JAMB UTME - Principles of Accounts - 2018

Calls in advance are treated in the balance sheet as_______

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Calls in advance are treated in the balance sheet as a current liability. Calls in advance refer to the money paid by shareholders in advance for shares that they have subscribed for, but not yet fully paid for. The company is therefore indebted to the shareholders for this amount until the shares are fully paid for. In the balance sheet, current liabilities are short-term debts or obligations that are due within a year, and calls in advance typically fall under this category. This is because the shareholders have the right to demand a refund of the money they paid in advance if the shares are not allotted to them or if they choose not to take up the shares. Therefore, calls in advance will be listed as a liability in the balance sheet, typically under the "current liabilities" section, until the shares are fully paid for and the liability is discharged.

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 head office ledger, the value of goods sent to the branch are____________

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In the head office ledger, the value of goods sent to the branch are debited to the branch current account. When a company sends goods from the head office to the branch, this is known as a branch transfer. The value of these goods should be recorded in the head office ledger as a debit to the branch current account. This is because the head office is effectively lending the goods to the branch, and the branch will need to repay the head office for these goods at a later date. The branch current account is a type of account in the head office ledger that is used to track the transactions between the head office and the branch. All transactions relating to the branch, such as branch transfers, expenses paid by the head office on behalf of the branch, and cash sent to the branch, are recorded in the branch current account. Therefore, when the head office sends goods to the branch, the value of these goods is recorded as a debit to the branch current account in the head office ledger. This means that the branch owes the head office for the goods received, and the head office can use this information to track the balance owed by the branch. In summary, the value of goods sent to the branch from the head office is debited to the branch current account in the head office ledger, as this account is used to track all transactions between the head office and the branch.

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.

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

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Which of the following is a common cause of a discrepancy between head office and branch trial office________

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Stock and cash in transit is a common cause of a discrepancy between head office and branch trial office. This is because stock and cash in transit are two types of assets that are often not recorded accurately in the accounts. Stock can be difficult to value and count accurately, especially if it is in transit between the head office and the branch. Cash in transit refers to cash that is in the process of being transferred between the head office and the branch, and may not be recorded in either account until it has arrived at its destination. If the stock or cash in transit is not recorded accurately, it can result in a discrepancy between the head office and branch trial balance. For example, if the branch has recorded the stock as received, but the head office has not yet recorded it as sent, the branch will have a higher stock value than the head office. Similarly, if the branch has recorded cash in transit as received, but the head office has not yet recorded it as sent, the branch will have a higher cash balance than the head office. , which suggests stock and repayment, is incorrect because repayment is not directly related to a discrepancy between head office and branch trial balance. , which suggests creditors and cash in transit, is also incorrect because creditors are liabilities and not directly related to the assets that are in transit between head office and branch. , which suggests debtors and cash in transit, is also incorrect because debtors are not assets that are in transit between head office and branch, and therefore not a common cause of discrepancy between head office and branch trial balance.

The basic role of accounting is to?

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The main difference between the ordinary and preference shareholders is that?

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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.

Determine the current liabilities.

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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.

What act generally includes completing unfinished partnership business, collecting and paying debts, collecting partnership assets to be turned into cash and taking inventory?

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Use the information contained in the table to answer the question below.

From the data above, compute the prime cost. 

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To compute the prime cost, we need to add the cost of direct materials, direct labour, and direct expenses. Adding the figures for direct materials, direct labour, and direct expenses gives us: 2,500 + 5,000 + 1,000 = 8,500. Therefore, the prime cost of the product is N8,500. The prime cost represents the total cost of direct materials, direct labour, and direct expenses that are directly attributable to the production of a product or service. This cost is essential to know for any manufacturing or production-oriented business, as it is the basis for determining the total cost of production.

Why should a new partner contribute towards goodwill on his admission?

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In reconciling the branch and head office accounts, remittance in transit in the branch books is treated as a_____________

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In reconciling the branch and head office accounts, remittance in transit in the branch books is treated as a debit entry. Remittance in transit refers to funds that have been sent from the branch to the head office, but have not yet been recorded in the head office's books. When reconciling the accounts, this amount is recorded as a debit in the branch's books because the branch has already sent the funds, but they have not yet been received and recorded by the head office. The debit entry in the branch's books serves to reduce the branch's cash balance, while the corresponding credit entry in the head office's books, when it is eventually recorded, will increase the head office's cash balance. This treatment of remittance in transit as a debit entry is a common practice in accounting and helps to ensure that the accounts are reconciled accurately and that the cash balances in both the branch and head office are correctly reflected.

