JAMB UTME - Principles of Accounts - 2018

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Trading account for the year ended 31st December 2009

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The price-earnings (P/E) ratio of the company can be calculated by dividing the market price per share by the earnings per share (EPS). The P/E ratio shows how much investors are willing to pay for each Naira of the company's earnings. In this case, to calculate the P/E ratio for Tanko Ltd: Market price per share / Earnings per share = P/E ratio N1.50 / N0.47 = N3.19 So, the P/E ratio for Tanko Ltd is N3.19. This means that investors are willing to pay N3.19 for every Naira of the company's earnings. In simple terms, the P/E ratio is a measure of how much investors are willing to pay for every Naira of the company's earnings and in this case, the P/E ratio for Tanko Ltd is N3.19.

Use the information above to answer the following question;

Calculate the sales ledger balance.

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The fixed amount of money given to a petty cashier at the beginning of a period is called?

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The fixed amount of money given to a petty cashier at the beginning of a period is called the "imprest". An imprest system is a way of managing petty cash, which is a small amount of cash kept on hand for minor expenses such as office supplies, postage, and travel expenses. In this system, a fixed amount of money is provided to the petty cashier at the beginning of a period, and they are responsible for managing and recording all the petty cash transactions during that period. The purpose of the imprest system is to ensure that the petty cash fund is always at a fixed amount, which is called the "imprest amount". At the end of the period, the petty cashier submits the petty cash vouchers to the main cashier for reimbursement, and the main cashier provides the petty cashier with the exact amount required to bring the petty cash fund back to the imprest amount. This way, the petty cash fund is always replenished to the fixed amount, which helps in keeping track of the petty cash transactions and preventing fraud. In summary, the imprest is the fixed amount of money provided to a petty cashier at the beginning of a period to manage the petty cash transactions, and it is a part of the imprest system of managing petty cash.

Use the information below to answer the question.

Adex Ltd. Issues stock to its retail branches at cost price.

Calculate the cost of goods credited to the head office trading account.

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Use the information below to answer the question

If at 31/1/95 the following information was ascertained;

(i) rent for shop ₦12,000 paid for the year

(ii) Total purchases ₦15,000

(iii) Total sales ₦8,200

(iv) Stock of goods left ₦10,000

(v) paid sales boy ₦500

If at 31/1/95 the following information was ascertained;

(i) rent for shop ₦12,000 paid for the year

(ii) Total purchases ₦15,000

(iii) Total sales ₦8,200

(iv) Stock of goods left ₦10,000

(v) paid sales boy ₦500

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Advertising expenses incurred on a product in a business organization should be charged to

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Advertising expenses incurred on a product in a business organization should be charged to the Sales department. The purpose of advertising is to promote a product or service to potential customers, which makes it an important part of the sales process. By generating interest in the product, advertising can help to increase sales and revenue. Therefore, advertising expenses are considered a selling expense and should be charged to the Sales department. This department is responsible for the promotion and sale of the product, and as such, it is appropriate to allocate the cost of advertising to this department. The Production department is responsible for manufacturing the product, while the Purchase department is responsible for acquiring the materials and supplies needed for production. Neither of these departments is directly involved in the sales process, which means that it would not be appropriate to charge advertising expenses to them. Finally, the Administration department is responsible for managing the overall operations of the business, including finance, human resources, and legal affairs. While advertising is an important part of running a successful business, it is not typically considered to be an administrative expense.

The amount called in respect of a share but not paid before or on the date fixed for payment is referred to as:

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The amount called in respect of a share but not paid before or on the date fixed for payment is referred to as a "call in arrears". When a company issues shares, it may require shareholders to pay for them in installments. These installments are known as "calls" and the amount that is due but not paid on the due date is called a "call in arrears". For example, let's say a company issues 100 shares with a nominal value of $10 per share. The company may require shareholders to pay for the shares in two installments, with $5 due on the issue of the share and $5 due in six months' time. If a shareholder pays only $4 on the due date of the second installment, they would have a call in arrears of $1. It is important for companies to keep track of calls in arrears because they represent unpaid capital that the company is entitled to collect. The company can take legal action to recover the amount owed, or it may declare the shares forfeited if the shareholder fails to pay the amount due within a specified period of time. In summary, a call in arrears is the amount that a shareholder owes to a company for a share that has been issued but not fully paid for on the due date. It represents unpaid capital that the company is entitled to collect, and the company may take legal action or declare the shares forfeited if the shareholder fails to pay the amount due.

Using the following:

Balance as par overdraft of the cashbook is ₦4000, uncredited cheque is ₦2300, bank charges ₦300, unpresented cheque ₦5000.

What is the adjusted cashbook balance?

