WAEC SSCE - Financial Accounting - 1989 (Objective)

View Answer

Question 2 Report

Use the following information to answer the given question
MANUFACTURING AND TRADING ACCOUNTS
\(\begin{array}{c|c} & N & & N \\ \hline \text{Opening raw material} & 10,000 & \text{Manufacturing cost} & 114,000 \\ purchases & 60,000 \\ & \overline{70,000} & & \\ \text{Less: Closing raw material} & 8,000 & & \\ & \overline{62,000} & & \\ \text{Direct labour} & 20,000 & & \\ \text{Direct expenses} & 20,000 & & \\ \text{Factory overhead} & 12,000 & & \\ & \overline{114,000} & & \overline{114,000} \\ & & & \text{_______} \\ \text{Stock b/d} & \overline{10,000} & sales & X \\ Purchases & X & \text{Less sales returns} & 5,000 \\ \text{Manufacturing cost} & 114,000 & & \\ & \overline{144,000} & & \\ \text{Stock c/d} & 12,000 & & \\ & \overline{132,000} & & \\ \text{Gross profit 20% on sales } & \text{_______} & & \text{_______}\\ & X & & X \end{array}\)
What is the total of raw materials consumed?

N144,000

N132,000

N70,000

N62,000

N60,000

Answer Details

The total of raw materials consumed can be calculated by adding the opening stock of raw materials to the purchases made during the year, and then subtracting the closing stock of raw materials. Opening stock of raw materials = N10,000 Purchases of raw materials = N60,000 Less: Closing stock of raw materials = N8,000 Therefore, the total of raw materials consumed is: N10,000 + N60,000 - N8,000 = N62,000 Therefore, the correct answer is N62,000.

Read lesson note on Accounts Of Not-for-profit-making Organizations (JAMB)

Read lesson note on Nature And Significance Of Accounting (JAMB)

Accounts Of Not-for-profit-making Organizations

View Answer

Question 3 Report

Which of the following does not belong to the group?

a proprietor of a business

an entrepreneur

an investor

a debtor

a creeditor

Accounts Of Not-for-profit-making Organizations

View Answer

Question 4 Report

The concept of Double Entry Book-Keeping states that

if you receive goods on credit the seller becomes your creditor

for every debit entry there must be a corresponding credit entry

one party receives and another party gives value

purchases and sales are stated separately

for every seller there is a buyer

Answer Details

The concept of Double Entry Book-Keeping states that for every debit entry, there must be a corresponding credit entry. Double Entry Book-Keeping is a system of accounting that ensures accuracy and completeness in recording financial transactions. Every transaction involves two or more accounts, and for every debit entry made in one account, there must be a corresponding credit entry in another account. This means that the total debits must equal the total credits in any transaction. For example, when a company sells goods on credit, it debits accounts receivable (an asset account) and credits sales revenue (a revenue account). This ensures that the total debits and credits in the transaction are equal. The seller becomes the company's creditor, but this is not the main concept of Double Entry Book-Keeping. By following this principle, errors and fraud can be easily detected, and financial statements can be prepared accurately. Double Entry Book-Keeping is widely used in modern accounting, and it forms the basis of the accounting equation: Assets = Liabilities + Equity.

Read lesson note on Principles Of Double Entry (JAMB)

Principles Of Double Entry

View Answer

Question 5 Report

Which of the following may have been recorded in the cash book and fail to appear in the Bank statement?

bank charges and commission

cheques issued, presented and cashed

bank lodgements

payments made by the bank on a tanding order

opening bank overdraft

Cashbook

View Answer

Question 6 Report

Use the following information to answer the given question
MANUFACTURING AND TRADING ACCOUNTS
\(\begin{array}{c|c} & N & & N \\ \hline \text{Opening raw material} & 10,000 & \text{Manufacturing cost} & 114,000 \\ purchases & 60,000 \\ & \overline{70,000} & & \\ \text{Less: Closing raw material} & 8,000 & & \\ & \overline{62,000} & & \\ \text{Direct labour} & 20,000 & & \\ \text{Direct expenses} & 20,000 & & \\ \text{Factory overhead} & 12,000 & & \\ & \overline{114,000} & & \overline{114,000} \\ & & & \text{_______} \\ \text{Stock b/d} & \overline{10,000} & sales & X \\ Purchases & X & \text{Less sales returns} & 5,000 \\ \text{Manufacturing cost} & 114,000 & & \\ & \overline{144,000} & & \\ \text{Stock c/d} & 12,000 & & \\ & \overline{132,000} & & \\ \text{Gross profit 20% on sales } & \text{_______} & & \text{_______}\\ & X & & X \end{array}\)
What is the cost finished goods purchased?