Which of the following should not be adjusted for in the profit and loss account?

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The control account is used in facilitating?

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Departmentalization of accounts is useful because it shows the____________

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Departmentalization of accounts is useful because it shows the overall performance of a division. It allows a company to track the financial performance of individual departments or divisions within the company, providing insight into which areas of the business are performing well and which ones need improvement. By analyzing financial data for each department, managers can make informed decisions about allocating resources and making changes to improve overall company performance. This approach helps to ensure that each department is held accountable for its performance, and that managers have the information they need to make effective decisions about the allocation of resources. Ultimately, this can lead to improved financial performance for the entire company.

The amount paid by the new partner on admission as a compensation for the reputation built up by old partners is a

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The amount paid by the new partner on admission as compensation for the reputation built up by old partners is called "Goodwill". Goodwill is an intangible asset that represents the value of a business beyond its tangible assets such as property, equipment, and inventory. It takes into account things like the business's reputation, customer relationships, and brand recognition. When a new partner joins a business, they may pay for a share of the goodwill to compensate the existing partners for the value they've built up in the business. In simpler terms, goodwill is like the good reputation of a business and the new partner pays for a share of this reputation when they join the business.

In departmental accounting, which is not a transfer pricing_________

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Peak pricing is not a transfer pricing method in departmental accounting. Transfer pricing is the process of determining the price at which goods or services are exchanged between different departments or divisions within a company. Cost based transfer price is a method where the transfer price is set based on the cost of producing the goods or services being transferred. Market based transfer pricing is a method where the transfer price is set based on the market price for the goods or services being transferred. Dual pricing system is a method where two different transfer prices are set for the same goods or services, depending on the context in which they are being transferred. Peak pricing is a pricing strategy where prices are increased during periods of high demand, such as holidays or special events. It is not a transfer pricing method.

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.

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.

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.

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

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Ade, Tony, Rose share profit and losses in the ratio of 3 : 2 : 1 respectively. Ade retires and the remaining partners decide to take Ade’s share in the existing ratio. What is the new ratio?

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Use the information below to answer question

Trading account for the year ended 31st December 2009

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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.

Tea and Cup are into a partnership business. Interests on drawings made by partners are at 10% per annum. Tea’s capital is ₦70000 and current balance is ₦50000. He withdrew the following amounts during the year : 3000 on 31st January ,2000 on 31st March, 4000 on 1st July, 1500 on the 30th September, 2500 on 1st November. Cup’s capital is ₦100000 and current balance is ₦40000. He made no drawings during the period. What is the interest on the drawings of Tea?

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Profit or loss in a partnership is usually arrived at after deducting from gross profit all expenses including____________

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In a partnership, the profit or loss is calculated by subtracting all expenses from the gross profit. These expenses include various costs incurred in running the partnership business, such as rent, utilities, supplies, and wages paid to employees. Additionally, the expenses also include the salaries paid to partners, which is the amount paid to the partners for their work in the business. This is different from the interest on capital, which is the return on the money invested by the partners in the business. Interest on loans is the cost of borrowing money to finance the partnership's operations. This interest expense is deducted from the gross profit to determine the partnership's net profit or loss. Finally, the partners' drawings, which are the amounts taken out of the business by the partners for personal use, are also deducted from the gross profit to determine the partnership's net profit or loss. In summary, the profit or loss in a partnership is calculated by subtracting all expenses, including salaries paid to partners, interest on capital, interest on loans, and partners' drawings, from the gross profit.

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.

For an incomplete record to provide necessary information, it must be converted to?

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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.

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.

What is the amount of capital employed?

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A partnership’s internal regulation are set out by________---

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In dealing with incomplete record, fixed assets are posted to___________-

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In dealing with incomplete records, fixed assets are typically posted to the closing balance sheet as a brought forward figure. This means that the fixed asset is recorded as an asset at the beginning of the accounting period and is carried forward until the end of the period. The asset is then included in the closing balance sheet, which provides a snapshot of the company's financial position at the end of the period. Since incomplete records do not provide a complete picture of the company's financial transactions, it can be difficult to determine the exact value of fixed assets. Posting fixed assets to the closing balance sheet as a brought forward figure provides a way to include the assets in the company's financial statements without the need for extensive record-keeping or complicated calculations. By posting fixed assets to the closing balance sheet, it is easier to calculate the net worth of the company, which is an important indicator of financial health. This information can be used by investors, creditors, and other stakeholders to make informed decisions about the company.

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.

Use the information below to answer the question.

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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Branch stock adjustment account is prepared at?

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