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The office responsible for ascertaining whether all public expenditures and appropriations are in line with approved guidelines is the________

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The office responsible for ascertaining whether all public expenditures and appropriations are in line with approved guidelines is the Auditor General. The Auditor General is an independent body that audits and reports on the government's financial statements, ensuring that public expenditures are legal and authorized, and are within budgeted amounts. The Auditor General is responsible for reviewing and examining all financial records of the government, ensuring that financial transactions are recorded accurately, and that financial reporting is transparent and in compliance with the applicable laws and regulations. The Auditor General is usually appointed by the government, and the office is independent of any particular government department. This independence ensures that the Auditor General can operate impartially and without undue influence from any particular government agency. The Auditor General is a vital part of ensuring the accountability and transparency of government finances and plays a critical role in maintaining public trust in government institutions.

The cost price method is applicable when_____

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The rent expense for Trendy store is ₦3500. Trendy store has three departments; jewelry, hair dressing, and clothing. The floor spaces occupied by the departments are 3:2:5 respectively. What is the rent allocated to clothing department?

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To allocate the rent expense to the clothing department, we need to use the ratio of the floor spaces occupied by each department. Let's first add up the ratio of the floor spaces: 3 + 2 + 5 = 10 This means that the clothing department occupies 5/10 (or 1/2) of the total floor space. To allocate the rent expense to the clothing department, we need to multiply the total rent expense by the proportion of the floor space that the clothing department occupies: ₦3500 x 1/2 = ₦1750 Therefore, the rent allocated to the clothing department is ₦1750. So, the correct answer is option (C) ₦1750.

Cost of rent as an expense can be apportioned to all department on the basis of:

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The cost of rent can be apportioned to all departments on the basis of the space occupied by each department. For example, if a company has three departments and Department A occupies 40% of the total office space, Department B occupies 30%, and Department C occupies 30%, then the cost of rent can be apportioned accordingly. If the total cost of rent is $10,000 per month, then Department A would be responsible for $4,000 (i.e., 40% of $10,000), Department B would be responsible for $3,000 (i.e., 30% of $10,000), and Department C would be responsible for $3,000 (i.e., 30% of $10,000). This method of apportionment is fair because each department is responsible for the amount of space it occupies and therefore the amount of rent it incurs. Using other criteria such as the number of employees, stock value or wages, may not accurately reflect the actual amount of space used by each department and could lead to unfair distribution of rent expenses.

A cash book had a opening balance of N15,200, closing balance of N18,400 and total cash received during the period of N36,000. What was the amount of cash paid out during the same period?

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In government accounting , the method used which records on the basis of financial entity with self balancing books instead of entity of propietorship is?

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The method used in government accounting which records on the basis of financial entity with self-balancing books instead of the entity of proprietorship is called fund accounting. Fund accounting is a method of accounting used by organizations, such as governments, non-profit organizations, and universities, that have multiple funds with separate accounting and reporting requirements. Each fund is treated as a separate accounting entity, and financial transactions are recorded in separate self-balancing books for each fund. The purpose of fund accounting is to provide accountability and transparency in the use of public funds. It allows the government to track and report on the use of funds for specific purposes, such as capital projects, debt service, or operating expenses. It also ensures that funds are used only for their intended purposes and that financial reports accurately reflect the financial position of each fund. In summary, fund accounting is a method of accounting used by government entities that records financial transactions on a fund-by-fund basis with self-balancing books. This provides accountability and transparency in the use of public funds and ensures that funds are used only for their intended purposes.

Which of the following methods of invoicing goods to branches facilitate easy checks on the activities of branches?

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The current growth in the volume of trading and financial dealings in nigerian is helped by?

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The current growth in the volume of trading and financial dealings in Nigeria is mainly helped by increased financial activities. Over the past few years, there has been a significant increase in the number of financial institutions, such as banks and mobile money operators, offering various financial products and services. This has made it easier for businesses and individuals to access credit, make payments, and conduct other financial transactions. Moreover, the rise of digital technologies has further facilitated financial activities, allowing people to conduct transactions online and in real-time. This has also helped to reduce the cost and time required to conduct financial transactions, making it more convenient for businesses and individuals to engage in trade. While government intervention may have played a role in creating an enabling environment for financial activities, such as through the introduction of policies and regulations, it is ultimately the increased availability and accessibility of financial services that have driven the growth of trading and financial dealings in Nigeria.

The total credit sales for a period can be extracted from the?