N60,000

N50,000

N140,000

N30,000

N20,000

Manufacturing Accounts

View Answer

Question 7 Report

Which of the following accounts belongs to the private ledger?

drawing accounts

premises account

machinery account

depreciation account

V. Okafor's account

Answer Details

I'm happy to explain what a private ledger is and which of the listed accounts belongs to it! A private ledger is a set of financial accounts that a company maintains for internal use only, and it is not shared with outsiders. The information contained in a private ledger is used for managerial decision-making, budgeting, and other internal accounting purposes. Out of the listed accounts, the V. Okafor's account is most likely to belong to the private ledger. This is because it is a personal account that represents transactions related to a specific individual, rather than the company's assets or expenses. Personal accounts, such as customer accounts or employee accounts, are typically part of a company's private ledger. On the other hand, the other accounts listed - drawing accounts, premises account, machinery account, and depreciation account - are all related to the company's assets or expenses, which are generally part of the company's general ledger, not the private ledger. I hope this helps!

Read lesson note on The Final Accounts Of A Sole Trader (JAMB)

Read lesson note on Partnership Accounts (JAMB)

Partnership Accounts

View Answer

Question 8 Report

Use the following information to answer the given question: SALES LEDGER CONTROL ACCOUNT
\(\begin{array}{c|c} 1986 & & N & 1986 & & N \\ \hline Jan. 1 & \text{Balance b/d} & 1,300 & Jan.1 & \text{Balance b/d} & 86 \\ 31 & sales & 7,630 & & bank & 6,555 \\ & \text{dishonoured cheques} & 250 & & discount& 345 \\ & \text{stopped cheques} & 100 & & returns & 130 \\ & \text{balance c/d} & 92 & & \text{Purchases ledger} & 360 \\ & & & & \text{balance c/d} & 1,896 \\ & & 9,372 & & & 9,372 \\ Feb. 1 & \text{balance b/d} & 1,896 & Feb.1 & \text{balance b/d} & 92 \end{array}\)
The sum of N6,555 described as 'Bank' represents

cash sales for the month, including discounts

cash sales for the month excluding discounts

receipts from trade debtors only

receipts from all the debtors of the business

takings from both cash and credit sales

Cashbook

View Answer

Question 9 Report

Use the following information to answer the given question
MANUFACTURING AND TRADING ACCOUNTS
\(\begin{array}{c|c} & N & & N \\ \hline \text{Opening raw material} & 10,000 & \text{Manufacturing cost} & 114,000 \\ purchases & 60,000 \\ & \overline{70,000} & & \\ \text{Less: Closing raw material} & 8,000 & & \\ & \overline{62,000} & & \\ \text{Direct labour} & 20,000 & & \\ \text{Direct expenses} & 20,000 & & \\ \text{Factory overhead} & 12,000 & & \\ & \overline{114,000} & & \overline{114,000} \\ & & & \text{_______} \\ \text{Stock b/d} & \overline{10,000} & sales & X \\ Purchases & X & \text{Less sales returns} & 5,000 \\ \text{Manufacturing cost} & 114,000 & & \\ & \overline{144,000} & & \\ \text{Stock c/d} & 12,000 & & \\ & \overline{132,000} & & \\ \text{Gross profit 20% on sales } & \text{_______} & & \text{_______}\\ & X & & X \end{array}\)
What is the factory cost of production?

N144,000

N102,000

N78,000

N132,000

N114,000

Manufacturing Accounts

View Answer

Question 10 Report

Outstanding rent of N300 is paid by the proprietor. The effect on the balance sheet is that

both the liability and asset are increased

both the liability and asset are decreased

liability is increased while the asset is decreased

liability is decreased while the asset is increased

both liability and asset remain unchanged

Answer Details

When outstanding rent of N300 is paid by the proprietor, it means that the proprietor has settled a debt owed to a third party (the landlord) using company funds. The effect on the balance sheet is that both the liability and the asset are decreased. The liability decreases because the company no longer owes N300 to the landlord. The asset decreases because the company has spent N300 to settle the outstanding rent. Therefore, the correct answer is (2) both the liability and asset are decreased. both the liability and asset are increased, liability is increased while the asset is decreased, liability is decreased while the asset is increased, and both liability and asset remain unchanged are incorrect, as they do not reflect the correct accounting treatment for paying outstanding rent.

Read lesson note on Nature And Significance Of Accounting (JAMB)

View Answer

Question 11 Report

The term bad debt means

a debt written on bad receipts

debt owed by a bad person

debt that can not be collected

overcharge on a debtors account

debt paid with bad currency notes

Answer Details

The term bad debt means debt that cannot be collected. Bad debt is a financial term used to describe a debt that is no longer considered collectible by the creditor. This may occur when a debtor is unable or unwilling to pay the debt owed to the creditor. Bad debts are usually written off by the creditor as an expense in their financial records. Bad debts can occur in any business where credit is extended to customers, and it is a risk that must be managed by the creditor. To reduce the risk of bad debts, businesses may use credit analysis tools to evaluate the creditworthiness of potential customers before extending credit.

