JAMB UTME - Principles of Accounts - 2018

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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.

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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.

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Detalhes da Resposta

The accumulated fund of a non-trading concern can equally be referred to as the "surplus fund". This is because the surplus fund represents the excess of the organization's total assets over its total liabilities and any other committed funds. Non-trading concerns, such as non-profit organizations, do not operate for the purpose of making a profit for its members or shareholders. Instead, any surplus generated is used to further the organization's objectives or to invest in its activities in the future. The surplus fund can be seen as a reserve that the organization can draw on when needed. The other answer options, such as members equity, share capital, and general fund, are not necessarily applicable to non-trading concerns, and do not specifically refer to the accumulated fund. For example, share capital typically refers to the funds raised by a company through the sale of shares, while members equity typically refers to the ownership interest of the members in a company.

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Detalhes da Resposta

Detalhes da Resposta

Detalhes da Resposta

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.

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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.

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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.

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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.

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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.

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Detalhes da Resposta

Detalhes da Resposta

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.

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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.

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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.

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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.

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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.

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Detalhes da Resposta

Detalhes da Resposta

Detalhes da Resposta

Detalhes da Resposta

Detalhes da Resposta

A partnership deed is used to promote mutual understanding. It is a legal document that outlines the rights, responsibilities, and obligations of each partner in a partnership business. By specifying the roles and expectations of each partner, a partnership deed helps to prevent misunderstandings and conflicts that could arise between partners. The partnership deed typically includes information such as the names of the partners, the nature of the business, the capital contributions of each partner, the profit and loss sharing ratio, the management structure of the partnership, the procedures for adding or removing partners, and the rules for dissolution of the partnership. By having a clear and well-defined partnership deed, all partners can have a shared understanding of how the business will operate and what is expected of each partner. This can help to establish trust and promote a healthy working relationship between partners, which is crucial for the success of any partnership business.

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Detalhes da Resposta

Detalhes da Resposta

Detalhes da Resposta

Detalhes da Resposta

Detalhes da Resposta

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.

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Detalhes da Resposta

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.

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If the purchase price of a company exceeds the net assets, the excess amount is debited to the "goodwill account." Goodwill represents the value of a company's reputation, brand, customer relationships, and other intangible assets that are not included in the net assets of a company. When one company acquires another company for a price that exceeds the net assets of the acquired company, the difference between the purchase price and the net assets is attributed to the value of goodwill. Therefore, the excess amount is debited to the goodwill account to record the value of the intangible assets acquired in the transaction. This helps the acquiring company to reflect the true value of the acquired company's intangible assets on their balance sheet.

Detalhes da Resposta

Detalhes da Resposta

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.

Detalhes da Resposta

Detalhes da Resposta

Detalhes da Resposta

Detalhes da Resposta