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The total credit sales for a period can be extracted from the Sales Day Book. The Sales Day Book is a book of prime entry used to record all credit sales made by a business during a particular period. It typically contains information such as the date of the sale, the name of the customer, the amount of the sale, and any relevant invoice or reference numbers. Since credit sales involve selling goods or services on credit, they are not immediately paid for at the time of sale. Instead, the customer is given a certain amount of time, usually 30 to 90 days, to pay for the goods or services. As a result, credit sales do not result in an immediate inflow of cash, but they do represent revenue earned by the business. Therefore, to determine the total credit sales for a given period, we can simply add up all the credit sales recorded in the Sales Day Book for that period. This figure represents the total amount of revenue earned by the business from credit sales during that period, and is an important indicator of the business's financial performance. In summary, the Sales Day Book is used to record all credit sales made by a business, and the total credit sales for a period can be extracted from this book by adding up all the credit sales recorded during that period.

The control account is used in facilitating?

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Branch stock adjustment account is prepared at?

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Use the information below to answer the question.

Adex Ltd. Issues stock to its retail branches at cost price. The following particulars relate to Ede branch.

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To find the cost of goods sold (COGS) for the Ede branch, we need to calculate the cost of goods available for sale and then subtract the ending inventory. The cost of goods available for sale is the sum of the stock at the beginning of the year and the goods sent to the branch during the year: 400 (stock at the beginning of the year) + 8000 (goods sent to the branch) = 8400 To calculate the COGS, we need to subtract the ending inventory from the cost of goods available for sale. The ending inventory is the stock at the end of the year: 8400 - 720 (stock at the end of the year) = 7680 Next, we need to adjust the COGS for any returns to the head office. The returns are given as 340, so we subtract this from the calculated COGS: 7680 - 340 = 7340 Finally, we need to calculate the gross profit by subtracting the COGS from the cash sales: 9160 - 7340 = 1820 Therefore, the answer is ₦1820, which represents the gross profit for the Ede branch.

Mrs. Okoro who lives in the riverine community of Rivers State makes her living through crabbing and fishing. This type of occupation is? 

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The yearly depreciation using the straight line method would be

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The straight-line method of depreciation assumes that an asset decreases in value evenly over its useful life. To calculate the yearly depreciation using the straight-line method, we need to subtract the scrap value from the original cost and then divide the result by the number of years of the asset's useful life. The original cost of the machine is N35,000, and the scrap value is N9,000. Therefore, the depreciable value of the machine is: Depreciable value = Original cost - Scrap value = N35,000 - N9,000 = N26,000 The useful life of the machine is 5 years. Therefore, the yearly depreciation is: Yearly depreciation = Depreciable value / Useful life = N26,000 / 5 = N5,200 So the yearly depreciation using the straight-line method for this machine is N5,200. Therefore, option C is the correct answer.

Transfers from the head office to branches are best carried out at__________

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Transfers from the head office to branches are best carried out at cost plus mark-up. This is because cost plus mark-up allows the head office to recover the cost of producing the goods, and also make a profit to cover its own overheads and expenses. Selling price and market price may not be the best options because they do not take into account the actual cost of producing the goods, which could lead to overcharging or undercharging the branches. In contrast, cost plus mark-up ensures that the branches receive the goods at a fair price, while also allowing the head office to cover its own costs and make a profit. Overall, this method promotes transparency and fairness in the transfer process.

In the absence of a partnership deed, the act stipulates that____________

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Subscription received during the year N30,000. Subscription owed last year  N4,000. subscription received for next year N6,000. 

Use the details above to answer the following question.

The N6,000 subscription received is?

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The N6,000 subscription received is a current liability. A liability is a debt or obligation that a company owes to another party, which must be settled in the future. In this case, the N6,000 subscription received is for next year, which means that the company has not yet provided the goods or services for which the customer has paid. Therefore, the N6,000 subscription is an obligation that the company must fulfill in the future, making it a current liability. The N30,000 subscription received during the year is a revenue or income for the company, while the N4,000 subscription owed last year is a previous liability that was not settled in the past year. Both of these amounts are not related to the current question.

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Calculate the balance in the bank statement.

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Bala ltd acquired the business of bello ltd and caused the separate existence of the latter company to terminate. 

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Based on the given information, the term that best describes the scenario is "merger". A merger is a business consolidation that involves the combination of two or more companies into a single new entity. In this case, Bala Ltd acquired the business of Bello Ltd, which means that Bello Ltd is no longer operating as a separate company. Instead, Bello Ltd's assets, liabilities, and operations have been merged with those of Bala Ltd to form a single new entity. It's important to note that a merger can take many forms, and the specific legal and financial details of the transaction can vary. However, the key idea is that two or more companies combine to form a new, larger entity.

Which of the following is not a type of branch?

