JAMB UTME - Principles of Accounts - 2019

From the following, determine the value of closing stock using:

Feb 1 purchased 200 units @ ₦2.00 each

Feb 3 purchased 100 units @ ₦1.00 each

Feb 4 issued 120 units @ ₦5.00 each

Feb 5 purchased 50 units @ ₦3.00 each

Feb 6 issued 100 units @ ₦4.00 each

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Goods were purchased for resale on credit costing ₦150,000 on 30th September 20X8 from Tosanwumi International. The entry to record these transaction is debit

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The entry to record the purchase of goods for resale on credit costing ₦150,000 from Tosanwumi International on 30th September 20X8 is: Debit: Purchase Account ₦150,000 Credit: Tosanwumi International Account ₦150,000 This means that the Purchase Account is debited with the value of the goods purchased on credit, while the Tosanwumi International Account is credited for the same amount, representing the amount owed to the supplier. The Purchase Account is a nominal account that is used to record the cost of goods purchased for resale or for use in the business. The Tosanwumi International Account is a personal account, specifically a creditor account, used to record the amount owed to Tosanwumi International for the goods purchased on credit. This entry follows the double-entry bookkeeping system, which requires that every transaction has equal debits and credits. The debit entry represents the increase in expenses, while the credit entry represents the increase in liabilities, specifically accounts payable to the supplier.

Majority of commercial transactions are termed credit transactions, which means

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When we say that a commercial transaction is a credit transaction, it means that the payment for goods or services is deferred to a future date. In other words, the buyer doesn't pay immediately for the goods they've purchased, but instead, they are given a certain period of time to pay for those goods. This is a common practice in business, as it allows buyers to make purchases without having to pay for them upfront, and it also allows sellers to extend credit to their customers, which can help to build customer loyalty and increase sales. In a credit transaction, an account is usually opened between the buyer and seller, which keeps track of the amount owed and the payment due date. When the payment due date arrives, the buyer is expected to make the payment, which settles the account. It's important to note that in a credit transaction, the item of expenditure doesn't increase. The cost of the goods or services remains the same, but the payment for those goods or services is deferred to a future date.

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If only wages is shown on the trial balance, it should be charged to the

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The following are the final accounts of a trading organisation Wazobi ventures, for the year ended 30th June, 19x8

Calculate the net profit on percentage of expenses.

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To calculate the net profit as a percentage of expenses, we need to first determine the total expenses of the company for the year. We can do this by adding up all of the overhead expenses: admin expenses + selling expenses + other overhead expenses. Total expenses = ₦16,800 + ₦15,000 + ₦6,200 = ₦38,000 Next, we can calculate the net profit as a percentage of expenses by dividing the net profit by the total expenses and multiplying by 100. Net profit as a percentage of expenses = (Net profit / Total expenses) x 100 = (₦25,000 / ₦38,000) x 100 = 65.79% Therefore, the correct answer is 65.79%, which is option (D). This means that for every ₦1 spent on expenses, the company earned a net profit of approximately ₦0.66. It's important to note that this percentage does not take into account the cost of goods sold, which is a separate expense and is already deducted from the sales figure.

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Payment to creditors ₦12,250

Creditors at start ₦550

Creditors at end ₦830

What is the creditors amount in the balance sheet?

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Discount received is apportioned to each department on the basis of

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Discount received is usually apportioned to each department on the basis of their purchases. The reason for this is that the discount is typically given by the supplier as a percentage of the total value of goods purchased. Therefore, the more a department purchases from the supplier, the more discount they receive. For example, if a department purchases $10,000 worth of goods and the supplier offers a 5% discount, the department would receive a discount of $500. If another department purchases $5,000 worth of goods from the same supplier, they would only receive a discount of $250. By apportioning the discount on the basis of purchases, each department receives a fair share of the discount based on their contribution to the total purchases from the supplier. This helps to ensure that the discount is allocated in a way that reflects the actual purchasing activity of each department.