Read lesson note on Nature And Significance Of Accounting (JAMB)

Read lesson note on Principles Of Double Entry (JAMB)

Principles Of Double Entry

View Answer

Question 12 Report

Use the following information to answer the given question:
Issued capital.................100,000
Ordinary shares................40,000
Preference shares..............30,000
Reserves.......................10,000
Debentures.....................60,000
Current........................150,000
Fixed assets...................90,000
Current assets.................240,000
What is the working capital?

N90.00

N5.00

N40.00

N30.00

N2.00

Answer Details

The working capital is N90.00. Working capital is a measure of a company's liquidity and its ability to pay its short-term obligations. It is calculated by subtracting a company's current liabilities from its current assets. Current assets are assets that are expected to be converted into cash within a year, while current liabilities are obligations that are due within a year. To calculate the working capital, we first need to add up the current assets and the fixed assets: Current assets + Fixed assets = N240,000 + N90,000 = N330,000 Next, we need to subtract the current liabilities from this total: Working capital = Current assets - Current liabilities Working capital = N240,000 - N150,000 = N90,000 Therefore, the working capital is N90.00.

Read lesson note on The Final Accounts Of A Sole Trader (JAMB)

Read lesson note on Principles Of Double Entry (JAMB)

Principles Of Double Entry

View Answer

Question 13 Report

A machine cost N12,000 and has a useful life of 4 years and an expected disposal value of N400. Using the reducing balance method, what us the net book value at the end of the year 2? (ignoring residual value)

N10,480

N10,080

N9,680

N9,600

N7,680

Accounts Of Not-for-profit-making Organizations

View Answer

Question 14 Report

Which of the following show s the stock at the start of an accounting period?

appropriation account

current assets in the balance sheet

current liabilities in the balance sheet

tradng account

profit and loss account

Stock Valuation

View Answer

Question 15 Report

Use the following information to answer the given question: SALES LEDGER CONTROL ACCOUNT
\(\begin{array}{c|c} 1986 & & N & 1986 & & N \\ \hline Jan. 1 & \text{Balance b/d} & 1,300 & Jan.1 & \text{Balance b/d} & 86 \\ 31 & sales & 7,630 & & bank & 6,555 \\ & \text{dishonoured cheques} & 250 & & discount& 345 \\ & \text{stopped cheques} & 100 & & returns & 130 \\ & \text{balance c/d} & 92 & & \text{Purchases ledger} & 360 \\ & & & & \text{balance c/d} & 1,896 \\ & & 9,372 & & & 9,372 \\ Feb. 1 & \text{balance b/d} & 1,896 & Feb.1 & \text{balance b/d} & 92 \end{array}\)
The balance of the provision for depreciation account is shown in the

trial balance as a debit

trial balance as a credit

balance sheet as a fixed asset

balance sheet as a ling term liability

balance sheet as a current liability

Partnership Accounts

View Answer

Question 16 Report

Which of the following accounts belongs to the personal ledger?

purchases account

capital account

machinery account

depreciation account

rent and rentals

Cashbook

View Answer

Question 17 Report

A machine cost N12,000 and has a useful life of 4 years and an expected disposal value of N400.Using the reducing balance method what will be the depreciation charge for year 2 at 20%? (ignoring residual value)

N3,000

N2,900

N2,400

N1,920

N1,536

Answer Details

The reducing balance method is a depreciation method that applies a fixed percentage rate to the remaining net book value of an asset each year. To calculate the depreciation charge for year 2 at 20% using the reducing balance method, we first need to determine the net book value of the asset at the beginning of year 2. In year 1, the depreciation charge is calculated as 20% of the initial cost of the machine, which is N12,000. Therefore, the depreciation charge for year 1 is N2,400, and the net book value of the machine at the beginning of year 2 is N9,600 (i.e., N12,000 - N2,400). To calculate the depreciation charge for year 2, we apply the same depreciation rate of 20% to the net book value at the beginning of the year. Therefore, the depreciation charge for year 2 is 20% of N9,600, which is N1,920. So the answer is N1,920. In summary, the depreciation charge for year 2 using the reducing balance method at 20% for a machine that costs N12,000, has a useful life of 4 years, and has an expected disposal value of N400 is N1,920.

Read lesson note on Nature And Significance Of Accounting (JAMB)

Read lesson note on Principles Of Double Entry (JAMB)

Principles Of Double Entry

View Answer

Question 18 Report

Which of the following would be posted to the proprietor's capital account?

gross sales

gross profit

net sales

net profit

manufacturing profit

Answer Details

Out of the given options, "net profit" would be posted to the proprietor's capital account. The proprietor's capital account is a part of the accounting system for sole proprietorships, where the owner's equity in the business is recorded. Net profit, which is calculated by deducting all expenses from total revenue, is the amount of profit that is available to the owner of a business after all expenses and taxes have been paid. This net profit increases the equity of the owner and is therefore credited to the proprietor's capital account. The other options mentioned, such as gross sales, gross profit, net sales, and manufacturing profit, are all accounting terms used to measure different aspects of a business's financial performance. However, they do not directly affect the equity of the owner and therefore are not posted to the proprietor's capital account.

