JAMB UTME - Principles of Accounts - 2023

Détails de la réponse

The ultimate controller, refers to the shareholder who has the ultimate control in the company and is not controlled by anyone. This ownership structure often results in a certain level of control between the ultimate controller and the listed company.

The principle of double entry developed from the axioms of accounting equation is given as

Détails de la réponse

The accounting equation states that:
- Capital( Equity) = Assets - Liabilities
- Assets = Capital (Equity) - Liabilties
- Liabilties = Assets - Capital (Equity)
- Equity(Capital ) = Assets

Determine the net profit

Détails de la réponse

To determine the net profit, we need to calculate the Cost of Goods Sold (COGS) and deduct it from the net sales.
First, let's calculate the COGS: - Start with the stock on January 1st: 2,600 - Add purchases: 4,000 - Add carriage inwards: 500
Total Cost of Goods Available for Sale: 7,100
Next, let's calculate the net sales: - Total Sales: 9,000 - Deduct carriage outwards: 500
Net Sales: 8,500
Now, we can calculate the COGS by dividing the net sales by the total cost of goods available for sale and multiplying by 100: COGS = (COGS / Total Cost of Goods Available for Sale) * Net Sales
COGS = (7,100 / 8,500) * 100 COGS = 83.53%
Finally, we can calculate the net profit by deducting the COGS from the net sales: Net Profit = Net Sales - COGS
Net Profit = 8,500 - (8,500 * 0.8353) Net Profit = 8,500 - 7,098.75 Net Profit = 1,401.25
Therefore, the net profit is #1,401.25.
The correct answer is: #1,400

Which of the following expenses is *not* apportined in proportion to turnover?

Détails de la réponse

The expense that is not apportioned in proportion to turnover is **rent**. To understand why, let's first understand what it means to apportion an expense in proportion to turnover. When an expense is apportioned in proportion to turnover, it means that the amount of the expense is allocated based on the amount of revenue or sales generated by a business. Now, let's look at the other expenses listed: - **Commission**: This expense is typically a percentage of the sales or revenue earned by the business. So, it is directly proportional to turnover. The more sales or revenue generated, the higher the commission expense will be. - **Discount allowed**: This expense is also directly related to turnover. When a business offers discounts to customers, the amount of the discount is deducted from the revenue earned. So, the higher the turnover, the higher the discount allowed expense. - **Carriage outwards**: This expense refers to the cost of delivering goods to customers. It is directly related to turnover because the more goods sold, the more deliveries need to be made and therefore the higher the carriage outwards expense. Now, let's focus on **rent**. Rent is a fixed expense that a business pays for using a physical space, such as a store or office. It is not directly related to the amount of sales or revenue generated. Even if a business has higher sales or turnover, the rent expense remains the same. Therefore, it is not apportioned in proportion to turnover. In summary, among the given options, the expense that is not apportioned in proportion to turnover is **rent**.

When expenses are paid on behalf of the venture, the accounting entries is to debit

Détails de la réponse

Expenditure paid on bahalf of joint venture
Accountint entries:
Dr: Joint venture account
Cr: Bank account

Which of the following is charged to trading account?

Détails de la réponse

A trading account is a financial statement that shows the profit or loss of a business through its trading activities. It includes all the revenues and expenses directly related to the buying and selling of goods. Out of the options provided, the expenses that are charged to the trading account are: 1. Carriage Inwards: Carriage inwards refers to the transportation costs incurred in bringing goods into the business. It can include expenses such as freight charges, import duties, and handling fees. These expenses are directly related to the purchase of goods and are considered a part of the cost of inventory. Hence, carriage inwards is charged to the trading account. 2. Carriage Outwards: Carriage outwards refers to the transportation costs incurred in delivering goods from the business to the customers. It includes expenses such as delivery charges, packaging costs, and shipping fees. Carriage outwards is not directly related to the purchase of goods but is rather an expense incurred in selling them. Therefore, carriage outwards is not charged to the trading account. 3. Rent: Rent refers to the cost of occupying a property for business purposes. Rent is not directly related to the buying and selling of goods, but rather to the use of the premises where the business operates. Hence, rent is not charged to the trading account. 4. Discount Allowed: Discount allowed represents the reduction in the selling price of goods given to customers as an incentive or reward. It is a reduction in revenue and does not directly relate to the cost of inventory or the buying and selling of goods. Therefore, discount allowed is not charged to the trading account. In summary, the expenses that are charged to the trading account are carriage inwards. Rent, discount allowed, and carriage outwards are not charged to the trading account as they are not directly related to the buying and selling of goods.

