can be recorded as debit to?

Income and expenditure account is more informative than receipts and payments account because it discloses?

Use the information below to answer question .

Capital ...................₦2000

Bank ......................₦1200

Purchase ..................₦2500

Sales .....................₦6700

Stock .....................₦1300

Creditors .................₦1000

Fixed assets...............₦3700

Drawings ..................N?

Drawings are always estimated at 50% of capital.

The trial balance total is?

Given:

Cost of raw materials issued to production.....₦37000

Opening stock of raw material..................₦2000

Purchases of raw material......................₦3800

Wages .........................................₦500

What is the closing stock of raw material?

The recording phase of accounting is known as?

Answer Details

The recording phase of accounting is known as bookkeeping. It involves the systematic and accurate recording of all financial transactions that occur within a business, such as sales, purchases, expenses, and payments. Bookkeeping typically involves the use of journals and ledgers to record these transactions and ensure that they are properly categorized and accounted for. The purpose of bookkeeping is to provide a clear and accurate picture of a business's financial position, which is essential for making informed decisions, preparing financial statements, and complying with tax laws and regulations. While trial balancing, ledger accounting, and final accounting are all important aspects of accounting, they are not the same as the recording phase, which specifically refers to the process of bookkeeping.

A company has two departments X and Y. Y transferred goods to X at a profit margin of 25%. ₦10,000 worth of goods was not sold at the end of the accounting period.

How much is the unrealized profit?

Use the information below to answer question Goods from head office................₦13,400

Returns to head office ...............₦118

Rates and insurance paid .............₦188

Wages paid ...........................₦913

Cash remitted to head office..........₦16,625

Stock at 1/1/2000.....................₦1,875

Rents paid ...........................₦325

Stock at 31/12/2000 ..................₦1,975

Sundry expenses ......................₦200The profit realized from the trade is?

Use the information below to answer questions .Motor Vehicle Account as at 31st December 2001.

Debit:

Jan. 1, cost ................₦1950 000

Dec.31, Addition ............ ₦400 000

Credit:

Jan. 1, Depreciation ........₦1360 000

June 30, Sales proceeds...... ₦700 000

The vehicle sold was purchase on January 1, 1998 at a cost of ₦1,000 000 and had depreciation at 25% on cost.What is the actual profit or loss arising from the vehicle disposed of?

Use the information below to answer this questions

Capital..................N............N........
Land and building.......18470........24000....
Mortgage on premises...................11090...
Drawings...............3000...................
Profit and loss........................3600...
Furniture and fittings...5120.................
Motor Vehicles...........3462................
Closing Stock............3000................
Debtors..................11474...............
Creditors..............................7354.
Cash.....................1518................
..........................46044.........46044

What is the capital employed?

For the purpose of conversion of a partnership to a company, a total purchase consideration of ₦3.6m was paid. If 30% of the purchase consideration was in cash and the rest by 50k shares, how many shares issued?

The transaction that completes its double entry in the same ledger account appears in?

Answer Details

The transaction that completes its double entry in the same ledger account appears in the cash account and bank account. Double entry accounting is a system of recording financial transactions where every transaction affects at least two accounts - one account is debited and another account is credited. This ensures that the accounting equation (assets = liabilities + equity) remains balanced. In the case of a transaction completing its double entry in the same ledger account, it means that both the debit and credit entries of the transaction are made in the same account. This can only happen in the cash account and bank account since they are the only two ledger accounts that can have both debit and credit entries. For example, if a company withdraws $500 cash from their bank account, the double entry for this transaction would be a debit of $500 in the cash account and a credit of $500 in the bank account. Both entries are made in different accounts, but in this case, they complete their double entry in the same ledger account, which is the bank account.

Which accounting concept supports the assertion that economic reality takes precedence over legal issues?

Answer Details

The accounting concept that supports the assertion that economic reality takes precedence over legal issues is the "substance over form" concept. This concept states that the economic substance of a transaction or event should be recorded in the financial statements rather than just the legal form of the transaction. In other words, the true nature and economic impact of a transaction should be reflected in the financial statements even if the legal documentation does not fully support it. This concept helps to ensure that financial statements provide a fair and accurate representation of the company's financial position and performance.

Which of the following is used to update the cash book in bank reconciliation?

Use the information to answer this question.