Read lesson note on The Final Accounts Of A Sole Trader (JAMB)

Read lesson note on Partnership Accounts (JAMB)

Partnership Accounts

View Answer

Question 19 Report

Use the following information to answer the given question:
Issued capital.................100,000
Ordinary shares................40,000
Preference shares..............30,000
Reserves.......................10,000
Debentures.....................60,000
Current........................150,000
Fixed assets...................90,000
Current assets.................240,000
What is the capital attributable to the equity shareholders?

N130,000

N140,000

N170,000

N180,000

n240,000

View Answer

Question 20 Report

Use the following information to answer the given question
MANUFACTURING AND TRADING ACCOUNTS
\(\begin{array}{c|c} & N & & N \\ \hline \text{Opening raw material} & 10,000 & \text{Manufacturing cost} & 114,000 \\ purchases & 60,000 \\ & \overline{70,000} & & \\ \text{Less: Closing raw material} & 8,000 & & \\ & \overline{62,000} & & \\ \text{Direct labour} & 20,000 & & \\ \text{Direct expenses} & 20,000 & & \\ \text{Factory overhead} & 12,000 & & \\ & \overline{114,000} & & \overline{114,000} \\ & & & \text{_______} \\ \text{Stock b/d} & \overline{10,000} & sales & X \\ Purchases & X & \text{Less sales returns} & 5,000 \\ \text{Manufacturing cost} & 114,000 & & \\ & \overline{144,000} & & \\ \text{Stock c/d} & 12,000 & & \\ & \overline{132,000} & & \\ \text{Gross profit 20% on sales } & \text{_______} & & \text{_______}\\ & X & & X \end{array}\)
What is the net sales for the period?

N175,000

N170,000

N165,00

N132,000

N144,00

Manufacturing Accounts

View Answer

Question 21 Report

a subsidiary record is a book

found in the ledger

of subsidiary entries

of original entry

containing the final accounts

of final entry

Cashbook

View Answer

Question 22 Report

Pending the location of error, the difference disclosed in the trial balance is normally posted to

an adjustment account

a control account

a suspense account

a profit and loss account

a trading account

Answer Details

When the trial balance does not balance, it indicates that there is an error in the accounting records. The difference between the debit and credit sides of the trial balance is referred to as the "balance carried down" (or "balance b/d" for short), and this amount is normally posted to a suspense account until the error is identified and corrected. A suspense account is an account used to temporarily hold the difference between the debit and credit sides of the trial balance until the error is located and rectified. Therefore, the answer is "a suspense account".

Read lesson note on Company Accounts (WAEC)

Read lesson note on The Final Accounts Of A Sole Trader (JAMB)

Read lesson note on Control Accounts And Self-balancing Ledgers (JAMB)

Company Accounts

View Answer

Question 23 Report

When goods are sold for cash the credit entry goes to the

trader's account

cash book

purchases account

sales account

customers account

Cashbook

Principles Of Double Entry

View Answer

Question 24 Report

Which of the following is not true of capital expenditure? i. assets acquired for the purpose of earning income ii. extension of office building iii. it is incurred and its full benefits consumed in one period of account

i

ii

i and ii

ii and iii

iii

Answer Details

The statement that is not true of capital expenditure is "iii. it is incurred and its full benefits consumed in one period of account." Capital expenditure refers to the funds spent by a business to acquire or improve assets that have long-term value and are essential for the business's operations. Examples of capital expenditures include the purchase of property, plant and equipment, and investments in software or other intangible assets. Option i is true because capital expenditure is incurred to acquire assets that are expected to generate income for the business in the future. Option ii is also true because an extension of the office building is considered a capital expenditure as it adds value to the property and has long-term benefits. Option iii is false because capital expenditure is expected to generate benefits over several accounting periods and not just one. For example, if a company purchases a new machine that will be used for the next 10 years, the full benefits of that machine will be realized over those 10 years, and not just in the year of purchase. In summary, capital expenditure is not fully consumed in one period of account and, therefore, option iii is not true.

Read lesson note on The Accounting Equation And Double Entry Principle (WAEC)

The Accounting Equation And Double Entry Principle

View Answer

Question 25 Report

Use the following information to answer the given question:
Issued capital.................100,000
Ordinary shares................40,000
Preference shares..............30,000
Reserves.......................10,000
Debentures.....................60,000
Current........................150,000
Fixed assets...................90,000
Current assets.................240,000
What is the percentage of equity to the total capital employed?