The authority warrant issued prior to the approval of the appropriate bill at the begining of the year

Détails de la réponse

The correct answer is **provisional general warrant**. A provisional general warrant is issued by the authority at the beginning of the year to allow for the necessary expenses before the approval of the appropriate bill. It serves as a temporary authorization to spend money until the formal annual general warrant is approved. The purpose of this warrant is to ensure that essential and urgent expenditures can be made in a timely manner, even without the formal approval of the bill. It helps to prevent delays in government operations and ensures that necessary services are not interrupted due to the lack of a finalized budget. The provisional general warrant is not a long-term solution, and it is eventually replaced by the annual general warrant once the bill is approved. The annual general warrant provides a more comprehensive and detailed allocation of funds for the entire fiscal year. In summary, the provisional general warrant allows for necessary expenses at the beginning of the year until the appropriate bill is approved, ensuring the smooth operation of government services.

The purchases ledger control account is also known as

Détails de la réponse

The purchases ledger control account is also known as the creditors control account.
Let me explain it simply for you.
In a business, the purchases ledger records all the transactions related to buying goods or services on credit. It keeps track of the amounts owed to suppliers or vendors. Now, the purchases ledger control account is a summary account that helps in monitoring and controlling these transactions.
Think of it as a big picture view. The purchases ledger control account combines all the individual creditor balances from the purchases ledger. It shows the total amount the business owes to its creditors at any given time.
By using the purchases ledger control account, the business can easily track the total purchases made on credit and manage its outstanding payments to suppliers. It provides a summary of the business's total credit purchases and the total amount owed to creditors.
So, in summary, the purchases ledger control account is the same as the creditors control account because it represents a summary of all the amounts owed to suppliers or vendors.

Dairo and Segun are in partnership sharing profits and losses in the ratio 2:3 respectively. The information below relates to their business for the year ended 31st December, 2018.
 

- Interest on drawings 10%

- Interest on capital 5%

- Profit for the year ₦36,000

- Salary: Segun ₦10,000

The interest on Dairo's drawings is

Détails de la réponse

To calculate the interest on Dairo's drawings, we need to find out the total drawings made by Dairo during the year. Dairo's drawings: ₦12,000 Now, let's calculate the interest on Dairo's drawings using the formula: Interest on Drawings = Drawings * Rate of Interest Given: Rate of Interest = 10% Interest on Dairo's drawings = ₦12,000 * 10% = ₦1,200 Therefore, the interest on Dairo's drawings is ₦1,200.

The discount column on the left-hand side of cash book represents a discount

Détails de la réponse

In a cash book, the discount column on the left-hand side does not represent a discount. The purpose of this column is to record any discounts that are allowed to a debtor. When a debtor pays their outstanding debt earlier than the due date, the creditor may offer them a discount as an incentive for early payment. This discount is recorded in the discount column on the left side of the cash book.
Therefore, the correct answer is "allowed to a debtor."

The effect of transaction when cash is paid into the bank is?

Détails de la réponse

When cash is paid into the bank, the effect on the transaction is that **the bank balance increases and the cash balance decreases**. Let's break it down step by step: 1. When cash is paid into the bank, we are essentially depositing money into our bank account. This means that the money is moving from our possession (cash balance) to the bank. 2. As the cash balance decreases, our bank balance increases. The bank keeps track of the money we deposit and adds it to our account balance. So, to summarize, when cash is paid into the bank, the bank balance increases because the bank is receiving the money, and the cash balance decreases because we no longer have the cash in our possession.

