Loading....

WAEC SSCE - Financial Accounting - 1997 (Objective)

Question 1 Report

Use the following information to answer the given question. The Receipts and Payments Account of Acada Club for the year ended 31st December, 1995 is as follows:
\(\begin{array}{c|c} & N & & N \\ \hline \text{Balance b/f} & 800 & \text{Printing and stationery} & 320 \\ Subscriptions & 3,600 & \text{Postages and Telephone} & 160 \\ \text{Donations} & 650 & Rent & 1,200 \\ \text{Dace tickets} & 1,200 & \text{Library books} & 2,500 \\ & & \text{Anniversary dance expenses} & 945 \\ & & \text{balance c/d} & 1,125\\ & \overline{6,250} & & \overline{6,250} \end{array}\)
The capital expenditure of the club for the year was
Answer Details
The capital expenditure refers to the expenditure incurred on the acquisition or improvement of long-term assets such as land, building, machinery, etc. We can determine the capital expenditure of the club by identifying the items in the Receipts and Payments Account that relate to the acquisition or improvement of long-term assets. From the given information, we can see that there is an item called "Library books" with a value of N2,500. This item represents the purchase of a long-term asset (books for the club's library), which is a capital expenditure. Therefore, the capital expenditure of the club for the year was N2,500.
Read lesson note on Nature And Significance Of Accounting (JAMB)
View Answer