42%

12%

56%

59%

63%

The Accounting Equation And Double Entry Principle

View Answer

Question 26 Report

Use the following information to answer the given question: SALES LEDGER CONTROL ACCOUNT
\(\begin{array}{c|c} 1986 & & N & 1986 & & N \\ \hline Jan. 1 & \text{Balance b/d} & 1,300 & Jan.1 & \text{Balance b/d} & 86 \\ 31 & sales & 7,630 & & bank & 6,555 \\ & \text{dishonoured cheques} & 250 & & discount& 345 \\ & \text{stopped cheques} & 100 & & returns & 130 \\ & \text{balance c/d} & 92 & & \text{Purchases ledger} & 360 \\ & & & & \text{balance c/d} & 1,896 \\ & & 9,372 & & & 9,372 \\ Feb. 1 & \text{balance b/d} & 1,896 & Feb.1 & \text{balance b/d} & 92 \end{array}\)
The balance of N92 represents the i. amount necessary to balance the account ii. sum due to the customers iii. amount due from the customers

i

ii

iii

i and ii

i and iii

View Answer

Question 27 Report

Use the following information to answer the given question:
Issued capital.................100,000
Ordinary shares................40,000
Preference shares..............30,000
Reserves.......................10,000
Debentures.....................60,000
Current........................150,000
Fixed assets...................90,000
Current assets.................240,000
What is the total of the loan capital of the business?

N10,000

N30,000

N40,000

N60,000

N70,000

Answer Details

The total of the loan capital of the business is N60,000. In accounting, loan capital refers to the funds raised by a business through the issuance of loans or debentures. In the given information, the business has debentures worth N60,000. Therefore, N60,000 represents the total loan capital of the business. The other items listed in the information such as issued capital, ordinary shares, preference shares, reserves, current, fixed assets, and current assets, do not represent loan capital. Issued capital is the total amount of shares issued by the company, while ordinary and preference shares represent the equity capital raised by the company. Reserves represent the accumulated profits of the company that have not been distributed as dividends. Current and fixed assets represent the assets owned by the company, and current assets represent the short-term assets that can be converted into cash within a year. In summary, the loan capital of the business is represented by the value of debentures, which in this case is N60,000.

Read lesson note on Partnership Accounts (JAMB)

Read lesson note on The Accounting Equation And Double Entry Principle (WAEC)

Partnership Accounts

The Accounting Equation And Double Entry Principle

View Answer

Question 28 Report

Discount allowed would appear on the

debit side of sales control account and the credit side of purchases control account

debit side of sales ledger control account only

debit side of purchases ledger control account

credit side of the sales ledger control account

credit-side of the purchases ledger control account

Answer Details

Discount allowed would appear on the credit side of the Sales Ledger Control Account. When a business offers a discount to a customer, it is known as a discount allowed. The discount allowed is deducted from the total amount owed by the customer and is recorded in the Sales Ledger Control Account. This account keeps track of all the transactions made in the sales ledger, including sales, returns, and discounts allowed. Since the discount allowed reduces the amount owed by the customer, it is shown as a credit entry in the Sales Ledger Control Account. In summary, the discount allowed would appear on the credit side of the Sales Ledger Control Account, which keeps track of all the transactions made in the sales ledger, including sales, returns, and discounts allowed.

Read lesson note on Incomplete Records And Single Entry (JAMB)

Read lesson note on Control Accounts And Self-balancing Ledgers (JAMB)

View Answer

Question 29 Report

Use the following information to answer the given question: SALES LEDGER CONTROL ACCOUNT
\(\begin{array}{c|c} 1986 & & N & 1986 & & N\\ \hline Jan. 1 & \text{Balance b/d} & 1,300 & Jan.1 & \text{Balance b/d} & 86 \\ 31 & sales & 7,630 & & bank & 6,555 \\ & \text{dishonoured cheques} & 250 & & discount& 345 \\ & \text{stopped cheques} & 100 & & returns & 130 \\ & \text{balance c/d} & 92 & & \text{Purchases ledger} & 360 \\ & & & & \text{balance c/d} & 1,896 \\ & & 9,372 & & & 9,372 \\ Feb. 1 & \text{balance b/d} & 1,896 & Feb.1 & \text{balance b/d} & 92 \end{array}\)
The items 'Purchases ledger N360' means i. cash purchases during the period ii. credit purchases during the period iii. trade debtors set off against debts on purchases

i

ii

iii

i and ii

ii and iii

View Answer

Question 30 Report

Use the following information to answer the given question:
Issued capital.................100,000
Ordinary shares................40,000
Preference shares..............30,000
Reserves.......................10,000
Debentures.....................60,000
Current........................150,000
Fixed assets...................90,000
Current assets.................240,000
What is the total of Net Assets of the business?

N200,000

N180,000

N160,000

N150,000

N140,000

View Answer

Question 31 Report

The drawings account of a sole proprietorship is transferred to the

capital account

debit side of the trading account

credit side of the prfit and loss account

current liabilities in the balance sheet

current assets in the balance sheet

Answer Details

In a sole proprietorship, the owner can withdraw funds from the business for personal use. These withdrawals are recorded in a separate account called the "drawings account". At the end of an accounting period, the balance in the drawings account is transferred to the capital account of the owner. This is because the withdrawals from the business reduce the owner's capital in the business, and transferring the balance in the drawings account to the capital account reflects this reduction. Therefore, the correct answer is (1) capital account. debit side of the trading account, credit side of the profit and loss account, current liabilities in the balance sheet, and current assets in the balance sheet are incorrect, as they do not reflect the correct accounting treatment for the drawings account of a sole proprietorship.

