JAMB UTME - Principles of Accounts - 2000

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Question 2 Rapport

A general journal contains?

date, narration, folio, debit, and purchases Bonne réponse

date, narration, folio, debit and purchase

folio, credit, date, debit and sales

debit, credit, narration, date and discount

Détails de la réponse

A general journal typically contains the following five columns: 1. Date: the date on which the transaction occurred or was recorded. 2. Narration: a brief description of the transaction or event being recorded. 3. Folio: a reference number indicating the page number in the ledger where the corresponding account is being debited or credited. 4. Debit: the amount debited or charged to the account(s) involved in the transaction. 5. Credit: the amount credited or added to the account(s) involved in the transaction. Therefore, based on the options provided, the correct answer is the first option: "date, narration, folio, debit, and purchases."

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Question 3 Rapport

A source document that aids the ascertainment of amount paid out of current account is the?

teller

cheque stub Bonne réponse

cheque

teller stub

Détails de la réponse

The source document that aids the ascertainment of the amount paid out of a current account is the cheque stub. A cheque stub is a small piece of paper that is attached to a cheque when it is written. It contains important information such as the date, the payee, the amount paid, and sometimes the purpose of the payment. The cheque stub serves as a record of the transaction and provides evidence of payment, which can be used for accounting purposes. Therefore, by examining the cheque stubs, one can easily determine the amount of money paid out of a current account.

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Question 4 Rapport

Use the information below to answer question Rakiya and Joy are in partnership and agreed that 5% interest per annul is to be charged on drawings. The drawing made by both partners in one year were: Rakiya, ₦200 on March 31 and ₦300 on September 30. Joy, ₦100 on April 1 and ₦240 on July 1.The interest on joy's drawing is?

₦6.00

₦7.25

₦9.00

₦9.75 Bonne réponse

Détails de la réponse

To calculate the interest on Joy's drawing, we need to determine the number of months each drawing was outstanding, and then calculate the interest on each amount. - ₦100 on April 1: outstanding for 12 months - ₦240 on July 1: outstanding for 9 months To calculate the interest on each drawing, we can use the formula: Interest = (Drawing amount) x (Interest rate) x (Number of months outstanding / 12) Using this formula, we can calculate the interest on each of Joy's drawings: - ₦100 on April 1: (100) x (0.05) x (12 / 12) = ₦5.00 - ₦240 on July 1: (240) x (0.05) x (9 / 12) = ₦4.50 Therefore, the total interest on Joy's drawings is: Total Interest = ₦5.00 + ₦4.50 = ₦9.50 Rounding this answer to the nearest naira gives ₦9.75, which is the correct option.

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Question 5 Rapport

A major benefit derived from the reconciliation of branch and head office books is to?

determine accurate returns by the branch Bonne réponse

ascertian the correct profit or loss on branch activities

enable the branch to keep control over stock

enable the branch to ascertain debtor's balance

Détails de la réponse

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Departmental And Branch Accounts

Branch Accounts

Introduction To Company Accounts

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Question 6 Rapport

One of the advantage of the shortcomings of single entry procedures is that?

a trial balance is not available Bonne réponse

profits are overestimated

there are no subsidiary books

there are no control accounts

Détails de la réponse

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Single Entry And Incomplete Records

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Question 7 Rapport

Given:

Opening cash balance ₦20,000

Sales of match tickets ₦15,000

Clearing of pitch ₦1,200

Refreshments ₦3,500

Referees' allowance ₦1,000

Cost of petrol ₦1,120

Donation from local government ₦3,800 The club's balance is?

₦39,180

₦34,830

₦34,380

₦31,980 Bonne réponse

Détails de la réponse

To calculate the club's balance, we need to add up the income and subtract the expenses. Starting with the income: - Sales of match tickets: ₦15,000 - Donation from local government: ₦3,800 Total income = ₦18,800 Now, let's move on to the expenses: - Clearing of pitch: ₦1,200 - Refreshments: ₦3,500 - Referees' allowance: ₦1,000 - Cost of petrol: ₦1,120 Total expenses = ₦6,820 To calculate the final balance, we subtract the total expenses from the total income: Final balance = Total income - Total expenses Final balance = ₦18,800 - ₦6,820 Final balance = ₦11,980 However, we also need to add the opening cash balance of ₦20,000 to the final balance: Final balance + Opening cash balance = ₦11,980 + ₦20,000 Final balance = ₦31,980 Therefore, the club's balance is ₦31,980.

