JAMB UTME - Principles of Accounts - 2021

Question 1 Report

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

balance b/d

cheque dishonoured

balance c/d Correct answer

purchases

Answer Details

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Partnership Accounts

Control Accounts And Self-balancing Ledgers

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Question 2 Report

Use the information below to answer this question

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

credited with application and allotment ₦187,500

debited with application and allotment ₦375,000

debited with application and allotment ₦187,500

credited with application and allotment ₦375,000 Correct answer

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.

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Partnership Accounts

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Question 3 Report

Use the information below to answer this question:
i. cash at bank ii. cash in hand iii. premises iv. land v. creditors vi. loan from friends/bank

Determine the fixed assets

iii and iv Correct answer

i and v

ii and iv

ii and vi

Answer Details

- 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.

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

The Final Accounts Of A Sole Trader

Nature And Significance Of Accounting

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Question 4 Report

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

credit real accounts

credit the ledger Correct answer

debit real accounts

debit the ledger

Answer Details

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Read lesson note on Principles Of Double Entry (JAMB)

Cashbook

Principles Of Double Entry

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Question 5 Report

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

have a higher cost of goods sold

have a higher value of closing stock

have a higher gross profit Correct answer

pay higher income tax

Answer Details

Read lesson note on Stock Valuation (JAMB)

Stock Valuation

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Question 6 Report

Use the information below to answer this question
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

₦202,000 Correct answer

₦210,000

₦195,000

₦184,000

Answer Details

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

Nature And Significance Of Accounting

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Question 7 Report

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

Nigerian Accounting Association and the Executive Cost and Management Accountants of Nigeria

Institute of Certified Public Accountants of Nigeria and the Institute of Cost and Management Accountants

Institute of Chartered Accountants of Nigeria and the Association of National Accountants of Nigeria Correct answer

Association of Accountants of Nigeria and the Institute of Management Accountants of Nigeria

Answer Details

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).

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Partnership Accounts

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Question 8 Report

Recurrent expenditures are expenses for the period not exceeding

10years

2years

5years

1year Correct answer

Answer Details

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

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Nature And Significance Of Accounting

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Question 9 Report

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

technical, special trust and commercial funds

personal advances, technical and public funds Correct answer

personal advances, treasury clearance and special trust funds

commercial loans and treasury clearance funds

Answer Details

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Public Sector Accounting

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Question 10 Report

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

accrual accounting Correct answer

cash accounting

fund accounting

commitment accounting

Answer Details

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

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Principles Of Double Entry

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Question 11 Report

The interest on partner's loan is

debited in profit and loss account Correct answer

credited in profit and loss account

debited in current account

Answer Details

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Partnership Accounts

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Question 12 Report

Given:

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

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

₦4000

₦6000

₦2000 Correct answer

₦8000

Answer Details

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Nature And Significance Of Accounting

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Question 13 Report

The principle of double entry system ensures

balances at the bank

increase in the assets and liabilities

balance of cashbook

mathematical accuracy in trial balance Correct answer

Answer Details

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Read lesson note on Principles Of Double Entry (JAMB)

The Accounting Equation And Double Entry Principle

Principles Of Double Entry

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Question 14 Report

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

cash and credit stationery

purchases and credit stationery

stationery and credit purchases

stationery and credit cash Correct answer

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).

Read lesson note on Cashbook (JAMB)

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

Cashbook

Nature And Significance Of Accounting

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Question 15 Report

Use the information below to answer this question:
i. cash at bank ii. cash in hand iii. premises iv. land v. creditors vi. loan from friends/bank

What are the current assets?

i and v

i and ii Correct answer

ii and iv

iii and v

Answer Details

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

Read lesson note on Cashbook (JAMB)

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

Cashbook

Nature And Significance Of Accounting

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Question 16 Report

The major objectives of departmental account is to ascertain the

materials sold in each department

insurance premium payable on employees

number of employees in each department

contribution of each department to profit Correct answer

Answer Details

Read lesson note on Departmental And Branch Accounts (WAEC)

Read lesson note on Departmental Accounts (JAMB)

Departmental And Branch Accounts

Departmental Accounts

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Question 17 Report

The excess of income over expenditure is usually transferred to the

current assets in the balance sheet

profit and loss account

accumulated fund Correct answer

current liabilities in the balance sheet

Answer Details

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

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

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

The Final Accounts Of A Sole Trader

Accounts Of Not-for-profit-making Organizations

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Question 18 Report

Use the information below to answer the question

	Dept A ₦	Dept B ₦	Total ₦
Gross profit b/d	6,000	4,000	10,000
Less: Salaries and wages	1,800	1,200	3,000
Electricity	?	?	2,000
Depreciation	600	?	1,000
Net profit c/d	?	1,600	4,000
	6,000	4,000	10,000

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

₦500

₦300

₦400 Correct answer

₦600

Answer Details

- ₦400

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Read lesson note on Principles Of Double Entry (JAMB)

Manufacturing Accounts

Principles Of Double Entry

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Question 19 Report

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?

i, ii and iii Correct answer

i and ii

i and iii

ii and iii

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.