Abelawo ltd operates a retail branch at Aba. All purchases are made by the head office in Onitsha and goods are charged to the branch at cost plus 50%. During the year ended. Goods sent to branch at invoiced price is ₦30,870, cash sales ₦13,020 and Bad debt amounted to 129. From the following, what is the profit?

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The manufacturing account is prepared to ascertain

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Use the question to answer this questionThe following information were extracted from the books of Miliki state

Recurrent expenditure is

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Industry ltd, issued 100,000 shares at ₦1 each out of its Authorized share capital of ₦200,000 at ₦1 each. At the of the first call, all shareholders paid in full, except for two shareholder who owes ₦20,000.

The company's paid-up capital is

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Given:

Ordinary share dividend ₦100,000, General reserve ₦4,100, Net profit b/d ₦27,370, corporation tax ₦2,500, Profit and loss ₦28,200, Interim ordinary dividend ₦4,050, Goodwill 20,50 provide for preference Dividend ₦2100 and Final ordinary Dividend of 5% and also write off Goodwill at ₦1500.

The retained profit in the Appropriation account is

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Expenses are to be shared in the ratio of sales.

What was the cost of goods sold?

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A fall or decrease in the economic service potential of an asset as a result of wear, tear and obsolescence is referred to as

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Depreciation is the fall or decrease in the economic service potential of an asset as a result of wear, tear and obsolescence. Think of an asset as something you own, like a car, a computer, or a building. Over time, these assets lose value because they get older, wear out, or become outdated. This loss of value is called depreciation. It's an estimate of how much an asset has lost in value over a certain period of time. In simple terms, depreciation is like getting older - the more time goes by, the less useful you become. The same thing happens to assets. The longer they're in use, the less valuable they become, and that decrease in value is called depreciation.

The advantage of double entry is that

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The advantage of double-entry bookkeeping is that it ensures the accuracy of financial records and provides a complete picture of a company's financial transactions. Double-entry bookkeeping is a method of recording financial transactions that involves recording every transaction in at least two accounts, with one account debited and the other credited. This ensures that the total debits always equal the total credits, which means that the books are always in balance. By using double-entry bookkeeping, companies can ensure that their financial records are accurate and complete. They can also quickly identify errors and discrepancies in their records, which can help them to make better financial decisions. In addition, double-entry bookkeeping provides a complete picture of a company's financial transactions. It shows how every transaction affects both sides of the accounting equation (i.e., assets = liabilities + equity), which helps companies to understand the impact of their transactions on their financial position. In summary, the advantage of double-entry bookkeeping is that it ensures the accuracy and completeness of financial records, helps companies to quickly identify errors and discrepancies, and provides a complete picture of a company's financial transactions. It is not related to options such as increasing assets or disbursing cash.

Which of the following cannot depreciate?

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Land is the item that cannot depreciate. Depreciation is the reduction in the value of a fixed asset due to wear and tear, obsolescence or other factors. It is a non-cash expense that is charged against the income of a company over the useful life of the asset. However, land is a fixed asset that has an unlimited useful life, and its value does not diminish over time. Therefore, it cannot be depreciated. On the other hand, plant and machinery, motor vans, and premises are all fixed assets that have a limited useful life, and their values decrease over time due to wear and tear, obsolescence or other factors. As a result, they can be depreciated. In summary, land is the item that cannot be depreciated, while plant and machinery, motor vans, and premises are all items that can be depreciated.

One of these is not a similarity between Joint Venture and Partnership.

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An ordinary share of ₦100 was issued at ₦80. The share was issued at

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An ordinary share of ₦100 was issued at ₦80, which means it was issued at a discount. A share is said to be issued at a discount when its issue price is lower than its par or face value. In this case, the par value of the share is ₦100, but it was issued at ₦80, which is lower than its face value. Therefore, the difference between the issue price and the par value (₦100 - ₦80 = ₦20) is the discount. On the other hand, if a share is issued at a price higher than its par value, it is said to be issued at a premium. When a share is issued at its face value, it is said to be issued at par. Lastly, a loss is incurred when the selling price of an asset is lower than its purchase price. However, that is not the case in this scenario as there is no information on any selling of the share.