Read lesson note on The Final Accounts Of A Sole Trader (JAMB)

View Answer

Question 32 Report

Use the following information to answer the given question
MANUFACTURING AND TRADING ACCOUNTS
\(\begin{array}{c|c} & N & & N \\ \hline \text{Opening raw material} & 10,000 & \text{Manufacturing cost} & 114,000 \\ purchases & 60,000 \\ & \overline{70,000} & & \\ \text{Less: Closing raw material} & 8,000 & & \\ & \overline{62,000} & & \\ \text{Direct labour} & 20,000 & & \\ \text{Direct expenses} & 20,000 & & \\ \text{Factory overhead} & 12,000 & & \\ & \overline{114,000} & & \overline{114,000} \\ & & & \text{_______} \\ \text{Stock b/d} & \overline{10,000} & sales & X \\ Purchases & X & \text{Less sales returns} & 5,000 \\ \text{Manufacturing cost} & 114,000 & & \\ & \overline{144,000} & & \\ \text{Stock c/d} & 12,000 & & \\ & \overline{132,000} & & \\ \text{Gross profit 20% on sales } & \text{_______} & & \text{_______}\\ & X & & X \end{array}\)
What is the prime cost?

N62,000

N70,000

N78,000

N102,000

N144,000

Manufacturing Accounts

View Answer

Question 33 Report

The balance in the purchases ledger control account is

total purchases

total sales

the total of the debtors

the total of the creditors

the total credit purchases

Control Accounts And Self-Balancing Ledgers

View Answer

Question 34 Report

A machine cost N12,000 and has a useful life of 4 years and an expected disposal value of N400. The accumulated depreciation at the end of the year 3 using the straight line method is

N9,300

N9,000

N8,700

N6,900

N6,000

Answer Details

The straight-line method of depreciation is calculated by subtracting the salvage value of an asset from its cost and dividing the result by the useful life of the asset. In this case, the machine cost is N12,000, and it has a useful life of 4 years with an expected disposal value of N400. To calculate the annual depreciation expense, we subtract the salvage value from the cost and divide by the useful life: (N12,000 - N400) / 4 = N2,900 So, the annual depreciation expense is N2,900. To find the accumulated depreciation at the end of year 3, we need to multiply the annual depreciation expense by the number of years that have passed. Therefore, the accumulated depreciation at the end of year 3 would be: N2,900 x 3 = N8,700 Therefore, the accumulated depreciation at the end of year 3 using the straight-line method is N8,700. Therefore, option (C) is the correct answer.

Read lesson note on Cashbook (JAMB)

Read lesson note on Partnership Accounts (JAMB)

Cashbook

Partnership Accounts

View Answer

Question 35 Report

The petty cash book can have

a debit balance only

a credit balance only

both debit and credit balances

a debit or nil balance

a nill balance only

Cashbook

View Answer

Question 36 Report

Which of the following in a classified form contains a permanent record of all transactions? The

sales day book

cash book

ledger

journal

purchases day book

Answer Details

The ledger contains a permanent record of all transactions. A ledger is a book or electronic record that contains a categorized summary of all financial transactions that a company or individual has made. It's also called the principal book of accounts. Every financial transaction that a company makes is recorded in the ledger, including purchases, sales, expenses, and revenues. The ledger serves as a permanent record of all these transactions, and it's used to prepare financial statements, such as the income statement and balance sheet. In contrast, the sales day book, purchases day book, cash book, and journal are subsidiary books used to record specific types of transactions, but they don't contain a complete and permanent record of all financial transactions.

Read lesson note on Single Entry And Incomplete Records (WAEC)

Read lesson note on Cashbook (JAMB)

Single Entry And Incomplete Records

Cashbook

View Answer

Question 37 Report

Use the following information to answer the given question
MANUFACTURING AND TRADING ACCOUNTS
\(\begin{array}{c|c} & N & & N \\ \hline \text{Opening raw material} & 10,000 & \text{Manufacturing cost} & 114,000 \\ purchases & 60,000 \\ & \overline{70,000} & & \\ \text{Less: Closing raw material} & 8,000 & & \\ & \overline{62,000} & & \\ \text{Direct labour} & 20,000 & & \\ \text{Direct expenses} & 20,000 & & \\ \text{Factory overhead} & 12,000 & & \\ & \overline{114,000} & & \overline{114,000} \\ & & & \text{_______} \\ \text{Stock b/d} & \overline{10,000} & sales & X \\ Purchases & X & \text{Less sales returns} & 5,000 \\ \text{Manufacturing cost} & 114,000 & & \\ & \overline{144,000} & & \\ \text{Stock c/d} & 12,000 & & \\ & \overline{132,000} & & \\ \text{Gross profit 20% on sales } & \text{_______} & & \text{_______}\\ & X & & X \end{array}\)
What is the gross profit?