Détails de la réponse

The amount of sales for the year is calculated using the formula: Opening Debtors + Sales - Cash received from debtors - Closing Debtors + Bad debts written off + Discount allowed - Discount received. Plugging in the given values, we get: 4000 + Sales - 8500 - 1500 + 350 + 500 - 1000 = Sales. Solving for Sales, we get Sales = 6850.

Détails de la réponse

Another name for control accounts is **total account**. Control accounts are summary accounts that are used to monitor and reconcile the balances in individual subsidiary accounts. They serve as a means of controlling and verifying the accuracy of the transactions recorded in the subsidiary accounts. A control account, such as a total account, contains the summarized information from multiple related subsidiary accounts. It simplifies the process of monitoring and managing the subsidiary accounts by providing a single balance that represents the total of the individual account balances. For example, in the context of a business's accounts receivable, the control account would be the total account that represents the combined balance of all the individual debtor accounts. Similarly, in the context of a business's accounts payable, the control account would be the total account that represents the combined balance of all the individual creditor accounts. By using control accounts, businesses can easily identify any discrepancies or errors in the subsidiary accounts. They can compare the balances in the control accounts with the detailed balances in the subsidiary accounts to ensure accuracy and detect any discrepancies. This helps in maintaining the integrity of the financial records and ensuring that the accounts are reconciled properly. In summary, control accounts, also known as total accounts, are summary accounts that consolidate and monitor the balances of individual subsidiary accounts. They provide a simplified and efficient way of managing and reconciling the subsidiary accounts, ensuring accuracy in the financial records.

The accounting system in which only one aspect of transaction is recorded is

Détails de la réponse

The accounting system in which only one aspect of a transaction is recorded is called single entry accounting. In this system, only the cash or assets received or paid are recorded, without recording the corresponding liabilities or expenses. In single entry accounting, each transaction is recorded only once, typically in a single column cash book. This means that there is no systematic tracking of the financial impact of transactions on both sides of the equation (assets = liabilities + equity). It is important to note that single entry accounting is generally considered less comprehensive and reliable compared to double entry accounting. Double entry accounting, on the other hand, is a more complete and accurate system where each transaction is recorded twice—once as a debit and once as a credit. This allows for a better understanding of the financial health of a business and provides a basis for generating accurate financial statements. Overall, single entry accounting is a simpler but less robust approach to recording financial transactions, as it does not provide a complete picture of a company's financial position and performance.

Détails de la réponse

To calculate the amount of preference shares dividends payable at the end of the year, we need to consider the number of preference shares and the dividend rate. In the given information, we know that Larry Limited has 150,000 preference shares of ₦1 each fully paid. The dividend rate for these preference shares is mentioned as 5%. To calculate the total dividend payable for the preference shares, we can multiply the number of preference shares by the dividend rate. 150,000 preference shares x 5% dividend rate = 7,500. Therefore, the amount of preference shares dividends payable at the end of the year is ₦7,500.

Larry Limited has 4,000,000 ordinary shares of 50k each and 150,000 5% prefrence shares of ₦1 each fully paid.
 

At the end of the period, what is the balance of the profit and loss appropriation account?

Détails de la réponse

Balance c/d = net profit + profit and loss - ( goodwill + ordinary share + preference share)
= (90,000 + 10,000) - ( 1000 + 25000 + 7500)
= 100,000 - 33500
= ₦66500

Calculate the cost of raw materials consumed

Détails de la réponse

To calculate the cost of raw materials consumed, we need to consider the stock of raw materials at the start of the year, any purchases made during the year, and the stock of raw materials at the end of the year. Given the following information: Stock on 1/1/16: ₦1,000 Purchases: ₦16,000 Stock on 31/12/16: ₦1,400 We can calculate the cost of raw materials consumed using the following formula: Cost of raw materials consumed = Opening stock + Purchases - Closing stock Substituting the values: Cost of raw materials consumed = ₦1,000 + ₦16,000 - ₦1,400 Simplifying the calculation: Cost of raw materials consumed = ₦16,600 Therefore, the cost of raw materials consumed is ₦16,600. So the correct answer is option: - ₦15,600