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"Single branch" is not a type of branch. A branch refers to an additional location of a business, separate from its main or headquarters location. A dependent branch is a location that relies on the head office for support and decision making. An independent branch operates separately from the head office, making its own decisions and managing its own resources. A foreign branch is a location established in a foreign country. However, "single branch" is not a type of branch. It simply refers to a situation where a business has only one location or branch.

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Goods worth ₦300 was transferred from department Q to P. Similarly, P’s total expenses for the period was ₦200.

Department P’s net profit was

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When goodwill is not retained in the business, the entries in the new partners books will be to debit______________

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Use the information above to answer the following question. 

What is the gross profit margin?

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The gross profit margin is a measure of the profitability of a business, and it is calculated by dividing the gross profit by the revenue and expressing the result as a percentage. The gross profit is the difference between the revenue and the cost of goods sold, which is the direct cost of producing the goods or services that the business sells. In the information provided, the revenue or sales is N20,000, and the cost of sales is N10,000. Therefore, the gross profit can be calculated as follows: Gross profit = Revenue - Cost of sales = N20,000 - N10,000 = N10,000 The gross profit margin can be calculated by dividing the gross profit by the revenue and expressing the result as a percentage: Gross profit margin = (Gross profit / Revenue) x 100% = (N10,000 / N20,000) x 100% = 50% Therefore, the gross profit margin is 50%, which means that for every Naira of revenue generated, the business earns 50 kobo in gross profit. This indicates that the business has a healthy gross profit margin and is able to cover its direct costs of production while making a reasonable profit.

Determine the current liabilities.

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The accounting entries used to record a cheque issued by a business is to?

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The accounting entries used to record a cheque issued by a business are to credit the Cash Book and debit the Drawer's account. When a business issues a cheque, it reduces the balance of cash held by the business, and this reduction in cash is recorded by debiting the Drawer's account. At the same time, the cheque creates a liability for the business, which is recorded by crediting the Cash Book. In other words, when the cheque is issued, the business is reducing its own cash balance and creating a debt or liability that will be paid in the future. Therefore, the Cash Book is credited to reflect the creation of the liability, while the Drawer's account is debited to show the reduction in the business's cash balance.

Subscription received during the year N30,000. Subscription owed last year  N4,000. subscription received for next year N6,000. 

Use the details above to answer the following question.

What is the subscription to be charged to income and expenditure account?

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The subscription to be charged to the income and expenditure account is N36,000. This is because the subscription received during the year is N30,000, the subscription owed from the previous year is N4,000 and the subscription received for the next year is N6,000. Adding up these three amounts gives us N30,000 + N4,000 + N6,000 = N36,000. So, the total subscription to be charged to the income and expenditure account is N36,000.

Why are adjustments in the profit and loss account necessary?

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The profit and loss account is a financial statement that shows a company's revenues, expenses, and profits over a particular period. The purpose of this statement is to give an overview of the company's financial performance during that period. However, it's not always straightforward to determine the exact amount of income and expenses for a particular period, which is why adjustments are necessary. Adjustments are necessary to ascertain the actual expenses incurred and income earned during the year. This involves adjusting the revenue and expenses figures to reflect the actual amounts earned or incurred during the year, including any amounts that have not been received or paid but are still owed or owing. For example, if a company has sold goods to a customer on credit, the revenue from that sale will not be reflected in the profit and loss account until the payment is received. Similarly, if the company has received goods or services from a supplier but has not yet paid for them, the expense will not be reflected in the profit and loss account until the payment is made. Adjustments are also necessary to show the provisions made during the year. Provisions are amounts set aside to cover potential future expenses or losses. For example, a company may set aside a provision for bad debts to cover potential losses from customers who are unlikely to pay. In conclusion, adjustments in the profit and loss account are necessary to provide an accurate representation of the company's financial performance during the period. These adjustments reflect the actual expenses incurred and income earned during the year, as well as any provisions made for potential future expenses or losses.

Sule and Ahmed are in partnership sharing profit and losses equally. If Khadija is admitted as a new partner to take 1/5 th as her share. What is the new profit or loss sharing?

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Sule and Ahmed have been sharing profits and losses equally, which means they divide the profits and losses 50-50. Now, Khadija is admitted as a new partner, and she takes 1/5 of the share. The new profit and loss sharing ratio will be 3 parts because there are now three partners. To calculate the new profit and loss sharing ratio, we need to divide 3 parts equally among the three partners. So, each part will be 1/3. Therefore, the new profit and loss sharing ratio will be: Sule 1/3, Ahmed 1/3, and Khadija 1/3. Hence, the correct answer is: Sule 1/3, Ahmed 1/3, and Khadija 1/3.

which of the following  affects the accuracy and authenticity of trial balance? 

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Gross profit in the branch adjustment account is transferred to the branch____________

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