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Question 8 Rapport

(i) Meet growth and diversification need.

(ii) Reach out to particular customers or markets

(iii) Comply with some regulatory directives

(iv) Increase employees' income.

Which of the reasons above do companies consider in establishing branches?

i and ii Bonne réponse

i, ii and iii

ii, iii and iv

iii and iv

Détails de la réponse

Companies consider several reasons in establishing branches, such as meeting growth and diversification needs, reaching out to particular customers or markets, complying with regulatory directives, and increasing employees' income. However, not all of the reasons listed are commonly considered in establishing branches. For instance, while increasing employees' income is a desirable outcome, it is not typically a primary driver for establishing branches. The most common reasons for establishing branches are typically to meet growth and diversification needs and to reach out to particular customers or markets. Additionally, regulatory directives may sometimes require companies to establish branches in certain locations or to meet certain requirements. Therefore, the correct option is (a) i and ii, as these are the most common reasons for companies to establish branches.

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Branch Accounts

Departmental Accounts

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Question 9 Rapport

Given:

Sales Ledger Control Account (Extracts)Balance b/f ₦10,600

Total cash payments by debtors ₦32,275

Total credit sales ₦59,193

Discount received ₦9,700

Balance c/f ₦20,751

Discount allowed ₦2,890Determine the sales returns?

₦24,577

₦13,877 Bonne réponse

₦7,067

₦2,890

Détails de la réponse

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Question 10 Rapport

The accumulation fund of a non-trading concern can equally be referred to as?

members' equity Bonne réponse

share capital

general fund

surplus fund

Détails de la réponse

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Partnership Accounts

Accounts Of Not-for-profit Making Organizations

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Question 11 Rapport

In order to make the cash book balance equal to the bank statement, it is usual to add?

uncredited cheques

direct payments by bank

bank charges

unpresented cheques Bonne réponse

Détails de la réponse

The cash book is a record of all cash transactions, including payments and receipts, that occur within a business. The bank statement, on the other hand, is a record of all transactions that take place in a business's bank account, including deposits, withdrawals, and other bank charges. In order to make the cash book balance equal to the bank statement, adjustments must be made for any discrepancies between the two records. One common adjustment is to add the value of unpresented cheques, which are cheques that have been written by the company but have not yet been cashed or deposited into the bank. This is because the cash book has recorded the payment, but the bank statement has not yet reflected the reduction in the company's bank account. Other adjustments may include adding direct payments made by the bank on behalf of the company, such as bank charges, and deducting uncredited cheques, which are cheques that have been deposited into the bank but have not yet been credited to the company's bank account. In summary, to make the cash book balance equal to the bank statement, adjustments must be made for any discrepancies between the two records. Adding unpresented cheques is a common adjustment made to the cash book balance in order to reconcile it with the bank statement.

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Bank Transactions And Reconciliation Statements

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Question 12 Rapport

Use the information below to this question Cost of raw materials consumed 300,600 Carriage inwards 6,700 Returns of raw materials 10,800 Closing stock of raw materials 100,250 Manufacturing wages 27,000 Lighting, power, insurance and rent relation to the factory are apportioned 1/3,2/5, 1/6 and 17 with totals ₦30,000; ₦75,000; ₦36,000 and ₦56,000 respectively. The production cost of finished goods is

₦524,600 Bonne réponse

n408,600

n381,600

n327,600

Détails de la réponse

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Partnership Accounts

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Question 13 Rapport

The most appropriate basis for apportioning inventory holding cost among departments is to use the value of?

purchases

opening stock Bonne réponse

closing stock

average stock

Détails de la réponse

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Stock Valuation

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Question 14 Rapport

Halal Limited with three departments has a total of ₦7,200,000 as net debtors for the year ended 31/12/97.