An advantage of FIFO method of stock valuation is that

Détails de la réponse

One of the advantages of FIFO method is that the stock received first will be issued out first thereby reducing the problem of deterioration or obsolesence and also items are issued in order of receipt therefore, it is realistic.

In manufacturing, depreciation of office machine is charged to

Détails de la réponse

Depreciation of office machines in manufacturing is charged to the profit and loss account.
Depreciation is a method used to allocate the cost of an asset over its useful life. Office machines, such as computers, printers, and photocopy machines, are considered as fixed assets. These assets gradually lose their value and become less useful over time due to wear and tear or technological advancements.
When manufacturing companies calculate their annual expenses, they include the depreciation of their office machines as an expense in the profit and loss account. The profit and loss account records all the revenues and expenses incurred by a company during a specific period, such as a financial year.
By charging the depreciation of office machines to the profit and loss account, manufacturing companies accurately reflect the decrease in value of these assets over time. This allows them to calculate their net profit or loss for the period more accurately.
It is important to note that while depreciation is charged to the profit and loss account, the accumulated depreciation of office machines is shown as a contra-asset on the balance sheet. The balance sheet provides a snapshot of a company's financial position at a specific point in time, showing its assets, liabilities, and shareholders' equity.
In summary, the depreciation of office machines in manufacturing is charged to the profit and loss account, reflecting the decrease in value of these assets over time and accurately calculating the net profit or loss for the period.

Subscription in advance is treated in the balance sheet as a

Détails de la réponse

Subscription in advance is treated in the balance sheet as a current liability.
This is because subscription in advance represents money that has been paid by customers for products or services that will be delivered or rendered at a future date. Since the provision of these products or services has not yet occurred, the company has an obligation to fulfill this commitment in the future.
As a current liability, subscription in advance is considered a short-term obligation that is expected to be settled within the next operating cycle, typically within one year. It is categorized as a liability because the company owes a future performance to its customers.
On the balance sheet, current liabilities are listed under the liabilities section and represent obligations that are expected to be settled in the near future using current assets or by creating new liabilities. Examples of other current liabilities include accounts payable, accrued expenses, and short-term loans.
It is important for companies to accurately present subscription in advance as a current liability on the balance sheet, as it reflects the company's financial obligations and helps provide a clearer picture of its overall financial health and future cash flow obligations.

Income and Expenditure account is the same as the --------- of a sole trader

Détails de la réponse

The correct answer is profit and loss account.
The Income and Expenditure account is the same thing as the profit and loss account for a sole trader.
The profit and loss account shows all the revenue and expenses incurred by the sole trader during a specific period of time, usually a year. It includes all the sales or income earned by the sole trader, as well as the costs and expenses incurred in running the business.
The revenue or income includes sales from products or services, any interest earned, and other sources of income. The expenses include costs incurred in producing or providing the products or services, wages or salaries of employees, rent, utilities, and other operating expenses.
By subtracting the total expenses from the total revenue, the profit or loss for the sole trader can be calculated. If the revenue is higher than the expenses, it represents a profit, while if the expenses exceed the revenue, it represents a loss.
In summary, the profit and loss account, or the Income and Expenditure account, for a sole trader shows the financial performance of the business by summarizing the revenues and expenses over a specific period. It helps the sole trader assess the profitability of the business and make informed decisions.

