JAMB UTME - Principles of Accounts - 2021

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A company advertised and issued 750,000, 12% preference shares of N1 each to be issued ₦1.50 per share. Applications for 1,370,000 were received at 30k per share. 70k per share (including premium) was due on allotment while 25k per share was due on each of the remaining two calls. All amounts due were received. Application money for 120,000 shares was refunded to unsuccessful applicants and the remaining applicants were allotted shares on prorata basis.

The second final call account was debited with

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The second final call account was debited with the 12% preference share capital account ₦187,500.

Given:
                                  ₦
Bank overdraft       2,000
Cash                      2,000
Furniture                4,000

Derive the total amount on the credit side of the trial balance

The principle of double entry system ensures

Recurrent expenditures are expenses for the period not exceeding

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Recurrent expenditures are expenses that are incurred repeatedly over a short period of time, typically within one fiscal year. So, the correct answer would be: - 1 year

A source document is used for verifying the

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A source document is used for verifying the amount due from debtors, the amount due to creditors, and the actual cost of an asset.

Stationery which will be used over a long period of time is usually recorded as an expense instead of an asset. This concept is called

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This concept is called "materiality."

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Zahki Plc balance sheet (extract) as at 31st December 1997.

                                            ₦                                             ₦
Paid up capital               200,000       Fixed assets        300,000
Share premium                15,000                                   
Profit and loss account     60,000          Investment           180,000
Long-term loan               180,000          Stock                      28,000
                                                              Debtors                  90,000
Creditors                        200,000          provision(3000)      87,000
Other current liabilities    100,000         Cash                       60,000
                                                              Bank                     100,000
                                        755,000                                   755,000     

Determine the owner's equity

Given: i. The memorandum of association of the company ii. The article of association of the company iii. The incorporation documents.

From the above, which of the following is delivered to the registrar of companies for incorporation?

Answer Details

i, ii, and iii are typically delivered to the registrar of companies for incorporation. The memorandum of association outlines the purpose and objectives of the company, the names of the initial members, and the authorized share capital of the company. The articles of association set out the rules and regulations for the internal management of the company, including matters such as the appointment of directors, the conduct of meetings, and the distribution of profits. The incorporation documents include the memorandum and articles of association, along with other documents required by law, such as declarations of compliance and notices of appointment of directors. These documents are used to formally register the company with the relevant authorities and establish it as a separate legal entity.

The interest on partner's loan is

The corresponding entry of personal accounts  found in the debit side of the cashbook is to 

In a departmental accounting system, which of the following expenses will most likely be apportioned on the basis of turnover

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At the end of a financial period, the trading profit and loss account of a sole trader shows a profit of 
₦180,000 it is however discovered that revenue of 
₦15,000 is recorded as expenses while expenses of
₦4,000 is recorded as revenue.

Determine the adjusted net profit

Answer Details

To find the net profit made by Department A, we need to determine the values of the missing amounts in the table. According to the tradition of the organization, expenses are apportioned in the proportion 60%:40% for A and B respectively. We can use this information to calculate the missing amounts in the table: - Salaries and wages: ₦3,000 x 60% = ₦1,800 for Department A, and ₦3,000 x 40% = ₦1,200 for Department B. - Electricity: ₦2,000 x 60% = ₦1,200 for Department A, and ₦2,000 x 40% = ₦800 for Department B. - Depreciation: ₦1,000 x 60% = ₦600 for Department A, and ₦1,000 x 40% = ₦400 for Department B. Now that we have determined the values of the missing amounts, we can calculate the net profit made by Department A: Gross profit: ₦6,000 Less: Salaries and wages: ₦1,800 Less: Electricity: ₦1,200 Less: Depreciation: ₦600 Net profit: ₦6,000 - ₦1,800 - ₦1,200 - ₦600 = ₦2,400 Therefore, the net profit made by Department A is ₦2,400.

The excess of income over expenditure is usually transferred to the

Answer Details

The excess of income over expenditure is usually transferred to the accumulated fund.

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A company advertised and issued 750,000, 12% preference shares of N1 each to be issued ₦1.50 per share. Applications for 1,370,000 were received at 30k per share. 70k per share (including premium) was due on allotment while 25k per share was due on each of the remaining two calls. All amounts due were received. Application money for 120,000 shares was refunded to unsuccessful applicants and the remaining applicants were allotted shares on prorata basis.