N33,000

N28,800

N28,500

N26,400

N22,800

Manufacturing Accounts

View Answer

Question 38 Report

The balance the provision for depreciation account is shown in the

trial balance as a debit

trial balance as a credit

balance sheet as a fixed asset

balance sheet as a long term liability

balance sheet as a current liability

Answer Details

The balance of the provision for depreciation account is shown in the trial balance as a credit. The provision for depreciation is a contra-asset account which is used to reduce the value of a fixed asset to its net book value. As depreciation is charged on the fixed assets over their useful lives, the provision for depreciation account is credited each time a depreciation charge is made. Therefore, the balance of the provision for depreciation account at any given point in time represents the total amount of depreciation charged on the fixed asset up to that point. This balance is shown in the trial balance as a credit to offset the debit balance of the fixed asset account, which reflects the original cost of the asset.

Read lesson note on Provisions And Reserves (WAEC)

Provisions And Reserves

View Answer

Question 39 Report

Use the following information to answer the given question: SALES LEDGER CONTROL ACCOUNT
\(\begin{array}{c|c} 1986 & & N & 1986 & & N \\ \hline Jan. 1 & \text{Balance b/d} & 1,300 & Jan.1 & \text{Balance b/d} & 86 \\ 31 & sales & 7,630 & & bank & 6,555 \\ & \text{dishonoured cheques} & 250 & & discount& 345 \\ & \text{stopped cheques} & 100 & & returns & 130 \\ & \text{balance c/d} & 92 & & \text{Purchases ledger} & 360 \\ & & & & \text{balance c/d} & 1,896 \\ & & 9,372 & & & 9,372 \\ Feb. 1 & \text{balance b/d} & 1,896 & Feb.1 & \text{balance b/d} & 92 \end{array}\)
The amount of N7,630 represents

total credit sales

total of all the debtors of the firm

the total sales for the month

cash sales only

the double entry for the total of the sales account

Answer Details

The amount of N7,630 represents the total credit sales made in the month of January. This information can be obtained from the "sales" column of the Sales Ledger Control Account. Credit sales are sales made to customers who do not pay in cash at the time of purchase but are instead given credit terms to pay at a later date.

Read lesson note on The Final Accounts Of A Sole Trader (JAMB)

Read lesson note on Nature And Significance Of Accounting (JAMB)

Read lesson note on Control Accounts And Self-balancing Ledgers (JAMB)

Read lesson note on Principles Of Double Entry (JAMB)

Principles Of Double Entry

View Answer

Question 40 Report

A sales for N2,570 was recorded in the day book as N2,750. The error committed was

compensating error

error of omission

error of principle

error of original entry

erroe of transportation

Answer Details

The error committed in this case is an error of original entry. An error of original entry occurs when a transaction is recorded with an incorrect amount in the day book or journal. In this case, the sales amount of N2,570 was incorrectly recorded as N2,750. This error could have been caused by a mistake in transcribing the amount from the source document, such as an invoice or receipt. An error of original entry does not get offset or compensated by any other error and will carry through to the ledger accounts and financial statements. Therefore, it is important to identify and correct this type of error as soon as possible to ensure accurate financial reporting. In summary, the error committed in this case is an error of original entry, which occurs when a transaction is recorded with an incorrect amount in the day book or journal.

Read lesson note on Incomplete Records And Single Entry (JAMB)

View Answer

Question 41 Report

T. Trader sets aside from his private funds n1,500 for business purposes. The N1.500 would be referred to as

capital

loan

reserve

drawings

profit

Answer Details

The N1,500 set aside by T. Trader from his private funds for business purposes is referred to as "capital". Capital represents the amount of money or assets that an owner has invested in a business. It can be in the form of cash or other assets contributed by the owner to start or grow the business. In this case, T. Trader is contributing his own funds to the business, which increases the capital of the business.

Read lesson note on Nature And Significance Of Accounting (JAMB)

Read lesson note on Provisions And Reserves (WAEC)

Read lesson note on Principles Of Double Entry (JAMB)

Provisions And Reserves

Principles Of Double Entry

View Answer

Question 42 Report

When a buyer returns damages goods to the seller, the buyer receives a

proforma invoice

credit note

debit note

consiment note

goods return note

Answer Details

When a buyer returns damaged goods to the seller, the seller issues a credit note to the buyer. A credit note is a document used to record a reduction in the amount owed by the buyer to the seller. It is a type of document that a seller issues to a buyer to indicate that the seller is crediting the buyer's account for the amount shown on the credit note. The credit note is issued when the goods are returned by the buyer to the seller due to damage or other reasons. The buyer can use the credit note to reduce the amount owed to the seller or to receive a refund. Therefore, option B, "credit note", is the correct answer.