Goodwill can be introduced when

Détails de la réponse

The circumstances giving rise to the ascertainment of goodwill are:
- admission of a new partner
- change in profit sharing ratio
- death or retirement of a partner
- the business has been purchased
- dissolution of a business

The assumption that a business will continue to exist into the foreseeanle future is recognized by a concept called

Détails de la réponse

The concept that recognizes the assumption of a business continuing to exist into the foreseeable future is called "going concern." This concept assumes that a business will not be liquidated or cease to operate in the near future. It is based on the belief that businesses are established with the intention of operating indefinitely, unless there is evidence to suggest otherwise. The "going concern" concept is important because it affects how a business's financial statements are prepared. When preparing financial statements, the assumption is made that the business will continue its operations and fulfill its commitments. This assumption allows the use of historical cost accounting, where assets and liabilities are recorded at their original cost. In simpler terms, the "going concern" concept basically means that when a business is being evaluated, it is assumed to be an ongoing entity with no immediate plans of shutting down. This assumption allows for consistent and reliable financial reporting, as it reflects the expectation that the business will continue its operations and meet its obligations in the future.

The use of three column cash book is determined by

Détails de la réponse

The cash discount is allowed for prompt payment of an account or for payment within a specified period of time. It is divided into discount allowed and discount received.

An evidence of payment issued to a government ministry by a revenue collector is

Détails de la réponse

Receipt voucher are documents used for acknowledgement the receipt of public revenue. They must be issued out anytime revenue is collected by government ministries

The following was extracted from the books of MEGA COMPANY NIG. LTD

The working capital of the company is

Détails de la réponse

Working capital = Current Assets - Current Liabilites
= (350,000 + 25,000 + 5,500) - ( 116,500 + 7,500)
= 380,500 - 124, 000
= ₦256,500

Which of the following is not charged to manufacturing account?

Détails de la réponse

In a manufacturing process, various expenses are incurred for producing goods. These expenses can be classified into two categories: direct expenses and indirect expenses. Direct expenses are those expenses that are directly related to the production process and can be easily identified with a specific product or job. They are charged to the manufacturing account because they directly contribute to the cost of production. Examples of direct expenses include raw materials, factory wages, and direct expenses. On the other hand, indirect expenses are those expenses that cannot be directly attributed to a specific product or job. These expenses are incurred to facilitate the overall manufacturing process but cannot be easily allocated to a specific product. Indirect expenses, such as distribution expenses, are not charged directly to the manufacturing account. Instead, they are accounted for separately in the general expenses or overhead account. Coming back to the question, out of the given options, **distribution expenses** is not charged to the manufacturing account. Distribution expenses include costs incurred for storing, packaging, and transporting finished goods to customers. While these expenses are essential for selling and distributing the products, they are not directly related to the manufacturing process itself. Therefore, they are not included in the manufacturing account, which focuses solely on the cost of production. In summary, raw materials, factory wages, and direct expenses are all charged to the manufacturing account because they directly contribute to the cost of production. Distribution expenses, on the other hand, are not charged to the manufacturing account as they are considered indirect expenses related to the selling and distribution of finished goods.

The Accounting term used to describe a partnership firm that stops operation and disposes its assets is

Détails de la réponse

The accounting term used to describe a partnership firm that stops operation and disposes its assets is Dissolution.
Dissolution refers to the process of ending the partnership and distributing the assets among partners. It occurs when partners agree to terminate the business, or when a specific event, such as the death of a partner, triggers the dissolution.
During the dissolution process, the firm's assets, including cash, inventory, equipment, and investments, are evaluated and sold. The proceeds from the sale are then used to pay off any outstanding liabilities, such as loans or debts. If there are any remaining assets after settling the liabilities, they are distributed among the partners based on their respective capital account balances.
It is important to note that the dissolution of a partnership does not mean the same as bankruptcy. Dissolution is a planned process of winding up the partnership's affairs, while bankruptcy occurs when a business is unable to pay its debts. In dissolution, partners work together to settle the financial obligations and distribute the remaining assets, ensuring a smooth and orderly conclusion to the partnership.