One of the limitations of accounting is that

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Industry ltd, issued 100,000 shares at ₦1 each out of its Authorized share capital of ₦200,000 at ₦1 each. At the of the first call, all shareholders paid in full, except for two shareholder who owes ₦20,000.

The Unissued capital of the company is

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The authorized share capital of Industry Ltd is ₦200,000, which means the maximum amount of money the company can raise from issuing shares is ₦200,000. The company issued 100,000 shares at ₦1 each, so it raised ₦100,000. This means that ₦100,000 of the authorized share capital has been issued. All shareholders paid in full except for two shareholders who owe a total of ₦20,000. This means that the company received a total of ₦80,000 in payment for the issued shares. The unissued capital of the company is the portion of the authorized share capital that has not been issued yet. Since the authorized share capital is ₦200,000, and ₦100,000 has been issued, the unissued capital is ₦100,000. Therefore, the answer is (2) ₦200,000 is the authorized share capital, and ₦100,000 is the unissued capital.

Where there is no agreement made by the partners, the following provisions takes place except

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In a partnership, when no agreement is made by the partners, the default provisions of the Partnership Act of the relevant country take effect. These provisions dictate the terms of the partnership, including how profits and losses are to be shared, how interest is to be charged on capital and drawings, and whether partners are entitled to receive salaries. In this context, the statement "the following provisions take place except" is not clear as it suggests that there are several provisions, and one of them does not take effect. However, the options given do not constitute provisions that are part of the default provisions of the Partnership Act. Therefore, the statement is incomplete, and we cannot provide a definitive answer. However, we can say that the default provisions of the Partnership Act are in place to provide a framework for partnerships where there is no agreement between the partners. These provisions may vary from country to country and may be different depending on the legal jurisdiction. Overall, it is always recommended for partners to have a partnership agreement in place that outlines the terms and conditions of the partnership, as this can help avoid potential conflicts and ensure that all partners are on the same page.

A statement in a double entry system in which are recorded all the transactions of one specific class, which takes place during the period is called

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The statement in a double entry system that records all the transactions of one specific class during a period is called a ledger. A ledger is a book or a collection of accounts in which a business records its financial transactions. It contains all the financial information related to a specific account, such as sales, purchases, expenses, and revenues. In a double entry system, every transaction affects at least two accounts, one being debited and the other credited. These debits and credits are recorded in the ledger in separate columns, which allows for the calculation of the account balance at any given time. For example, a business might have a ledger for its sales transactions, in which all the sales made during a particular period are recorded. Each sale is recorded in the ledger as a debit to the customer's account and a credit to the sales account. At the end of the period, the balance in the sales account represents the total amount of sales made during that period. Overall, the ledger is an important tool in accounting as it provides a detailed record of all financial transactions, allowing businesses to monitor their financial performance and make informed decisions.

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Ojo, Sam and Ade are in partnership sharing profit in the ratio 4 : 3 : 1 respectively.

Extract from their books for the year ended are

Interest on drawings and capital is allowed 5% respectively and profit for the year amounted to ₦4,950

Ojo's share of profit is

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Use the question to answer this questionThe following information were extracted from the books of Miliki state

Capital expenditure is

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Capital expenditures are expenditures made by a company to acquire or improve long-term assets that are expected to provide benefits over several years. Examples of capital expenditures include the purchase of equipment, machinery, property, or buildings. Based on the information provided in the question, the following expenditures are capital expenditures: - Sinking of boreholes - Purchase of a motor car - Purchase of beds The total amount spent on these items is ₦2,900,000 + ₦920,000 + ₦425,000 = ₦4,245,000. Therefore, capital expenditure in this case is ₦4,245,000. In conclusion, capital expenditures are expenditures made to acquire or improve long-term assets that are expected to provide benefits over several years. Based on the information provided, the capital expenditure in this case is ₦4,245,000.