..............ZEBRA PLC..............
.............Balance sheet as at 31st March, 2002
...............N...............N............N......
Capital......100,000...Fixed assets:
Current................Land &..................
Liabilities...........buildings..50,000......
Creditors........30000..Furniture..10,000....60,000
.......................Current..................
.......................Assets: .......
..................Stock .........30,000...........
..................Debtors.......30,000.............
..................Cash..........10,000......70,000..
.............130,000.........................130,000
The business was acquired on 1st April, 2002 at a purchase consideration of N120,000 by SOZ. All assets and liabilities were taken over except the cash to open the new firm's bank account additional N20,000 was paid into the bank.

Use the information below to answer question ............PQ Manufacturing CompanyRaw materials (1/11/2001)...........₦3 500

Raw materials (31/12/2001)..........₦4 900

Purchase of raw materials...........₦56 000

Salary .............................₦63 000

Wages...............................₦148 000

Factory lighting ...................₦3 080

Plant Depreciation..................₦2 800

Factory Insurance ..................₦2 170The company consumed raw materials worth?

What is the consolidated revenue fund balance?

Use the information below to answer question.Ezekiel Malgwi is a retailer. He recorded sales representing 95% cash and 5% credit. He took the total cash sales of ₦19000 from the business tray and banked it.

The credit sales for the period would be?

Answer Details

Since Ezekiel recorded sales representing 95% cash and 5% credit, we can assume that the total sales for the period are 100%. Therefore, if the total cash sales recorded were ₦19000, we can find the total sales as follows: Total sales = Total cash sales / Percentage of cash sales Total sales = ₦19000 / 0.95 = ₦20000 Now, we know that the total sales are ₦20000, and that 95% of this amount represents cash sales, which is ₦19000. Therefore, we can find the credit sales by subtracting the cash sales from the total sales: Credit sales = Total sales - Cash sales Credit sales = ₦20000 - ₦19000 = ₦1000 So, the credit sales for the period would be ₦1000.

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

Answer Details

Advertising expenses incurred on a product in a business organization should be charged to the sales department. The reason for this is that advertising is a part of the selling process, and its purpose is to increase sales and revenue for the company. Therefore, it makes sense for the advertising expenses to be accounted for in the same department that is responsible for generating those sales. Charging advertising expenses to the production department or the purchases department would not be appropriate because those departments are primarily responsible for creating or acquiring the products, not selling them. Similarly, charging advertising expenses to the administration department would not be appropriate because that department is generally responsible for supporting the overall operation of the company, rather than the specific activities of any one department.

Use the information below to answer question .

...........PQ Manufacturing Company

Raw materials (1/11/2001)...........₦3 500

Raw materials (31/12/2001)..........₦4 900

Purchase of raw materials...........₦56 000

Salary .............................₦63 000

Wages...............................₦148 000

Factory lighting ...................₦3 080

Plant Depreciation..................₦2 800

Factory Insurance ..................₦2 170

The overhead cost is?

Given:

..............Rich Social Club...........

Cash.........................₦100,000

Loan ........................₦30,000

Subscription in arrears......₦5,000

Subscription in advance......₦15,000

What is the accumulation fund?

The first step in converting as single entry to a double entry system of bookkeeping is to prepare a?

Use the information below to answer question Total sales of ticket.......................₦300 000

Amount received from the sales..............₦260 000

Cash purchase of club house.................₦100 000

Credit purchase of equipment ...............₦60 000

Electricity bill paid ......................₦5 000

Salaries owed ..............................₦2 000What is the balance of the income and expenditure account?

Answer Details

The balance of the income and expenditure account is ₦33,000, which is calculated by subtracting the total expenses from the total income. Total income from ticket sales is ₦300,000, but only ₦260,000 was received. Therefore, there is an outstanding receivable balance of ₦40,000. Total expenses are ₦167,000, calculated by adding the cash purchase of club house (₦100,000), credit purchase of equipment (₦60,000), electricity bill paid (₦5,000), and salaries owed (₦2,000). Subtracting the total expenses of ₦167,000 from the total income of ₦300,000 gives us ₦133,000. However, since only ₦260,000 was received, we need to add the outstanding receivable balance of ₦40,000 to get a balance of ₦293,000. Therefore, the balance of the income and expenditure account is ₦293,000.

The two legally recognized professional accounting bodies in Nigeria are the?