The following appears in the trading account except

Détails de la réponse

The item that does not appear in the trading account is **carriage outward**. The trading account is a financial statement that shows the calculation of gross profit or loss by comparing the value of goods bought (cost of goods sold) with the value of goods sold (sales). Let's break down the other three options: 1. **Carriage inward**: This refers to the transportation cost incurred to bring goods into the business. It is considered as part of the cost of goods sold, as it directly relates to acquiring the goods for sale. 2. **Opening stock**: This represents the value of goods held in the beginning of the accounting period, before any sales or purchases. It is included in the trading account as it helps determine the cost of goods sold. 3. **Sales**: This represents the total revenue generated from selling goods or services. It is a crucial component of the trading account since it represents the value of goods sold during the period. However, **carriage outward** does not belong in the trading account. It refers to the transportation cost incurred when delivering goods to customers. Carriage outward is not directly related to the cost of goods sold or the calculation of gross profit/loss. Therefore, it is not included in the trading account. In summary, the trading account includes carriage inward, opening stock, and sales, while carriage outward is not part of it.

Given:

I. Settlement of debts
II. Cessation of business
III. Introduction of assets
IV. Disposal of assets

Which of these constitutes dissolution of partnership?

Détails de la réponse

Bankruptcy of a partner, illegality of object of the business, expiration of the time given, non performance of the business, admission of a new partner, withdrawal or retirement of partners give rise to dissolution of partnership.

When the goods are sold on credit to a buyer, the account receivable account will be

Détails de la réponse

When the goods are sold on credit to a buyer, the account receivable account debits, increasing the company's assets as the amount is receivable from the third party. The corresponding credit will be in the sales account, increasing the company's revenue.

What is the value of the indirect manufacturing cost?

Détails de la réponse

Indirect cost = 880 + 800 + 18000 + 620
= ₦20300

he part of capital issued only at the time of liquidation of the company is

Détails de la réponse

The part of capital issued only at the time of liquidation of the company is called "reserved capital." Reserved capital represents a portion of a company's capital that is set aside for a specific purpose, typically to be used in the event of liquidation. When a company is liquidated, its assets are sold off to pay off any outstanding debts and obligations. Any remaining funds or assets are then distributed to the shareholders. The reserved capital is used as a safeguard to ensure that there are sufficient funds available to cover any unforeseen expenses or liabilities that may arise during the process of winding up the company. Reserved capital is different from other types of capital, such as issued capital, called-up capital, and paid-up capital. Issued capital refers to the total value of shares that a company has offered to the public. Called-up capital is the portion of issued capital that the shareholders are required to pay for. Paid-up capital, on the other hand, is the portion of called-up capital that has been fully paid by the shareholders. In summary, reserved capital is a specific portion of a company's capital that is set aside to cover any unforeseen expenses or liabilities that may arise during the liquidation process. It is only utilized at the time of liquidation and ensures that there are sufficient funds available to pay off any outstanding debts and obligations.

A double entry for a transaction that offsets one amount against another on both sides of the cashbook is a

Détails de la réponse

A double entry for a transaction that offsets one amount against another on both sides of the cashbook is called a contra entry.
A contra entry is used when there is a need to record two opposite and equal transactions simultaneously in the books of accounts. In other words, it involves recording an amount on the debit side and an equal amount on the credit side of the cashbook.
The purpose of a contra entry is mainly to highlight the cancellation or offsetting of a previous entry. This type of entry helps to accurately track and reconcile transactions that involve the movement of funds within the same account or between different accounts.
For example, let's say that a company needs to withdraw cash from its bank account to pay off a loan. In this case, a contra entry would be made to reflect both sides of the transaction. The cash withdrawal would be recorded as a debit in the cashbook, representing the decrease in cash, and as a credit in the bank account, representing the decrease in the outstanding loan.
Contra entries are essential for maintaining the accuracy and integrity of financial records. They ensure that all debit and credit transactions are properly recorded, allowing for accurate financial reporting and analysis.