The company's policy provides for 15% bad debt annually. Which of the following represents the total balance of debtors before adjustment?

₦6,120,000 Bonne réponse

₦6,120,300

₦8,280,000

8,820,000

Détails de la réponse

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Departmental Accounts

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Question 15 Rapport

The most convenient cash book used by a petty trader operating in an area where there is no banking facility is?

four column

three column

single column Bonne réponse

two column

Détails de la réponse

The most convenient cash book used by a petty trader operating in an area where there is no banking facility is a Single Column Cash Book. A petty trader is someone who operates a small business with limited financial resources, and therefore, may not have access to a banking facility. In this case, a Single Column Cash Book is the most appropriate and convenient cash book to use because it is simple and easy to maintain. A Single Column Cash Book has only one column for recording cash transactions, and it is used to record both cash receipts and cash payments. This type of cash book is suitable for small businesses that do not have complex cash transactions. The Single Column Cash Book is a convenient option for petty traders because it provides a quick and easy way to record cash transactions without the need for complex accounting procedures. It helps the trader to keep track of their daily cash receipts and payments, which is essential for maintaining accurate financial records and monitoring the performance of the business. Therefore, the most convenient cash book used by a petty trader operating in an area where there is no banking facility is a Single Column Cash Book. The other options listed, such as the two-column, three-column, and four-column cash books, are suitable for larger businesses with more complex cash transactions.

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Question 16 Rapport

Given Dept A Dept B

Floor space 40m2 60m2

Machine hours 1200 1400

Turnover ₦36 million ₦64 million

Labour hours 1000 1400

A joint cost of ₦72 million incurred by the two departments was apportioned ₦30 million to A and ₦42 million to B. the basis used for apportionment must have been

labour hours Bonne réponse

floor space

turnover

machine hours

Détails de la réponse

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Joint Venture Accounts

Departmental Accounts

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Question 17 Rapport

When a customer's cheque is returned unpaid in a debtor's control accounting system, the treatment will be?

debit bank, credit custmer and credit conyrol account

credit bank, debit customer, and credit control account Bonne réponse

debit customer, debit control accountand credit bank

credit control account, debit bank and debit customer

Détails de la réponse

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Partnership Accounts

Cashbook

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Question 18 Rapport

In a manufacturing company, the total cost of goods produced is equivalent to?

purchases Bonne réponse

sales

cost of goods sold

cost of materials used

Détails de la réponse

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Manufacturing Accounts

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Question 19 Rapport

The body constitutionally charged with the responsibility of examining the audited accounts of the Federation and other reports as referred by the National Assembly is the?

Public Accounts Committee Bonne réponse

Public Audit Committee

Internal Audit Committee

External Audit Committee

Détails de la réponse

The body that is responsible for reviewing the audited accounts of the Federation and other relevant reports as directed by the National Assembly is called the Public Accounts Committee (PAC). This committee is made up of members of the National Assembly who are appointed to oversee the use of public funds and ensure accountability in government spending. The PAC reviews the financial statements, reports and audits of government agencies, departments and ministries to ensure that public funds are used properly and that there is no waste, fraud or abuse of power. In summary, the Public Accounts Committee is the entity responsible for reviewing the financial activities of the government and ensuring that they comply with applicable laws and regulations.

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Public Sector Accounting

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Question 20 Rapport

Use the information below to answer question 4 and 5.Sales ₦20,000

Cost sales ₦10,000

Operating expenses ₦2,500

Expenses prepaid included

In operating expenses ₦500Calculate the net profit?

₦12,500

₦10,000

₦8,000 Bonne réponse

₦7,500

Détails de la réponse

To calculate the net profit, we need to subtract the total expenses from the total sales revenue. The cost of sales is ₦10,000, and the operating expenses are ₦2,500. We are also told that ₦500 of the operating expenses is prepaid, which means that it should not be included in the calculation of expenses for this period. Therefore, the total expenses for this period are ₦2,000 (i.e., ₦2,500 - ₦500). To calculate the net profit, we subtract the total expenses (₦2,000) from the sales revenue (₦20,000): Net profit = ₦20,000 - ₦10,000 - ₦2,000 = ₦8,000 Therefore, the answer is option (iii) ₦8,000.