Use the information below to answer questions .Motor Vehicle Account as at 31st December 2001.

Debit:

Jan. 1, cost ................₦1950 000

Dec.31, Addition ............ ₦400 000

Credit:

Jan. 1, Depreciation ........₦1360 000

June 30, Sales proceeds...... ₦700 000

The vehicle sold was purchase on January 1, 1998 at a cost of ₦1,000 000 and had depreciation at 25% on cost.Assuming that depreciation is charged on the addition of the year at the rate of 15% on reducing balance, what should be the net book value of the vehicle as at 31st December 2003?

four broad classifications of overheads are?

Answer Details

Overheads are the indirect expenses of a business that are not directly related to the production of goods or services but are necessary for the smooth running of the business. These expenses are divided into four broad classifications: production, selling, distribution, and administration. 1. Production overheads: These are the indirect costs associated with the production process, such as rent, utilities, and maintenance of plant and equipment. These costs are necessary for the production of goods or services and are allocated to the cost of production. 2. Selling overheads: These are the indirect costs associated with the sales department of a business, such as advertising, marketing, and sales commissions. These costs are necessary for the promotion and sale of goods or services and are allocated to the cost of sales. 3. Distribution overheads: These are the indirect costs associated with the distribution of goods or services, such as transportation, warehousing, and packing materials. These costs are necessary for the delivery of goods or services and are allocated to the cost of distribution. 4. Administration overheads: These are the indirect costs associated with the general administration of the business, such as salaries of office staff, office rent, and office supplies. These costs are necessary for the smooth running of the business and are allocated to the cost of administration. Therefore, the correct answer to the question is option B: production, selling, distribution, and administration.

Use the information to answer this questionDate.............Details........................

Feb........1 Purchased 400 units at ₦1.00 each

,, ........5 Purchased 200 units at ₦2.00 each

,,.........10 Purchased 200 units at ₦300 each

,, .........15 Issued 320 units

,,..........20 Issued 200 units at ₦4,00 each

,,..........25 Issued 120 unitsUsing the periodic simple average method, the cost per unit is

Verifiability in accounting is only possible when there are?

Answer Details

Verifiability in accounting refers to the ability to confirm the accuracy and reliability of financial information presented in accounting records. This is only possible when there are source documents available to support the transactions recorded. Source documents provide evidence of the occurrence of a transaction, such as a sales invoice or a purchase receipt. For example, if a company records a sale of a product, the verifiability of this transaction would depend on the existence of a sales invoice that can be traced back to the customer. Without the sales invoice, it would be difficult to confirm the occurrence of the sale and the accuracy of the recorded revenue. Payment vouchers and minutes of meetings may provide additional evidence to support the occurrence of a transaction, but without source documents, it would be difficult to verify the accuracy and reliability of the financial information presented. Audit certificates, on the other hand, are issued by independent auditors after conducting an audit of the company's financial statements. While they provide assurance on the accuracy of the financial information presented, they are not the only means of achieving verifiability in accounting. Source documents remain a critical element in verifying the accuracy and reliability of financial information.

Mamsa Nigeria Limited issued 20 000 ordinary shares of ₦1.50 per share on 2nd July 2002.

1500 ordinary shares were fully subscribed for and their monies received as below:On application .........................₦0.40

On allotment ...........................₦0.20

First call (including premium of₦0.50)..₦0.70What is the balance of the ordinary share capital account after the first call was received?

The stock valuation data is important because it enables management to?

A company has departments M and N. The expenses incurred wholly in M is ₦5000. General expenses incurred amount to₦25000. Expenses are apportioned in the ratio 2:3 for departments M and N respectively.

What is N's share of the expense?

Answer Details

The total expenses incurred by the company include expenses that are wholly incurred by department M and general expenses that are to be apportioned between department M and department N. The expenses incurred wholly in M is ₦5000, and the general expenses incurred amount to ₦25000. To apportion the expenses between departments M and N, we need to determine the total ratio, which is 2 + 3 = 5. This means that for every ₦5 spent, ₦2 is spent on department M, and ₦3 is spent on department N. To find N's share of the expenses, we first need to calculate the total expenses that are to be apportioned between departments M and N. This is ₦25000, the general expenses incurred. To determine department N's share, we need to multiply the total expenses by the ratio that represents department N's share, which is 3/5. N's share of the expenses is, therefore, 3/5 * ₦25000 = ₦15000. Therefore, the correct answer is ₦15000.