Détails de la réponse

Current assets are shown in the balance sheet in order of performance as **stock, debtors, bank, and cash**. Stock refers to the inventory or goods a business holds for resale. It is shown first because it represents an essential part of a business's operations. By displaying stock at the top, it emphasizes its importance in the business's overall performance. Debtors are individuals or entities who owe money to the business. They come next because the amounts owed by debtors are expected to be converted into cash within a relatively short period. It is important for the business to accurately track and assess the amounts owed to maintain healthy cash flow. Bank refers to the amount of money held in the business's bank accounts. This includes funds available for immediate use and those that may require a few days to clear. Bank balances are considered highly liquid assets and hold a significant position in the balance sheet. Cash represents physical currency and cash equivalents held by the business. It is displayed last in the order of performance since it is the most liquid asset and readily available for immediate use. Therefore, the correct order of performance for current assets on the balance sheet is stock, debtors, bank, and cash.

The following are importance of branch account except

Détails de la réponse

Branch accounts are important tools that assist organizations in effectively managing their branch operations. They provide valuable information about the performance and profitability of each branch. However, **the importance of branch accounts does not include allowing fraud and wastage of resources**. Let's look at the other three options: 1. **Assisting the organization to determine the performance of a branch manager**: Branch accounts help evaluate the performance of a branch manager by providing detailed financial information about their branch. This can include sales revenue, expenses, and profit or loss generated by the branch. By analyzing this information, the organization can assess how well the branch manager is managing their resources and achieving targets. 2. **Enabling the organization to determine the branch that is making either profit or loss**: Branch accounts provide clear insights into the profitability or loss incurred by each branch. This information is crucial for decision-making purposes, such as whether to allocate additional resources, close an unprofitable branch, or implement measures to improve the performance of a struggling branch. 3. **Allowing proper control over the branch by the head office**: Branch accounts facilitate effective control and oversight of branch operations by the head office. By maintaining detailed financial records, the head office can monitor the financial performance of each branch, identify any irregularities, and take corrective actions when needed. This control ensures that the overall functioning of the branches is aligned with the organization's objectives and policies. In summary, while branch accounts are instrumental in evaluating branch manager performance, determining profitability, and ensuring control over branch operations, they do not permit fraud or wastage of resources.

Profit expressed in relation to cost of goods sold is

Détails de la réponse

Mark up is when profit is expressed as a percentage of cost price i.e cost of goods sold.

Capital for a profit making organization is generated through

Détails de la réponse

Shares can be issued to the public for subscription. A lot of money can be raised to finance the operation of the business through the issue of new shares to members of the public.

Shares are said to be authorized when they are

Détails de la réponse

Authorized shares are defined as the maximum number of shares that a company is legally allowed to issue to investors as per its own determinations

Détails de la réponse

A control account is a summary account that represents a group of similar transactions or balances. It is used to simplify the management and analysis of a large number of individual accounts. The advantage of a control account is that it provides a way to monitor and track the overall balance or activity within a group of related accounts. It helps to ensure accuracy and identify any discrepancies or errors. Now, let's analyze the options provided one by one to determine which one is NOT an advantage of a control account: 1. **Difficulty in committing fraud**: This is indeed an advantage of a control account. By consolidating and summarizing the information from multiple accounts, it becomes more difficult for individuals to manipulate or misrepresent the data for fraudulent purposes. 2. **It can be used to detect missing figures**: This is also an advantage of a control account. By comparing the total balance of the control account with the sum of the individual accounts it represents, any missing figures or discrepancies can be easily identified. 3. **Helps to determine profit and loss**: This is another advantage of a control account. By summarizing the transactions related to revenue and expenses, a control account can provide an overview of the profit or loss generated by a particular area or department. 4. **Helps in locating errors**: This is also an advantage of a control account. By comparing the balances of the control account with the detailed records, any errors or discrepancies can be quickly identified and addressed. Based on the analysis of the options, it can be concluded that the **difficulty in committing fraud** is not an advantage of a control account. In fact, it is an advantage because it makes it more difficult for fraud to occur.