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Question 21 Rapport

Which of the following is an example of intangible assets?

trade debtors Bonne réponse

stock of goods

trade creditors

motor vehicles

Détails de la réponse

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Question 22 Rapport

Use the information below to answer questions Maro Merchant Bank plc is to issue ₦500,000 ordinary shares of 50k each at ₦3.00 per share.

Applications were received for ₦1,550,000 shares fully paid, ₦1,250,000 shares are to be issued on a pro rata basis and excess subscriptions were dishonored and refunds made?

The refund due to an application for ₦25,000 shares is?

₦45,000

₦30,000 Bonne réponse

7,500

₦5,000

Détails de la réponse

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Partnership Accounts

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Question 23 Rapport

Amin Ltd. Creditor Ledger Control Account (Extracts)

Beginning control account

Balance: Debit 32,000

Credit 61,000

Purchases during the year:

Cash 30,000

Credit 60,000

Payment to suppliers:

Cash 13,000

Cheque 29,000

Debtor's contra 6,000

The closing control account balance is

₦41,000 Bonne réponse

₦65,000

₦71,000

₦77,000

Détails de la réponse

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Question 24 Rapport

A fixed cost is fixed only in relation to?

the quality of goods produced

the quantity of goods sold

a given period of time and a range of activities

a given period of time and the nature of activity Bonne réponse

Détails de la réponse

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Accounting Concepts

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Question 25 Rapport

An item of appropriation in partnership profit and loss account is?

interest on partners' capital Bonne réponse

interest on partners' loan

employees' salaries

partners' drawings

Détails de la réponse

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Partnership Accounts

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Question 26 Rapport

Didi Ltd offered 10,000 ordinary shares of ₦1.50 each at a discount of 2% which were fully subscribed. With regard to the offer above?

shares are never offered at a discount; the offer is invalid

the value of shares in the capital account will be lowered by 2%

the company incurs a loss to the tune of 2% of the offer Bonne réponse

each of the subscribers loses 2% of investment

Détails de la réponse

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Question 27 Rapport

Which of the following items does not feature in the balance sheet of a club?

Arrears of current year's subscription

Salary arrears paid in the current year Bonne réponse

Rental income received in advance

Advances subscription in respect of a coming year

Détails de la réponse

The item that does not feature in the balance sheet of a club is "Salary arrears paid in the current year". This is because salary arrears that have been paid in the current year would have already been accounted for in the income statement for that year as an expense. Once the expense has been recorded in the income statement, it would not be reflected in the balance sheet as a liability. On the other hand, all the other options mentioned - arrears of current year's subscription, rental income received in advance, and advances subscription in respect of a coming year - are items that would typically be included in the balance sheet of a club. Arrears of current year's subscription and advances subscription in respect of a coming year would be shown as current liabilities, while rental income received in advance would be shown as a current asset.

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Question 28 Rapport

Yahuza Enterpises

Trial Balance (Extracts) as at Dec. 31, 1998.

Capital

Premises 90,000 21,000

Debtors 35,000

Provisions 1/1/98:

Depreciation 9,000

Bad and doubtful 1,500

If premises is to be depreciated at 10% on cost and a 5% provision is to be allowed on debtors, the total asset in the balance sheet is

₦125, 000

₦114,500

₦105,500

₦105,250 Bonne réponse

Détails de la réponse

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Question 29 Rapport

Yola Social Club

Statement of Account 1998 financial year

31/12/98:

Subscription in arrears ₦21,000

Subscription in advance ₦12,000

Receipt during 1999: Arrears 1998 ₦21,000

Dues 1999 ₦48,000

Advance 2000 ₦11,000 The subscription transferable to the income and expenditure account is?