The necessary accounts to be opened on the issue of ordinary share capital are?

In a control account, provision for bad debts is found on the?

Answer Details

In a control account, provision for bad debts is found on the credit side of the sales ledger control account. The provision for bad debts is an estimated amount that a company sets aside to cover potential losses from customers who do not pay their debts. It's considered an expense and is recorded on the credit side of the sales ledger control account, which is a summary of all the transactions related to sales. By recording the provision for bad debts on the credit side of the sales ledger control account, the company reduces the overall value of its accounts receivable (the money owed to it by customers), as the provision is considered a reduction of the expected amount that will be collected. It's important to note that the provision for bad debts is an estimated amount, and the actual amount of bad debts may be different. As such, the provision may need to be adjusted in the future based on actual experience.

Use the information to answer this questionDate.............Details........................

Feb........1 Purchased 400 units at ₦1.00 each

,, ........5 Purchased 200 units at ₦2.00 each

,,.........10 Purchased 200 units at ₦300 each

,, .........15 Issued 320 units

,,..........20 Issued 200 units at ₦4,00 each

,,..........25 Issued 120 unitsCalculate the price per unit of closing stock using the periodic weighted average method.

Use the information below to answer question.Ezekiel Malgwi is a retailer. He recorded sales representing 95% cash and 5% credit. He took the total cash sales of ₦19000 from the business tray and banked it.The transaction would be recorded in the cash book as debit?

Given:

(i) Order of performance

(ii) Order of liquidity

(iii)Vertical order

(iv) Horizontal order

The order in which a balance assets is arranged are?

Given:Total debtors b/d 31/12/99...............₦25 000

Cheques received from debtors ...........₦255 000

Total debtors c/d 31/12/00...............₦15 000Determine the sales figure?

Given:Capital ...........₦1000

Liabilities........₦500

Assets.............₦1500

The accounting equation can be expressed as?

Use the information below to answer question .

Capital ...................₦2000

Bank ......................₦1200

Purchase ..................₦2500

Sales .....................₦6700

Stock .....................₦1300

Creditors .................₦1000

Fixed assets...............₦3700

Drawings ..................N?

Drawings are always estimated at 50% of capital.Compute the amount withdrawn

Answer Details

The question states that "Drawings are always estimated at 50% of capital." Since the capital is given as ₦2,000, we can assume that the amount of drawings taken by the owner is half of this amount, or ₦1,000. Therefore, the answer is option (D) ₦1,000. This calculation is based on the assumption that the estimated percentage of drawings is always 50% of the capital. However, in practice, this may not be accurate for all businesses and owners.

Use the information below to answer question Goods from head office................₦13,400

Returns to head office ...............₦118

Rates and insurance paid .............₦188

Wages paid ...........................₦913

Cash remitted to head office..........₦16,625

Stock at 1/1/2000.....................₦1,875

Rents paid ...........................₦325

Stock at 31/12/2000 ..................₦1,975

Sundry expenses ......................₦200What is the total expenses?

The amount of each invoiced goods sent to the branch is debited to?

Given:

(i) the consolidation revenue fund balance b/d..₦650 000

(ii) issue from contingency fund amount to......₦240 000

(iii) amount transferred to contingency fund is.₦210 000

What is the consolidation revenue fund balance?

During the year ended 31st December 2001,

Nuju Enterprises paid rent as follows:

Jan. 20, ₦24 000 for a period of 4 months.

May. 16, ₦30 000 for a period of 5 months.

Oct. 15, ₦36 000 for a period of 6 months.What is the overpaid portion of the rent?