Read lesson note on Partnership Accounts (WAEC)

Partnership Accounts

View Answer

Question 43 Report

The sales account is written up from

cash sales to customers only

credit sales to customers only

credit sales less cash sales

cash sales less cash discounts

both credit and cash sales

Answer Details

The sales account is written up from both credit and cash sales. The sales account is an important account in the books of a business, and it records the revenue generated by the sale of goods or services. The sales account is credited with the amount of revenue generated by the sale of goods or services. In most cases, a business makes both credit and cash sales. Credit sales are made when goods or services are sold on credit, and the customer is expected to pay for them at a later date. Cash sales are made when goods or services are sold for cash or a cash equivalent, such as a credit card or debit card payment. The sales account is written up from both credit and cash sales. When a credit sale is made, the amount of the sale is recorded in the sales account as a credit entry. When a cash sale is made, the amount of the sale is also recorded in the sales account as a credit entry. Therefore, the sales account is written up from both credit and cash sales, as both types of sales contribute to the revenue generated by the business.

Read lesson note on Nature And Significance Of Accounting (JAMB)

Read lesson note on Principles Of Double Entry (JAMB)

Principles Of Double Entry

View Answer

Question 44 Report

Trade discount is

allowance for prompt payment

allowance for damaged goods

allowance off price list

discount on creditors

discount on debitors

Accounting Concepts

View Answer

Question 45 Report

A cheque for N400 drawn in favour of Jeje was posted to the credit of his account. The entry necessary to correct the error is

a debit suspense account N800,credit Jeje's account N800

debit bank to correct N400, credit Jeje's account N400

debit suspense account N400, credit Jeje's account N400

debit Jeje's account N800, credit suspense account N800

debit Jeje's account N400, credit suspense account N400

Cashbook

View Answer

Question 46 Report

A business marked up its cost by 50%. This would mean a gross profit of

33\(\frac{1}{3}\)% on the cost price

50% on the selling price

66 \(\frac{2}{3}\)% on the selling price

66\(\frac{2}{3}\)% on the market price

33\(\frac{1}{3}\)% on the selling price

View Answer

Question 47 Report

The bank column in the cash book shows a credit balance of N180. This means

a total payment of N180

a gross receipt of N180

a left over of N180 in the bank

an overdraft of N180

a left over of N180 cash

Cashbook

View Answer

Question 48 Report

Factory cost consists of

direct material and factory overhead

direct labour and direct expenses

direct labour and factory overhead

direct6 materials, direct labour, direct expenses and factory overhead

direct expenses and factory overhead

View Answer

Question 49 Report

A machine cost N12,000 and has a useful life of 4 years and an expected disposal value of N400. Using the straight line method, the annual depreciation is

N3,100

N3,000

N2,900

N2,300

N2,000

Answer Details

To calculate the annual depreciation of the machine using the straight-line method, we need to subtract the expected disposal value from the original cost of the machine, and then divide the result by the useful life of the machine. The calculation would be: Annual depreciation = (Cost of machine - Expected disposal value) / Useful life of machine Substituting the values given in the question, we get: Annual depreciation = (N12,000 - N400) / 4 years Annual depreciation = N11,600 / 4 years Annual depreciation = N2,900 per year Therefore, the annual depreciation using the straight-line method is N2,900. This means that the value of the machine is expected to decrease by N2,900 each year over the 4-year useful life of the machine. At the end of the 4 years, the machine would have a net book value of N400, which is the expected disposal value.

Read lesson note on Stock Valuation (JAMB)

Read lesson note on Principles Of Double Entry (JAMB)

Stock Valuation

Principles Of Double Entry

View Answer

Question 50 Report

Use the following information to answer the given question
MANUFACTURING AND TRADING ACCOUNTS
\(\begin{array}{c|c} & N & & N \\ \hline \text{Opening raw material} & 10,000 & \text{Manufacturing cost} & 114,000 \\ purchases & 60,000 \\ & \overline{70,000} & & \\ \text{Less: Closing raw material} & 8,000 & & \\ & \overline{62,000} & & \\ \text{Direct labour} & 20,000 & & \\ \text{Direct expenses} & 20,000 & & \\ \text{Factory overhead} & 12,000 & & \\ & \overline{114,000} & & \overline{114,000} \\ & & & \text{_______} \\ \text{Stock b/d} & \overline{10,000} & sales & X \\ Purchases & X & \text{Less sales returns} & 5,000 \\ \text{Manufacturing cost} & 114,000 & & \\ & \overline{144,000} & & \\ \text{Stock c/d} & 12,000 & & \\ & \overline{132,000} & & \\ \text{Gross profit 20% on sales } & \text{_______} & & \text{_______}\\ & X & & X \end{array}\)
What is the average stock of finished goods?

N8,000

n9,000

N10,000

N11,000

N12,000

Answer Details

To find the average stock of finished goods, we need to take the total value of the closing stock for the period and divide it by the number of periods. From the information given, we know that the opening stock of finished goods was N10,000, and the closing stock of finished goods was N12,000. To calculate the average stock of finished goods, we add the opening and closing stock of finished goods, then divide by 2 (since there are 2 periods). Therefore, average stock of finished goods = (N10,000 + N12,000)/2 = N11,000. Hence, the answer is N11,000.

Read lesson note on Nature And Significance Of Accounting (JAMB)