₦48,000

₦59,000

₦60,000 Bonne réponse

₦69,000

Détails de la réponse

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Accounts Of Not-for-profit Making Organizations

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Question 30 Rapport

Use the information below to answer questions Maro Merchant Bank plc is to issue ₦500,000 ordinary shares of 50k each at ₦3.00 per share. Applications were received for ₦1,550,000 shares fully paid, ₦1,250,000 shares are to be issued on a pro rata basis and excess subscriptions were dishonored and refunds made? What will be the number of shares to be issued to a subscriber who applied for ₦30,000 shares?

₦20,000 Bonne réponse

₦18,000

₦15,000

₦12,000

Détails de la réponse

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Question 31 Rapport

Which of the following errors will affect the trial balance total?

posting disscount allowed to the debit side of the discount allowed account

omision of one account from the list when extracting from the ledger

failure to post sales of ₦2,000 and purchases of ₦2,000 from the subsidiiary ledger

omission of sales of ₦3,000 and purchases of ₦2,000 Bonne réponse

Détails de la réponse

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Cashbook

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Question 32 Rapport

what is the gross profit margin?

₦100%

₦50% Bonne réponse

₦40%

₦30%

Détails de la réponse

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Question 33 Rapport

An expenses account is closed by a debit to?

an asset account and a credit to the expenses account

the expenses account and a credit to an asset account

profit and loss account and a creit to the expenses account Bonne réponse

the expenses account and a credit to profit and loss account

Détails de la réponse

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Question 34 Rapport

The accounting convention which stipulates that money or goods taken from the business by the owner for personal use should be treated as deductions from capital is

cost

prudence

consistency

entity Bonne réponse

Détails de la réponse

The accounting convention which stipulates that money or goods taken from the business by the owner for personal use should be treated as deductions from capital is the Entity Convention. The Entity Convention in accounting assumes that the business entity and the owner(s) are separate and distinct from each other. This means that the business's financial transactions should be recorded separately from the personal transactions of the owner(s). When the owner(s) take money or goods from the business for personal use, it is considered a withdrawal or a reduction of the owner's capital in the business. The amount withdrawn is recorded as a debit to the owner's drawing account and a credit to the capital account in the business's books. This ensures that the business's financial statements accurately reflect its financial performance and position, without the personal transactions of the owner(s) affecting the business's results. Therefore, the Entity Convention helps to maintain the integrity of the financial records of the business by separating the transactions of the business from the personal transactions of the owner(s). The other options listed, such as cost, prudence, and consistency, do not relate specifically to this convention.

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Question 35 Rapport

Use the information below to answer questionRakiya and Joy are in partnership and agreed that 5% interest per annul is to be charged on drawings. The drawing made by both partners in one year were: Rakiya, ₦200 on March 31 and ₦300 on September 30. Joy, ₦100 on April 1 and ₦240 on July 1.Assuming that Rakiya was not credited with any income during the period, what is her closing current account balance?

₦340,000 credit

₦349,75 debit

₦500.00 credit Bonne réponse

₦511.25 debit

Détails de la réponse

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Partnership Accounts

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Question 36 Rapport

The main objective of bookkeeping is to record economic?

transactions systematically for routine managerial decision-making

events clearly to ensure adequate checks and balances

events clearly to facilitate strategic managerial desicion-making

transaction systematically to ascertain the financial position of a business Bonne réponse

Détails de la réponse

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Principles Of Double Entry

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Question 37 Rapport

The simplest form of single entry procedure consists fo keeping a?

day book or general journal

cash book and ledger accounts showing debtors and creditors balances Bonne réponse

cash journal, sales journal and purchases journal

day book in which transactions are described in chronological order

Détails de la réponse

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Accounts Of Not-for-profit Making Organizations

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Question 38 Rapport

An outright sale of a partnership amounts to the?

compensation of vendors by the purchase

admission of a new partner

purchase of rights of a dead partner

change of sharing ratio of vendors
Bonne réponse

Détails de la réponse

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Partnership Accounts

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Question 39 Rapport

When a purchase business is revalued, the effect is that?