Read lesson note on Company Accounts (WAEC)

Read lesson note on Introduction To Company Accounts (JAMB)

Company Accounts

Introduction To Company Accounts

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Question 20 Report

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

carriage inwards

carriage outwards Correct answer

discount received

returns outwards

Answer Details

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Read lesson note on Departmental Accounts (JAMB)

Departmental And Branch Accounts

Departmental Accounts

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Question 21 Report

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?

₦130,000

₦75,000 Correct answer

₦80,000

₦125,000

Answer Details

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Read lesson note on Branch Accounts (JAMB)

Departmental And Branch Accounts

Branch Accounts

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Question 22 Report

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?

₦5,480,000 Correct answer

₦6,480,000

₦8,480,000

₦7,380,000

Answer Details

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Nature And Significance Of Accounting

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Question 23 Report

Given:

Depreciation of plant and machinery	₦1,600
Factory rent	₦650
Indirect wages	₦695
General indirect expenses	₦726
Lubricants	₦1,235
Carriage inwards	₦829
Factory power	₦350
Bank charges	₦612
Carriage outwards	₦2,900

Determine the total factory overhead cost

₦4,485

₦6,085

₦6,556

₦5,256 Correct answer

Answer Details

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Provisions And Reserves

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Question 24 Report

Use the information below to answer this question
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

₦275,000

₦200,000 Correct answer

₦755,000

₦215,000

Answer Details

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The Accounting Equation And Double Entry Principle

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Question 25 Report

The prime cost is the total of the

direct materials+direct labour+direct wages Correct answer

production cost+selling expenses

administrative expenses+selling expenses+distribution expenses

direct materials+work overhead expenses

Answer Details

Read lesson note on Manufacturing Accounts (JAMB)

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

Manufacturing Accounts

Nature And Significance Of Accounting

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Question 26 Report

Use the information below to answer the question

	Dept A ₦	Dept B ₦	Total ₦
Gross profit b/d	6,000	4,000	10,000
Less: Salaries and wages	1,800	1,200	3,000
Electricity	?	?	2,000
Depreciation	600	?	1,000
Net profit c/d	?	1,600	4,000
	6,000	4,000	10,000

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

What is the net profit made by department A?

₦2000

₦3600

₦3000

₦2400 Correct answer

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.

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Manufacturing Accounts

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Question 27 Report

Sales ledger control account contains the total amount in respect of

Investors

Creditors

Shareholders

Debtors Correct answer

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.

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

Control Accounts And Self-balancing Ledgers

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Question 28 Report

The formular for calculating depreciation using straight line method is

Cost-scrap value/useful life Correct answer

Scrap value+sales/useful life

Sales-scrap value/useful life

Purshases+sales/useful life

Answer Details

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

Read lesson note on Accounting Concepts (WAEC)

Accounting Concepts

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Question 29 Report

Use the information below to answer this question

The second final call account was debited with

ordinary share capital account ₦187,500

12% preference share capital account ₦187,500 Correct answer

12% preference share capital ₦375,000

bank account ₦187,500

Answer Details

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

Read lesson note on Introduction To Company Accounts (JAMB)

Introduction To Company Accounts

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Question 30 Report

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

LIFO

simple average

FIFO Correct answer

weighted average

Answer Details

Read lesson note on Stock Valuation (JAMB)

Stock Valuation

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Question 31 Report

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

₦245,000 Correct answer

₦215,000

₦295,000

₦265,000

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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Cashbook

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Question 32 Report

The issued share capital is the number of shares that are

shared among the directors

authorised by the shareholders Correct answer

fully subscribed

in the share certificate

Answer Details

authorized by the shareholders

Read lesson note on Company Accounts (WAEC)

Read lesson note on Introduction To Company Accounts (JAMB)

Company Accounts

Introduction To Company Accounts

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Question 33 Report

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

capital reserve Correct answer

net loss

revenue reserve

net income

Answer Details

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Read lesson note on Accounts Of Not-for-profit Making Organizations (WAEC)

Read lesson note on Provisions And Reserves (WAEC)

Partnership Accounts

Accounts Of Not-for-profit Making Organizations

Provisions And Reserves

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Question 34 Report

The ordinary shareholders enjoy the following right except the right to

receive dividends at a predetermined rate Correct answer

vote at annual general meetings

elect the board of directors

participate in additional issues of shares

Answer Details

Read lesson note on Joint Venture Accounts (JAMB)

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Joint Venture Accounts

Partnership Accounts

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Question 35 Report

Use the information below to answer this question

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