Goods can be charged to branches using any of these pricing methods except

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A company goods sent to branch at invoiced price is ₦30,870 at cost plus 25%. The mark-up is

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The mark-up in this scenario is ₦6,174. When a company sells goods to its branch, it usually does so at a price that is higher than the cost price, to make a profit. In this case, the invoiced price of the goods sent to the branch is ₦30,870, which includes a markup of 25% on the cost price. To find the cost price, we can use the following formula: Cost price = Invoiced price / (1 + Markup percentage) Plugging in the values, we get: Cost price = ₦30,870 / (1 + 25%) = ₦24,696 Now, to find the markup, we can use the following formula: Markup = Invoiced price - Cost price Plugging in the values, we get: Markup = ₦30,870 - ₦24,696 = ₦6,174 Therefore, the mark-up in this scenario is ₦6,174. This represents the amount that the company has added to the cost price of the goods to arrive at the invoiced price that it charged to its branch.

Mr Ojo gives you the following information on 31st July 2017

Opening Stock         7,000

Closing Stock         12,000

Purchases         60,000

Expenses         4,500

Uniform margin of 33 $\frac{1}{3}$ %

You are required to calculate the sales

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Discount received is charge to

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Discount received is a reduction in the amount paid for goods or services purchased by a company. This reduction is usually given by a supplier to a customer as an incentive to encourage prompt payment or to build customer loyalty. In accounting, discount received is considered a gain for the company and is therefore credited to the profit and loss account. The profit and loss account is an account that records all revenues and gains on one side, and all expenses and losses on the other side, for a particular period. By recording discount received in the profit and loss account, the company can track and report its total gains for a specific period, and also calculate the net profit or loss for that period. This helps the company to make informed decisions about its operations and financial position, and to meet its reporting requirements. Therefore, the correct answer is option (B) - profit and loss account. Discount received is a gain for the company, and it is credited to the profit and loss account to be recorded as part of the company's total gains and revenues for a specific period.

Which of these will not appear in the preparation of control account.

I. Bad debts

II. Discounts

III. Returns

IV. Provision for bad debts

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The item that will not appear in the preparation of a control account is option IV only, which is "Provision for bad debts." A control account is a summary account that provides an overview of the individual accounts that make up a particular category, such as debtors or creditors. The purpose of a control account is to reconcile the total balance of individual accounts with the balance in the control account. In the context of accounts receivable, which is money owed to a company by its customers, the control account typically includes transactions such as sales, cash receipts, discounts, and returns. Bad debts, which are accounts that are unlikely to be paid by customers, are also included in the control account. However, the provision for bad debts is a separate account that is used to estimate the amount of bad debts that are likely to occur in the future, and it is not typically included in the control account. In summary, the provision for bad debts is not included in the preparation of a control account, while bad debts, discounts, and returns are typically included.

Every economic unit, regardless of its legal form of existence, is treated as a separate entity from parties having economic interest is

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The entity concept is a fundamental principle of accounting that assumes that every economic unit, regardless of its legal form of existence, is treated as a separate entity from parties having an economic interest. This means that a business is viewed as a distinct entity separate from its owners, shareholders, creditors, or any other parties with an economic interest in the business. Under the entity concept, the financial transactions of the business are recorded separately from those of the owner or other parties. This enables the business to track its financial performance and position accurately, and to prepare financial statements that are useful for decision-making. For example, if a business owner invests $10,000 of personal funds into the business, the entity concept requires that the transaction be recorded as a liability owed to the owner by the business. Similarly, if the business borrows $5,000 from a bank, the loan is recorded as a liability owed to the bank by the business. By treating the business as a separate entity, the entity concept enables stakeholders to evaluate the financial performance of the business without confusion or distortion caused by mixing personal transactions with business transactions.

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Ojo, Sam and Ade are in partnership sharing profit in the ratio 4 : 3 : 1 respectively.