a decrease in the value of asset has no effect on value of goodwill

an increase in the value of asset is treated as an increase in the value of goodwill

a decrease in the value of asset is treated as an decrease in the value of goodwil

an increase in the value of asset is treated as an decrease in the value of goodwill Bonne réponse

Détails de la réponse

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Manufacturing Accounts

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Question 40 Rapport

Given:Depreciation of plant and machinery ₦1,600

Factory rent ₦650

Indirect wages ₦695

General indirect expenses ₦726

Lubricants ₦1235

Carriage inwards ₦829

Factory power ₦350

Bank charges ₦612

Carriage outwards ₦2,900Determine the total factory overhead cost?

₦4,485

₦5,256 Bonne réponse

₦6,085

₦6,556

Détails de la réponse

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Stock Valuation

Provisions And Reserves

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Question 41 Rapport

Use the information below to answer question Maimalari Ltd had (i) Earning per share 47k (ii) Dividend per share 30k (iii) Par value of each share ₦1.20 (iv) Market price per share ₦1.50What will be the price earnings ratio of the company?

3.91

3.19 Bonne réponse

2.95

2.55

Détails de la réponse

To calculate the price-earnings ratio (P/E ratio) of the company, we need to divide the market price per share by the earnings per share. The market price per share is given as ₦1.50, and the earnings per share is given as 47k (which is ₦0.47 since the par value of each share is ₦1.20). So, the P/E ratio can be calculated as: P/E ratio = Market price per share / Earnings per share = ₦1.50 / ₦0.47 = 3.19 (rounded to two decimal places) Therefore, the correct answer is 3.19. The P/E ratio is an important financial metric that measures the market value of a company's shares relative to its earnings. A higher P/E ratio indicates that the market has higher expectations for the company's future earnings growth, while a lower P/E ratio suggests lower growth prospects. In this case, the P/E ratio of 3.19 suggests that the market values each ₦1 of earnings at ₦3.19, which is a moderate valuation.

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Question 42 Rapport

To write off bad debt, debt?

bad debt account and credit debtor's account Bonne réponse

debtor's account credit bad debt

provision for bad debt account and credit debtor's account

Détails de la réponse

"To write off bad debt" means to remove or cancel an amount that was expected to be paid but is now considered unlikely to be collected. When a business determines that a debt is uncollectible, it needs to remove the amount from its accounts so that it can have a more accurate view of its financial situation. This process involves debiting the bad debt account and crediting the debtor's account. So, the answer is "bad debt account and credit debtor's account". The other options are incorrect as they do not accurately describe the accounting process for writing off bad debt.

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Question 43 Rapport

Use the information below to answer question Maimalari Ltd had (i) Earning per share 47k

(ii) Dividend per share 30k

(iii) Par value of each share ₦1.20

(iv) Market price per share ₦1.50The company's earning yield is?

20.00%

25.00%

31.33% Bonne réponse

39.17%

Détails de la réponse

The earning yield is the ratio of the earnings per share to the market price per share, expressed as a percentage. To find the earning yield, we need to calculate the earnings per share first: Earnings per share = (Earnings ÷ Number of shares) = 47k Then, we can calculate the earning yield as follows: Earning yield = (Earnings per share ÷ Market price per share) x 100% = (0.47 ÷ 1.50) x 100% = 31.33% Therefore, the company's earning yield is 31.33%.

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Question 44 Rapport

A business is required at par when the?

purchase consideration equals goodwill

purchase consideration equals net value Bonne réponse

purchase consideration is greater than the net value

net assets is greater than the liabilitties

Détails de la réponse

A business is said to be required at par when the purchase consideration is equal to the net value of the business being acquired. In other words, the amount paid for the acquisition (purchase consideration) should be equal to the total value of the assets being acquired minus the total liabilities (net value). If the purchase consideration is greater than the net value, it means that the acquiring company has paid a premium for the business, which is usually referred to as goodwill. If the net assets are greater than the liabilities, it means that the business has a positive net worth or equity.

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