Answer Details

To find the overpaid portion of the rent, we need to calculate the total rent paid and compare it to the rent that would have been paid if it had been paid monthly for the entire year. The rent paid for 4 months in January is ₦24,000. This means that the monthly rent is ₦6,000 (₦24,000 ÷ 4). The rent paid for 5 months in May is ₦30,000. This means that the monthly rent is ₦6,000 (₦30,000 ÷ 5). The rent paid for 6 months in October is ₦36,000. This means that the monthly rent is ₦6,000 (₦36,000 ÷ 6). To find the rent that would have been paid if it had been paid monthly for the entire year, we need to multiply the monthly rent by 12: Yearly rent = Monthly rent x 12 Yearly rent = ₦6,000 x 12 Yearly rent = ₦72,000 Now we can calculate the total rent paid by adding up the amounts paid in January, May, and October: Total rent paid = ₦24,000 + ₦30,000 + ₦36,000 Total rent paid = ₦90,000 To find the overpaid portion of the rent, we need to subtract the yearly rent from the total rent paid: Overpaid portion = Total rent paid - Yearly rent Overpaid portion = ₦90,000 - ₦72,000 Overpaid portion = ₦18,000 Therefore, the overpaid portion of the rent is ₦18,000. So the correct answer to the question is option B: ₦18,000.

Which of these is a capital expenditure warrant?

Answer Details

A warrant is a document that authorizes the payment of funds for a particular purpose. In accounting, warrants are often used to authorize expenditures for different purposes. Capital expenditures are expenditures that are made to acquire or improve long-term assets, such as property, plant, and equipment, and are not intended to be consumed in the short term. Examples of capital expenditures include the purchase of land, buildings, machinery, and equipment. Out of the given options, the Development fund general warrant is more likely to be a capital expenditure warrant. Development funds are typically used to finance long-term capital projects such as the construction of new buildings, roads, and other infrastructure projects that are expected to provide benefits over a period of several years. Therefore, a Development fund general warrant would likely be used to authorize capital expenditures. Provisional general warrants, Reserved expenditure general warrants, and Supplementary warrants are types of warrants that may be used to authorize different types of expenditures, but they are not specifically related to capital expenditures. Therefore, the correct answer is Development fund general warrant.

Receipts and payments accounts is the summary of?

Answer Details

The Receipts and Payments Account is a summary of the cash book over a particular period of time, usually a year. It shows all the cash and bank transactions of a non-profit organization during that period, including the receipts and payments of both capital and revenue nature. Therefore, the correct answer is (B) cash book. The receipts and payments account is not a summary of income and expenditure, balance sheet, or profit and loss. Rather, it is a summary of the cash book which records all the cash and bank transactions of the organization.

Use the information below to answer the question:

What is the receipts and payment account balance?

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

Answer Details

The branch adjustment account is used to record any transactions or adjustments related to the branch, such as stock movements, expenses incurred, and revenue earned. The gross profit of the branch is calculated by preparing a trading account for the branch, which includes the revenue earned and the cost of goods sold. If there is a gross profit in the branch adjustment account, it means that the revenue earned by the branch was greater than the cost of goods sold, resulting in a profit. This gross profit needs to be transferred to the branch account, which is the account used to record all transactions related to the branch. The branch account can be a part of either the profit and loss account or the income and expenditure account, depending on the nature of the organization. The transfer of gross profit from the branch adjustment account to the branch account will increase the profit in the branch account and will be reflected in the overall financial statements of the organization. Therefore, the correct answer is profit and loss account.

Use the information below to answer this questions Capital..................N............N........

Land and building.......18470........24000....

Mortgage on premises...................11090...

Drawings...............3000...................

Profit and loss........................3600...

Furniture and fittings...5120.................

Motor Vehicles...........3462................

Closing Stock............3000................

Debtors..................11474...............

Creditors..............................7354.

Cash.....................1518................

..........................46044.........46044Calculate the value of fixed assets

Answer Details

The value of fixed assets is the sum of the value of land and building, furniture and fittings, and motor vehicles. Adding the value of land and building, furniture and fittings, and motor vehicles, we have: 18470 + 5120 + 3462 = ₦27,052 Therefore, the value of fixed assets is ₦27,052.

Use the information to answer this question...............ZEBRA PLC..............

.............Balance sheet as at 31st March, 2002

...............N...............N............N......

Capital......100,000...Fixed assets:

Current................Land &..................

Liabilities...........buildings..50,000......

Creditors........30000..Furniture..10,000....60,000

.......................Current..................

.......................Assets: .......

..................Stock .........30,000...........

..................Debtors.......30,000.............

..................Cash..........10,000......70,000..

.............130,000.........................130,000

The business was acquired on 1st April, 2002 at a purchase consideration of ₦120,000 by SOZ. All assets and liabilities were taken over except the cash to open the new firm's bank account additional ₦20,000 was paid into the bank.Calculate the network of the business