The share premium account would be

Answer Details

The share premium account would be credited with the application and allotment of ₦375,000. This can be calculated as follows: - Total amount received for the 1,250,000 shares allotted: 70,000 x 1,250,000 = ₦87,500,000 - Total amount received for the 120,000 shares refunded: 30,000 x 120,000 = ₦3,600,000 - Total premium received: ₦87,500,000 + ₦3,600,000 = ₦91,100,000 - Total premium received per share: ₦91,100,000 / 1,250,000 = ₦72.88 - Premium received in excess of the issue price: ₦72.88 - ₦15 = ₦57.88 - Total premium received in excess of the issue price: ₦57.88 x 1,250,000 = ₦72,350,000 - The share premium account would be credited with the application and allotment of ₦72,350,000.

If a company values its stock in the period of rising prices using LIFO method, there is a tendency for it to

The issued share capital is the number of shares that are 

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authorized by the shareholders

Capital and revenue expenditures of government are usually accounted for under funds which include

Given:
                        Lankoh Company Ltd
                                                      ₦
Stock                                        3,600,000
Cash at hand                               800,000
Cash in bank                            2,400,000
Debtors                                       580,000
Trade creditors                           920,000
Bank overdraft                            200,000
Tax liabilities                               600,000
Salary owed to staff                    180,000

What is the working capital?

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i. cash at bank  ii. cash in hand  iii. premises  iv. land  v. creditors  vi. loan from friends/bank

What are the current assets?

Answer Details

The current assets are i and ii (cash at bank and cash in hand).

If goods are sent to branch at 25% on cost, what will be the cost of goods sent to the branch at a selling price of ₦100,000?

The prime cost is the total of the

The major objectives of departmental account is to ascertain the

Given:

Determine the total factory overhead cost

The ordinary shareholders enjoy the following right except the right to

Sales ledger control account contains the total amount in respect of

Answer Details

The sales ledger control account contains the total amount in respect of debtors, who are individuals or companies that owe money to a business for goods or services they have purchased on credit. The sales ledger control account is used to track the amounts owed to the business by its customers and is an important part of a business's financial record-keeping system.

The formular for calculating depreciation using straight line method is

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The formula for calculating depreciation using the straight-line method is: (Cost - Scrap Value) / Useful Life.

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i. cash at bank  ii. cash in hand  iii. premises  iv. land  v. creditors  vi. loan from friends/bank

Determine the fixed assets

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- iii and iv (premises and land) are considered fixed assets. Fixed assets are long-term tangible assets that a company uses to produce income and are not expected to be converted into cash within the normal operating cycle of the business. They are usually held for a period of more than one year and are not intended for sale in the ordinary course of business.

The two leThe two legally recognized professional accounting bodies in Nigeria are the gally recognized professional accounting bodies in Nigeria are the 

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The two legally recognized professional accounting bodies in Nigeria are the Institute of Chartered Accountants of Nigeria (ICAN) and the Association of National Accountants of Nigeria (ANAN).

The purchase consideration that is lower than the net asset implies that, the buyer has gained the advantage of

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At the end of a financial period, the trading profit and loss account of a sole trader shows a profit of 
₦180,000 it is however discovered that revenue of 
₦15,000 is recorded as expenses while expenses of
₦4,000 is recorded as revenue.

The revenue to be added as an adjustment is

The accounting method that reports incomes when earned and expenses when incurred is called 

Answer Details

The accounting method that reports incomes when earned and expenses when incurred is called accrual accounting.

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Zahki Plc balance sheet (extract) as at 31st December 1997.

                                            ₦                                             ₦
Paid up capital               200,000       Fixed assets        300,000
Share premium                15,000                                   
Profit and loss account     60,000      Investment           180,000
Long-term loan               180,000      Stock                      28,000
                                                           Debtors                  90,000
Creditors                        200,000       provision(3000)      87,000
Other current liabilities    100,000      Cash                       60,000
                                                           Bank                     100,000
                                        755,000                                   755,000     

The quick ratio is

Which of the following stock valuation method is suitable under inflationary conditions?

Given:
                                                                  ₦
Total debtors b/d 31/12/99                    25,000
Cheques received from debtors         255,000
Total debtors c/d 31/12/00                    15,000

Calculate the sales figure

Answer Details

To calculate the sales figure, we need to determine the amount that was received from the debtors. We can do this by subtracting the total debtors b/d 31/12/99 from the total debtors c/d 31/12/00 and adding the cheques received from debtors. ((15,000 - 25,000) + 255,000) = 245,000 So, the sales figure is ₦245,000.

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It is the tradition of the organization to apportion expenses in the proportion 60%:40% for A and B respectively.

The depreciation to be charged to department B is

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- ₦400

Which of the following is a debit item in the purchase ledger control account?

Forlah, a stock broker bought stationery for ₦12,000 by cash. To record this transaction, debit

Answer Details

The correct way to record this transaction is to debit stationery and credit cash. This is because when a stock broker buys stationery for cash, the company's stationery account increases (debit) and the company's cash account decreases (credit).