Extract from their books for the year ended are

Interest on drawings and capital is allowed 5% respectively and profit for the year amounted to ₦4,950

Sam's share of profit is

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What was the gross profit?

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To calculate the gross profit, we need to subtract the cost of goods sold (COGS) from the total revenue (sales). COGS represents the cost of the products that were sold during the period, and it is calculated as: COGS = Opening stock + Purchases - Closing stock In this case, the values are: COGS = ₦20,000 + ₦70,000 - ₦15,000 = ₦75,000 Total revenue (sales) is given as ₦100,000. Therefore, the gross profit can be calculated as: Gross profit = Total revenue - COGS = ₦100,000 - ₦75,000 = ₦25,000 Hence, the answer is option (D) ₦25,000.

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In the preparation of a statement of profit, the opening capital is the amount of money a business had at the beginning of a given period, and the closing capital is the amount of money a business has at the end of that same period. If the opening capital is greater than the closing capital, it means that the business has used more money than it has received during the period, leading to a decrease in its overall capital. This decrease in capital is referred to as a "loss." Therefore, if the opening capital is greater than the closing capital, it indicates that the business has suffered a loss during the period.

Bought motor vehicle ₦60 paying by cheque. The effect of the transaction will be

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The effect of the transaction will be an increase in the assets of the motor vehicle account and a decrease in the assets of the bank account. When you bought the motor vehicle and paid for it by cheque, you transferred ₦60 from your bank account to the account of the seller. This means that the assets of your bank account decreased by ₦60, while the assets of the motor vehicle account increased by ₦60. In other words, the transaction resulted in the transfer of ₦60 worth of value from your bank account to the motor vehicle account. Therefore, there is no increase in liabilities of the bank account because you did not borrow any money to make the purchase. To summarize, the transaction of buying a motor vehicle and paying for it by cheque resulted in an increase in the assets of the motor vehicle account and a decrease in the assets of the bank account.

A proprietor withdraws cash from the business for private use, he

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The objective of departmentalization is to

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The correct entry for the transaction where Mr. Roi pays rent of ₦50,000 to his landlord on July 1st, 20x7 by cheque, using the double entry principle would be: - Dr Rent A/c; Cr Bank A/c The transaction has two effects: it decreases Mr. Roi's cash (Bank A/c) balance by ₦50,000 and increases the landlord's Rent A/c balance by the same amount. Applying the double entry principle, we need to record both of these effects in the accounts. Therefore, we will debit Rent A/c with ₦50,000 as it is an expense and credit Bank A/c with the same amount as it is a decrease in cash. This will ensure that the accounting equation (Assets = Liabilities + Equity) remains balanced. In summary, when Mr. Roi pays rent by cheque, we record a debit of ₦50,000 to Rent A/c and a credit of ₦50,000 to Bank A/c to maintain the balance of the accounting equation.

Which of the following is not charged to manufacturing account?

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Distribution expenses are not charged to manufacturing account. Manufacturing account is a record of all the costs incurred during the production process of goods. It includes direct expenses such as raw materials, direct labor (factory wages) and direct expenses incurred in the production process. On the other hand, distribution expenses refer to the costs incurred in the distribution of finished goods to the customers, such as transportation, packaging, and marketing expenses. These costs are not considered a part of the production process and hence are not charged to the manufacturing account. Instead, they are recorded in the selling and administrative expenses account.

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Cost of raw materials consumed is

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The cost of raw materials consumed is ₦152,120. To determine the cost of raw materials consumed, you need to subtract the stock of raw materials on January 1st from the stock of raw materials on December 31st and add the purchases of raw materials, which is ₦71,380 - ₦50,640 + ₦32,160 = ₦53,000. This amount is then added to the direct expenses, such as factory fuel, carriage inwards on raw materials, and manufacturing wages, which are ₦29,640 + ₦45,000 + ₦16,500 + ₦12,500 + ₦7,000 = ₦100,640. The total of these two amounts is ₦152,120, which is the cost of raw materials consumed.